Good morning, ladies and gentlemen. My name is Christian Herrmann, I'm Head of Investor Relations at Daimler Truck. I warmly welcome you to our Annual results Conference. Thank you very much for joining us today. Today's presentation material can be found on the Daimler Truck Investor Relations website. At our request, as always, this conference will be recorded. The replay will also be available as an on-demand webcast in the Investor Relations section of the Daimler Truck website. We are hosting this conference today jointly for investors, analysts, as well as for the media community. Therefore, Jörg, I'm very happy to have you with me today.
Thank you, Christian, and a very good morning from my side as well. My name is Jörg Howe, I'm the Head of Global Communications at Daimler Truck. Let me briefly tell you what to expect today. First, our CEO and interim CFO, Martin Daum, and Claus Bässler, sorry, and Claus Bässler, our Vice President of Treasury and Tax and Acting Head of Finance and Controlling, will present our business results of the 2023 financial year and provide an outlook for 2024. This will take about roughly 40 minutes, and there will be a simultaneous translation into German. Afterwards, there will be two Q&A sessions: one for analysts and investors, and one for media representatives. Active participants in the Q&A calls already received their personalized access data with their registration. Now let's start with welcoming our speakers, Martin Daum and Claus Bässler. Martin and Claus, the stage is yours.
Thank you. Hello everyone, and welcome to our Annual Results Conference. In the next hour, we will give you a comprehensive overview of our business figures for the past year, and I would like to start with a series of numbers that we are particularly proud of. In 2023, our unit sales grew modestly by 1%, limited by supply constraints. Our group revenue grew strongly by 10%. Our Adjusted Group EBIT grew very strongly by 39%. The free cash flow of the industrial business even grew by 61%. This means in 2023, Daimler Truck once more achieved truly profitable growth. This again means with our performance in 2023, we made another big step towards unlocking the full profit potential of our great company. This is underlined by the following two figures.
In 2023, Daimler Truck achieved an adjusted group EBIT of EUR 5.5 billion and an adjusted return on sales in our industrial business of 9.9%. This marks not only a significant improvement compared to the prior year, but also a new record profitability for our company. We are therefore very pleased with our 2023 results, and I would like to thank our entire Daimler Truck team for the great work. However, I want to address one issue right away. We could have achieved even higher financial results if we had engaged in opportunistic pricing. In 2023, demand often exceeded supply, and we could have taken advantage of this situation, yet we deliberately decided against it because we are convinced customer trust is key for the long-term success of a company. Therefore, we do not want to risk this trust. We rather want to strengthen it.
Our very positive 2023 results are obviously due to several success factors. In my view, one factor stands out: we have consistently been working on our challenges. You know that in recent years, some of our businesses were facing serious headwinds. Our bus business, for example, and our business in Brazil. Our management teams therefore closely analyzed these businesses and took the right measures to strengthen the product lineup and the cost position. Now this effort is paying off. Our bus business and our Brazilian business can now perform significantly better in any market environment. I can therefore clearly say: in 2023, all segments of our industrial business improved their profitability significantly. All segments are delivering. Trucks North America once again achieved a strong return on sales driven by higher unit sales, which could have been even higher without the existing supply constraints.
Mercedes-Benz Trucks made further considerable progress and, like Trucks North America, has already reached the profitability ambition we set for 2025. Trucks Asia has significantly improved its performance towards a target level despite still facing adverse conditions in key markets such as China and Indonesia. Regarding Daimler Buses, the figures clearly show: bus is back. In the aftermath of COVID-19, we made this business even stronger and can now take full advantage of the coach market recovery. Financial Services successfully established itself in 70 markets around the globe. Going forward, it can now leverage our industrial business to increase its profitability. So, across our businesses, you see the same story again and again: either our segments have already reached our 2025 profitability ambition, or they are moving towards it with strong momentum. Now let me provide you with an update on all our self-help measures and its three main components.
First, let's talk about the development of our service revenue. We are making further progress. Between 2019 and 2023, we have achieved 18% growth by leveraging our existing after-sales business and by starting and growing new service opportunities. We are confident in achieving our growth ambitions of 25% by 2025, which will make our business less cyclical and Daimler Truck more resilient. We are fully on track here. Let me give you one specific example. In Europe, own retail is an important pillar of our strategy, and just today we celebrate the opening of our own retail facility right here in Stuttgart. The new site is perfectly prepared for the future of transportation right from the start, with high-voltage workshop equipment and all the requirements for repair and maintenance of hydrogen-powered vehicles. Second, a key lever to increase our resilience: the development of our fixed cost.
By the end of 2022, we achieved a reduction of 8% compared to 2019. However, by the end of 2023, this figure deteriorated to only -6% versus 2019. The main reason for this were headwinds coming from spin-off-related IT spending. To be very clear: we are not satisfied with our progress, and we are working hard to get back on track. The fixed-cost task remains a challenge. The spin-off is more expensive than anticipated. But we are working relentlessly to make Daimler Truck more efficient. We believe the money is spent wisely to create a more efficient standalone process landscape. Consequently, our ambition remains the same: a fixed-cost reduction of 15% between 2019 and 2025. And third, the development of CapEx and R&D. As announced at our Capital Market Day, we have a very clear plan to grow our business significantly between 2025 and 2030.
To execute this plan, we are now ramping up our investments in new businesses like battery cells. To reiterate: these investments are fully integrated in our active portfolio management approach. They must have a clear business case and attractive returns on capital. Even with these additional investments, we achieved a reduction of 3% by the end of 2023 compared to 2019. On a more like-for-like comparison, with the 2019 scope excluding these investments and the extraordinary high inflation in excess of 2%, we have reduced CapEx and R&D by roughly 12%. We continue to strictly prioritize zero-emission technology, large profit pools, and return on capital employed. Therefore, we have increased our R&D spending for zero-emission technology and other additional businesses. We are maintaining our overall spending discipline to ensure we do not jeopardize the growth opportunities in our business in the future.
Now let's have a quick look at the development of our key markets in 2023. The North American heavy-duty market increased year-over-year by 7% to 331,000 units, a very robust development and a very high level. Due to significant supplier constraints in the U.S., particularly in the second half of the year, we could not leverage this market growth as much as we wanted to. Consequently, our market share decreased from 40% in 2022 to 39.1% in 2023. In 2024, we expect the markets to slightly decrease from this high level by -3% to -16%. At the same time, we are confident in increasing our market share, especially in the vocational segment, with our all-new Western Star trucks. Our order intake for 2024 looks very promising. The European heavy-duty market saw an even stronger increase in 2023, rising 15% to 342,000 units.
However, our market share has decreased year-over-year, dropping from 20% in 2022 to 19% in 2023. In 2024, the market volume in Europe is expected to increase by -12% to -24%, a slightly bigger decline than in North America. As reported in January, group unit sales increased from 520,000 units in 2022 to 526,000 units in 2023, despite supply issues in key regions. The Trucks North America segment contributed to this increase with a 4% rise to 195,000 units. Trucks Asia saw an increase of 3% to 161,000 units. Daimler Buses experienced a strong sales increase of 9% to 26,000 units. Only the Mercedes segment saw a drop in sales by 5% to 159,000 units, attributed to a weak market development in Brazil following the Euro 6 introduction.
Unit sales in the fourth quarter of 2023 decreased from 155,000 units in Q4 of 2022 to 140,000 units, a drop of almost 10%. This decline was primarily due to supply chain issues in North America and market weakness in Indonesia. The overall order situation in 2023 saw a significant decrease of 18% year-over-year on group level. This decrease is attributed to the fulfillment of pent-up demand in our major regions throughout 2022 and 2023. Consequently, the current order situation reflects clear signs of a normalization, as indicated in our last disclosure call for the third quarter of 2023. Customers are now ordering the vehicles when they need them, rather than reserving slots far in advance. Nevertheless, we are satisfied with the current order intake for the running Q1 and the following Q2. For North America, we are almost sold out for the first half of the year.
At Mercedes-Benz, we are sold out for the first quarter and were able to adjust production with our existing flexibility measures if needed. With that, I would like to hand over to you, Claus, for a deep dive into our financials.
Thank you, Martin. Also, a warm welcome from my side to our full year 2023 disclosure. Now let's have a look at our financials for the group and the segments. Revenue on group level increased year-over-year by 10% to EUR 55.9 billion in 2023. Adjusted group EBIT showed a strong increase of 39% to EUR 5.5 billion, while group EBIT rose even higher by 48% to EUR 5.2 billion. The most significant year-over-year increase within the key figures was seen in the free cash flow of the industrial business, which rose by 61% to EUR 2.8 billion in 2023.
As a result, net industrial liquidity increased from EUR 7.5 billion at the end of 2022 to EUR 8.3 billion at the end of 2023, despite our ongoing share buyback program. Revenue of the industrial business rose by 8% to EUR 53.2 billion in 2023. EBIT adjusted increased significantly to EUR 5.3 billion, with adjusted return on sales reaching 9.9%, up 230 basis points from the previous year. In 2023, Trucks North America achieved an adjusted EBIT of EUR 2.9 billion and an adjusted return on sales of 12.3%. Pricing was the main positive driver, supported by volume and mix to a lesser extent. FX contributed positively to the 2023 result, mainly driven by the strong Mexican peso. Material cost efficiencies improved year-over-year. Negative impacts came from supply chain interruptions that caused significant production inefficiencies. Inflation-related increases in personal costs continued to weigh on EBIT performance in 2023.
In Q4, performance at Trucks North America was mainly impacted by the negative volume-by-mix effects, which could not be compensated by the positive contribution from pricing. After-sales also had a negative impact, as customer fleets were largely renewed in the past 2 years, resulting in an expected temporary decrease in demand for parts. Despite these headwinds, we achieved a strong return on sales of 12%. For Q1, we expect lower volumes due to the typical seasonal production patterns, as the pipeline gets refilled after the holiday shutdown. Nevertheless, we expect the margin in Q1 on a similar level as in Q4, sitting well in the guidance corridor. Mercedes-Benz came in with an adjusted return on sales of 10.2% on the back of an adjusted EBIT of EUR 2.2 billion. Year-over-year EBIT performance benefited significantly from pricing and a strong after-sales result.
Inflation-related cost increases in materials were negatively impacting the Mercedes-Benz segment's EBIT. Negative effects year over year included also the China licensing fees, which had positively impacted 2022 results, and a normalization of the used truck business. The recent Q4 was a very strong quarter for Mercedes-Benz, particularly compared to Q4 of 2022. Pricing, again, was the major driver. For Q1, we anticipate normal seasonal effects, with the production pipeline filling back up at the beginning of the year. Unit sales in Q1 are expected to remain similar or slightly lower compared to Q1 last year, with a mix shift from Europe to Brazil, resulting in expected margins around the lower end of the guidance range. EBIT adjusted for our Trucks Asia segment was EUR 330 million, with an adjusted return on sales of 4.7%.
Overall, the performance of our Asia business was mainly impacted by cloudy market conditions, including a slightly better but still low Chinese market, and the dampening effect of the upcoming presidential elections in Indonesia. Pricing was the main positive contributor, followed by an improved after-sales business. Also, showing a significant improvement, the still severe market conditions in China led again to a negative at-equity result of our Chinese joint venture BFDA, which negatively impacted Trucks Asia profitability. A highlight in 2023 was the growth and strong performance of our India business. Throughout the entire year, we clearly benefit from the market trend towards more sophisticated trucks. Cost pressures compared to last year were driven by FX and inflation-related cost increases, particularly in material and personnel costs.
Given these headwinds, the 4.7% adjusted return on sales for Trucks Asia indicates a strong performance of the segment given the cloudy market environment in Asia. Q4 2023 was influenced by positive net pricing that included a catch-up of inflation-related pricing measures implemented in the previous two years. Regarding 2024, we expect at least for the first half of the year that the Asian markets remain weak. Given the weak markets in Q1, volume is expected significantly below previous year Q1, and margins will be around the lower end of the guidance range. After delivering break-even performance in 2022, Daimler Buses continued its recovery story in 2023, coming in with a significantly improved adjusted EBIT of EUR 214 million and an adjusted return on sales of 4.7%.
Significantly higher unit sales had a strong positive impact on EBIT, driven by the ongoing recovery of the European coach market, increased sales in the city and interurban markets, a strong market demand in Latin America, and a pre-buy effect due to the planned Euro 6 introduction in Mexico in 2024. Significantly improved net pricing, increased contribution from the after-sales business, and positive effects from FX, especially from a strengthening Mexican peso, also boosted EBIT. The full year 2023 performance at Daimler Buses clearly demonstrates that the ongoing strict and very successful cost work is paying off. Q4 performance for Daimler Buses was strong, driven by the similar factors that drove 2023 year-over-year performance. Q1, as subsequent quarters in 2024, is expected to reflect a typical seasonal performance pattern at our Daimler Buses segment, with a gradual improvement over the coming four quarters.
Now let's have a look at the EBIT performance on group level. As already highlighted, adjusted group EBIT increased significantly year-over-year by 39% to EUR 5.5 billion. The biggest positive contributor was pricing, making up by far the biggest part in the volume-price mix bucket. Mix and after-sales also had a positive impact. Positive pricing performance was necessary to offset higher inflation-driven costs, which almost entirely made up the industrial performance bucket. General admin expenses and R&D costs had an increased negative year-over-year impact, primarily due to the higher-than-expected IT and inflation-driven personnel costs. A significant portion of these additional IT costs is still driven by the upgrade of the IT systems following our spin-off. The others' bucket was positively impacted in 2022, about EUR 150 million, from an increase in discount rates related to provisions, and we now have seen a partial reversal effect in 2023.
The transition from EBIT adjusted to EBIT includes mainly negative effects from spin-off-related costs classified as impacts from M&A. This results in an EBIT of EUR 5.2 billion. At our spin-off, we clearly stated, "Every segment must deliver," and all our segments are delivering. All of them contributed positively to the increased industrial business result. Trucks North America and Mercedes-Benz delivered improvements of over EUR 500 million each. Trucks Asia and Daimler Buses also made strong contributions with improvements of EUR 159 million and EUR 199 million, respectively. The recon line, where we book our group participations and our investments in autonomous, showed a year-over-year plus of EUR 76 million. Overall, return on sales adjusted of the industrial business reached 9.9% on the back of a significantly increased EBIT adjusted of EUR 5.3 billion.
The return on sales of 9.9% marks an important step for our industrial business, as we are getting closer to our margin ambition for 2025 of over 10% in sunny market conditions. Our financial services segment showed a significant year-over-year increase in its new business of 20% due to the ramp-up in Europe, as well as increasing penetration rates in the second half of the year, mainly in North America, in a challenging market environment. Also, contract volume showed a significant increase of 17% from EUR 24.2 billion-EUR 28.3 billion by the end of 2023. Main drivers were the retail business in North America, major market ramp-up in Europe, and the wholesale business in all regions. Financial services achieved an EBIT adjusted of EUR 211 million, resulting in an adjusted return on equity of 9.1%.
Gross profit was positively impacted by a positive volume effect and an overall favorable cost of risk development based on globally good credit performance and pandemic recoveries. Higher costs were driven by the first full year of phase two markets and higher project spending in Europe, in conjunction with the integration of these new markets. The underlying quality of our portfolio remained solid, with cost of credit risk below eight-year average, despite regional and segment-specific heterogeneous developments. Cash generation in 2023 was exceptionally strong despite a change in working capital of -EUR 1.4 billion, mainly driven by higher inventories and receivables. Net investments exceeded depreciation and amortization by approximately EUR 600 million. This was caused by the increased need for investments in future transformational technologies and in new businesses, especially in emission-free powertrain and autonomous driving technology.
For the full year 2023, cash flow before interest and tax for the industrial business was strong at almost EUR 4 billion. The adjusted cash conversion rate remained strong at 0.8. Free cash flow of the industrial business was EUR 2.8 billion. Adjusted free cash flow of the industrial business increased significantly by more than 67% versus 2022, reaching EUR 3.3 billion. Net industrial liquidity consequently increased to EUR 8.3 billion. Net profit surged in 2023 by 44% to nearly EUR 4 billion. Consequently, earnings per share increased by a similar percentage from EUR 3.24 in 2022 to EUR 4.62 in 2023. As mentioned earlier, free cash flow of the industrial business came in with EUR 2.8 billion. Based on this very solid cash performance, management will propose a dividend per share of EUR 1.90 at our upcoming Annual General Meeting on May 15th.
The second dividend payment of Daimler Truck, as a standalone company, highlights our commitment to maintaining a strong balance sheet, sticking to our capital allocation principles, and keeping up a high cash conversion to support a sustainable dividend to our shareholders while meeting all the investment needs to navigate transformation of our company. Our current share buyback program that started in August last year further demonstrates our commitment to return excess liquidity to shareholders. That's it from my side on the financials for 2023. Back to you, Martin.
Before I walk you through the outlook for the full year 2024, please keep in mind that our outlook is subject especially to further macroeconomic and geopolitical developments. As was mentioned during our last Q3 disclosure call, we expect normalizing market conditions for 2024. This means a slight decline in heavy-duty markets for North America and Europe. Reasons for the normalization include the persisting challenging economic conditions and the absence of catch-up effects from pent-up demand that was exceptionally high during the previous two years. For the full year 2024, we consequently anticipate a range of 280,000-320,000 units in North America for the heavy-duty market, which translates into a decrease versus 2023 of -3% to -16%. We expect a range of 260,000-300,000 units for the European heavy-duty truck market, a decrease versus 2023 of -12% to -24%.
Now let's have a first look at the financial guidance for 2024. Group revenue is expected in a range of EUR 55 billion-EUR 57 billion, which is the same guidance range as last year. For EBIT adjusted and for EBIT reported, we anticipate a stable development on prior year level. R&D costs and investments in PP&E are expected to increase slightly year-over-year. For our industrial business, we guide unit sales in a range of 490,000-510,000 vehicles and revenues in a range of EUR 52 billion-EUR 54 billion. Despite a slightly decreased unit sales and revenue guidance compared to last year, we expect the return on sales adjusted in a range of 9%-10.5%. We remain committed to our promise of improved resilience and more stable results. Free cash flow is expected to slightly increase.
As a reminder, this translates into an increase between 10% and 25% in our definition. In summary, based on our current expectations, 2024 should result in a robust development compared to 2023 and thus again in a very solid year for Daimler Truck, despite headwinds from the markets. On segment level, we expect for Trucks North America unit sales in a range of 180,000-200,000. This reflects a normalization of demand, as pent-up demand that fueled the market in previous years is fulfilled, returning to the normal replacement cycle. Despite the lower market, we expect a stable development of Adjusted Return on Sales in a range of 11%-13%. For Mercedes-Benz, we expect unit sales in a range of 140,000-160,000 units.
We anticipate an adjusted return on sales that should come in for Mercedes-Benz in a range of 8.5%-10.5%, despite the expected market decline in Europe driven by the macroeconomic environment. Trucks Asia's unit sales are anticipated to come in within a range of 130,000-150,000. On this background, adjusted return on sales is expected to be in a range of 3%-5%. For Daimler Buses, unit sales range is guided at 23,000-28,000 units and adjusted return on sales at 5%-7%. The comeback of the bus business continues. Financial services is expected to generate new business volume of EUR 11 billion-EUR 13 billion due to the increasing operative business in Europe and South America. Adjusted return on equity should increase and lie within the range of 9%-11%.
Regarding the equity capital endowment of all our financial services companies, to meet tightened regulatory rating requirements and to support Daimler Truck Group rating, the equity ratio steering of Daimler Truck Financial Services from previously 9% will be adjusted towards approximately 10%. Consequently, we will inject up to an additional EUR 350 million of capital into financial services to meet this target. Reconciliation should be at the same level in 2024 as in 2023. Towards the end of our presentation, let me take a step back and give you the bigger picture. You know our two strategic goals to lead profitability and to lead transformation. In the past minutes, our focus was on profitability. Now it is important to me to briefly touch on our second strategic goal. Because currently, there are a multitude of challenges that concern us in Germany, in Europe, and around the world.
In this situation, we must not lose sight of the number one global priority of our times: mitigating climate change. I therefore want to appeal very clearly at this point: We have absolutely no time to lose and must act consistently. In society, in politics, and certainly in our business. At Daimler Truck, that is precisely what we are doing. We have aligned our strategy to lead the sustainable emission-free transport for the future, and we are successfully executing this strategy. In 2023, we sold more than 3,400 zero-emission trucks and buses, almost four times as many as in 2022. We got orders for almost 4,600 zero-emission vehicles, more than twice as many as in the year before. The numbers therefore continue to increase, which is positive.
We all need to be aware, and I do not say this for the first time: The mass market will only shift towards zero-emission vehicles if there is cost parity for most use cases and if there is a comprehensive charging infrastructure. To add momentum, we are in intense discussions with policymakers and energy companies, and we have started key projects together with partners. There is no doubt that the future of transportation will be emission-free, and I am convinced that it will pay off to lead this way. We therefore keep broadening our zero-emission product portfolio. By the end of 2023, we had 10 zero-emission product lines in serious production, and in 2024 we will hit the next major milestone: We will launch our Mercedes-Benz eActros 600, a battery electric truck with a range of 500 kilometers.
This means: With our eActros 600, we will start to decarbonize the long-haul segment, and this is a segment that really matters to mitigate climate change. The Swiss company Holcim already intends to add a total of 1,000 units of our eActros 600 to its fleet. In the next years, we will complement our battery electric vehicles with hydrogen-powered fuel cell vehicles, particularly for long-haul use cases. Let me wrap it up with our big picture regarding profitability. As we can see, we have already come to quite some way on our journey of unlocking our full profit potential. 9.9% adjusted return on sales in our industrial business in 2023 means great progress compared to the previous years. But this is not the end of our journey. Far from it. Next, we are heading for our 2025 profitability ambition that we fully stick to.
Based on this very solid profitability level, we will put a stronger focus on growth. In the second half of this decade, we aim for 40%-60% revenue growth, while at the same time further increasing our return on sales. If both revenue and return on sales increase, the operating profit increases even more significantly. I am therefore very confident about Daimler Truck going forward. I am fully convinced that the best years are yet to come. Thank you very much. Now we are looking forward to your questions. Our Q&A will start shortly.
Good morning, ladies and gentlemen. On behalf of Daimler Truck, I would like to welcome you to the analyst and investor Q&A session of our annual Results Conference with Martin Daum and Claus Bässler. You have probably all joined our presentation prior to this Q&A session. Just a quick reminder: All documents, including the annual report, are available on the Daimler Truck Investor Relations website. Later today, you also will find a more comprehensive roadshow presentation on that site. Now, before we start, the operator will explain the procedure.
Welcome to the Daimler Truck Global Conference Call. At our customer's request, this conference will be recorded. The replay of the conference will also be available as an on-demand webcast in the Investor Relations section of the Daimler Truck website. I would like to remind you that this teleconference is covered by safe harbor wording you will find in our published results documents. Please note: 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. We would like to draw your attention to the fact that all participants are in listener status and that the conference has been recorded.
If you would like to ask questions, please press the star and 1 keys on your touchscreen telephone. If you would like to withdraw your question, please press star and 2 on your telephone. If you require the assistance of an operator during the Q&A session, press star and 0 on your telephone. We will now start with a question-and-answer round. I would like to hand over to Christian Herrmann.
Thank you very much for that explanation. Ladies and gentlemen, you may ask your questions now. Please introduce yourself with your name and the name of the organization that you are representing. And as always, please ask your questions in English, and as a matter of fairness to all others, please limit the number of questions to a maximum of two. We get started, and the first question goes to Klas Bergelind from Citi.
Thank you. Hi, Martin and Claus. Klas at Citi. So my first question I had was on the embedded market share gains in the full year guide. Trucks North America down only slightly versus market down 10% at the midpoint. I guess that's Western Star. But Mercedes-Benz is down 6% versus market down 18% midpoint for Europe. We obviously have Brazil recovering. But in light of the weaker orders from Mercedes-Benz now in the fourth quarter and with the market share in Europe going backwards by three percentage points, Martin, I'm trying to understand a bit how we should think about your outperformance from here for Mercedes-Benz. Thank you.
Klas, I'm not sure I got all the problems. The market share of North America in 2023 was certainly impacted by that supply issues we had in the fourth quarter. Otherwise, I'm pretty confident we would have been above the 40%. Therefore, going forward, the more than 40% guidance we give is, in my opinion, very well achievable, and production and the order intake, in my opinion, is pointing in that direction. On the European side, we'll have to see in the development that in 2022, another competitor had significantly problems with his output due to supplier issues, which then normalized in 2023. So for me, this is rather a technical reaction. I see our development in Europe in the next year going alongside the market in plus-minus something is always happening.
There are always some tweaks and bumps, and on the other side, headwinds, which then can give you but more or less going together with the market.
Yeah, so I assume the limited expense. I mean, I can understand North America you pushing on Western Star. But still, in Mercedes-Benz, your unit sales are down 6%, market Europe 18% down at the midpoint, which suggests a quite strong recovery in Brazil embedded into your guidance. Is that how we should look at it, or? Yeah, that's my question, really.
I mean, if you look backwards to the 2023 number, there's always a slight difference between sale and market share. Market share is retail registered, while sales is when it leaves our facilities and goes to our sales partners. So there could be something out of that. Then certainly, you are fully right. You have the Brazil issue. Brazil in 2024 will be stronger. So I could see here something where we guide the European market, but on the other side, with Brazil being a significant business for the Mercedes Truck. So that is the mix. Basically, in Europe, it's a development together with the market in Europe, what we expect.
Yeah. Thank you. My second question I had was on the implied ASP. For me, your unit sales guide at 500,000 midpoint, I think, makes sense. But ASP is well ahead of expectations out there. Obviously, you will have Brazil recovering against Europe falling. That's negative for mix. So this must really be the aftermarket side and also very solid price realisation. If I look at pricing, I think Klas said out of the EUR 2.8 billion of volume and price mix on slide 12, by far was the positive pricing, which is pretty material. So can I ask you, Martin, what is your carryover on pricing here for the first half, and what do you think you can do on pricing for new orders here in the beginning of the year? Thank you.
First of all, pricing was last year mainly due to the inflation we had in all areas, starting with wages, continuing with logistics and energy costs, and ending with material costs. So a lot of the pricing was inflationary and sometimes even catch-up we have to do to previous years. So that part is definitely carrying on. What we never did last year, especially not in North America, was what I call the opportunistic pricing that we misused the strong market to pump up prices for the last 10,000 trucks we still had open slots for, because we are very much focused on long-term contracts, long-term relationships with customers, and we see that paying off in 2024. So I don't see there is not so much room for further price increase, but carrying on the 2023 level is, I would say, realistic.
However, I would say every sale is a free decision, and that's the fun of the business. So it's negotiation. But it's ultimately, for me, the strengths of the product, the strengths of the service network, the reliability of the product. And we see it in one product where we really invested at the right time. That is on the bus coach side, where we invested in a complete new coach bus, etc., for Europe in the midst of the crisis, and it's now paying off because now bus is back and we have the best product out in the market. And that product can then carry the price, and the customer is still absolutely happy going with our product. Klas?
Quick final one. Promise to be quick. On the fixed cost reduction, -6% versus 15% target, I think it were -8% last year, you're guiding for a very solid margin in Mercedes-Benz. Is this what you see, Martin, here into the second half, that you can sort of run a bit harder there on the fixed cost side? Because the margin was certainly better than I thought for looking at your guide. Thank you.
I mean, the fixed cost is a huge bucket of all different impacts. I would say the biggest one, especially if I compare 2022 with 2023, was the increased spending we had on IT. We have the duty to separate here completely from our old sister company, Mercedes. We decided deliberately, if we do it, we do it right and go for a new system and not just copy old systems. That costs, and especially in this area, we have significantly cost and price increases as well. That cost more than we initially thought. Certainly, higher investments, higher efforts in R&D cost us as well. But fixed cost is a continued important task, and it's one of the tasks where we are not yet done and sufficient because we need that resilience for the years ahead of us.
Thank you.
Thank you, Klas. The next question goes to Daniela Costa from Goldman.
Hi, good morning. Thanks for taking my questions as well. I have two. The first one is regarding sort of the CARB regulations that are being introduced now in California. Next year, I understand they're setting another four or five states final deadline, 2027. Can you help us think about when do you start to see these and how significant it could be as a contributor, especially for your 2025 vision? Then the second question, obviously, sort of like Mercedes last week, was quite outspoken about their intentions for the Daimler stake. You have a buyback, increased dividend, but still a lot of very cash-generative and a lot of cash in the balance sheet left. Can you remind us from here how should we think about capital allocation for the medium term? Thank you.
Daniela, thanks for your questions. I would say we are well prepared for the 2027 CO2 regulation as well as everything from CARB. That certainly brings more technology in the truck, makes a truck more expensive. So we might see in 2025 and 2026 a pull forward impact. It's strange sitting here and worrying about 2027 or 2026. We have a great position. We have great products. We are prepared for any regulation. So I am absolutely confident that we will master any reaction of the markets to that. And certainly, if we see in 2025 and 2026 a pull forward effect, that will take it and go from there. But the bigger question is for me, how will the US economy continue? Will 2025, 2026, be another strong year? The US economy is one of the strongest economies we have worldwide in 2023 and in 2024.
I have no clue how here the politics develop then after the elections. We'll have to see. I feel ourselves very well prepared for any scenario. I can't talk at all about Mercedes. You have to ask this question in their call. On the buyback of our side and the cash generation, yes, we are far from done with our share buyback program, potentially. Klaus, you can give the details where we are today. We definitely go through that program. We have a clear allocation. We increased our dividend in 2024 for 2023. We will continue to generate cash. We will be a strong company. That is what we always said. Daimler Truck is an absolutely cool company, and we continue with that.
Once we are through with the one programme Klaus is talking about, we will definitely have to invest, and we want our shareholders to participate. With both things, I think we have enough funds to satisfy those needs. Klaus, over to you.
Yeah, yeah. Thank you, Martin. Daniela, thanks for your question. I mean, very clear. I mean, we are a very cash-rich company at this point in time with a high cash generation. We talk about a cash conversion rate of 0.8, 0.9 as well for the future. That means we will sit on quite some cash. And what we have therefore announced at the last capital market day already last summer is that we'd like to get a little bit more flexible when it comes to dividend. We opened up the range we want to distribute to the shareholders from 40%-60%. The 60 or the opening up towards the 60, honestly, is more meant to basically keep dividends stable as well when results might not going up or not as good as we would wish in order to keep the dividends stable.
So we would take a little bit more out of the net income. And the other thing is that we have actually started already a quite aggressive, from our point of view, share buyback program for such a young company. I think we announced on a valuation of EUR 25 billion, I have to admit, last summer, to buy back EUR 2 billion within two years, which is 8% of the capital, which is really, from our point of view, a lot. And from today's perspective, I mean, we do not look at this share buyback program as a one-off. But first of all, we go through the current one. And as I said, EUR 2 billion in two years. We have split that into EUR 1 billion in one year and another stage, another billion in the second year, which might then end in the summer of 2025.
Currently, we are in the middle of the first stage. I have bought back in the meantime roughly EUR 600 million, basically a little bit more than half of the first tranche or a quarter of the entire program.
Thank you for the call.
Thanks, Daniela. And the next question goes to Nicolai Kempf from Deutsche Bank. Nicolai?
Yeah, good morning. Nicolai Kempf here from Deutsche Bank. First of all, congrats to a very strong 2023. Two questions from my side and also take them one by one. First of all, on the guidance, it just looks very ambitious. Can you walk us through the different building blocks here? I mean, volume, probably slightly down, pricing, a bit of tailwind, input costs. How should we think about that?
I mean, first of all, Nicolai, thanks for your assessment of our results. Yes, we are proud of it, but we are not by far not done. And therefore, that is our reflection of our 2024 guidance eval. If we say it looks ambitious, that was when someone told us in 2020, when we had our first or '21, when we had our first pre-spin-off capital market day, they told us we are ambitious. Yes, we are ambitious. We were ambitious. We are ambitious, and we will continue to be ambitious. If you look at our capital market day last year in Boston announcements, where I said we want to grow the company further, it will be more difficult in 2024 than in 2023, without doubt, but we are not afraid of. We will lose volume. That is clear.
And that is resilience means we show that we can come up with the same results with more headwinds than in 2023. And that is all reflected in that steady, with lower volume, same result announcement. But honestly, that is what we promised you three years ago. That is what we are working hard to get there. Now, if I walk you through the building blocks, volume will go down. Pricing, I don't see further tailwinds. But as I have said, we avoided opportunistic pricing in 2023, so I'm confident we can keep it through 2024. The input cost is very difficult to check. If they go down, they will come with a kind of a delay into our P&L. We will have further cost pressures next year as well. But we have a lot of areas where we can increase the efficiency of how we do things.
Even if the costs go slightly up, the pricing will stay stable, the volume goes down, then the rest has to come out of efficiency or out of great products with high quality and the efficiency we're working hard on and the products we have.
Great. Thank you. And just one quick follow-up. On the Mercedes fixed cost or the industrial fixed cost target, how could it split between this year and next year to achieve the 15% reduction in fixed cost?
Let me take that one. Nicolai, regarding the fixed costs, we have shown that we actually did not even pause. We fall back, which is not good. It was not the intention. We take it very serious from there to get better. We have earlier today already confirmed the -15 target for 2025. The plan is that we basically halve the gap this year towards that target of 15. Basically, when you halve the gap from -6, it's a 10-ish, -10-ish, which the planning is saying at this point in time. This is what we are going for.
Understood. Thank you.
The next in line is Miguel Borrega from BNP. Again.
Hi, good morning, everyone. Thanks for taking my questions. The first one on Mercedes-Benz and maybe a follow-up to what you just said, Martin, about keeping prices stable. So I just wanted to challenge that assumption a little bit. What is different this time, and what sustains that price-cost spread? You already mentioned the European market is going to be weaker. There's a negative mix effect from Brazil. And raw materials, namely steel prices, are down. So why wouldn't your customers demand lower prices?
First of all, every customer wants lower prices. Every supplier wants higher prices. And this is what it's called negotiations. And therefore, we have sales guys. And therefore, we have purchasing guys. And therefore, we always talk about full packages. Don't forget that we will increase our service revenue with good margins further. So it's a full mixed bag. But a lot of the price increases we won't increase our pricing in 2024. A lot is spillover effects from the last years. And potentially, I have to go back now in history. Remember the first quarter in 2022 where the cost increases hit us a lot where the cost went up much faster than we could bring up the pricing. Now, with benefit from the other side, we have a backlog in some areas, very strong backlogs.
We can then work off that backlog, and we know the pricing is there. The new truck businesses, as I said, no more increases. On the other side, good products that provide the customer a high value and therefore can command the respective price.
Very good. Then on the fixed cost reduction, what is there left to deliver? You basically have two years to deliver an additional 8% fixed cost reduction. Is this evenly split or a little bit more back and loaded? I know this is a sensitive topic, Martin, but you had an ambitious target to reduce headcount since the IPO, but numbers have been relatively flat. Can you maybe share some color there, please?
I mean, this is by far the most positive, the most difficult one task ahead. As you said, we have to continue to work on it despite a lot of demands and despite a clear pass for growth. How that works altogether is something we have to figure out. But one thing is absolutely where we are not going backwards. Number one, we will and have to keep our profit targets even in more tougher environments. And you mentioned it yourself in your first question. We have to show, and we want to show, and we will show you that 2024, we can have that resilience, which in the past was sometimes not necessarily our key trade. And fixed cost plays a big role into that.
And secondly, we will do everything to keep this ambitious growth target we have for the second half of the decade built off a solid profit foundation. And for that, we have to be more nimble, especially when it comes to SG&A or what we do on our production sites in the future. And therefore, we work on that. And here, 2024 is a very key year to balance the headwinds, the targets of resiliency, and on the other side, the preparation for future growth and bring that into a mix that does not harm the profits at all. This is the most difficult task, and that is where all our teams are working diligently on. And this is certainly a topic we will talk in the future a lot when we meet again in calls or in capital market days.
Great. One quick follow-up to what you just said on Euro 7 regulation. Can you share some color on the additional investments and whether that will change in any way your margin? Thank you very much.
No, I mean, Euro 7 was the hot topic of 2023. The initial draft of the law would have required a lot of absolutely unnecessary additional equipment, technology into the truck our customers had to pay for with very little impact on the environment. Ultimately, rationale prevailed. We are able to reduce NOx emissions, nitrogen oxide emissions, significantly. So Euro 7 will bring to the environment, to the public, cleaner trucks and already today very clean trucks, but with no unnecessary, let's say, equipment on the truck. So the necessary testing and development requirements are in our budgets reflected, always well reflected. So going forward, are reflected. I don't see that Euro 7 will and then Euro 7 comes fairly late into the market, so I won't see much break here with Euro 7 because it's an evolutionary going on.
If people are really familiar with the matter, we are already at the moment at Euro 6E. So that is not the initial Euro 6 we had about 10 years ago. And Euro 7 is an evolutionary continuation of what we started. So it's not, for me, an inflection point which brings the market upside down.
Thanks, Miguel, for your question. The next in line is José Asumendi from JP Morgan. José.
Thank you, Christine. Hi, Martin. And Klaus. Congrats on the strong results and strong guidance for 2024. Just two follow-ups, two questions, please. On Mercedes-Benz, are there any additional structural measures that you can take within the brand to improve the share of aftermarket and revenues? Or are you largely done with the measures you implemented a couple of years ago, and you have managed to close the gap to your peers? And second, I'm trying to understand a bit better this fixed cost reduction. I guess IT cost reduction is a substantial burden still for Mercedes-Benz brand. So can you comment maybe on either the timing of the IT cost reduction coming down? I guess it's more 2025 than 2024. And maybe the magnitude of the margin impact, that would be great. Thank you.
I mean, first of all, I mean, one of the biggest measures, and here we really did all the homework, was to turn Brazil completely around. Secondly, was to reestablish the quality of our product. This is a clear check mark. Third is to work on the cost. This is a continuous and ongoing work where the teams of Mercedes-Benz are really on track. That does include additional structural measures. I would say if the measure is so big that I would call it structural, I definitely wouldn't announce it in an analyst call. And everything else, we could call it structural, but I call it more evolutionary going forward. We have to reduce our cost on the variable side, on the efficiencies in the plants as well, especially on the SG&A field, and we go with that.
It, I would say that is certainly something more on the 2025 when we see ultimately the benefits of it. But this is a longer journey.
Thank you.
Thanks, José. The next question goes to Shaqeal Kirunda from Morgan Stanley.
Hey, guys. It's Shaqeal from Morgan Stanley. Congrats on the great result, and thanks for taking my question. So I understand that Mercedes-Benz result was driven by strong pricing in Q4, but can you shed some light on what drove the timing of that? Why did this become particularly visible in Q4 versus the rest of the year? And how should we think about that going forward?
I mean, Shaqeal, first of all, it was not just pricing. As I said, it was Brazil. It was a very strong aftermarket business. It was hey, we had a pretty messy production situation for a very long time. Once you clean up here and go back to more normal, normal is good for production because it allows you more efficiency there. So there were a lot of things that came to fruition in the fourth quarter. And then I would say I would do it like I said last 12 months ago. I recommended everyone where we had a not-so-good fourth quarter. I ask everyone to balance off third and fourth quarter for a half year. And I would say this year, potentially to avoid a similar situation like last year, we had potentially a little bit more overcautious when we looked for potential end-of-the-year problems or bookings.
Take the second half. This is very good guidance of the strengths of Mercedes-Benz, not just the fourth quarter, which is always good to be on that side and then on the other side. I remember the discussions we had at that table 12 months ago was a little bit more difficult.
Got it. Thank you very much. And then you raised an interesting point about maximizing pricing on an opportunistic basis. Can you shed some light on the ways you expect that to pay off in 2024?
I mean, it definitely pays off in the U.S. where we have a huge portion of our sales goes to large customers. And here, we are continuing it pays off that they don't take now advantage of opportunistic situations this year. So in my opinion, it balances off. But the basic is always never use the opportunity, but build your pricing upon the strengths of the product and the value the product brings to the customer. That is the core of how we did it in the last years, which was a key for the success for many, many years. And it will be a strong foundation for the years to come in those markets. And it makes us pretty confident for 2024.
Thank you very much. Just my last question. Can you tell us a little bit about the building blocks that go into your 2024 North America market outlook? How much do you factor in a soft landing or infrastructure expenditure from the IRA and the IIJA or even a pre-buy effect?
I mean, we see a shift in the North American market. And everything I say now is nuances. So it's not that drop, not that what we would call catastrophic decline or so. The on-highway business is softer. But this is good for us because it frees up capacities, which we haven't had in 2023, on the vocational side. The vocational market, which goes into construction, which goes into utilities, which goes to bodybuilders, was strong and is strong. And now we can participate because we have the production slots. Our factory in Cleveland, North Carolina, that four years ago was 100% on-highway tractors, will be 2024 100% vocational Western Star trucks. And we are looking where we can add additional capacity potentially to follow that up. Medium duty is strong. We have a good lineup there. So I would say overall.
But as I said, it's nuances where we can now react with our broad product portfolio to the market. We are almost sold out for the first half. Certainly, there's always and I said that in my speech, there are always macroeconomic outlooks. U.S. economy is going strong. This is a solid country that did a lot of things right in the last couple of years. And it's benefit in 2024 about it. How that will develop in the second half, this is one of the uncertainties. And we have to see and deal with it, however, what it gets. Normalization, as I said in Q3, means you don't have that 12-month outlook where I could say, "Guys, we are basically sold out," or "Every slot we have is already dedicated to a customer, so no worries.
Volume will come as long as we have supplies." This is not the case. Almost sold out for first half in North America means we still have to sell a full half year of trucks into an economy we don't know how it develops. And we have to see how it is. But we will get it from the newspaper, and you'll get it out of the newspaper as well. But the products and the company is there.
Thank you very much, Martin.
Next in line is Jonathan Day from HSBC. Jonathan.
Yeah. Good morning. Thanks very much for taking my questions. I've got a couple. I was firstly on the pricing, just wondering. I mean, you talked about not increasing prices in 2024, but you also talked about some pricing spillover effects. And I was just wondering if you could give us a sense of how those would progress over 2024, those sort of spillover effects. That's my first question.
I would like to talk about that topic further down the road. If I say we are not increasing pricing, then that means for every customer listening who pays a higher price in 2024 to 2023, I now make the job for the sales guy much more difficult. Pricing is people sometimes ask me how much costs a truck, and I answer back how much costs a house. And there are things in the house which gets cheaper over the years, and there are other things when you build something which gets more expensive. And so is pricing. Pricing ahead of time and speculating. We have hundreds of people that's going option pricing, in base model pricing, in pricing for segments, in pricing for markets, in pricing for different countries. Jonathan, just take what I say.
When we say overall stable, that always includes some segments that go up, that includes some segments that go down, that includes for Europe some markets where we have currency headwinds, and it certainly includes markets where we have currency tailwinds. That is very complex. You have to take here our word. We keep it. We see the margins we make on trucks in 2024 stable to 2023. The rest, we have to work hard on to make it happen. We'll certainly talk about that when we present half and full-year results.
Great. Thank you. Second question, just coming back to the U.S. and the vocational market. I was just wondering if you could remind us a bit of the profitability differential on the U.S. vocational trucks versus the on-highway trucks?
It's again how much costs a house. There are small, what we call baby Actros vocational trucks. They are heavy-loaded trucks for the oil fields. It's a mixed bag. We have fleet businesses. We have bodybuilder deals. I would say it's the same. It's good markets. We are very well positioned on the on-highway side. And I will say and we are the newcomer on the vocational side, so we will increase our position there and will increase our profitability there. Yeah.
Okay. Great. Thank you.
Next question is for Virginia Montorsi from Bank of America, Virginia.
Good morning. Just a quick one from me. Can you give us just a little bit more color in terms of the market share that you think for vocational, especially for 2024, and kind of the driver there?
Virginia, sorry. For my entire life, to announce market share gains only energizes competition. That's at least what happens to us. Anytime a competitor goes out and says he wants to take market share away from us in certain areas, especially when it comes to on-highway in the U.S., it's the best doping for our teams. I don't want to energize our competitors. So we just work hard and then celebrate the successes.
Okay. Thank you.
And then we have a question from Stephen Reitman from Société Générale. Stephen.
Yes. Good morning. Thank you for taking my question. And again, congratulations on the results and the guidance. I'd like to look a little bit at the zero-emission field. And obviously, you showed a pretty big percentage increase, but on a relatively small number, 3,443 vehicles. I'd like you maybe to see your views on the state of the market, really. Do you think some of the hype or the excitement that was pushing the market, this zero emissions, is following the trend we're seeing in the passenger car market as well as the realities that sink in about TCO and the inability to do the job until the technology significantly improves or prices come down? Thank you.
I mean, Stephen, for me, to ultimately move the entire industry from diesel to zero-emission is a historic undertaking, which needs a lot of elements. I called it always a magic formula, three items: great products from the OEMs, TCO parity, and a working infrastructure. When I came out with the first speech about those threes about four years ago, I was saying that at the moment, every single one is zero. By the way, those three factors are combined like a multiplication. One factor is zero. The entire equation is zero. Four years ago, all four are zero. The product from the industry, not just from us but from our competitors as well, but especially from us, are not any longer zero. As I said in my speech, we have 10 complete product lines out. That's far more than any startup can promise.
They have a pointed one-truck-only prototype-like pre-production level. We'll have 10 complete product lineups from the eCanter, which, by the way, is the best e-truck money can buy, to the eActros 600 and to our city bus here in Europe, all absolutely fine, highly praised trucks by the trade press, by our customers. Number one. We have a lot more as prototypes, as test vehicles, as we have shown on the hydrogen side in our pipeline. This will not be the problem. Then it comes. I go to infrastructure. Infrastructure is the biggest challenge. Therefore, we are on this two-legged strategy because charging can't do the job. Already today, in a lot of markets, the biggest limitation is that our customers can't get the high-power charging we know. At the moment, we talk, for example, in Europe only about 300 kW charging.
But we have to get to 700 or one MW chargers, which are not available yet. So this has to be built. And the clock is ticking because 2030 is the year where it has to be. Therefore, we are on hydrogen, on green hydrogen, at a price of about EUR 450 per kilogram. That is not available today. So we work diligently with proven players in that field, whether it's Linde, with whom we opened up a liquid hydrogen filling station, in Wörth, or whether it's Abu Dhabi, with Mubadala, to look to get the green hydrogen exports coming from the Persian Gulf to Europe at a competitive price. All that floating in, then comes TCO. And TCO is only solvable. And I think this is the biggest wake-up in other industries that zero-emission will be more expensive.
It can be TCO better, but then we need a price on diesel. And in Germany, and I know that this is a big burden on our customers, we have now a CO2 pricing in the toll when you run trucks on public highways. And I see that other European countries are following that direction. So running diesel trucks will become more expensive. And then the more expensive e-vehicles will then still be TCO-positive. I tried now to pull an entire evening filling sermon or a multi-day series into five minutes of answer. I can only recommend I have multiple podcasts out, Transportation Matters, about that issue, where you can deep dive.
I'm fully convinced that by the end of the decade, we'll have a significantly higher amount of zero-emission vehicles that we sell to our benefit, that our customers buy to their benefit, and where the entire society is benefiting for significantly reduced CO2 emissions.
Thank you. Would you be able to share with us maybe your best guess at what the absolute volume of your sales might be at any particular times?
If you write me down the price of energy and the availability, the number of megawatt chargers we have in Europe and the United States, the price of energy the customer has to pay at those megawatt charges, the amount of hydrogen that is landed from the Middle East in Europe or is produced in the United States, and the price of hydrogen, if you write me down those four numbers and really bet your fortune on it that they are right, then I give you an exact number how much battery and how much fuel cell. The rest is a sliding factor in between, depending on applications, on range of the trucks. And we have to prepare in this uncertain world for a lot of scenarios. And I tell you, we are prepared in our strategy.
We'll certainly, next Capital Market Day, whenever that is, we will certainly deep dive more on that. Rest assured, we spend a lot of brain energy, and we are very flexible for whatever outcome.
Sounds fair enough. Thank you.
Thank you, Stephen. I think we have time for one more question. That would go to Frank Biller from LBBW.
Yes. Hello. Thanks for taking my question. There's also one left here. The one is on autonomous driving. I haven't heard anything about autonomous driving within this call. Maybe you can give us an update what's going on in Daimler Truck and here the time progresses.
The reason why you haven't heard anything in the call is because we were focusing on 2023 and 2024. Certainly, autonomous is part of our investment. It's part of our investment in the future. Therefore, in the figures you have seen, autonomous is included. We make very good progress on that. It's one of the huge strategic topics and opportunities that can really reshape the industry. I have a feeling we are very well positioned there. When we have more strategic-oriented meetings, we definitely will talk a lot about autonomous. And you'll see more in 2024. We had a couple of really good press coverage last year. We will have more to tell about our progress. We're progressing very well with our subsidiary Torc, with our redundant chassis, and most importantly for me, in the collaboration with our large customers in the United States.
There will be a lot of exciting news in 2024 as well on that topic.
So nothing changed here from speeding time? It's not slowing down like some car companies do?
No, it's not slowing down. It's diligent work. It's a grinding work of getting things done, the hardware going, the sensing going, the software stacks going, and look for all the crazy edge cases, we call it, that can happen out there on the roads, driving truck on the road, simulating different scenarios. Exciting stuff. Could talk hours about it. But you'll hear more about that during the year.
Okay. Thanks a lot. Congrats to the figures. Yeah.
Thank you. Thank you. So before we conclude, I would like to say one thing. First of all, I have to say thank you, Claus, for being really a good steward in the last nine months. It was a pleasure working with you together. He will stay with the company, so it's now not his farewell. But it's his last time here on the podium. But we all know why Claus had to step in, despite his job as a treasurer, is because of Jochen Goetz passing away in mid-2023. And I tell you, really, it still touches me at that moment. I would have loved to give these numbers, extraordinary numbers, out together with Jochen because he was working for that more than 8% return on sales, for that more than EUR 4 billion in EBIT, as hard, as emotional, as energized as I did.
It's a shame that I'm alone here. Sorry. I want to dedicate that year to Jochen as well.
Martin, thank you. Thank you very much for taking the time. Thank you for that great words at the end as well. That's the end of the Q&A sessions, ladies and gentlemen. Thanks for participating. Thanks for joining us today. As always, investor relations remains at your disposal afterwards throughout the day and also the next weeks. For the ones who want to follow the media Q&A, this will start in a couple of minutes. To all of you, have a great day. Take care. Thank you. We look forward to talking to you soon. Thanks.