Statement by Dr. Friedrich Eichiner, Member of a Board of Management of BMW AG, Finance, Conference Call Interim Report to 30 Sep 2016

Good morning, Ladies and Gentlemen,

 

The BMW Group achieved good in a third entertain of 2016 and
continued a certain business expansion from a initial half of the
year. EBIT domain in a Automotive Segment stays within a target
range, during 9.1%, for a initial 9 months. Sales, revenues and Group
pre-tax gain all reached new all-time highs for a year to the
finish of September. We are also progressing a desirous superintendence for
a full year. In a initial 9 months of a year, a BMW Group
delivered roughly 1.75 million vehicles to business – 6.2% some-more than
a prior year.

 

In China, BMW Group deliveries exceeded a expectations. More than
379,000 cars were sole by a finish of Sep – an boost of 10.7%.

Both locally constructed and alien models did well. The
long-wheelbase chronicle of a new BMW X1 and a other X models are
proof generally renouned with business in China. Despite lifecycle
factors, sales of a BMW 3 Series and a BMW 5 Series continued to
perform good here. Sales expansion in Europe continued to be
dynamic, with double-digit growth. The categorical sales drivers were our
compress vehicles and X models. The new BMW 7 Series also continues to
make poignant gains. The US automobile marketplace stays rarely competitive
with a BMW Group focusing on a scold change between volume and
profitability. The association continues to advantage from a process of
globally offset sales.

 

 

During a march of fine-tuning a strategy, a BMW Group made
some pivotal decisions to beam a association into a future. The company
is operative tough to exercise these measures by targeted
investments in tomorrow’s mobility. In a initial 9 months of this
year, we fake brazen with many opposite projects, including
foundation of a product choice and topics associated to digitalisation.

 

Third-quarter Group revenues climbed 4.6% to € 23.36 billion, but
were dampened rather by banking headwinds. Adjusted for currency
interpretation effects, revenues rose in line with sales, by 6.6%. At the
finish of a initial 9 months, revenues reached € 69.23 billion.
Pre-tax gain climbed 13.8% between Jul and Sep to € 2.58
billion. As good as certain handling business expansion during Group
level, an alleviation in a financial outcome also contributed to this
poignant increase. This was especially due to a certain outcome of
a satisfactory marketplace gratefulness of commodity derivatives.

 

The BMW Group’s pre-tax gain for a initial 9 months totalled €
7.74 billion, an boost of 8.8%. At Group level, a EBT domain for
a year to a finish of Sep was 11.2%. As it implements its
strategy, a BMW Group is creation targeted investments to enhance its
indication choice and arise new business segments. The association invested
a sum of € 1.97 billion in products and apparatus in a year to the
finish of September. This figure is reduce than final year since there
were fewer product launches.

 

The capex ratio was 2.8% for a initial 9 months, and 4.0% for the
quarter. In a fourth quarter, collateral output is expected to be
aloft as a outcome of a common anniversary factors. We design a capex
ratio for a full year to be on a standard with final year, as planned.
Research and expansion spending for a initial 9 months totalled €
3.33 billion and was therefore tolerably reduce than in 2015. The
prior year’s figure enclosed high expansion costs for a launch
of a BMW 7 Series, a X1 and a 2 Series Gran Tourer, among other effects.

Third-quarter RD activities especially clever on preparations
for new high-volume models. Additional concentration areas enclosed increasing
car connectivity and serve expansion of motorist assistance systems.

 

The RD ratio for a initial 9 months was 4.8%. The
fourth-quarter figure will be higher, especially due to a ramp-up of the
new BMW 5 Series. For a full year, as planned, we design it to be on
standard with final year’s level.

BMW Group liquidity stood during € 11.46 billion during a finish of September,
confirming a company’s financial strength.

 

Let’s take a demeanour during a gain opening in a sold segments.

In a Automotive Segment, the association sole a total
of 1.75 million vehicles in a year to a finish of September. This
represents an boost of 6.2% and a new all-time high: Over 100,000
some-more vehicles were delivered to business than in a same duration last
year. Third-quarter sales reached only underneath 584,000 vehicles – an
boost of 7.1% year-on-year. In a initial 9 months, revenues rose
by 2.8% to € 63.25 billion. The boost in revenues was dampened
somewhat by banking headwinds. Adjusted for this effect, revenues for
a year to a finish of Sep climbed 4.4%. Third-quarter revenues
totalled € 21.56 billion. This also represents an boost of 2.8%.

 

Automotive EBIT for a year to a finish of Sep reached € 5.78
billion. This is a slight boost of 4.6% compared to a same period
of final year. EBIT for a third entertain decreased somewhat to € 1.84
billion. We are now operative tough to exercise Strategy Number
ONE NEXT. This, and a renovation of pivotal high-volume models, once
again compulsory upfront investments in a third quarter. We are also
investing into a serve expansion of electro-mobility and
projects associated to digitalisation. The association has continued to
partisan competent specialists for these critical destiny projects.
Workforce expansion and aloft crew costs from a collectively
bargained compensate boost in Germany as of a 1st of Jul impacted
gain in a third quarter.

Due to indication change-overs and ramp-ups, prolongation will be reduce in
a second half of a year than in a initial 6 months, as planned.
The ensuing effects of register valuations will impact gain in
a second half of a year. Competition stays heated in a number
of automotive markets. Although prices have mostly stabilised in
Europe and China, pricing stays a plea in North America, in particular.

 

As already mentioned, a handling EBIT domain stood during 9.1% after
a initial 9 months of a year. The EBIT domain for a third
entertain also remained within a desirous aim operation of 8-10%, during 8.5%.

 

The financial outcome for a Automotive Segment improved
significantly in a third entertain – augmenting by € 260 million as
compared to a third entertain 2015. As already mentioned, this growth
especially stems from a certain satisfactory marketplace gratefulness effects of
commodity derivatives. The third-quarter at-equity result, which
essentially includes a gain grant from a Chinese joint
try BBA and losses in tie with a interest acquired in the
mapping use HERE, totalled € 162 million. As usual, we anticipate
aloft costs in a fourth quarter. This will moderate gain development.

 

The financial position in a Automotive Segment continued its
certain trend. Free money upsurge stood during € 3.42 billion during a finish of
September. We design giveaway money upsurge in a Automotive Segment to
sojourn clever and to surpass a aim of € 3 billion over a full
year. At a finish of a third quarter, net financial resources amounted
to € 16.72 billion.

 

The Financial Services Segment continued a expansion trend in the
third quarter. A sum of scarcely 468,000 new contracts were concluded
with business between Jul and September. This represents a
poignant boost of 11.2%. Business in a Chinese marketplace was
quite successful.

Over 1.34 million contracts were resolved with sell business in
a initial 9 months, 9.8% some-more than a prior year. The overall
volume of new business climbed around 9.0% to € 40.63 billion.

 

In a third quarter, credit financing, in particular, saw
poignant expansion of 14.8%. The commission of leasing contracts
remained fast during around one third of sum new business. The dynamic
expansion in new business is also reflected in a sum series of
contracts. As of a 30th of Sep 2016, a Financial Services
Segment confirmed 4.60 million contracts with sell customers
worldwide. This represents an boost of 8.8% over a prior year.

 

The Asia/Pacific shred once again reported double-digit expansion of
18.7%, while a Europe/Middle East/Africa shred posted a solid
boost of 8.5%. The Americas and a EU Bank also contributed to
this successful development.

 

The invasion rate – a commission of new vehicles financed or
leased by Financial Services – has increasing to 49.0% during a finish of
a third quarter. This is 2.9 commission points aloft than for the
same duration of final year, especially due to a poignant expansion in
credit financing.

 

BMW Group Financial Services continues a clever performance. The
certain expansion in new business is reflected in revenues and
earnings. Segment revenues for a year to a finish of Sep rose
by 6.2% to € 18.94 billion. Earnings before taxation climbed roughly 8.2%
over a same duration to € 1.64 billion. Pricing on a international
used-car markets remained comparatively fast from a prior year. We
are constantly monitoring residual value trends as partial of our
extensive risk government activities. The credit detriment ratio of
0.30% stays really low.

 

Overall, a risk conditions in a shred stays stable, with
clever direct for financial services products. We design this positive
business opening to continue in a fourth entertain of 2016.

 

The Motorcycles Segment also posted a clever third quarter. More than
116,000 BMW motorcycles were delivered to business in a initial nine
months – an boost of 3.2%. Revenues for a initial 9 months
reached € 1.65 billion and were therefore on a standard with 2015. Segment
EBIT for a same duration stood during € 224 million, that was reduce than
a prior year.

 

BMW Motorrad is focusing a efforts on implementing a plan and
expanding a indication portfolio. This requires poignant upfront
investments this year, that are reflected in shred earnings. The
vital indication descent continues. In October, a Bagger K 1600 B –
a bike specifically designed for a American marketplace – distinguished its
universe premiere in Los Angeles. BMW Motorrad is also expanding its
successful Heritage family with a R NineT Pure and R NineT Racer
also presented final month. The BMW G 310 R is a genuine BMW in the
shred next 500 cc that will open adult totally new marketplace potential
worldwide. Based on this clever product momentum, we design sales for
a full year 2016 to strech a new all-time high.

 

Let’s pierce on to a opinion for a fourth quarter.

 

Costs generally arise towards a finish of a year, so we design this
to have a dampening outcome on earnings. Capital output will also
be aloft in a final 3 months of a year, especially due to the
start of prolongation and ramp-up of a new BMW 5 Series. The BMW Group
is focusing on a desirous targets for a year. Assuming conditions
sojourn stable, we can endorse a superintendence from a commencement of a year.

 

  • The BMW Group expects to see a slight boost in pre-tax earnings
    for a full year.
  • The Automotive Segment is targeting slight increases in both
    revenues and deliveries.
  • We intend to keep a EBIT domain for a Automotive Segment
    within a aim operation of 8-10%.
  • For BMW Motorrad, we foresee a plain boost and a new all-time
    high in sell sales for a full year 2016.
  • In a Financial Services Segment, we design lapse on equity to
    sojourn during final year’s turn – and therefore above a aim of at
    slightest 18%.

Depending on a domestic and mercantile situation, tangible business
opening could, however, differ from stream expectations.

The profitability mezzanine of 8-10% for a automotive business will
sojourn a target, also in a entrance years. In 2007, we geared our
association towards profitability. Recent years have shown that
forward-looking government regulating pivotal opening indicators also makes
a association some-more strong in times of crisis. Strategy Number ONE
NEXT is a judicious prolongation of this idea. The BMW Group has a strong
core business. It gives us a financial precedence to make targeted
investments in destiny projects, such as serve expansion of
electro-mobility, unconstrained pushing and digitalisation.

As we pierce forward, a BMW Group will continue to actively figure the
mobility of a destiny – focusing on tolerable business management
and fast profitability during a high level.

 

Thank you.