In essence, the figures represent increased revenue from sponsorship and the F1 prize fund, and are solid proof of how successful top teams can be in the sport’s current financial environment.
The turnover figure also includes a contribution from the Applied Science division. Like other big teams Mercedes has moved people and other resources out of a direct involvement in the F1 programme in order to stay under the cost cap.
The overall income figure also includes items such as the sale of gearboxes and associated systems to Aston Martin and Williams.
Mercedes-Benz Grand Prix Ltd declared turnover of £474.6m for 2022, representing an increase of £91.3m on the previous year’s figure of £383.3m.
That revenue was split approximately into 51% for sponsorship and licensing, 30% from the F1 prize fund, and 19% for other income, which was mainly the Applied Science division.
The prize fund income was up because 2021 was still a COVID-hit season with several of the more lucrative flyaway races absent and some late replacements added, with some crowd restrictions still in place, whereas in 2022 there was a normal schedule.
Thus there was a bigger overall pie to share between the teams in 2022, and as reigning 2021 constructors’ champion, Mercedes continued to earn the biggest slice.
That income is set to dip for the 2023 season as the impact of the team’s slip to third place in the 2022 championship kicks in.
Cost of sales, in essence what the team spent to go racing, rose by a smaller amount than turnover, from £297.4m to £350.8m.
That reflects the extra resources put into the W13 project for the new regulations in 2022, after the previous car was largely a carryover, as well as the impact of inflation.
In addition the calendar, more flyaway races added to the overall cost of running the team in 2022.
Profits after tax were £89.7m, up by some £20.9m from £68.8m. However, there was a one-off tax situation in 2022 that put a big dent in the former figure. At an operating level the profit was even bigger, up from £71.9m to £113.6m, which perhaps gives a truer indication of how well the company performed.
A dividend of £75.0m was split equally between the three shareholders, Mercedes AG, Ineos and team principal Toto Wolff’s company, MIL.
The average headcount in 2022 was 1114, an increase of over 100 compared to the previous year. Only 24 added in design, engineering and manufacturing, and thus directly under the cost cap, with the rest in administration.
The latter rise largely reflects the extra HR and finance people needed to deal with the operation of the cost cap, as well as additional marketing staff involved in the servicing of sponsors, with the team undertaking more hospitality at races.
Intriguingly, despite the rise in overall staff, costs were down from £109.0m to £93.8m, essentially reflecting the fact that in 2022 the team fell to third in the constructors’ championship with just one race win, and thus employees didn’t receive the success bonuses that they earned in 2021.
The 2022 season also saw the team finally acquire ownership of the Brackley site it has occupied since it started as British American Racing in 1999, and which is signalled by an increase of £30m in tangible assets.
Wolff noted that the acquisition “will give a more secure, robust and autonomous business model for the future, and enable significant investment into cutting-edge, net-zero-carbon facilities as the campus is developed.”
One interesting detail that emerges from the accounts is that the annual Ineos sponsorship was worth £42.0m in 2022. That figure had to be made public because the company is a related party as a shareholder of the team.
In addition, the Ineos-backed America’s Cup project, Athena Racing, paid £12.8m for the R&D work conducted by Applied Sciences.
