Munich. The BMW Group invested substantially in the
mobility of the future during the first half of the year, while at the
same time firmly continuing on its course of profitable growth.
Rigorous implementation of the Group’s Strategy NUMBER ONE
NEXT is playing a key role, as the company shapes the
transformation of the automotive sector. Driving this process forward,
the BMW Group always remains focused on the needs and desires of its
customers and is continuing its ground-breaking work on the four
ACES topics (Autonomous,
Connected, Electrified and
Services/Shared). The BMW Group has also set a
decisive course for its future in China, the company’s largest growth market.
“We continue to focus on following our own path and remain firmly on
course. We are consistently preparing ourselves to meet the demands of
tomorrow. This approach enables us to remain a reliable partner – all
the more important during challenging times,” stated Harald
Krüger, Chairman of the Board of Management of BMW AG, in
Munich on Thursday. “The BMW Group has more than 100 years of
experience in dealing with volatility in a changing world. Our vision
remains clearly on long-term prospects. It is crucial that we remain
focused on the key issues of profitability, growth and innovation to
ensure our competitive edge going forward.”
As planned, this year the BMW Group has significantly increased its
upfront expenditure on future mobility. Research and
development expenses over the first six months of 2018 were
more than € 300 million higher than in the corresponding period one
year earlier and totalled € 2,610 million (+13.6%). As previously
reported, full-year RD expenses are likely to reach up to seven
per cent of Group revenues in the current year (2017: 6.2%).
In addition to ramping up production to drive the new model
offensive, the BMW Group is focusing on expanding its activities in
the fields of electric mobility and autonomous driving. In both cases,
the BMW iNEXT will serve as a technological spearhead
that sets new standards. It will be presented to the public as a
vision vehicle during the second half of 2018 and will be built at the
Dingolfing plant from 2021 onwards. This underlines the significance
of Germany as a key location for future technologies and a centre of
competence for electric mobility.
Commitment in China taken to a new level
Over the past few weeks, the BMW Group has also taken numerous steps
to expand its footprint and the scale of its commercial success in
China. The BMW Group and Brilliance Automotive Group
have agreed to further expand their joint venture BMW Brilliance
Automotive (BBA) and, from 2020 onwards, to export the all-electric
BMW iX3 (which will be manufactured by BBA) to
markets outside of China.
As previously stated, the BMW Group welcomes China’s commitment to a
further opening of its markets and initiating reforms by lifting the
foreign shareholding limit for automotive joint ventures for passenger
vehicles as from 2022. However, it remains the BMW Group’s policy not
to comment publicly on ongoing discussions with partners.
In addition to expanding the BBA joint venture, the BMW Group has
signed an agreement with the Chinese manufacturer Great Wall Motor to
produce electric MINI vehicles in China through a
mutual 50:50 joint venture. As well as electric MINI vehicles, the
“Spotlight Automotive Limited” joint venture will also
produce electric vehicles for Great Wall Motor. The establishment of
the new company is subject to approval by the relevant Chinese
authorities and the finalisation of business registration procedures.
The BMW Group is also investing in Europe, adding a
new plant in Hungary to its existing production network and thereby
maintaining a good balance in terms of global manufacturing between
Asia, America and Europe. “The decision to construct this new
plant highlights the BMW Group’s prospects for growth,” said
Krüger. “This new location will also produce
vehicles powered by combustion engines and electrified drivetrains on
the same production line.”
The BMW Group is developing worldwide into a mobility tech company
and systematically expanding its expertise and capacities in the field
of software development. To this end, during the
second quarter the BMW Group signed an agreement with CRITICAL
Software to form a joint venture called Critical TechWorks, subject to
examination and approval by the relevant antitrust authorities. The
BMW Group’s stake in Critical TechWorks secures access to the know-how
and skills of a highly successful European software development
company, whose locations in Lisbon and Porto are witnessing dynamic
growth in this sector. Meanwhile, the BMW Group continues to increase
the number of people engaged in IT and software development in Germany
and at its many other facilities around the world.
BMW Group underlines its leading role in electric mobility
The BMW Group has pioneered electric mobility and followed this path
resolutely ever since the market launch of the BMW i3 almost five
years ago. Following the launch of the new BMW i8 Roadster, the BMW
Group’s product range now includes ten electrified models. The number
of electrified BMW and MINI vehicles delivered since the beginning of
the year has increased to 60,660 units (+42.5%), underlining the BMW
Group’s position among the world’s leading providers of premium
e-mobility. “We are delivering on our promise of more than
140,000 electrified vehicles this year,” said
Krüger. Furthermore, production of the
battery-electric MINI will begin at the Oxford plant at the end of
2019, followed in 2020 by the all-electric BMW iX3, which will be
manufactured in Shenyang, China. Together with the BMW iNEXT and the
BMW i4, the BMW Group is set to have 25 electrified models
on the roads by 2025, half of which will be all-electric.
BMW Group on course after first half of year
A successful and sustainably profitable core business continues to
form the backbone of the BMW Group. “We always see challenging
conditions as an opportunity to leverage our competitive edge to the
best advantage. A clear focus and high flexibility are our response to
an environment characterised by dynamic change,” commented
Nicolas Peter, Member of the Board of Management of
BMW AG, Finance. “We are endeavouring to ensure that the BMW
Group remains profitable on a sustainable basis. The company’s
financial strength and its position as the world’s most profitable
manufacturer enable us to achieve our aims. These fundamental
qualities guarantee our ability to shape tomorrow’s mobility with our
own resources – even in times of volatility.” The Automotive
segment generated free cash flow of € 1,944 million during the first
six months of the year (2017: € 2,035 million; -4.5%) and continues to
target a figure in excess of three billion euros for the full year.
Deliveries of BMW, MINI and Rolls-Royce premium brand vehicles
increased by 1.8% to 1,242,507 units (2017: 1,220,819 units) during
the first half of the year. Group
revenues amounted to € 47,717 million (2017: € 49,691
million; ‑4.0%). Adjusted for currency effects, revenues were at a
similar level to the previous year (-0.3%). In view of the
significantly higher upfront expense incurred for research and
development activities, profit before financial
result (EBIT) amounted to € 5,479 million (2017: € 5,753
million; -4.8%). The financial result for the six-month period
benefited from the contribution of € 444 million (2017: € 342 million)
made by the BBA joint venture in China. Profit before
tax (EBT) amounted to € 6,038 million (2017: € 6,238 million;
-3.2%). The EBT margin for the Group came in at 12.7%
(2017: 12.6%). Group net profit amounted to
€ 4,383 million (2017: € 4,491 million; -2.4%).
Second-quarter deliveries edged up by 0.7% to 637,878
units (2017: 633,582 units). Group revenues for the
three-month period totalled € 25,023 million (2017: € 25,765 million;
-2.9%, currency adjusted +0.1%). Profit before financial
result (EBIT) finished at € 2,746 million (2017: € 2,932
million; ‑6.3%) due to a significant increase in upfront RD
expenditure. Profit before tax (EBT) amounted to
€ 2,873 million (2017: € 3,058 million; -6.0%). The EBT
margin came in at 11.5% (2017: 11.9%), above the target of 10
percent set for the Group. Group net profit amounted
to € 2,082 million (2017: € 2,217 million; -6.1%).
Automotive segment: EBIT margin within target range
Six-month revenues for the Automotive segment
totalled € 41,518 million (2017: € 42,166 million; -1.5%;
currency adjusted +2.4%). Segment EBIT amounted to
€ 3,800 million (2017: € 4,121 million; -7.8%), resulting in an
EBIT margin of 9.2% (2017: 9.8%). Profit
before tax for the six-month period amounted to € 4,343
million (2017: € 4,676 million; -7.1%).
At € 22,192 million, second-quarter Au
tomotive segment revenues were at a similarly high
level to the previous year (€ 22,165 million; +0.1%, currency adjusted
+3.2%). In addition to considerably higher RD expenses,
second-quarter EBIT was also negatively impacted on a
low- to mid-three-digit million-euro scale by exchange-rate effects
and higher raw materials prices. To a large extent additional costs
were offset by efficiency improvements. Overall, EBIT
for the three-month period amounted to € 1,919 million (2017: € 2,244
million; ‑14.5%), resulting in an EBIT
margin for the Automotive segment of 8.6% (2017:
10.1%), which lies within the unchanged target range of between 8 and
10%. Profit before tax reached € 2,062 million (2017:
€ 2,391 million; ‑13.8%).
The excellent second-quarter sales performance means that the BMW
Group has now recorded growth in 35 consecutive quarters. The ramp-up
of production of the BMW X3 in China and South Africa
will enable the BMW Group to meet the high market demand for its
coveted X models. This increased availability means the company
expects sales growth to accelerate during the second half of the year.
The conversion of BMW models to the new WLTP test
procedure is proceeding according to plan and has been largely
completed. In addition, around 190 models currently already comply
with the Euro 6d-TEMP emissions standard, which does not become
mandatory for all new registrations until 1 September 2019. The range
of these models extends from conventional petrol and diesel vehicles
to BMW i and BMW iPerformance as well as BMW M GmbH.
A total of 1,059,296 BMW brand vehicles were
delivered to customers worldwide (2017: 1,038,030 units; +2.0%) during
the first half of the year. The BMW 1 Series (98,396
units; +7.2%), the BMW X1 (152,866 units; +11.8%) and
the BMW 5 Series (191,185 units; +14.9%) were among
the numerous models that have contributed to sales volume growth since
the beginning of the year. The BMW 5 Series Sedan took first place in
the business sedan segment over the six-month period. Improved
availability resulted in a 24.6% jump in monthly deliveries of the
BMW X3 to 17,584 units in June.
At 181,430 units (+0.1%) worldwide deliveries of
MINI brand vehicles during the first six months of
the year matched the high level recorded one year earlier. The MINI
Countryman was particularly popular, with 48,692 units (+39.8%)
delivered to customers during the first half of the year.
Six-month deliveries of Rolls-Royce brand vehicles
rose by 13.1% (1,781 units) year-on-year. Rolls-Royce models remain in
high demand in most regions, including a positive upward trend in
China. Market conditions in the Middle East, however, remain volatile.
In addition to excellent sales figures for the new Phantom, demand for
the Black Badge versions of the Dawn, Ghost and Wraith models is
surpassing expectations. The new Rolls-Royce Cullinan was presented in
May to great acclaim and has generated a sizeable order book
stretching well into next year.
All three major sales regions contributed to volume
growth in the first half of the year. In Europe, the
number of vehicles delivered increased slightly year-on-year (562,102
units; +1.2%). Deliveries of BMW Group vehicles were also up in the
Americas region (226,061 units; +3.9%), with all
markets in the region recording volume growth in the first half of
2018 , including the USA (176,570 units; +2.8%). Sales figures for
Asia were also higher for the six-month period
(423,890 units; +1.9%). The BMW Group’s largest market, China, saw a
slight increase in deliveries (300,153 units; +2.2%).
Motorcycles segment revamps model range
BMW Motorrad is revamping its model range on a massive scale in 2018,
with nine new models being launched. However, production adjustments
necessary during the ramp-up phase are having a negative impact on
delivery numbers. During the first six months of the
year, the Motorcycles segment delivered a total of
86,975 motorcycles and maxi-scooters to customers (2017: 88,389 units;
-1.6%). Revenues totalled € 1,182 million (2017:
€ 1,315 million; -10.1%). Profit before financial result
amounted to € 175 million (2017: € 229 million; ‑23.6%),
leading to an EBIT margin of 14.8% (2017: 17.4%). Profit
before tax for the six-month period amounted to € 174
million (2017: € 228 million; ‑23.7%).
A total of 51,117 units (2017: 52,753 units; -3.1%) were delivered to
customers during the second quarter, generating
revenues of € 658 million (2017: € 695 million;
-5.3%). Profit before financial result fell to € 98
million (2017: € 104 million; -5.8%), corresponding to an EBIT margin
in the segment of 14.9% for the quarter (2017: 15.0%). Profit
before tax for the three-month period amounted to € 96
million (2017: € 103 million; -6.8%).
Financial Services segment remains firmly on course
The Financial Services segment continued to perform
well during the first six months of 2018. In total,
932,211 (2017: 934,237; -0.2%) new
credit financing and lease
contracts were signed during the first half of 2018.
The contract portfolio with retail customers
comprised 5,506,901 contracts at 30 June 2018 (31 December 2017:
5,380,785 contracts; +2.3%). Segment revenues
totalled € 13,815 million (2017: € 14,090 million; -2.0%).
Profit before tax amounted to € 1,166 million
(2017: € 1,184 million; -1.5%) for the six-month period.
A total of 480,303 (2017: 468,603 / +2.5%) new
credit financing and lease
contracts were signed during the second
quarter. Segment revenues amounted to
€ 7,141 million (2017: € 7,044 million; +1.4%). Profit before
tax amounted to € 605 million (2017: € 589 million; +2.7%).
Increase in workforce size
The BMW Group’s workforce comprised 131,636
employees at 30 June 2018, 1.3% more than at 31 December 2017. The
Group continues to recruit skilled workers and IT specialists in
future-oriented areas including digitalisation, autonomous driving and
electric mobility.
BMW Group reaffirms targets for the financial year 2018
The BMW Group is confident of achieving its projected targets for the
current financial year – largely driven by its strong brands, its
attractive product portfolio and the expectation that international
automobile markets will continue their generally upward trend. These
favourable factors are offset by extremely high levels of upfront
expenditure for new technologies, intense competition and rising
personnel expenses. The global political and economic environment is
expected to remain volatile.
The BMW Group reaffirms its targets for the full year.
Deliveries and revenues for the
Automotive segment are both forecast to grow
slightly to achieve new highs in 2018. Group profit before
tax is being targeted at the previous year’s level. The
EBIT margin for the Automotive segment is expected
to remain within the target range of between 8 and 10%.
In connection with the planned bundling of its mobility services, the
BMW Group has announced that – subject to approval by antitrust
authorities in the current year – the establishment of the joint
venture will have a one-off valuation and earnings effect and result
in an adjustment to the outlook. Under these circumstances, the
Group profit before tax for 2018 would be slightly
higher than in the previous year. The effect described above has no
impact on the EBIT margin of the Automotive segment.
Forecasts for the current financial year are based on the assumption
that worldwide economic and political conditions will not change significantly.
* * *
The BMW Group – an overview
1st half year 2018
1st half year 2017
Change in %
Deliveries to customers
Automotive
units
1,242,507
1,220,819
1.8
Thereof: BMW
units
1,059,296
1,038,030
2.0
MINI
units
181,430
181,214
0.1
Rolls-Royce
units
1,781
1,575
13.1
Motorcycles
units
86,975
88,389
-1.6
Workforce
1 (compared to
31.12.2017)
131,636
129,932
1.3
Automotive
segment EBIT margin3
%
9.2
9.8
-0.6 %points
Motorcycles
segment EBIT margin3
%
14.8
17.4
-2.6 %points
EBT margin BMW Group
3
%
12.7
12.6
+0.1 %points
Revenues
3
€ million
47,717
49,691
-4.0
Thereof:
Automotive3
€ million
41,518
42,166
-1.5
Motorcycles3
€ million
1,182
1,315
-10.1
Financial Services
€ million
13,815
14,090
-2.0
Other Entities
€ million
3
3
–
Eliminations3
€ million
-8,801
-7,883
-11.6
Profit before financial result (EBIT)
3
€ million
5,479
5,753
-4.8
Thereof:
Automotive3
€ million
3,800
4,121
-7.8
Motorcycles
€ million
175
229
-23.6
Financial Services
€ million
1,176
1,192
-1.3
Other Entities
€ million
16
12
33.3
Eliminations3
€ million
312
199
56.8
Profit before tax (EBT)
3
€ million
6,038
6,238
-3.2
Thereof:
Automotive3
€ million
4,343
4,676
-7.1
Motorcycles
€ million
174
228
-23.7
Financial Services
€ million
1,166
1,184
-1.5
Other Entities
€ million
78
19
–
Eliminations3
€ million
277
131
–
Income taxes
3
€ million
-1,648
-1,747
5.7
Net profit
3,4
€ million
4,383
4,491
-2.4
Earnings per share
2,3
€
6.60/6.61
6.79/6.80
-2.8/-2.8
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 2017 figures were adjusted according to IFRS 15 – see
note [5] in quarterly report.
4 2018 figure incl. -7 Mio. € from discontinued operations
The BMW Group – an overview
2nd quarter
2018
2nd quarter 2017
Change in %
Deliveries to customers
Automotive
units
637,878
633,582
0.7
Thereof: BMW
units
541,849
534,585
1.4
MINI
units
95,055
98,155
-3.2
Rolls-Royce
units
974
842
15.7
Motorcycles
units
51,117
52,753
-3.1
Workforce
1 (compared to
31.12.2017)
131,636
129,932
1.3
Automotive
segment EBIT margin3
%
8.6
10.1
-1.5 %points
Motorcycles
segment EBIT margin3
%
14.9
15.0
-0.1 %points
EBT margin BMW Group
3
%
11.5
11.9
-0.4 %points
Revenues
3
€ million
25,023
25,765
-2.9
Thereof:
Automotive3
€ million
22,192
22,165
0.1
Motorcycles3
€ million
658
695
-5.3
Financial Services
€ million
7,141
7,044
1.4
Other Entities
€ million
1
1
–
Eliminations3
€ million
-4,969
-4,140
-20.0
Profit before financial result (EBIT)
3
€ million
2,746
2,932
-6.3
Thereof:
Automotive3
€ million
1,919
2,244
-14.5
Motorcycles
€ million
98
104
-5.8
Financial Services
€ million
607
588
3.2
Other Entities
€ million
7
8
-12.5
Eliminations3
€ million
115
-12
–
Profit before tax (EBT)
3
€ million
2,873
3,058
-6.0
Thereof:
Automotive3
€ million
2,062
2,391
-13.8
Motorcycles
€ million
96
103
-6.8
Financial Services
€ million
605
589
2.7
Other Entities
€ million
8
23
-65.2
Eliminations3
€ million
102
-48
–
Income taxes
3
€ million
-784
-841
6.8
Net profit
3,4
€ million
2,082
2,217
-6.1
Earnings per share
2,3
€
3.13/3.14
3.34/3.35
-6.3/-6.3
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 2017 figures were adjusted according to IFRS 15 – see
note [5] in quarterly report.
4 2018 figure incl. -7 Mio. € from discontinued operations
For questions please contact:
Corporate Communications
Max-Morten Borgmann, Business and Finance Communications
Telephone: +49 89 382-24118, Telefax: +49 89 382-24418
max-morten.borgmann
@bmwgroup.com
Glenn Schmidt, Head of Business and Finance Communications
Telephone: +49 89 382-24544, Telefax: +49 89 382-24418
glenn.schmidt@bmwgroup.com
Internet: www.press.bmwgroup.com
e-mail: presse@bmw.de
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 30 production and assembly
facilities in 14 countries; the company has a global sales network in
more than 140 countries.
In 2017, the BMW Group sold over 2,463,500 passenger vehicles and
more than 164,000 motorcycles worldwide. The profit before tax in the
financial year 2017 was € 10.655 billion on revenues amounting to
€ 98.678 billion. As of 31 December 2017, the BMW Group had a
workforce of 129,932 employees.
The success of the BMW Group has always been based on long-term
thinking and responsible action. The company has therefore established
ecological and social sustainability throughout the value chain,
comprehensive product responsibility and a clear commitment to
conserving resources as an integral part of its strategy.
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