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22 million loss: Mercedes before break-even

Despite the second achievement of the World Cup doubles in Formula 1, the Mercedes team again lost millions in the financial year 2015. Strictly speaking, the balance sheet published at the British Commercial Register Companies House contains a minus of 22,3 million British pounds (converted into 24,7 million euro).

The workforce is thus in the immediate run-up to the break-even. 2014 had the minus still 76,9 million pounds. In the balance sheet of the year 2016, Mercedes will rise to a higher bonus level for the two-time World Championship win in terms of the distribution of Formula One revenues. These bonus payments for the double in the designer-WM 2014/15 are paid retrospectively only 2016.

Already in the 2015 balance sheet, the team’s sporting success over the past three years has had an impact. Turnover has increased from 146,9 to 213,3 million pounds compared to 2014. Subsidies from Daimler AG, which holds 60 percent of the Mercedes team, are not taken into account. The remaining 40-percent are owned by Toto Wolff (30, Sports Manager) and Niki Lauda (10, Chairman of the Board of Supervisors).

Even the most successful team concludes negatively

While a negative business balance of the most successful team of formula 1 remotely restarts the cost discussion in formula 1, Mercedes celebrates the numbers as a success. For the minus of 22,3 million pounds is the estimated value of over three billion US dollars in television, classical media and social media. Daimler benefits. Despite this, Wolff leaves relatively free rein in the management of the team.

We are in a very happy position that our most important partners understand our business,”says the Austrian.”We are in a very happy position that our most important partners understand our business.” You know that a Formula One team doesn’t work if it’s run like a normal company. You need to be independent, agile and able to make quick decisions. The Daimler board, led by Dieter Zetsche, understood that.”

Wolff thanks Daimler for his patience

Daimler and the main partners in the team’s construction phase, which started long before Wolff’s start, were a”decisive factor for our success”, says the sports director and thanks to his predecessors: “Our results today begin with the good decisions of Ross Brawn, who has driven the technologies and engaged the right people.”

“On this foundation we have built with a clear strategy. Now we see that the company on the business side reaps the fruits, as in previous years already on the track,”says Wolff. This is accompanied by an increase in staff: Stand 2015 has employed Mercedes 807 employees (2014: 765), of which 90 are active in the management area and 717 in design and production.

The operating costs of the team have increased from 2014 to 2015 by 3,5 percent; the staff cost 78,4 million pounds. The Mercedes success is also worthwhile for its executives: if 2014 had spent six,0 million pounds on its members, it was 2015 10,5 million. The Management Board shall be composed of seven persons; including Wolff, Lauda and technical director Paddy Lowe.

New rules for 2017 cost money

The Mercedes team’s perspective is positive with continued sporting success. 2016 will for the first time include the financial reward for the profit of two WM titles in the business balance sheet. At the same time, developing a car for a new regulation will also cost money. Wolff: “We need to find a way to start a new cycle of success. There are new goals and challenges now.”

“If you take risks”, he describes his philosophy,”you are a player. Then go to the casino. If you’re lucky, you win. I’ve seen in my life that successful managers don’t take risks. They make sure they have all the information they need to make good decisions. For me, it’s always about the worst-case scenario. If this is tolerable, you can take a risk.”