In their recently published accounts, it was found that Mercedes amg had become the first Formula 1 team to cross a turnover of £500M which is USD 650M.
The Silver Arrows declared a turnover of $709.9 million, covering the year that ended on December 31st.
The reported $709.9 million turnover marks a $93.5 million increase over the previous year’s $617.7 million.
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In comparison, Red Bull Technology, supporting Red Bull’s F1 team, had a turnover of $501.6 million in 2022.
Despite the revenue growth at Mercedes, their profits slightly dropped from $116.9 million in 2022 to $109.1 million.
546.5 Million £ 💷💷
Mercedes F1 team becomes First F1 team to have a Turnover crossing 500 Million
🟢 Turnover £ 546.5 Million (2023) vs £474.6 mil in 2022,
growth of £71.9 mil
🔻 Profits £83.8 mil (2023) vs £89.7 mil (2022)🔺Staff 1289 (2023) vs 1114 (2022)
🔺Staff Salary… pic.twitter.com/WLaZHGGMLF— Desi Racing Co. (@DesiRacingco) April 16, 2024
This result is due to several reasons, including higher expenses and increased tax payments during the 2024 financial year.
The race car development assets’ value, carried forward to the following season, increased from about $53.4 million in 2022 to approximately $66.9 million last year.
This rise partly reflects the additional investment required to change its 2024 F1 challenger, which needed a new chassis for this season.
The $67.9 million figure also includes the early work that the team did in producing the 2023 gearbox and suspension parts supplied to customer Williams this year.
This work was completed before the 2024 components used by Aston Martin.
Increase in Staff Numbers and Tax Payments at Mercedes in 2024
Mercedes also increased its staff levels from 1,114 in 2022 to 1,289, up by 175, resulting in their salary bills jumping from $106.8 million declared in 2022 to $145.3 million.
Staff bonuses contributed to some parts of these bills when the team secured second place in the constructor’s championship, rather than the third place in previous seasons.
Taxes also played a major role in increasing turnover. The team’s 2022 figures included a deferred tax asset, which meant its profits last year were unusually good.
This, combined with the government’s tax rate hike from 19% to 25% in April 2023, combined with other factors, caused mercedes tax bill to increase by $30.9 Million.
In USD, the tax bill jumped from approximately $11.2 million in 2022 to about $42.2 million last year.
The contrast in tax payments year on year had a significant impact on overall profit, but the business appears to be on a solid foundation with its EBIT remaining stable, at approximately $148.1 million for the year ended 2023 compared to about $147.9 million in 2022.
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Despite this, the company continues to show resilience and strength in its financial performance.
While Mercedes finished second in the 2023 F1 constructors’ championship behind Red Bull.
An improvement over its 2022 performance it also reported a decline in television coverage due to fewer podium finishes. However, other factors indicated strong growth.
Gaurang is a writer at the SportsOrbit covering articles related to F1,Gaurang was 14 when he cared more about playing football than studying. But when COVID hit and he had to stay home, he discovered Formula 1. It immediately caught his interest. Since then, he’s been really into Formula 1, watching every race and learning all about it. He still loves football, but now he’s also a big fan of Formula 1, especially Lewis Hamilton. Even though he loves racing, he still looks up to Cristiano Ronaldo as his idol.