The Mercedes Formula 1 team suffered its first winless season since 2011 last term but off-track, there are reasons for the Brackley-based outfit to be positive as parent company Mercedes-Benz Grand Prix Ltd reported a 2023 turnover of £546.5 million.
The report is drawn up for the financial year ending 31 December 2023 and a number of factors were at play to see Mercedes become the first F1 team to see a £500 million-plus turnover and a £71.9 million jump compared to the team’s turnover in 2022.
A Group Strategic Report submitted to the UK’s Companies House stated the financial growth was down to “higher commercial revenues from sponsorship,” having brought on seven new commercial partners throughout 2023.
The impressive turnover does correlate to Mercedes’ performance in 2023 from a sporting perspective.
Despite finishing one place higher in the Constructors’ standings in 2023 (second as opposed to third in 2022), fewer podium finishes had an effect on television coverage.
“The team’s share of television coverage showed a small decline to 14.7% for 2023, reflecting the lower number of podium finishes the team enjoyed versus 2022,” read Mercedes report.
“The cumulative Advertising Value Equivalent (AVE) remained strong for commercial partners and shareholders, at $5.3 billion. The team continued to grow strongly on social media, with a cumulative followership of 36 million (+15%) and a total of 465 million engagements (+9%).”
The increase in turnover reflects the outfit’s impressive valuation.
McLaren CEO Zak Brown is of the impression all 10 F1 teams are worth in excess of £1 billion and in July, Forbes estimated Mercedes’ value to be at $3.8 billion (approx £3.05 billion).
Mercedes’ profits for 2023 were £83.8 million, down from £89.7m in 2022 with the report attributing the drop to higher tax payments and overall costs.
Car development rose from £41 million in 2022 to £52m last year with the revised 2024 car, which required a new chassis design, a part of the increased development costs along with the early development of 2023 gearbox and suspension parts supplied to Williams for this season’s campaign.
There was also growth on a staff level, with the overall Mercedes F1 group seeing Mercedes staff rise from 1114 people in 2022 to 1289 last year which naturally saw salary growth to the tune of £29.6 million.
This saw staff salaries amount to £111.7m in 2023 compared to £82.1 million in 2022.
Mercedes also noted that cost-cap regulations were having a positive effect on regulating spending.
The team’s report said “The Financial Regulations continued to be effective in the control of the cost base in 2023.
“Following the conclusion of the FIA audit process, the team was confirmed to be in full compliance with the 2022 Financial Regulations.”
Moving forward, Mercedes’ 2024 turnover will likely be impacted by development plans for its Brackley base “which received planning permission in January 2024.”
