Munich. The BMW Group recorded growth in deliveries,
revenues and earnings in the third quarter and is therefore well on
its way to achieving its targets for 2019. Group net profit increased
at a double-digit percentage rate, helped to some extent by a base
effect from the previous year’s reported figures. Moreover,
profitability has continued to improve over the course of the
nine-month period. To compensate for the high upfront expenditure on
future-oriented technologies, the BMW Group is working hard on
continually improving efficiency.
“At the nine-month stage, we are well on our way to achieving our
targets for the year as a whole,” said Oliver Zipse,
Chairman of the Board of Management of BMW AG, in Munich on Wednesday.
“However, we are looking further into the future, having recognised
that far-reaching technological transformation is a great opportunity
for the BMW Group. I am convinced that our business model will only
benefit from this. The vehicle of the future, with all its integrated
digital functions, is a high-tech product of a complexity that is
still underestimated.”
The BMW Group sees enormous potential for the future role of the
automobile on the back of these technological developments: “The
decisive transformation is taking place inside the vehicle. We are
bringing technological solutions to the road that ensure the
automobile continues to meet the expectations and needs of society
going forward. Areas of key focus include digital connectivity and
creating environmentally compatible mobility,” said Zipse.
Significant expansion in e-mobility – increase in upfront expenditure
The BMW Group is significantly expanding its range of e-mobility
products. By 2023, the company will have 25 electrified models on the
roads – more than half of which will be all-electric. The key to
implementation is highly flexible vehicle architectures and an equally
agile production system that enables a model to be manufactured as an
all-electric, a plug-in hybrid or a combustion engine version to
ideally meet demand in each relevant market segment. By 2021, demand
for electrified vehicles is likely to double compared to 2019. The BMW
Group then expects to see a steep growth curve up to 2025, with sales
of electrified vehicles growing on average by more than 30% annually.
As a pioneer in e-mobility, the BMW Group is already a leading
supplier of electrified vehicles. By the end of 2021, the company aims
to have more than a million all-electric or plug-in hybrids on the
roads worldwide.
All-electric vehicles planned with increased frequency
At that stage, the BMW Group will offer five all-electric
series-built vehicles. Alongside the BMW i3, demand
for which has increased by approximately 20% so far this year,
November will also see production of the all-electric MINI* begin at
the Oxford plant (UK). Over 78,000 customers have meanwhile expressed
a keen interest in the MINI ELECTRIC*. In 2020,
production of the all-electric BMW iX3 will begin at
the Shenyang plant (China), followed in 2021 by the
BMW iNEXT, which will be manufactured at the
Dingolfing plant (Germany). The BMW i4 is also due to
go into series production at the Munich plant the same year.
In paving the way for the future of mobility, a substantial level of
upfront expenditure was again required during the period under report.
Research and development expenses for the
nine-month period totalled € 4,247 million, 9.4% up on the previous
year (€ 3,881 million). The growing proportion of electrified vehicles
is also driving up costs. Exchange rate factors and rising prices for
raw materials also put downward pressure on earnings. Capital
expenditure for property, plant and equipment and other
intangible assets during the period from January to September
increased by 14.5% to € 3,308 million (2018: € 2,889 million), mainly
in connection with continuing the new model initiative as well as the
modernisation and flexibilisation of existing plant structures.
Revenues and net profit significantly up in third quarter
The BMW Group set a new record for third-quarter
deliveries with its highly attractive and rejuvenated
model range. In total, 613,361 units of the Group’s BMW, MINI and
Rolls-Royce premium brand vehicles were delivered during the
three-month period (2018: 592,303; +3.6%). The BMW Brilliance
Automotive joint venture in China continued to play a major role in
this positive development. Group revenues rose to
€ 26,667 million (2018: € 24,715 million; +7.9%). Profit
before financial result (EBIT) improved by around one third
to € 2,289 million (2018: € 1,722 million; +32.9%). In the third
quarter of the previous financial year, performance had been
significantly dampened by supply distortions and unexpectedly intense
competition due to the changeover to WLTP regulations as well as
higher expenditure for goodwill and warranty measures. All of these
factors had contributed to a significant decline in profit before
financial result in the third quarter, especially in the Automotive segment.
In 2019, third-quarter Group profit before tax (EBT)
increased significantly to € 2,248 million (2018: € 1,822 million;
+23.4%). The EBT margin came in at 8.4% (2018: 7.4%),
while Group net profit improved significantly to
€ 1,546 million (2018: € 1,387 million; +11.5%).
During the first nine months of 2019, the BMW Group
delivered a total of 1,866,198 units to customers (2018: 1,834,810
units; +1.7%). Group revenues increased slightly
year-on-year to € 74,844 million (2018: € 72,373 million; +3.4%).
Earnings for the nine-month period were impacted by a provision of
approximately € 1.4 billion recognised in the first quarter in
connection with the Statement of Objections received from the EU
Commission relating to ongoing antitrust proceedings. However, the BMW
Group has made it clear that if necessary it will contest the EU
Commission’s allegations with all the legal means at its
disposal. Profit before financial result (EBIT)
reported for the nine-month period amounted to € 5,079 million,
significantly lower than in the previous year (2018: € 7,168 million;
-29.1%). Group profit before tax (EBT) amounted to
€ 5,063 million (2018: € 7,827 million; -35.3%), corresponding to an
EBT margin of 6.8% (2018: 10.8%). The BMW Group
reported nine-month Group net profit of € 3,614
million (2018: € 5,745 million; -37.1%).
“The efficiency-boosting measures we have implemented are bearing
fruit: we are performing at a high level in comparison with our
competitors and considering the difficult conditions our business is
facing. Nonetheless, we aspire to achieve more than that,” said
Nicolas Peter, Member of the Board of Management of
BMW AG, Finance. “Upfront expenditure in the technologies of the
future such as e-mobility needs to be financed. That is why we
continue to work systematically on those matters that lie in our own
hands and maintain a clear focus on performance and efficiency.”
A key aspect in achieving these aims for the BMW Group is to develop
even faster digital processes and leaner structures. The
Performance NEXT initiative is expected to
generate efficiencies in excess of 12 billion euros by the end of
2022. Among other contributing factors, development times for new
vehicle models will be reduced by as much as one third. On the product
side, up to 50% of traditional drivetrain variants
will be eliminated from 2021 onwards in the transition to creating
enhanced flexible vehicle architectures – in favour of additional
electrified drivetrains. It is in this area that the full impact of
these measures will come into effect particularly in the years after
2022. Moreover, the model portfolio is regularly assessed with a view
to finding additional ways of reducing complexity.
Potential for greater synergy and efficiency in indirect purchasing as
well as in terms of material and production costs is also being
leveraged throughout the Group. Furthermore, the BMW Group is
strengthening its top line performance with new models – especially in
the high-margin segments. The company aims to double its sales volume
in the luxury segment from 2018 to 2020.
EBIT margin improved in third quarter
Automotive segment revenues for the three-month
period increased to € 23,016 million (2018: € 21,111 million; +9.0%).
EBIT was significantly higher than one year earlier at € 1,515 million
(2018: € 930 million; +62.9%), corresponding to a third-quarter
EBIT margin of 6.6% (2018: 4.4%). Profit
before tax amounted to € 1,533 million (2018: € 1,003
million; +52.8%). Free cash flow in the Automotive segment jumped to
€ 714 million in the third quarter (2018: € 98 million).
At € 64,853 million, nine-month segment revenues
were slightly up on the previous year (2018: € 62,629 million; +3.6%).
EBIT for the nine-month period from
January to September was influenced by the provision (approximately
€ 1.4 billion) recognised in the first quarter of the financial year
2019 in conjunction with the Statement of Objections received from the
EU Commission relating to ongoing antitrust proceedings, and
accordingly amounted to € 2,674 million (2018: € 4,730 million;
-43.5%). The EBIT margin came in at 4.1% (2018:
7.6%). Profit before tax amounted to € 2,989 million
(2018: € 5,346 million; -44.1%).
BMW brand sales increased by 2.2% to 1,601,397 units
in the first nine months of the year (2018: 1,566,216 units). During
this period, high double-digit growth was recorded in particular by
the BMW X3 (+74.0%) and the BMW X4 (+43.4%).
At 261,024 units, sales of the MINI brand in the
first nine months were slightly down year-on-year (2018: 265,935
units; -1.8%) within an extremely competitive market environment.
Sales figures for the MINI Countryman for the nine-month period went
up by 2.6% to 73,344 units (2018: 71,490 units), whereas the MINI
Hatch (3 and 5 door models) was slightly down year-on-year at 132,363
units (2018: 133,963 units; -1.2%).
Rolls-Royce continued to grow strongly in sales
volume terms, with 3,777 units delivered to customers worldwide in the
first nine months of the year (2018: 2,659 units; +42.0%). All regions
of the world recorded growth and sustained demand across the entire
range of Rolls-Royce model families. Sales of the Wraith, especially
the Black Badge variant, developed particularly well during the period
under report. Customer demand for the Cullinan remains exceptionally
high, as a result of which the order book has grown steeply and now
extends well into the first quarter of 2020. Based on this
performance, the brand remains firmly on course for a highly
successful financial year in 2019.
BMW Group strives for evenly balanced delivery distribution worldwide
The BMW Group remains committed to its strategy of achieving an even
distribution of deliveries worldwide, including a well-balanced
relationship between production and delivery volumes by region. In
this endeavour, the company leverages its highly flexible production
and sales structures to even out fluctuating demand between individual regions.
At 809,497 units, delivery numbers in Europe during
the nine-month period were similar to the previous year (2018: 816,037
units; -0.8%). In Germany, the region’s largest single market, the BMW
Group recorded solid growth, with deliveries up to 239,601 units
(2018: 224,933 units; +6.5%).
Deliveries of BMW, MINI and Rolls-Royce brand vehicles in
Asia during the first nine months of the year
increased to 681,773 units (2018: 638,449 units; + 6.8%). China
contributed significantly to this performance, with nine-month
deliveries of the Group’s three brands up by 14.5% to a total of
526,824 units (2018: 460.200 units).
In the Americas region, deliveries of 334,785 units
between January and September came close to matching the previous
year’s level (2018: 336,258 units; ‑0.4%). At 261,278 units, sales
volume in the USA was also at a similar level year-on-year (2018:
260,086 units; +0.5%).
Motorcycles segment reports higher revenues and earnings
BMW Motorrad was able to increase
deliveries of its motorcycles and maxi-scooters in
the third quarter to 43,744 units (2018: 39,818 units; +9.9%),
resulting in a corresponding growth in revenues to
€ 558 million (2018: € 476 million; +17.2%). EBIT
also improved, rising to € 35 million for the three-month period
(2018: € 33 million; +6.1%). The third-quarter EBIT
margin for the segment came in at 6.3% (2018: 6.9%).
Motorcycle deliveries during the first nine months
of 2019 totalled 136,932 units (2018: 126,793 units; +8.0%),
generating revenues of € 1,871 million (2018: € 1,658
million; +12.8%). EBIT improved by 8.7% to € 226
million (2018: € 208 million), corresponding to an EBIT
margin of 12.1% (2018: 12.5%).
Financial Services segment continues to perform well
The retail customer contract portfolio under
management within the Financial Services
segment grew by 3.4% to stand at 5,414,506 contracts as at 30
September 2019 (31 December 2018: 5,235,207 contracts). During the
third quarter, 504,217 (2018: 490,347 contracts;
+2.8%) new credit financing and lease contracts were
signed with retail customers. Revenues grew by 3.5%
to € 7,471 million (2018: € 7,219 million). Profit before
tax for the three-month period amounted to € 597 million
(2018: € 549 million; +8.7%).
In total, 1,475,504 new contracts were concluded
with customers during the nine-month period under
report (2018: 1,422,558 contracts; +3.7%). Segment
revenues increased to € 21,981 million (2018:
€ 20,807 million; +5.6%) and profit before tax to
€ 1,797 million (2018: € 1,705 million; +5.4%).
Workforce at previous year’s level
The BMW Group’s workforce comprised 135,524
employees at 30 September 2019 and was therefore at a similar level to
the end of the previous financial year (134,682; +0.6%). The BMW Group
continues to recruit skilled workers and IT specialists on a selective
basis to engage in future-oriented projects such as digitalisation,
autonomous driving and electric mobility. By capitalising on natural
fluctuation trends, the aim for the year as a whole is to maintain
workforce numbers at the previous year’s level.
BMW Group reaffirms targets for current financial year
The BMW Group sets itself ambitious targets, even in times of
political and economic uncertainty. With its young product
portfolio, further rejuvenated with the introduction of new
models, the Group intends to remain the world’s leading automotive
manufacturer in the premium segment.
The BMW Group is again investing substantially in new technologies
and the mobility of the future in 2019. Costs are also being driven up
in other areas, including the significantly higher cost of complying
with stricter carbon emission legislation. Against this background,
rising manufacturing costs are likely to have a
dampening effect on earnings. Currency factors and raw materials
prices will also have a negative impact. At the same time, the ongoing
issue of international trade conflicts remains a source of uncertainty.
Taking all these factors into account, the BMW Group is confident of
its ability to achieve volume growth in the Automotive
segment, where it is targeting a slight increase in the
number of deliveries to customers in 2019. Within a stable business
environment, an EBIT margin in the range of 8 to 10%
remains the set target for the BMW Group. However, its ability to
influence underlying conditions is limited. Excluding the impact of
the € 1.4 billion provision recognised in connection with ongoing
antitrust proceedings, the target range for the EBIT margin remains
unchanged at 6 to 8%. Since the provision has a negative impact on the
EBIT margin, the BMW Group is expecting a margin between 4.5 and 6.5%
in the Automotive segment for 2019.
With its rejuvenated model range, the Motorcycles
segment is forecast to achieve a solid increase in deliveries
to customers. As in 2018, the segment EBIT margin is
expected to be within the target range of 8 to 10%. In the
Financial Services segment, the BMW Group expects a
return on equity at the previous year’s level and
thus above the target of 14%.
In addition to the various negative influences described above, the
fact that some positive valuation effects recorded in 2018 will not be
repeated in 2019 will result in a significant decline in the Group’s
financial result. Group profit before tax is
therefore also expected to be significantly below the previous year’s level.
Forecasts made for the current year are based on the assumption that
worldwide economic and political conditions will not
change significantly. However, any deterioration in conditions could
have a negative impact on the outlook. The BMW Group will vigorously
continue to implement key measures for growth on the one hand and
improved performance and efficiency on the other, thereby creating
sufficient headroom to enable it to help shape the
future and secure its own competitiveness going forward. Its
operational and financial strength place the BMW Group in an excellent
position to play a key role in shaping the ongoing transformation and
enhance its leading role in the automotive industry.
* * *
The BMW Group – an overview
Jan. – Sept.
2019
Jan. – Sept.
2018
Change in %
Deliveries to customers
Automotive
units
1,866,198
1,834,810
1.7
thereof: BMW
units
1,601,397
1,566,216
2.2
MINI
units
261,024
265,935
-1.8
Rolls-Royce
units
3,777
2,659
42.0
Motorcycles
units
136,932
126,793
8.0
Workforce
1 (compared to 31 December
2018)
135,524
134,682
0.6
Automotive
segment EBIT margin
%
4.1
7.6
-3.5 % points
Motorcycles
segment EBIT margin
%
12.1
12.5
-0.4 % points
EBT margin BMW Group
3
%
6.8
10.8
-4.0 % points
Revenues
3
€ million
74,844
72,373
3.4
thereof: Automotive
€ million
64,853
62,629
3.6
Motorcycles
€ million
1,871
1,658
12.8
Financial
Services3
€ million
21,981
20,807
5.6
Other Entities
€ million
4
4
–
Eliminations3
€ million
-13,865
-12,725
-9.0
Profit before financial result (EBIT)
3
€ million
5,079
7,168
-29.1
thereof: Automotive
€ million
2,674
4,730
-43.5
Motorcycles
€ million
226
208
8.7
Financial
Services3
€ million
1,860
1,694
9.8
Other Entities
€ million
7
22
-68.2
Eliminations3
€ million
312
514
-39.3
Profit before tax (EBT)
3
€ million
5,063
7,827
-35.3
thereof: Automotive
€ million
2,989
5,346
-44.1
Motorcycles
€ million
222
205
8.3
Financial
Services3
€ million
1,797
1,705
5.4
Other Entities
€ million
-181
105
–
Eliminations3
€ million
236
466
-49.4
Income taxes
3
€ million
-1,493
-2,060
27.5
Net profit
3,4
€ million
3,614
5,745
-37.1
Earnings per share
2,3
€
5.37/5.38
8.62/8.63
-37.7/-37.7
1 Excluding dormant employment contracts, employees in the
work and non-work phases of pre-retirement part-time working
arrangements and low wage earners.
2 Earnings per share of common stock/preferred stock.
3 Prior year figures adjusted due to first-time application
of revised IFRS 16; see note 4 to the Interim Group Financial
Statements for the period ended 30 June 2019.
4 Value for 2018 includes a loss from discontinued
operations of € 22 million; value for 2019 includes a loss from
discontinued operations of € 44 million.
The BMW Group – an overview
3rd quarter
2019
3rd quarter
2018
Change in %
Deliveries to customers
Automotive
units
613,361
592,303
3.6
thereof: BMW
units
525,438
506,920
3.7
MINI
units
86,680
84,505
2.6
Rolls-Royce
units
1,243
878
41.6
Motorcycles
units
43,744
39,818
9.9
Workforce
1 compared to 31 December
2018)
135,524
134,682
0.6
Automotive
segment EBIT margin
%
6.6
4.4
+2.2 % points
Motorcycles
segment EBIT margin
%
6.3
6.9
-0.6 % points
EBT margin BMW Group
3
%
8.4
7.4
+1.0 % points
Revenues
3
€ million
26,667
24,715
7.9
thereof: Automotive
€ million
23,016
21,111
9.0
Motorcycles
€ million
558
476
17.2
Financial
Services3
€ million
7,471
7,219
3.5
Other Entities
€ million
1
1
–
Eliminations3
€ million
-4,379
-4,092
-7.0
Profit before financial result (EBIT)
3
€ million
2,289
1,722
32.9
thereof: Automotive
€ million
1,515
930
62.9
Motorcycles
€ million
35
33
6.1
Financial
Services3
€ million
606
528
14.8
Other Entities
€ million
1
6
-83.3
Eliminations3
€ million
132
225
-41.3
Profit before tax (EBT)
3
€ million
2,248
1,822
23.4
thereof: Automotive
€ million
1,533
1,003
52.8
Motorcycles
€ million
35
31
12.9
Financial
Services3
€ million
597
549
8.7
Other Entities
€ million
-26
27
–
Eliminations3
€ million
109
212
-48.6
Income taxes
3
€ million
-702
-420
-67.1
Net profit
3,4
€ million
1,546
1,387
11.5
Earnings per share
2,3
€
2.31/2.31
2.07/2.07
11.6/11.6
1 Excluding dormant employment contracts, employees in the
work and non-work phases of pre-retirement part-time working
arrangements and low wage earners.
2 Earnings per share of common stock/preferred stock.
3 Prior year figures adjusted due to first-time application
of revised IFRS 16; see note 4 to the Interim Group Financial
Statements for the period ended 30 June 2019.
4 Value for 2018 includes a loss from discontinued
operations of € 15 million.
For queries, please contact:
Corporate Communications
Max-Morten Borgmann, Corporate Communications
Telephone: +49 89 382-24118, Max-Morten.Borgmann@bmwgroup.com
Mathias Schmidt, Head of Corporate and Culture Communications
Telephone: +49 89 382-24544, Mathias.M.Schmidt@bmw.de
Internet: www.press.bmwgroup.com
Email: presse@bmwgroup.com
The BMW Group
With its four brands BMW, MINI, Rolls-Royce and BMW Motorrad, the BMW
Group is the world’s leading premium manufacturer of automobiles and
motorcycles and also provides premium financial and mobility services.
The BMW Group production network comprises 31 production and assembly
facilities in 15 countries; the company has a global sales network in
more than 140 countries.
In 2018, the BMW Group sold over 2,490,000 passenger vehicles and
more than 165,000 motorcycles worldwide. The profit before tax in the
financial year 2018 was € 9.815 billion on revenues amounting to €
97.480 billion. As of 31 December 2018, the BMW Group had a workforce
of 134,682 employees.
The success of the BMW Group has always been based on long-term
thinking and responsible action. Ecological and social sustainability
along the entire value-added chain, full responsibility for our
products and an unequivocal commitment to preserving resources are
prime objectives firmly embedded in our corporate strategy.
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