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. This short introduction will be directly followed by a Q&A session. [Operator Instructions] I would like to remind you that this telephone conference is governed by the Safe Harbor wording that you'll 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. I'm very happy to have with me today Harald Wilhelm, our CFO. To give you maximum time for your questions, Harald will begin with an introduction directly followed by a Q&A session. The respective presentation can be found on the Mercedes-Benz IR website. Now I'd like to hand over to Harald.

Yeah. Thank you Steffen and good morning everybody. Welcome to the Q1 call. Well, if I look at I mean this quarter I would say this is a demanding quarter, looking at market evolution, supply chain, product transitioning. Therefore, I think it's important I mean that we all understand what are the temporary impacts in the quarter and what are the implications for the full year in particular met for the guidance. With this being said now, let's have a look at the numbers at the group level. Page 2. Obviously lower car sales may lead to lower revenue, EBIT and EPS. So the EPS reduction however is smaller lower than the EBIT reduction in net income is less impacted and we have the accretion effect from the share buyback on EPS. We delivered a solid cash flow of €32.2 billion. So you see cash matters and is in the focus and that supported a very comfortable cash position -- net cash position with more than €33 billion by the end of the quarter. Before we turn to the numbers of the first quarter in more detail, I would like to highlight a few models products, which came into the market, I mean in Q1. I think this is also important to understand the Q1 sales and mix evolution as these products are going to hit the market in the remainder of the year and obviously the time ahead of that. So what are they? First and foremost, I mean the all new G cars on the ice. Next to it, we have the electric G cars World Premier in U.S. and China last week simultaneously. You might have seen that this comes along I mean with unique driving functions like the G-Turn, the G-Steering and the intelligent off-road crawl functions. Well, what else? We saw an extensive upgrade of the EQS with more than 800 kilometers range, new executive rear seats and the standing star on front of the hood. And lots of stuff on the AMG side with different E-Class variance of AMG, the 53. Further GT Coupé variance in the first quarter. So, again, these products will hit the market in the remainder of the year, which will help, I mean, sales but in particular, mix and much more to come in the quarters and in the time ahead of us. Let's look at the sales evolution on Page 4 a bit more in detail. Total sales at cars were at 463,000 units, impacted by supply constraints, product transitioning, and market dynamics. So, let's zoom a bit into the regional evolution. We could see basically a stable evolution in Europe and in the U.S. in the first quarter. We zoom and deep dive a bit further into China. What happened here. The E-Class availability was constrained in the first quarter. We also saw effects from the model year changeovers and the product launches. These product introductions as just mentioned before will support H2. And overall we have seen a market weakness in the first quarter. Also our top-end vehicle products could not completely escape from that market weakness. If we look at the sales evolution from the segment structure, globally, we can say that the first quarter was still constrained in terms of supply, but this is on the way to ease. The easing supply constraints had an immediate impact on the GLC in particular, which means that the core segment increased by 8%. On the top end vehicle side, this is comparatively lower than last year, which was a pretty decent and a high level. So, the quarter one on the top end is a mixed bag of product transitioning with 67,000 units. We saw the impact from the model changeovers at the G Class, the changeovers I mean in high-volume vehicles like the AMG E-Class and the GLCs, as well as supply chain bottlenecks. In the top end, as I just mentioned before, we also saw sales mean a bit lower, that also impacted mean on the S-Class. However, S-Class remains the undisputed leader in all regions. Overall, we see that sales should improve over the quarters. The top end mix should also improve in H2 as well, while we continue to take a cautious view on the market overall. If you look on the best side of things, in the first quarter, the xEV share is at the prior year level with EQC and Smart reaching the end of their life cycles in H1. We also see some slowdown in the EV adoption rate across the industry and therefore, we adopt our offerings to it. In this period of uncertainty, in terms of the EV transitioning, our top-notch plug-ins can play an important role in this transitioning. Cars financials, page 5, revenue is down in line with the volume. ASP at €75,000, EBIT 2.3 adjusted, cash flow CFBIT at 2.3. Let's go through the EBIT walk in more detail on the page 6. So the return on sales adjusted is at 9% in the first quarter. How did we get there? Number one, the bucket volume structure net pricing is down driven by the lower volume. The mix impact, as I outlined before, a net pricing, which is in total positive and additional measures, investments into the product life cycle to keep the product at the cutting edge. Furthermore, we see in the bridge effects negative due to the Turkish lira, whereas on the industrial performance side, we see a positive evolution. The main effects here are tailwinds from lower raw material prices and improved operational efficiencies, which suggests that we're doing our homework in terms of the efficiencies. The R&D spend is slightly below prior year level. Main effects in the other bucket of minus €200 million are the BBAC at equity result and the absence of some prior year one-time effects. On the adjustment side, we see €133 million upside related to legal proceedings in the diesel. You might have heard the positive news for our company that the DOJ has closed the criminal inquiry into Mercedes-Benz related to diesel emissions in the United States. Here, I would like to point out that the €133 million results from various developments and assessments and may not necessarily relate only to one specific proceeding or case. With this altogether, the EBITDA is booked at 2.5%, with a loss at 9.6%. Obviously, this is not, I mean, the level where we want to be. And we'll talk later in terms of where we wanted to be for quarter two, and subsequent quarters. On the cash flow side cars page 7, the CFBIT is at 2.3%, with a cash conversion at 1, slight tailwind from working capital at 0.3%, more or less all in balance. Net investments, our PPE and intangibles are lower than the depreciation, which means that the investments are prioritized and stringently managed. The other line includes adjustments of the BBAC and equity result in the absence of a divvy in the first quarter. So if you turn to the VAN side, a strong start into the year with regards to sales driven by the commercial vans, especially strong performance, I mean in the US and in China. Our strong product portfolio has been further supported with the launch of the new eSprinter and the midsized vans. That product substance and portfolio, the healthy mix, robust net pricing and price premium, combined with efficiency measures, all in all, resulted in another quarter with very good financial performance on the van side. At the same time, obviously, we continue to prepare for VAN.EA with a groundbreaking inventory being the latest example. Sales numbers on the VAN side, total sales 7% up in all regions. As I just said before, the all new EV portfolio has been launched in the quarter one, therefore not leaving traces in the quarter one yet, so being available in the quarters to come. And with this we obviously, expect also the EV share to increase with the new eSprinter and midsized EQV and eVito, once they are fully available. Key numbers on the Page 10 for Vans, all figures up. Revenue is up in line with the volume. EBIT adjusted up by 11% to €800 million and also the cash conversion up by more than 50%. EBIT bridge on the Page 11. So return on sales adjusted at 16.3%. Where is it coming from? A significant tailwind from the volume structure pricing bucket with increased volume with positive structure, healthy pricing supported by the product substance. On the industrial performance side, we have a bit of a headwind from higher inflation and supply chain related to cost. With all of this I mean the EBIT adjusted is at €800 million. On the adjustments same comment as for cars related to legal proceedings and the diesel. On the cash flow side of Vans, we see EBIT reported 0.6% adjusted, 0.7% cash conversion, 0.9% moderate working capital uplift. The net investments exceed the depreciation. No surprise is that we invest in our plans to make them ready for the recently announced models as well as the VAN.EA generation to come. On the other buckets the same comment as on Cars. On Mobility, what can we see here in terms of the highlights on the first quarter. The new business remained at the same level. We see in China penetration rates are lower due to significant competition in the local banking sector. The EVs – the xEVs see an increasing acquisition rates. Mobility continues to support the ramp-up of the EVs with every second vehicle being supported by NBM financing options. The profitability of the new acquisitions continues to improve. The increase in the cost of credit risk is mainly driven by the development in the US. And at the same time we continue to develop them in our charging business with more charging hubs already being up and running in the first quarter. On Page 14, the key numbers, new business as I just mentioned before, at the same level. Portfolio also roughly same level as at year-end 2023. And for the EBIT, we look on the next page. On the walk, Page 15. So as we guided for in the quarter one, which said I mean would be in single-digit territory. That's what you can see here on the chart. How did we get there? Higher cost of credit risk mainly driven by the US, due to increased credit losses in the Consumer segment were one of the key drivers. Besides the continued improved acquisition margin, we see a positive impact from the development of the portfolio versus the first quarter. However, the overall portfolio margin is still under pressure, as it takes time for the improved acquisition margin to be reflected in the portfolio. At the same time, we also see an impact from a bit lower remarketing results at Alon. And we also included in these numbers are the investments in terms of the charging business for the first quarter. With all of that, I mean this is at 8.5% return on equity. Group numbers, Page 16. So Cars, Vans, Mobility, I already explained, leaves the recon, the consolation item. Here, basically, we find the equity result of Daimler Trucks with a bit more than €200 million included. The EBIT adjusted at 3.6% after the adjustments I elaborated before, we see a group EBIT reported at 3.9%. How did we turn that into cash? Page 17. Income taxes and obviously, division evolution when I explained already before. Income taxes at minus 0.7%, a bit lower. That's the usual seasonality, and we have slightly negative impact due to interest received seasonal pension effect and a bit of others in the recon items. All-in-all, I mean, a pretty strong cash flow at €2.2 billion in the first quarter and cash adjustments of €90 million for legal proceedings related to diesel. Looking at the NIL evolution, Page 18. So end of the quarter, we see a comfortable €33.6 billion. That has been supported by the cash flow obviously of €2.2 billion. At the same time, we bought back shares for around €300 million. Let me update you shortly on the capital allocation, Page 19. On the chart, you see on the left-hand side what we announced in February in terms of our new capital allocation framework. How do we implement it now in May 2024? Right after the AGM, we will start already announced additional €3 billion share buyback program. From then onwards, and I think this is a piece of news here, both buyback programs, the remaining €4 billion and the new €3 billion will run in parallel. They will be executed by an independent bank, which makes its trading decisions, obviously, without influenced by ourselves. As a milestone, we expect buybacks to reach a total of around €4 billion by quarter three this year. And to finish with a total share of buybacks up to €7 billion all-in-all, in first quarter 2025 before the AGM. As of today, approximately 13 months after we started our initial share buyback, we have already acquired approximately €2.3 billion. This means in around, I mean, 11 remaining months, we plan to buy back additional shares in the amount of up to €4.7 billion. Both share buybacks will be executed through the stock exchange with the purpose of redeeming the shares at the end of the program before AGM 2025. As we said, we intend to ask for a renewal of the authorization for SPBs in our AGM in 2025 to further continue share buybacks in line with the share buyback policy. With any share buyback we'll keep, however, flexibility on the execution in case of unexpected market developments. So let me sum it up on this one here, I would say cash flow generation remains one of the key focus topics of the company. As you can see with the cash flow in the first quarter and capital allocation shareholder return, obviously, equally important to us. With this let's turn to the outlook on page 21. For the assumptions please read the chart carefully. What is written there in terms of economic, macroeconomic and global uncertainties? Let's jump to the car side in terms of the situation with regard to the supply. So we see that the current supply bottlenecks are in the way to ease on GLC and on E-Class and are expected to improve further. The Q1 is considered to mean to be the trough. In terms of the sales quarter two should be better already. What does it mean for the sales guidance? Total car unit sales, we expect at prior year level with all new cars and GLC expected to support the core segment development this year. And the top end vehicle segment improving versus the first quarter level due to the product transitioning, which I emphasized I mean before. Looking at the regions. In Europe overall we see a sentiment, which is unchanged. More detailed picture. I mean in Europe shows, however, a bit of a heterogeneous picture in the different markets. With regard to China we do see the availability of products, I mean to improve in particular on E-Class. Here we see a very good product acceptance for this one and others like I mean the GLC. So from the product portfolio side and an availability perspective, we see growth potential. However, overall in terms of market assessment I mean for China would remain a cautious perspective. On the US, we still see a solid momentum for sales and demand with a positive year-on-year development. Positive effects come in particular on the SUV side. And here I would mention the GLC. On the xEV share, we confirmed the guidance at 19% to 21%. Be aware, our consolidated smart sales are running out since the new smart is not part of the reported sales figures anymore. On the adjusted return on sales cost guidance, this is unchanged at 10% to 12%. So how do we want to get there with the 9% in the first quarter? Well, we do expect the volume to increase over the quarters. We clearly target a mix improvement in the second half of the year. We want to hold pricing and defend it at the current levels. We clearly see raw materials improving further, generating further tailwinds. At the same time, we see supply chain-related costs generating further headwinds. However, all-in-all material costs remain a net positive, i.e. a further tailwind. So with this, all-in-all we confirm a 10% to 12% return on sales adjusted in a continued demanding environment. For PPE, R&D, cash conversion rate adjusted for cars all unchanged. So, with this I would move to the Van side. So, here the guidance is unchanged. We had a strong quarter one as we walked through before. With the start into the year, we have a comfortable cushion I mean for the remainder of the year, considering current macro developments and uncertainties. With regard to H2, we stay rather prudent and confirm full year guidance at a 12% to 14% return on sales adjusted. We also expect a healthy quarter two in terms of return on sales. Market demand is expected to be softening in private and commercial land side. Full year guidance on all the other KPIs are unchanged. On Mobility, the adjusted return on equity is also unchanged in the range of 10% to 12% for the full year. We see quarter one as the trough with improvements in the second half of the year despite a further increase in the ramp-up cost of our charging infrastructure. So, how do we get there from the 8.5% in the first quarter? Positive effects from the increased acquisition margins translating into the portfolio as I emphasized before and some improvements in the cost of credit risk compared to quarter one. On the group guidances that follows Page 22 follows the same premises as a segment guidance. All group guidances KPIs are confirmed. With this I would wrap it up here in terms of the summary the takeaway from the first quarter. So, we clearly expect the volumes I mean to come up. We do see quarter one as the trough. We have a great product lineup. We talked about the top end vehicle products, I mean to come into the market in quarter two and beyond. In particular, I mean in H2, we see a strong potential and momentum here from the products and further on in 2025 obviously, I emphasize the G-Class, the GT, the E-Class AMG versions, the GLC AMG versions, and a lot of products to come in 2025 and beyond. At the same time, we stay flexible on the transitioning from ICE to EVs and do our homework in terms of efficiency, while staying focused on the cash generation and on capital allocation. With this, I would now be happy to take your questions.

Thank you, Harald. Ladies and gentlemen, you may ask your questions now. [Operator Instructions] Now, before we start, the operator will explain the procedure.

[Operator Instructions]

We start the Q&A and the first question goes to Tim Rokossa from Deutsche Bank.

Yeah. Good morning, gentlemen. Thank you. It's Tim from Deutsche Bank. Harald, do you have a number of things going for you. There's a really strong buyback now in parallel. The free cash flow remains strong and it is amazing. But obviously, the 9% CAS margin is really tough to swallow this morning. And we knew that Q1 would be weaker. This is still weaker than most had anticipated, and how important this KPI is. So it is quite crucial for you guys to rebuild the story with this very strong decline that we have now seen for multiple quarters in a row. You say that, Q1 was the trough. Will Q2 already see a material turning point for the cash margin? Will it be above 10%? Or is this sort of like a slow transition into the second half and we have to wait for that time to really see this? Secondly, this is a pretty busy auto morning. You see a couple of consistent themes from the reporting. Pricing seems to hold up very well in the mass market as well as in the premium market. Mix is not great, and volume seems to be quite weak for everyone. On the positive side, the tells of the industry remains very price disciplined. We wanted that. It's good. But at the same time, it is quite curious why everyone really struggles on the volume side and talks about product availability being an issue and a lot better volumes to come in to H2. Can that really be the case? And what are you preparing in terms of pricing for if everyone really needs to make up a lot of volume with all the newly available models launched in H2? Thank you.

Yeah. Thank you very much, Tim. So on the first question, how do we exit from the 9% ASAP. I can say very clearly, I mean, I'm not happy with the 9% in the first quarter, very, very clear. And that mean there's a lot of emphasis on getting out of that territory as quickly as we can. What do we expect to happen in the second quarter without giving a detailed guidance now for the quarter. But clearly, I mean, we target, I mean, volume higher in the second quarter than in Q1. That's why I did say before that quarter one is a trough. I do see that on the material cost, in particular, on raw mat there should be further tailwind in the second quarter. I think that gives opportunity to improve in the second quarter already and clearly, I mean, I would have the ambition that we see a double-digit again in the second quarter. Whereas, I mean, the mix improvements rather kicks in, in the second half of the year in terms of top end vehicle availability and further ramp up given the supply constraints. So that should be trajectory, I mean, to get to the full year guidance of 10% to 12%. In terms of your second question, so much stuff to come. I have a bit of a different perspective, if I may say. You could see the high level of demand materializing on GLC. GLC availability with 8% up in the first quarter on the core, driven by the GLC. What is my message here? These products are in high demand. So it's a product substance, which is driven – which drives the market dynamics. And we see exactly I mean the same market feedback demand on the E-Class. Also in China, we were constrained also in other overseas markets in particular in South Korea. So once the products are now available in these markets, we really see in the demand for customers for it with healthy pricing level. We stay competitive but the pricing levels on the products I mean are healthy. I commented before are stable. So as we discussed I think at the earlier occasions I mean the heat is rather on the EV pricing. The ICE pricing is in a solid territory.

Sounds good. Thank you.

Thank you, Tim and we continue with George Galliers from Goldman Sachs.

Yes. Good morning and thank you for taking my questions. The first question I had which was a little bit related to Tim's question was just with respect to the drop in wholesale that we saw in Q1. Obviously, if we compare that to the run rate of the prior three quarters, it looks like you had around 60,000 – 50,000 to 60,000 unit drop. Could you just help sort of break down what the buckets are there in terms of how much of that is E-Class changeover? How much of that is maybe due to demand dynamics? And how much of it is a result of the supply chain constraints that you flagged? And then the second question I had was a more general question. One of your peers at their full year results called for a comprehensive review of EU fleet CO2 legislation. Do you share the view that this should be revisited? And would if change in legislation actually prove economically a net benefit for you given the ongoing investments in battery electric vehicles at this point in time? Thank you.

Yes. Thank you, George. Well, I would say in terms of the volume drop in the first quarter compared to previous year and compared to where we want to be on a full year basis. Product availability is still I mean the number one in terms of volume size and that refers I mean a lot to e-cars availability. Number two, I would say is now the product transitioning in various segments but in particular on the top hand side. And number three, I think all in all is some softness on the market in the top end in China and maybe also a bit in overseas. So that's the ranking. How I would see it? You can read from the confirmation of the full year sales guidance. I mean that obviously, we do expect to overcome that quarter one situation as I just commented before following me Tim's question already mean with quarter two sales being up and then for the progression in H2. Your second question in terms of revisiting CO2 legislation. I think if I'm not mistaken, there is a juncture in 2025 at the EU level to see whether or where the EV penetration stands with regard to the 2035 ICE ban. I think, I mean that probably makes perfect sense in order to see whether the customer demand is there to support the transitioning as initially envisaged. Therefore, taking a pragmatic view, I think we support that perspective. However, let me say at the same time as we start to be a bit too nervous. And I think, I mean, too much on the back foot in terms of EV transitioning in these days. It remains our objective to go electric. It remains our objective to go CO2 neutral. And therefore, I think, keeping ambitious targets also in terms of EV transitioning is what we globally support in line with our strategy.

Thanks, George, and we continue with Stephen Reitman from Bernstein Societe Generale.

Yes. Thank you very much. Could you give us some more comments, please, on what you -- how you see the marketing China developing? You mentioned that the class has been very well received. Could you talk also about the general environment you're seeing, both on ICE and for your BEVs in terms of incentive activity and your pricing level there, please?

Yes. Thanks, Stephen. So we zoom a bit more in depth on the China market. Number one, availability on E-Class, as I emphasized. So once -- I mean, that is coming up. We can see a demand, I mean, for the product also at healthy pricing level. We clearly see a very strong field of competitors and product availabilities in the EV space. I think many of you were in Beijing, I mean, last week on the show. So, definitely a very strong supply of our products, I mean in the EV space. And we positioned ourselves here, I mean, on the EV side. But as you can see also from the numbers, we're not artificially pressing or trying to buy a share with the products on the EV space, I mean, in China. So we are rather leveraging, I mean, the products where we feel intrinsic customer demand as just outlined before. And then number three, I would mention that globally, given the macro evolution in China and still, I think some lack of consumer comfort and given the consumer sentiment, we see the dynamics of the market still being at a slower pace, including the top end segment, which also mean leaves on traces in the first quarter and probably also for the full year. However, this is not related, I think, to our products is we see -- I mean, that our products in the top end space, in particular, I mean the S-Class remain absolutely market leader. Not only in China, but in all of the markets, but that is an evolution, which is, I mean, also top end globally. So that's what I would say roughly in terms of the dynamics on the China market.

Thank you, Stephen. And the next gentleman line is José Asumendi from JPMorgan. José Asumendi: Thank you very much. José Asumendi from JPMorgan. Good morning, Harald, Just a couple of questions please. The first one, can you please quantify how many units did you sell did you miss in terms of deliveries in Q1 for Mercedes-Benz cars due to the supply bottlenecks? Can you maybe just give us a few more examples of why you think these bottlenecks are easing into the second quarter? Is this something that you've already seen in Q2? It looks like the topic has been the lag for a couple of quarters. So any anecdotes you have on those bottlenecks easing that will be great. And then second, can you comment a bit on your share of electric cars in China. So zooming into China, how do you think about the powertrain mix in the region. We're seeing one of the competitors has a higher share of that, quite high share of that in China. Do you plan to increase the share of electric vehicles in your Chinese sales in the coming quarters? Or do you plan to keep it stable in 2024 versus 2023?

Yeah. On your first question José as I just commented before, the sales or the volume impact in the first quarter, I mean the most important in there was a product I mean availability given the supply constraints and would again mention E-Class in terms of the given the unit sales being the most impacted area still in the first quarter. On your side, you could see I mean with the GLC availability that this is coming up, which gives us I think confidence that on the availability on E-Class is there that we also see this one improving in the quarter, the minute to come. In terms of the EV share as just commented, we follow customer demand. We're not pushing excessively in the products into the market. We want to protect the product substance. We also want to protect margin. And that's why I would say we rather see an EV share globally this year, which is rather stable at 19% to 21%. That also applies I would say for the market or the EVs in China. But this is a very important point. Let me take the opportunity of your question to go beyond the quarter. We are in a situation right now where we do not have EV offerings in all important segments of the market. Here I look very much into 2025 and then further into 2026 when MMA comes to market, which obviously will have a much larger, much broader offering in terms of EV vehicles in the entry segment. And then I'm looking very much to electric C-Class and GLC 2026 to come to markets, which obviously is the area where we see most of the EV growth in these days where given the life cycle evolution of EQC, which we commented in earlier in the call. We don't have a product offering at this juncture. So that explains, I would say, why you see different dynamics also in terms of EV evolution between market participants. At our end this is a function of product availability and the products, which like to come MMA and C-Class and GLC Electric, we are very confident that they are going to meet customer expectations towards mean Mercedes products in the years 2025 and 2026. And therefore, I mean we're going to build a curve on the EV share not only in China, but also in the rest of the world with these products to come. I think this is very important that we have a good understanding in terms of the product sequences. And here there is really good stuff and many of you have seen the products and I think share our belief that they are going to make a difference in the market. José Asumendi: Thank you so much. Very clear.

Thanks José. We continue with Philippe Houchois from Jefferies.

Yes, good morning. Thank you for letting me ask a question. My question is on R&D. There was a nice tailwind to the Q1 performance. And I'm just trying to understand how much of that is seasonal weakness that will kind of normalize back? And also in the broader context as we look at potentially the industry having to manage a longer transition to EVs than initially thought. To what extent there is a need to reinvest in the longer life span for ICE? And also as you know many of us were in China last week and we see that interest in plug-in hybrids in the U.S. and in China and the return or the expansion of the range extenders. And any thoughts that the need within the Mercedes portfolio to consider ranging extenders as again a longer transition into a world of Benz? Thank you.

Thanks Philippe. Absolutely you're right. I mean on the plug-ins, I think they can play a very important role in many markets in terms of the transitioning. I would dare to say that probably we have -- I mean the richest the broadest, the most versatile, the most useful portfolio of plug-ins, I mean, in the market with autonomy with range of 100, 130 kilometers autonomy. So, you can do basically most of the missions a week on a fully electric basis. But then once you need the range, you have the combustion engine to take you further. We can see also in the quarter one that the plug-in share, I mean, is at a bit higher level than in previous quarters. The products are there. So, it's not that we need to invest R&D into it. So, they are ready to hit the street. So, I think this is a jewel in the toolbox which we can leverage. And we're happy if the market demand supports that not only China, but in many other markets U.S. as well, in the future as we go through this transitioning. In terms of the investments for the EVs, let me be very clear, we do not slow down the investments on the EV side. Despite some doubts, in terms of the pace of transitioning, we don't take a tactical approach here. No, we keep the strategic focus in terms of investing into the EV product. I commented before on MMA in 2025 on GLC and C-Class in 2026, but obviously more stuff to come. I mean thereafter so we stay full swaddle on in terms of the investment on the EV side. And also on the ICE side, we do a lot to keep the products, I mean at the cutting edge. In the quarter one bridge, I also said that we invest into measures to further improve cutting-edge technology and content in the vehicles, not only for new vehicles, but over the life cycle. So the ICE portfolio, which is in the market has a great future and, therefore, can support with healthy margins. Overall, well, what you can see in the quarter one, I would not take it times four in terms of full year R&D and investments, a bit of phasing, as always on the R&D side. You can see a bit as well. I mean, that we are prioritizing the investments not each and every idea being brought forward is being passed. So, despite the focus on EV investments, on technology investments, software, MBOS, drivetrain, however, we prioritize, and that's what you also see in the numbers. So with this, I mean, on the margin side but also on the cash flow side, if you look into the first quarter. So these are, I think, I mean, the elements at work.

Great. Thank you.

Thanks, Philippe. And the next gentleman in line is Henning Cosman from Barclays.

Yeah. Thank you. Good morning. Thanks for taking the question. I had a couple of questions on price increase. Firstly, if you could remind us if in the net pricing, you include the residuals or the remarketing gains and the year-over-year change of that. And if you could remind us how this is trending and how you see this developing in the course of the year. If you could perhaps give us the million impact in the first quarter and how you see it trending in the course of the year? And then the second part of the pricing question is if you could again help us reconcile the pricing and how it's holding up for you and you said you'd see it holding up for yourself, and I'm always trying to reconcile that with the headline discounts that we're seeing in the market, not only in China but also in the US, where we get this third-party data. It doesn't seem to reconcile with the strong pricing that you're continuing to enjoy. So if you could please help us understand, again, is this a function of list prices still improving for you and net-net, despite higher discount that's still stable? Or is there a part that the dealers are currently still digesting and how you think about the sustainability of that element? Or might you have to start adjusting a bit more of the discount yourself in the course of the year and into next year? Thank you very much.

Thanks, Henning. On the first question, with regard to the remarketing used car business, as we guided for in the full year guidance in February, we do see some softening on the used cars, which is included in the volume structure pricing bucket on the EBIT walk. However, not in the commentary on the pricing, where we said pricing is stable. So you can rather I mean, allocate that to structure or so. In terms of what is the evolution in the expected evolution in 2024? So, we ended 2023 with a pretty decent situation, I would say, in terms of the used car of the marketing results still being in the four-digit territory -- in the low four-digit territory and higher than what we initially thought. However, we do expect I mean some softening part of which we could see in the first quarter, some further softening. We do anticipate at this juncture. I mean for the remainder of the year, which should still leave us – I mean with a healthy three-digit mid- to high three-digit million remarketing result in the full year 2024. I hope that explains a bit. I mean the building blocks I mean on that element. In terms of your second question, the pricing dynamics, why are we seeing that? I mean pricing has been kept stable in the first quarter. Clearly, this is – I mean the sum of new pricing for vehicles to come to market. So the MSP evolution including year-on-year escalation update and the discount evolution on the other side. So we continued our Pillar 2 strategy value over volume in terms of product positioning on the MSP side. We used some flexibility. I mean here and there. I mean on commercial measures to stay tactically competitive and the sum of the two is a net positive. Let me say at the same time however as you guys obviously spot each and every movement and each and every discount the dealer is giving on an individual vehicle. We – at the end of 2023 but also into quarter one, we had some stock measures and stock clearances so to say cleaning which has been done by dealers and that I mean yielded some higher-level discounts. I would say in particular I mean on the EV side and we look at that very carefully. And then we take respective and conclusions in terms of how much supply is healthy. How much supply can be digested or is demanded by customers in view of the stock at dealer, stock at our end. And then if need be we do adjust. So therefore, I mean I do expect that some of these measures you did observe should not be with us for the remainder of the year. On the ICE side, overall I mean the pricing is at a more comfortable level at a healthier level than on the EV side.

Thank you.

Thanks, Henning. And we conclude the Q&A with Horst Schneider from Bank of America.

Yes. Thank you. Can you hear me?

Loud and clear.

Okay. Excellent. Thank you. I just have got some smaller items left in terms of questions. What I'm observing basically for wireless that your interest income gets pretty strong. So the run rate that we are seeing basically since Q4, can we extrapolate that now for the next few quarters. If you of a kind of €150 million positive net interest income. The number two that I have is related to the bridge items, foreign exchange and also industrial performance. However, you said industrial performance going to remain strong. So we can expect for the next few quarters that you see an even better number that you did in Q1. Is that right? And in terms of foreign exchange burden, is that something that will now carry through the year? Or that is something, which will peter out maybe in the next few quarters?

Thanks, Horst. So the credit in terms of the improved interest rate results, I mean, I'm happy to pass it to Steffen managing that with his Treasury head, but maybe not at €150 million run rate a quarter. It would take it slightly down, I would say. Maybe still in the three-digit territory, but just at the beginning of it. He's nodding with his head so suggests, I mean, that is a close to true statement. On the other items, FX frankly, is a bit difficult, I would say, to predict. I'm not claiming to have a crystal ball in front of me in terms of the key currencies evolution. What we do observe, however, now since a while is the evolution of the Turkish lira. So maybe this is still constituting some headwind, which we try to offset on pricing side goes without saying. Thanks to remind us on the industrial performance is, I mean, this is really the name of the game in terms of the effort of the teams in all areas in supply chain management. Try to materialize cash in the raw material evolution, which should be further beneficial. I mean, as we go through the year, it is the effort of the teams to mitigate, minimize claims coming through the supply chain in terms of inflation claims or capacity-related claims. Here, I still see some further headwinds, I mean, on these kind of one-off claims, but trying also to leverage a commercial and technical efficiency in the supply chain. So an extra effort, I mean, has been set up here by the purchasing teams to extract more value, not necessarily saying, I mean, cash out of the supply chain, but more value out of the supply chain. So it's really, I mean, the gigantic effort, which, all-in-all, on the material cost of the vehicles of the products, I mean, should provide us some further tailwind as we go through the year. But not limited to the supply chain, obviously, also in our operational field and environment, we took a quite significant operational objectives in terms of further HPV evolution, efficiency gains, fixed cost reduction in operations to drive efficiencies through the factories and the whole company. So altogether, these efforts in terms of efficiencies, be it supply chain, be it operations, I mean, internally should provide us with a tailwind for the quarters to come.

Okay. Thank you very much.

Thank you, Horst. So, ladies and gentlemen, thanks a lot for your questions, for being with us today. We know it's a busy day for you as well. Also, thank you very much to Harald for answering the questions. As always, IR remains at your disposal to discuss further topics. Have a great morning, great afternoon and great evening. Thank you very much, and goodbye.