Welcome to the global conference call of Mercedes-Benz. At our customers request, this conference will be recorded. The replay of the conference call will also be available as an on-demand audio webcast in the investor relations section of the Mercedes-Benz website. The short introduction will be directly followed by a Q&A session. If you have difficulties during the conference, please press zero and rhombus on your telephone keypad for operator assistance. I would like to remind you that this telephone conference is governed by the safe harbor wording that you find in our published results documents. Please note that our presentations contain forward-looking statements that reflect management's current views with respect to future events. Such statements are subject to many risks and uncertainties. If the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. Forward-looking statements speak only to the date on which they are made. May I now hand over to Steffen Hoffmann, Head of Mercedes-Benz Investor Relations and Treasury. Thank you very much. Good morning, ladies and gentlemen. This is Steffen Hoffmann speaking. On behalf of Mercedes-Benz, I'd like to welcome you on both the telephone and the Internet to our Q1 results conference call. We are very happy to have with us today Harald Wilhelm, our CFO. In order to give you maximum time for your questions, Harald will begin with an introduction directly followed by the Q&A session. As always, the respective presentation can be found on the IR website. Now, Harald, I'd like to hand over to you. Thank you, Steffen. Hello, everybody. Welcome to that call. Well, if we look at, I mean, the Q1, what is, I mean, our key takeaway from that quarter, it is that we could demonstrate again, resilience in a challenging market environment. You have seen already in the pre-release, strong pricing significantly outweighed headwinds for material costs and led to another solid quarter. Today, I mean, with the update, I mean, of the guidance and the outlook, I think you can see confidence built into that guidance. That is, I think what we want to demonstrate here, that we keep the pace moving forward. Let's have a look into that a bit more in detail. You go to the page three on the group numbers, all of them are up year-over-year. Slightly higher car sales, significantly higher van sales generate 8% revenues up. Group EBIT 5% up at EUR 5.5 billion. The cash generation at EUR 2.2 billion free cash flow, leading to a NIL of EUR 29 billion. Look a bit closer, I mean, on the car side in terms of the highlights and the key messages. On the performance side, we can see that the Top-End Vehicles increased significantly by 18%. I think that underpins our progress towards the top-end luxury strategy and execution. Also on the BEV side, we could almost double the sales, which means we continue to transform Mercedes at full speed towards an all-electric future. On the profitability side, we see continuing strong net pricing and now six consecutive quarters reporting a double-digit margin, which reflects and demonstrates a resilience and a structurally uplifted business performance. On the products, I mean, last week in Shanghai, we unveiled a new top-end family member, the new Mercedes-Maybach EQS. Fantastic vehicle, great seating comfort, just I mean blows you away. Also this week, an all-new E-Class was unveiled, which will come to the market I mean, later this year. I think it was, I mean pretty good feedback, which we received this week. Also the EQE SUV will start sales this quarter. On the strategy side, we had two capital markets events. The one in Sunnyvale on the MB.OS strategy, where we explained our chip-to-cloud architecture and also announced some new partnerships such as the one with Google. The ESG conference which we did more recently, outlining where we are heading and which progress we are doing on the ESG front with some examples such as the groundbreaking for the battery recycling plant or the power purchase agreement with Iberdrola. On the cars numbers, overall, we see a slight increase on the sales side with a reduction in the core. Some of you might have the question, "Oops, what's that?" This is technical, I mean, model changeover to our top-selling product, I mean the GLC. I can confirm, I can witness this is a hot car. Once available, you will see the core segment coming back up again and the GLC being extremely strong pillar in this segment. On the top end, we could grow by 18% in all categories of the top end. In particular, strong increase of AMG sales by 43% with a high level of demand for G-Class and Maybach. The xEV sales increased 24%. On the BEV, we can see that it is almost I mean doubled or around the doubled, I mean, in the quarter all in all, and xEV share now with around 18%. On the BEV sales already commented, I mean, this almost doubled with the now EQS SUV being in the market, but also the EQE sedan next to the entry segments. On the car financials, sales up, revenue increased by 8%, ASP 6% up year-over-year, which means, I mean, Q1 compared to Q1 2022, but also up compared to Q4, which I think is good news. EBIT adjusted slightly above EUR 4 billion and the MBM EBIT significantly up at EUR 3 billion. How did we get there on page 7 in terms of the EBIT walk, departing from the EUR 4.2 billion adjusted from last year. The bucket volume structure and net pricing increased significantly by EUR 1.3 billion. The majority of that comes from strongly improved net pricing driven by gross list price increases, including escalation updates and tight discounts management. The slight increased unit sales and the good product mix contributed positively as well. The used business slightly negative year-on-year. FX also slightly negative. On the industrial performance side, the -EUR 550, what was behind that one, raw material cost related to various smaller effects. One of that being on the lithium side, obviously with a higher EV volume, you also have a burden there and an elevated I mean spot level. Maybe at this point, just a note, if you see changes in the spot rates, I mean, in the markets, it has a lead time before it hits the P&L. Let's bear that in mind. Other than that, in industrial performance, we see also one-time commodity charges for some semi-related costs and inflation-related costs are also included in here. What is a key takeaway? I would say net net, and what we called, I think, I mean, the net net pricing, we significantly outweighed, I mean, the headwinds from material cost and inflationary increases by pricing power. That makes, I mean, the gross profit to grow by almost EUR 600 million with a stable gross profit ratio of 26%. Some of you know what I mean by emphasizing that. Selling expenses are slightly higher marketing expenses, volume-induced selling expenses, and agent remuneration from our new direct sales markets with a positive counterpart in the price bucket. The G&A is slightly higher due to inflation. Rest assured, the journey to focus on fixed costs mean reduction, the minus 20% until the middle of the decade, definitely continues. In line with our full year guidance, we saw higher R&D costs for our future platforms and technologies, in particular MB.OS. Well, MMA go to market will come closer by the end of 2024. MB will follow, I mean, very quickly. We need to get that ready. We need to mature it, and that's why we put some incremental effort into it. It doesn't change, however, our longer-term perspective in terms of the investment profile, which is also the minus 20% by the middle of the decade. The others are mainly coming from effects in connection with the discounting of non-current provision, which was more a Q1 2022 entry. Therefore, overall, we see the EBIT adjusted at 4.1% with a return on sales at 14.8%. On the cash flow side, page 8, EUR 3 billion cash conversion 0.7. What was behind that? Negative working capital charge of EUR 0.8 billion, mainly from new vehicle stock. The stock increased due to an elevated overall amount of vehicles, where we had production running ahead of sales to refill the pipeline for the customers, but also a switch in the U.K. to the direct sales model, which leads to slightly higher inventories in the books. On the other side, we had better receivables and improved payables offsetting these effects by a large portion. Looking at the net financial investments of EUR 350 million, we have a Formula One Grand Prix restructuring and cash proceeds in here, as well as some further retail outlet sales. Net investments in PP and intangible assets versus depreciation, amortization are negative, all in all in line, however, with our guidance. The others, I mean, includes the adjustment of the BBAC equity result, where I mean obviously dividend is to come later in the year. The adjustments are the well-known ones, I think, as you can read on the chart. On the page nine, on the vans, performance, 99,000 vans being sold in the Q1 with strong earnings, despite the ongoing challenges also on the logistics side, on the outbound. Profitability strongly improved, net pricing, higher unit sales, definitely outweighed higher material cost and inflation here. On the product side, in February, we had the world premiere of our new eSprinter, that was also very well-perceived. The market launch will be in the second half of this year, with an electric range, according to WLTP of up to 400 kilometers. On the strategy side, please pencil it down. We're preparing for a virtual Van strategy and business update on the 16th of May. Page 10, we look at the sales. Sales up by 12%, mainly driven by Europe. Strong contribution coming from the commercial side of things. EV sales are up 22%, and in 2023, we'll have the eCitan and the EQT also joining the portfolio, which means the entire product offering has an EV for sale. Page 11, the financials. All figures up here. Great quarter by the Vans. Very well done. The demand side for premium Vans is very high, very solid in terms of volume and pricing. Revenues are up 25%. The EBIT adjusted EUR 719 million. That shows that Vans could further improve, I mean, pricing, leading to such a high level of margin, more than 15%, despite the cost inflation, and also could translate that into cash flow of EUR 450 million. How did we get there to 15.6% return on sales adjusted? Page 12. Well, I mean, the bucket volume structure pricing here increased by EUR 600 million. That is also coming from a very strong net pricing. Discounts were significantly reduced versus last year, and the list prices were up. On the sales side, I want to emphasize the Sprinter, the Vito, Citan, and the T-Class, which increased. On the industrial performance, same comment as on the car side, higher raw material prices, one-time commodity charges, inflation, and outbound supply chain related costs. That means that the net-net, that the net price increases could definitely outweigh inflationary increases. The net-net is definitely very positive, as you can see here on the chart. Direct selling increased. Same thing as on the cars with the direct sales and the adjustments are well known, as you can read on the chart. Page 13, on the cash side. On the EUR 410 reported, EUR 450 adjusted. A slight working capital charge of EUR 100 million with inventory higher than that, driven by production ahead of sales to refill the pipeline. The pipeline being very well underpinned by the order book. This effect is also partially offset by payables and receivables. On the receivable also, a channel mix with shorter payment terms was helpful on the Van side. Net financial investments are also related to the own retail sales divestment. On the investment side, as guided, we have higher investments in PP&E and intangible than the amortization side. That is due to the ramp-up of the EV transformation, namely the VAN.EA. On the other side, provision consumption and the BBAC at equity result. Looking at Mobility, page 14. Overall, solid profitability despite the challenging market environment, a stable portfolio development and overall the penetration close to our ambition level of 50%. The net credit losses remain on a low level. Stable cost of credit risk reflect a high portfolio quality. The interest rate are generally, or the higher level interest rates are generally passed on to customers, but the consequently higher customer rates intensify the competition in the financing sector and put pressure on the interest margins. Mobility actively supports the electric vehicle sales of cars and Vans with tailor-made finance and Mobility products and services. That's how we recenter the strategy for Mobility with good progress in the Q1. Next to that, Mobility is now also in charge to elevate the customer experience by charging, building up a network around the globe in the charging infrastructure. In terms of the financials, page 15 for Vans. The new business in Q1 and the portfolio are roughly stable. The EBIT adjusted decreased, however, compared to exceptionally high level last year. What is behind that? Page 16. In the Q1, the EBIT and the return on equity have been lower. We're still on a good level despite, I mean, the headwinds from the pressure on interest margin from rising interest rates, and slightly increased investments in the transformation towards a digital and seamless integrated customer experience. The portfolio at about, I mean, same level, and a slightly positive effect on EBIT resulting from the low quarterly cost of credit risk reflecting the update in the economic outlook. Now, on the group side, the group EBIT, Cars, Vans & Mobility, I explained already. Leaves the recon, which is positive mainly due to the at-equity contribution from our friends from Daimler Truck, which is a quarter-over-quarter change of EUR 117 million, which means roughly EUR 60 million positive this quarter. The EBIT adjusted at EUR 5.4 billion. Adjustments, I don't think I need to read that out. Page 18 on the cash flow bridge. The C of EBIT of Cars and Vans, I explained before already, leaves the income taxes at roughly minus EUR 1 billion, as reflect, I mean, they're going up. Higher earnings obviously and lower offsettable tax loss carryforwards are the reason for that. Free cash flow industrial side, EUR 2.2 billion, also with net minor adjustments to the reported number. On the NIL side, page 19. Well, a decent progress in the Q1, to close to EUR 29 billion, driven by the free cash flow, which we discussed before. Maybe just a comment on the others is, this includes the first tranches of the share buyback. By the end of March, we bought back shares for approximately EUR 30 million. As we speak, this number is roughly EUR 100 million. All in all, I think NIL on a strong and very comfortable level. Now, let's turn to the outlook. First on the division side, page 21. Please read, the assumption chart, I mean, carefully. Definitely, I think we see significant regional differences. The overall gross momentum of the world economy still likely to remain rather subdued. High, albeit declining inflation rates and the restrictive monetary policies at central banks in U.S. and Europe weigh on growth. In addition, the recent turbulences in the U.S. and the EU banking sector brought additional new uncertainties and geopolitical imponderables, these I mean, remain. By contrast, energy prices, I mean, should be less volatile and global supply bottlenecks are expected to ease further. At this juncture, a word on Russia. As of this week, we successfully transferred our Russian business activities to the investor, Avtodom. In the Q1 23, there were no significant effects on the profitability and the cash flows. For Mobility, we expect a loss in the low 3-digit million EUR range on the sale becoming effective, which will be adjusted. No significant effects are expected on the liquidity and the capital resources. Let's have a look on the demand side of the markets. For Europe, on the incoming order side, we see that, in the first, I mean, quarter is still sluggish. The order bank in Europe, however, I mean, supports the sales in the coming months. In the U.S., we continue to see, U.S. demand on a good, on a healthy level. In China, we see the momentum coming back, post Chinese New Year, with strong demand and order intake at the end of the Q1, which is, I think, good news. On the division side for Cars, the sales guidance, I mean, is unchanged at the same level. That includes for the full year overall, TEV sales expected to be slightly above for the prior year, with definitely tailwinds from the Q1, the 18% growth. On the BEV sales, we also expect to approximately double the BEV sales, which has been demonstrated in the Q1. Return on sales guidance. Well, I mean, with quarter one at 14.8, we had a solid start into the year compared to our guidance range of 12%-14%. This gives us, I mean, a good head start and a strong foundation for the following quarters. We do see in quarter one what we told you already, that our net-net pricing is positive in Q1, yes, it is our target to retain that for the full year. Therefore, it is a good likelihood that the coming quarters will also be on a strong level. You know, maybe we are a bit prudent, and it is still early in the year. That's why we confirm the guidance in the range of 12%-14%. However, let me be very clear, we see us being at the upper end of that guidance corridor of 12-14 by now. That even leaves, I would say, some further upside potential for the remainder of the year. CCR unchanged at 2.8- 1. R&D now significantly above, mainly to MB.OS and investments in AMG.EA and MB.EA, as I commented before. On the Vans side, sales guidance, with the tailwinds from the Q1 and the full order books throughout the year, we lift the sales guidance to slightly above. On the return on sales side, for Vans, here we lift the guidance by 200 basis points to 11%-13% with a strong tailwind from the Q1. Going forward, we see more volume and the net-net pricing being stronger than anticipated before. Not everything from the Q1, I mean, can be taken into the run rate for the full year compared to the Q1 we see in particular, I mean, higher R&T. Within that corridor of 11-13, however, similar comment, we also see that at the upper end of that corridor. CCR increased to 0.6-0.8. On mobility, the return on equity unchanged, 12%-14%, with 15.6% in the Q1. Also here we see us at the upper end of the range now. The building blocks why we see full year return on equity at the lower than the Q1, however, I mean, remain unchanged compared to what we said at the beginning of the year, which means the deterioration of the interest rate margin and an increase in OpEx for the charging network I mentioned before. On the group guidance, page 22, obviously that follows the same premises as the segment guidance. The group revenue, EBIT, free cash flow are confirmed and are unchanged on group EBIT resulting out of the adjusted van guidance and the upper end car and MBM guidance. We also see the group EBIT guidance at the upper end of the guidance range. On the free cash flow side, on the industrial free cash flow, we also see it at the upper end of the guidance range. CO2 also remains unchanged, significantly below prior year level. To wrap it up, page 23, beautiful vehicle. Well, we told you in February that we are executing, I mean, our strategy with a focus on profitable growth, with better pricing and a healthy operating optimum, that we remain focused on resilience with cost discipline and that we continue to grow our Top-End Vehicles and our BEV offerings. With these Q1 re-results, we again delivered and provided good headroom with regard to the full year guidance on which hopefully you could hear a certain level of confidence on this call so far. With this, happy to take your questions. Yeah. Thank you very much, Harald. Ladies and gentlemen, you may ask your questions now. I will identify the questioner by name. However, please also introduce yourself with your name and the name of the organization that you are representing before asking your question. As always, a few practical points. Please ask your question in English, and as a matter of fairness, please limit the amount of questions to a maximum of two. Now before we start, the operator will explain the procedure. Ladies and gentlemen, if you want to ask a question, please press nine and the star key on your telephone keypad. To remove the question, please press nine and the star key again. Please note that dialing nine star a second time during the call will automatically withdraw your question. Please refrain from pressing the key combination multiple times during the call. Again, for a question, please press nine star on your telephone keypad. If you have difficulties during the conference, please press zero rhombus on your telephone keypad for operator assistance. Thank you for that. We start the Q&A now, and the first question goes to Stephen Reitman from Societe Generale. Yes, good morning, thank you. I have two questions. 1st of all, clearly, very good result from pricing here. Could you comment on what the reaction has been from customers, really? Because you've obviously raised prices quite significantly, with the, when you did the refresh on the A-Class and obviously the GLC which you referenced as well. Can we assume that we will see similar pricing moves on the E-Class as well, that you've just now shown? secondly, I would like to ask about the agency model that's now been introduced in the U.K. from the beginning of this year. Are there any preliminary thoughts on how that's been going through and what's happening to transaction prices? Thank you very much. Thanks a lot, Stephen. On first question on pricing positioning. I think during the full year, we emphasized that as part of not the model change, the midlife update on the entry segment, we also elevate the pricing level over there. These vehicles are being opened, I think, in the days and the weeks to come to market. We do expect positive feedback on that uplift. On the GLC, I can definitely say the level of demand is high. Hot car. We have some constraints in terms of the ramp-up, which we are trying to overcome. That's why you could see the numbers, I mean, in the Q1 still at the low end. There is significant uplift and upbeat in the substance of the vehicle of which justifies also, I mean, the elevated pricing levels. So far, I have no indication for pushback, I mean, on that side, therefore, and we definitely expect, I mean, the same thing on the E-Class. I mean, some of you could see the interior of the E-Class in Sunnyvale. You could see the features which are being offered, not just from a fantastic hardware of the vehicle, but also on the software side of things. Now, you know the jewelry also on the outside. I think therefore, I mean, it is also fair to position it correctly from a pricing point of view. We expect a very, very positive resonance on the E-Class when it will hit the market later in the year. The direct sales in the U.K., number one, I think went very smoothly. Number two, can confirm that basically each and every move of the markets we had been doing so far into the direct sales model had a supportive element in terms of the net pricing, in terms of the consolidated, I mean, discount management. I will not outline, I mean, any particular or individual impacts by markets, as obviously, I mean, they are different, and I think, I mean, we should not confuse ourselves, but I can witness, I mean, that is a positive impact. We had a burden on the inventory, as I commented, I mean, before. Definitely we see, I mean, potential moving forward to consolidate also on the inventory side between the dealer stock which did exist before and our own and seek efficiencies therefore, as well on the working capital side. Thank you. Thanks, Stephen, we continue with Jos é Asumendi from JPMorgan. Questions, please. How can you comment a little bit more around the, maybe the proportion of high-end vehicles in AMG? Where do you see this as a proportion of group sales, short-term or medium-term? Should we think about, you know, mid-20s as proportion in maybe by the end of the year or 2024? Second question, Vans Capital Markets Day, I think it's going to be very interesting. Maybe it's a question for you also for, you know, for Ola, but should we think about this division? Should it sit as it stands right now within the group? Is there a chance to strategically think that, you know, the Van division could be maybe separated from the Mercedes-Benz luxury product? As such, strategically, you know, we could potentially discuss at the CMD, you know, a different path for this group, for this division going forward. Maybe a spin-off or a different construct versus where it stands right now. Thank you. Thanks, Jose, for the questions. On the first one, if you remember, I mean, the presentation at the Economics of Desire, I mean, a year ago in May, we said that, I mean, by the end of, I think, I mean, 2021, the top end was around 16% in terms of the sales of the portfolio, and that we have the ambition to grow that. 2022, I think overall, we could command, I mean, high single digit growth number in the top end. Good news, I think, I mean, quarter one, 18% for the full year. We also wanna grow, I mean, the top end, definitely with a good head start, I mean, from coming from the Q1. I mean, what is behind, obviously, great products, on the AMG side, the SL, a GT to come at a later point, and needless to talk about, I mean, the G-Class and the Maybach, which are driving that high level of demand for these, for these products. Overall, we wanna have, I mean, a higher level growth rate at that end, but I mean, I don't think, I mean, we should speculate about 25% or what the numbers were, I mean, you just quoted before that. That doesn't make sense, I think, to push it, I mean, too hard. It's definitely, this is very important, to protect the pricing, in this field. Probably needless to say that, I mean, we talk about a share of 16% or so in terms of the top end out of the whole portfolio. The share in terms of revenues is above that. If we think about the share of the top end in the margin of the company as a whole, it is a totally different number. That's exactly why we are putting the emphasis on the growth in this in this segment. On your question on the Van side, I don't wanna steal the thunder from the May event. The one answer I can give you at this stage is Van sits very well in the portfolio, I mean, of Mercedes. It's a good place to be for the Vans, I mean, in Mercedes-Benz portfolio, and it is also good to have, I mean, the Vans inside the portfolio for the car side of things. Why? We will tell you on May 16th. Looking forward. Thank you. Thanks, José. We stay in London and go to George Galliers from Goldman. Yeah. Good morning, thank you for taking my call. It's George from GS. I had two questions. The first one was just starting with the ASP. Obviously, very strong again in Q1 and up 6%. When we think about the composition, there are clearly several factors, including price mix and FX. Can you directionally tell us what your expectations are for each of these components in coming quarters, particularly in light of your comments on sluggish demand in Europe and also giving consideration for the new models that you are introducing, including the E-Class? Secondly, just on the gross margin, I think 26.2% is a record, but maybe you can confirm that. Obviously, you've achieved this in a period where your bill of material and manufacturing costs are presumably fairly elevated due to inflation. How do you think about the inflationary pressure going forward? Are we within a couple of quarters of seeing a stabilization or even a decrease in those inflationary pressures or not at this point in time? Thank you. Thanks, George. Yeah, I think I'm happy in that we could further expand the ASP in the Q1, year-over-year, compared to quarter 1 in 2022, but also compared to Q4, 2022. In terms of, I mean, where do we see that going? I would not wish to quantify that. Definitely in terms of, I mean, the pricing overall and, you know, pricing being composed of the base pricing, the inflation adjustment and the discount management, we want to continue the pricing policy and the strategy, which was quite successful, I think so far. Probably the growth rates in terms of, I mean, price, enhancements, you cannot expect that to continue as we had been commanding that now over the last six quarters. I think that would be a bit, I mean, too ambitious. On the FX side, at least for 2023, on the main currencies, we're pretty well hedged, I would say. leaves and on the mix side, well, head start, I mean, from the Q1, I would say, if I look at the, I mean, the full year for 2023, let's not speculate now maybe about each and every quarter I mean to come, but I don't see, I mean, a structural reason why the mix should dilute the ASP moving forward. But maybe, in terms of the growth rates of ASP overall, again, compared to the last six quarters, we cannot expect the same level of growth moving forward, but definitely we want to hold it. In terms of the gross profit ratio and inflation in, inside, to your second question, whereas we see overall on the macro side, I mean, some decrease in inflation also due to the monetary policy measures, we still expect some impact from the supply chain in terms of a higher level inflation charges on a discretionary basis, I mean, in the remainder of the year. That is built into the guidance for the full year, and therefore see some headwind from that. Definitely, in terms of, the net pricing, as we could see in the Q1, we also want to keep a net-net pricing, positive for the, for the full year, i.e., for the quarters, to come. That is, the strategy that is built in the, in the numbers, and that's how we drive it. Great. Thank you very much. Thank you, George. We continue with Dorothee Cresswell from Exane. Yeah. Hi there, it's Dorothee from Exane. Thanks for taking my question. My first one is around the order intake, the demand dynamics in Europe. You've told us that the order intake is still quite sluggish in Europe. I'm just wondering is whether you've seen a worsening of that dynamic or even some order cancellations, since we saw those price cuts from Tesla. Have you had to make any adjustments in response to Tesla to your BEV pricing specifically, or maybe just things like the leasing rates or the vehicle option packages? My second question is around China. It sounds like you're feeling much more optimistic around the outlook there. Could you tell us if you think you've passed through the regional earnings trough in Q1? Could you also tell us how many vehicles you still have in inventory that are of the China 6a emission standard? If you could remind us when the EQE SUV goes on sale, that would be great. Thank you so much. Thanks, Dorothee. The line was a bit bad. I hope I got it right. Order intake momentum in Europe. When we commented in February, sluggish, still, I mean, running at a lower level, I mean, as we speak. The order book, I mean, supporting the sales in the months, I mean, ahead of us. We do expect, however, I mean, that some of that, I mean, will improve in terms of order intake momentum moving forward, also with consumer confidence, I mean, rebuilding. We see a competitive environment. This is absolutely fair. We see a very competitive environment when in particular at the in the lower segments to which we respond, but within the overall framework as we outlined, I mean, that we don't wanna push volume. We are rather ready to sacrifice on volume here to protect, I mean, the pricing. We can do that as we adjust it on the industrial side. We have the industrial flexibility, I mean, to do so. We re-lowered, I mean, the break-even point, as you know. At the same time, maybe to your second question, we see also momentum in other markets, not only in China, but in the US, being solid. Therefore, we don't feel, I mean, pressurized, if I may say, to fill up a pipeline and volume in Europe. On China, yeah, there is, I think, I mean, this changeover, where still some, I think, I mean, level of uncertainty left in terms of, I mean, the final date, so a bit of tactical maneuvering, which probably led to some turbulence, I mean, in the Q1. I commented that by the end of the Q1, we could see the momentum, the sales momentum, but also, I mean, showroom traffic and level of demand, I mean, definitely picking up. I would say same applies also for the months of April, so the beginning of the Q2. Same for me, I mean, here we definitely want to emphasize, I mean, on the Top-End and not enter, I mean, too much into the very competitive environment in the lower range, which is very much, I think, tense competition, I mean, on the BEV side. The situation at the Top-End is still dominated in the ICE world or by the ICE world, and that does applies, I think, not only to us, but the Top-End segment, still being overall, I mean, very much an ICE segment, in which we are definitely market leader and will hold that and will transition then into the BEV world as well. Thank you, Dorothee. We continue with Horst Schneider from Bank of America. Taking also my questions. Just few follow-ups relating to this inventory issue. You said you want to handle that a little bit better going forward. Does it mean that you are planning to reduce a little bit production as of Q2, and if yes, in which regions? Another follow-up on the cost guidance. Harald, you said that it's gonna remain a burden also for the rest of the year, I mean, the burden should decrease somewhat in H2, of course. Is it possible that we maybe see another burden in Q2 and then maybe a kind of tailwind as of the Q3? The last question that I have that relates more to the EV business again, we have now the Inflation Reduction Act in the US in place. Maybe can you provide a little bit color about the trends by region? Is the order situation in the US on the EV side better than expected? In contrast, maybe a little bit weaker in China. In Europe, I think it's normal business as we speak. Thank you. Yep. Thanks, Horst. I mean, managing sales and production and inventory, that's a day-by-day business, obviously. You can see from the Q1 that production, I mean, was running ahead of the sales. That is against an expectation in terms of commercial opportunities for the remainder of the year. If that comes through, obviously that provides an opportunity. If it doesn't, we would then, I mean, adjust, I mean, inventory and obviously production as need be. Overall, I mean, the guidance you could see is unchanged in terms of sales, being same level. Definitely on the other side, we don't wanna miss opportunities. I think that's what you should read behind. Overall, yes, I can say that, I mean, inventory level, I mean, is an issue where I'm not completely happy and satisfied, and my colleagues know that, and we work on that. I do see, I do think, I mean, there is potential. I know that I bore you a bit by repeating that since many quarters. Obviously the volatilities which we could see from COVID and then semi, and the market volatilities were not necessarily, I mean, the good boundaries to drive structural changes at the inventory at this juncture. Rest assured, that remains on the to-do list. On the cost side, cost overall, well, inflation headwinds, yeah, should overall, I mean, decrease, I mean, over the year. Raw mats, I mean, should improve from here on, towards, I mean, the end of 2023. From what we can see today in terms of spot markets and this translating then via our contracts into the P&L. However, as I said before, probably some discretionary adjustments and supply chain charges we have to expect or we do expect for the remainder of the year, which will not level out. That is at least the perspective we have as of today, and as I said before, is built into the guidance statements. On the BEV momentum, I confirm, I think your judgment in terms of the level of momentum. Good momentum on the BEV, I mean, in the U.S., IRA definitely, I mean, supports it. We're also making use of it or in the field of leasing, as you know. The demand here for the EQS sedan, but now in particular EQS, I mean, SUV, is at a good, at a healthy level. We're happy about that. Europe to come thereafter, and China, the momentum being slower for the reasons I commented before, namely, again, top-end vehicle segment clearly being dominated not only at our end globally by the combustion world, where the transition to the BEV is only going to happen. I think with some of the products, I mean, such as EQS SUV, and then also the EQE SUV to come, we have the right, the good tools into place also to be present in this market. Okay. That's great. Thank you. Thanks, Horst. We go over to Daniel Roeska from Bernstein. Good morning, everybody. Thanks for taking my questions. I'd like to talk a little about direct-to-consumer. Could you update us on the progress and the plans for this year, kind of how's the transition progressing? You know, what's the impact possibly we can expect by the end of the year? You know, in terms of numbers, where do you want to be? More strategically, I think recent price actions have captivated the financial market's attention a bit, but it also shows one of the limitations, right? It's difficult to do individual consumer price discrimination in a direct-to-consumer model. How do you think about this more broadly in the context of your own direct-to-consumer move, and how you think about your pricing toolbox going forward? Thanks, Daniel. Well, in terms of what is the roadmap in terms of the progress on direct sales, commented, I mean, on U.K. being accomplished at the beginning of the year. We're now preparing for the migration of the German market, which is obviously the largest, I mean, in Europe and very important market. That should happen in the second half of the year, all in all. Next to the ones we did already, the roadmap, I think off the top of my head, is that by 2025, around 80% of the European markets will be migrated, which I think is a pretty massive undertaking, and progressive. We will do it in all of the markets which are eligible for it, which means, as you know, not feasible from our perspective to do it, I mean, in the U.S. In terms of what does it mean in terms of customer relationship and pricing toolbox, as you call it. Well, obviously you have much more visibility, more transparency at both ends. I think that is favorable. As, I mean, today it's not only about, I mean, the competition inter-brand, but intra-brand. The customer trying to get, in brackets, I mean, the best deal. Once having made up, I mean, on the individual vehicle and then watching out where can you get that best deal from the dealer. The customer definitely therefore has, in the future, I think, a benefit in terms of being assured that, I mean, the deal, I mean, she or he gets, is the best fair deal, which will not be a function of the individual dealer. I think that is that is beneficial to the customer overall. We, you know that we have the intention and the strategy to be also a reliable partner when it comes, I think, to the product, but also then to the pricing, which means, I mean, not to do erratic, I mean, pricing adjustments up or down, but rather having stable pricing reflecting the intrinsic value, I mean, of the products. That's, I think we, I mean, how we will take it forward, in the markets where we switched over, I mean, so far, be it Sweden, India, Australia and others, we could see overall, that, I mean, it was really beneficial. If I may say, even I think from all stakeholder perspectives, from the customer side, as I just commented before, from our side in terms of the impact, I mean, on the pricing, on the net pricing, the discount management. Even from the dealer side, so I think, Ola could witness that. I mean, during some of the recent visits in some of these countries, that even the dealers who might have been a bit skeptical, I mean, in the first place at the end, were pretty happy. As obviously as you know, they keep the after-sales business, which is, I mean, the margin business, and still are obviously as an agent, very much involved into the new vehicles. Probably, I mean, also a bit of the risk reward to transfer being beneficial for all stakeholders. Great. Thanks. Thanks for that. Thank you, Daniel. We try to sneak in two more questioners. Next one is Tom Narayan from RBC, afterwards Henning Cosman from Barclays. Hi, thanks. Tom Narayan, RBC. I was wondering if we could just get a little more commentary on what you were saying on mix for the remainder of the year. GM earlier this week said they expected a downshift in mix. You know, they prioritize chips on higher margin cars. Now that with semis availability improving they were saying they were going to see a downshift. I know you guys are different, but just curious if you could just shed some light on why you're so confident that mix should be a resilient. I know you have some product launches. Secondly, this might be a question more for Ola, but, you know, Tesla made some comments at their call about how they were willing to sacrifice profitability in order to grow scale and sell autonomy. You know, judging from what we learned at Sunnyvale, I'm guessing you don't maybe agree with that, or at least not for Mercedes. Curious on your thoughts at a high level on this strategy? You know, in other words, selling software subscriptions at higher margins to enable you to, you know, effectively cut pricing on the car business. Thanks. Thanks, Tom. First I mean on the mix. We guided in February for the full year that we would increase, I mean, the Top-End Vehicle share slightly. By the guidance brackets and corridors, you know what that means. Now having achieved in the Q1 18% growth, I mean, Q1 2023 over Q1 2022, I think that is a good head start. I think what are the tools behind to enable that? Definitely I think we have EQS, I mean, SUV full year. We have continued high level demand on the AMG side, on G-Class, on Maybach. also have, I think, a favorable impact once we're coming out of the ramp up. In the top end, let's not forget about the SL where we should have this year, first full year of SL, and then at a later point to come also GT. So I think there are a lot of products and product substance behind to drive the mix in line with the full year guidance. And again, quarter one gives us a good head start into that. In terms of driving profits from software subscription, you know, during the Sunnyvale presentation, we outlined our approach to that. We definitely consider that to be an intrinsic part of the vehicle offering in the future, with the various packages, the connect package, the drive package, i.e., infotainment navigation, then the ADAS functionalities, level 2, level 2 plus, level 3. Last but not least, also I mean the charging. The numbers which we outlined, I think, in Sunnyvale, I mean, in allude to some incremental potential in terms of revenues and margins. However, I mean, we do consider that this will not replace or change the profile of the company in terms of being a subscription margin company and the margin on the new vehicle sale, therefore being less important. No, here we are an auto company. We stay an auto company. There's very solid margins on the new vehicle side, supported by the features on subscription, i.e., these packages connect and drive and charge. The size of the margin we're having today on the new vehicles, I think, you would need to be, I think, very creative to imagine that that would be ever replaced by a subscription margin. Therefore, we stay rather humble on that. Thank you. Thanks, Tom. Last one, Henning Cosman from Barclays. A quick one perhaps. Yeah. Thanks, Steffen, for squeezing me in. Good morning, everybody. The first question, just, how we appreciate the color on the guidance and achieving more the top end of the range. I'm wondering if it's just another way of saying, or commenting towards this, 1.5 percentage points buffer. That you have built into your full year guidance 1% for macro, 0.5% for residuals. Has anything changed how you think about either of these two components, as compared to the start of the year? Of course, as we go and we are not using the buffer, is another way, I guess, of saying that there's more upside risk to the guidance if you could just maybe pick up on these two components. Within that or related to that, I think came up a couple of times now, this discretionary supply or supply chain compensations. Just maybe another word on that is could that be meaningful? I think in the press, some suppliers are being quoted as saying they expect 80%-90% compensation. Other European OEMs have dismissed that level. If you could just give us an idea of we should be wary of that, could that be very meaningful at the end of the year? Second short question, just Mobility, that EUR 540 million EBIT that you've shown in Q1, do you think that's a good run rate now, or is that the ceiling on a quarterly basis? Could it only go down from here in the course of a year? A little bit color on that would be great. Thanks very much. Thanks. If I counted right, it was three questions, I mean, let's do it quickly. Yes, I think you can read from the guidance today, namely confirming the guidance. However, saying that we see it at the upper end, namely 14%, I mean, for cars. That we have more confidence, I mean, around, supported by the performance in the Q1. Some of the key building blocks, the ones we outlined, I think are still the same. The used car, we could see the used car coming down a bit in the Q1 already. That commends, I think, I mean, holds for the year, remainder of the year. We'll see some further growth on the BEV with the dilution impact. I mean, that's why, I mean, as you see here, I mean, the 14, and anything else I think is to come, I mean, for later. We'll watch the situation. I think, yeah, you can read the confidence, but also I think management determination, that we wanna hold the performance in the remainder of the year. That we stick to what we're saying, that we see Mercedes at a double-digit margin moving forward and not going over the cliff, and the best being over. That is the message we wanna give here. Supplier claims and payments, please understand I will not, I mean, comment, I mean, too much further, I mean, on this. We want to ensure a good, a trustful relationship with the supply chain. That's why we're looking case by case into it. There might be one or the other ad-adjustment if that would be the case. That would definitely be a one-timer without polluting baseline moving forward, namely for the years ahead. One has to recognize, I think, that there were some significant movements here and there on commodities. Again, that is a discretionary judgment at our end. We'll keep you posted on it. On Mobility, well, I think we need to anticipate a bit of further softening on the interest rate margin. That's why I think, I mean, the Q1 run rate might be a bit lower, I mean, for the remainder of the year. Obviously we need to watch out on the cost of credit risk, which, as you know, is a function of the macro environment, which is a bit difficult to predict. In the guidance, there is a bit of a step up, I mean, anticipated in the cost of the credit risk compared to what we had in the Q1, given the continued macro uncertainties and volatilities. That is why you see the 12%-14% guidance confirmation on Mobility. Same comment here, rather at the upper end, namely the 14. Thank you so much. With that, ladies and gentlemen, thanks a lot for your questions, for being with us today. Harald, thanks a lot for answering all those questions. IR is at your disposal afterwards, as always. Last thing to mention from my side, you've heard it, we'll have a virtual strategy update on the van business May 16. Please pencil it in your calendar. Now, to all of you, have a great morning, great afternoon, great evening. Look forward to talking to you soon, and thanks and goodbye.