Mercedes becomes first F1 team to exceed £500m turnover

Mercedes becomes first F1 team to exceed £500m turnover

The company that runs the team, Mercedes-Benz Grand Prix Ltd., reported 2023 revenue of £546.5 million, which covers the year ending December 31.

This figure represents an increase of £71.9 million on the 2022 figure of £474.6 million.

For comparison, Red Bull Technology, the company behind the Red Bull F1 team, had revenues of £385.6 million in 2022.

However, despite the increase in turnover at Mercedes, the Brackley-based company reported a slight fall in profits – down to £83.8 million from the reported £89.7 million in 2022.

This is the result of a combination of factors that include both increased costs and higher tax payments in fiscal 2023.

Race car development assets, which carry over to the following season, increased from £41m in 2022 to £52.2m last year.

This higher figure partly included the additional investment needed to change its 2024 F1 challenger, which required a new chassis for this season.

The £52.2m figure also includes early work the team was able to carry out to produce the 2023 gearbox and suspension parts which were supplied to customer Williams this year, which was able to be completed before the 2024 components used by Aston Martin.

Mercedes also reported a big increase in average headcount, up 175 to 1,289 last year, up from 1,114 in 2022.

This resulted in an increase in its wage bill of £29.6 million to £111.7 million from the reported £82.1 million in 2022 – although some of this was due to the The increase in staff bonuses paid to the team finishing second in the constructors’ championship rather than third in the previous season.

Certain tax elements also played a role in the final profit calculation.

The team’s figures for 2022 included a deferred tax asset, which meant its profits last year were exceptionally good.

This, combined with the Government’s increase in the corporation tax rate to 25% in April 2023 from 19% in 2022, means Mercedes’ bill jumped by £23.7 million, from £8. £6m in 2022 to £32.5m last year.

The contrast in tax payments from year to year had a big impact on overall profit, but the company appears to be on very solid footing with its EBIT (earnings before interest and tax) fairly stable. It was £113.8 million for the financial year ending 2023, compared to £113.6 million in 2022.

While Mercedes finished 2023 in second place in the F1 Constructors’ Championship behind Red Bull, improving on its 2022 performance, it also reported a drop in the media coverage it received on television as it achieved fewer podiums. However, other factors have seen strong growth.

In a statement on file, Mercedes said: “The team’s share of television coverage showed a slight decline to 14.7% for 2023, reflecting the lower number of podiums the team enjoyed compared to 2022.

“Cumulative advertising equivalent value (AVE) remained strong for business partners and shareholders at $5.3 billion. The team continued to grow strongly on social media, with a cumulative number of 36 million followers (+15%) and a total of 465 million engagements (+9%).

“During 2023, the team welcomed seven new commercial partners and introduced a world-class hospitality offering at the Las Vegas Grands Prix, to meet the growing demand for VIP race attendance then as F1 continues to grow globally. In July, Forbes estimated the team’s value at $3.8 billion. »

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