Mercedes has become the first Formula 1 team to exceed £500 million in turnover, according to the latest figures published.
The company, which runs Mercedes-Benz Grand Prix Ltd., announced 2023 turnover of £546.5m, covering the year ended 31 December.
This figure represents an increase of £71.9 million from the figure of £474.6 million in 2022.
By comparison, Red Bull Technology, the company behind Red Bull, had a 2022 turnover of £385.6m.
However, despite the increase in turnover at Mercedes, the Brackley-based company reported a slight fall in profits – from £89.7m to the £83.8m it reported for 2022.
This is the result of a combination of factors including increased costs and higher tax payments in the 2023 financial year.
Funding for the development of racing cars, which is carried over to the next season, has increased from £41m in 2022 to £52.2m last year.
This higher figure partly included the additional investment required to change their W15 car, which required a new chassis for the season.
The £52.2m figure also includes the initial work the team was able to do to produce the 2023 gearbox and suspension parts supplied to Williams this year, which was completed ahead of the 2024 components used by Aston Martin.
Mercedes also reported a big rise in average staff levels, by 175 to 1,289 last year, compared to 1,114 in 2022.
This resulted in their wages jumping by £29.6m to £111.7m from the £82.1m he reported in 2022 – although this was partly due to increased staff bonuses awarded to the team after they finished second in the Constructors’ Championship, not third in last season.
In the final calculation of profit, some tax elements were also at play.
The team’s 2022 figures included deferred tax assets, which meant last year’s profits were unusually good.
That, along with the government increasing the corporate tax rate to 25% in April 2023 from 19% in 2022, means Mercedes’ bill jumps by £23.7m from £8.6m in 2022 to £32.5 million pounds last year.
The contrast in tax payments from year to year has had a major impact on overall profits, but the business appears to be on very solid footing through EBIT (earnings before interest and tax) which is fairly stable. It was £113.8m for the year ending 2023, compared to £113.6m in 2022.
While Mercedes finished 2023 in second place in the championship, improving on their 2022 performance, they also reported a drop in the coverage they received on television as they had fewer podiums. However, other factors showed strong growth.
In a statement, Mercedes said: “The team’s share of television viewing showed a slight decrease to 14.7% for 2023, reflecting the lower number of podium finishes the team enjoyed compared to 2022.”
“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 following of 36 million (+15%) and a total of 465 million engagements (+9%).”
“During 2023, the team welcomed seven new commercial partners and introduced a world-class hospitality offering at the Las Vegas Grand Prix, to meet increased demand for VIP racegoers as F1 continues to grow globally. In juju, Forbes estimated the team’s worth at $3.8 billion.”
