Statement Dr Nicolas Peter, Member of a Board of Management of BMW AG, Finance, Conference Call Half-Year Report to 30th Jun 2021

Ladies and Gentlemen,

 

Good morning!

 

In a second entertain of 2021, as expected, a BMW Group was means to
build on a clever opening of a initial 3 months. Individual
mobility stays in high direct opposite a globe. The EBIT domain in
a Automotive Segment for a year to a finish of Jun was 13.0% and,
therefore, during a really healthy level.

 

In a decade of transformation, a BMW Group is holding an active and
infirm role. Sustainable profitability lays a substructure for us
to continue investing in destiny technologies. That is why, during a
clever initial half-year, we continued to concentration on a performance. The
potency measures we launched in new years are now also temperament fruit.

 

So far, interjection to a tough work of a staff in Purchasing,
Production and Sales, we have been means to make adult for a challenges
in semiconductor supplies. But, as a supply bottlenecks drag on, the
conditions is apropos some-more volatile. That is because we design further
intrusion to prolongation in a second half of a year and a related
impact on automobile sales.

 

Ladies and Gentlemen,

 

Let’s start with a financial sum for a Group. The recovery
from a mercantile impact of a coronavirus predicament continued in the
initial half of 2021.

 

In a year to a finish of June, Group revenues climbed 28.1% to 55.36
billion euros.

 

At 9.74 billion euros, Group gain before taxation for a initial six
months were, as expected, significantly aloft than a prior year
– that had been heavily impacted by a lockdown. The figure for the
second entertain rose to roughly 6 billion euros. Reflecting a positive
business expansion overall, a Group EBT domain was 17.6% for the
year to a finish of Jun and 20.9% for a second quarter. The revenue
and gain formula mostly simulate softened pricing, certain effects
from a indication mix, as good as aloft sales volumes ensuing from
increasing demand. Both a new vehicles and a pre-owned cars are
proof really renouned with business right now. The significant
alleviation in a financial outcome also increasing Group earnings.

Lower risk provisioning and aloft income from a resale of
end-of-lease vehicles also contributed to a increase. Having
recognized aloft reserve final year, in response to a volatile
conditions caused by a pandemic, we were now means to recover some of
this amount. In serve to this, as already announced in May,
certain effects came from a prejudiced recover of a sustenance in
tie with a EU antitrust record of around
one-billion-euro, as good as from gratefulness effects from a pension
obligations. However, these certain effects were equivalent by headwinds
from aloft tender element prices.

 

In new years, we have implemented long-lasting changes in all
areas of a association that are now essential off. At a same time, we
have taken serve critical stairs to revoke complexity: For instance,
new package solutions for a products have, in particular, done the
digital patron knowledge most easier and some-more enjoyable. They are
also relieving vigour on a cost side.

 

To entirely feat sales intensity and urge operative capital, we are
constantly optimising a sales structures and regulating research collection to
conduct a sales and inventories in an even some-more granular way, i.e. by
market, indication or sales channel. In this way, we always have the
suitable offer. On a prolongation side, as formerly announced, we
will revoke cost per section by a entertain from 2019 levels by 2025. One
of a ways we will grasp this is by exploiting intensity for
optimisation in logistics and ability utilisation, as good as through
practical formulation processes.

 

Further foundation of a automobile swift is a concentration of our
brief and medium-term planning. The all-electric BMW iX has been
rolling off a prolongation line during a plant in Dingolfing given July.
This will be followed in a autumn by a all-electric BMW i4 from
a categorical plant in Munich.

 

At over 2.57 billion euros, RD output for a initial six
months remained high. This also includes initial upfront investments
for a Neue Klasse, as good as output for serve expansion of
a electric expostulate trains and digitalisation of a fleet. As always,
a concentration stays on a customer. The RD ratio for a first
half-year, according to a German Commercial Code, was 4.6%.

 

All a decisions are clearly focused on a categorical topics of
electrification, sustainability and digitalisation. We are using
accessible resources cleverly for limit impact.

 

Capital output is aloft than for a same duration of final year,
during only underneath 1.71 billion euros. Investment in a launch of a new
iX and serve expansion of a electric expostulate trains were key
drivers for this.

 

Higher revenues meant a capex ratio of 3.1% was somewhat revoke than
a prior year.

In a second half of 2021, collateral output is foresee to be
higher, due to a series of launches and common anniversary effects. We
design a ratio for a full year to be next a aim figure of 5%.

 

The financial outcome increasing significantly in a initial 6 months.
The at-equity outcome once again reflects a clever business
opening of a Chinese corner try BBA, whose earnings
grant climbed to one billion euros, interjection to clever customer
demand. Of course, a figure for a prior year had been dampened
by pestilence restrictions, generally in a initial quarter.

 

The other financial outcome benefited from gratefulness effects for
seductiveness rate derivatives in tie with aloft seductiveness rates in
a US. The outcome from investments also saw serve positive
gratefulness effects from a iVentures comment and SGL Carbon shares.

 

YourNow’s digital services have benefited from a Europe-wide easing
of pestilence restrictions in new months. Demand has risen
significantly. FREE NOW Ridehailing, for example, achieved 140% growth
in cab and chauffeur rides. SHARE NOW also gifted a strong
upswing in automobile sharing. Long-term rents increasing by 41% in a first
half of 2021 compared to a prior year.

 

Ladies and Gentlemen,

Let’s now take a demeanour during a sold segments, starting with the
Automotive Segment.

 

Strong direct in a general automotive markets was reflected
in significantly aloft revenues – that reached 47.75 billion euros
for a year to a finish of June. Revenues for a second quarter
totalled 24.98 billion euros. All regions of a universe saw positive
expansion – generally China and a US.

 

The handling result, EBIT, reached a new all-time high of 6.19
billion euros for a initial half-year. The figure for a second
entertain rose to 3.95 billion euros. As good as releasing some of the
sustenance for a EU antitrust proceedings, as we already mentioned,
revoke worker numbers, softened pricing and an unusually good
conditions for residual value expansion also had a certain effect.
Higher tender element prices, including a pointy boost in rhodium and
palladium costs, dampened gain development, however. Against this
background, a EBIT domain was 13.0% for a year to a finish of June
and 15.8% for a second quarter.

 

The doubt over supply bondage and additional tender material
headwinds stays high. As a result, gain movement is approaching to
break in a second half of a year.

 

The segment’s financial outcome for a second entertain benefited from
a clever gain grant of roughly 500 million euros from our
Chinese corner try BMW Brilliance Automotive and certain valuation
effects from equity investments.

 

Let’s take a demeanour during giveaway money upsurge in a Automotive Segment.

We are holding advantage of a stream conditions to systematically
optimise a operative capital. We are on a right track: Free cash
upsurge in a Automotive Segment totalled 4.9 billion euros during a end
of June. Good operative collateral government associated to revoke inventories
due to a semi-conductor conditions and, in particular, higher
earnings, are a motorist for this. As is usual, payments for
investments will boost towards year-end. Additionally, earnings
movement will be dampened by a supply bottlenecks we referred to. In
a second half of a year, we also design money outflows for
crew restructuring measures. Tax pre-payments will also be due.
We are aiming for a giveaway money upsurge during year-end above a previous
record of 5.8 billion euros.

 

Let’s pierce on to a Financial Services Segment, that also benefited
from tellurian sales expansion and a certain risk conditions in a second
entertain and delivered a clever financial performance.

 

A sum of 1.03 million new financing and leasing contracts were
resolved with sell business in a initial half of 2021 – an
boost of 28% year-on-year. The sum portfolio of 5.6 million
sell contracts was during a same turn as during a start of a year.
The really certain expansion in pre-owned automobile markets we already
mentioned also continued in a second entertain – generally in a US
and UK. This resulted, in high income from a sale of end-of-lease
vehicles. Credit waste remained during a low level.

 

In a initial half of a year, shred gain before taxation increased
to 1.94 billion euros. The figure for a second entertain was 1.15
billion euros. The prior-year entertain had been dominated by
doubt due to a coronavirus pandemic, with additional risk
provisioning for expected credit and residual value risks.

 

The Motorcycles Segment also achieved good in a second quarter,
with 8 new models introduced by a finish of June. Thanks to this
clever product offering, we were means to grow sales to 107,000 units
in a initial half of a year – a new all-time high for this period.
The segment’s handling gain rose in line with a positive
business expansion in a year to a finish of Jun to 284 million
euros. The figure for a second entertain was 149 million euros.

The EBIT domain for a initial half of a year was 17.5%.

 

Ladies and Gentlemen,

Let’s take a demeanour now during a superintendence for a stream year.

 

The BMW Group continues to concentration on profitable, tolerable growth.

 

After a clever initial half-year, we generally design a positive
business expansion for a full year 2021. Our superintendence assumes that
domestic and mercantile conditions will not mellow significantly.
It also does not take comment of a probable serve impact of the
coronavirus pandemic.

 

For a full year, formed on a stream assessments, we design the
pivotal financial and non-financial opening indicators to rise as follows:

 

We design a poignant boost in Group pre-tax gain for
a full year. Thanks to ongoing crew restructuring measures, we
intend to grasp a goals with a somewhat revoke series of employees
than final year.

 

In a Automotive Segment, we should see a plain boost in the
series of BMW, MINI and Rolls-Royce vehicles delivered to customers.
Electrified vehicles will comment for a significantly higher
commission of sum volumes. We have a clever marketplace position in
China. Demand for cars from a 3 BMW Group brands stays high in
a US and Europe. However, due to a stream doubt over
semiconductor supplies, we can't order out a probability of our
sales sum being impacted by serve prolongation downtimes.
Continued high tender element prices will have a poignant impact in
a second half of 2021. We also design to see a common seasonal
boost in bound costs towards a finish of a year. For this reason,
a EBIT domain is foresee to be during a high finish of a aim range
of 7 to 9%. We will once again significantly revoke CO₂ emissions in
a new automobile fleet.

 

In a Financial Services Segment, gain expansion will benefit
some-more from a softened conditions than creatively expected – both in
terms of credit and residual value risks. This is reflected in a
aloft lapse on equity than in a strange superintendence – that we now
design to be within a operation of 17 to 20%.

In a Motorcycles Segment, we had so distant foresee a plain increase
in deliveries. Now, due to certain marketplace development, it looks like
we will be means to broach somewhat some-more motorcycles than foresee in
March. We therefore design a poignant boost in deliveries,
somewhat above a 10% mark. The EBIT domain will sojourn within our
aim operation of 8 to 10%.

 

Ladies and Gentlemen,

 

After a initial 6 months of 2021, a BMW Group is on march to
accommodate a goals for a year. However, a doubt surrounding
semiconductor reserve creates formulation for a full year difficult. Our
automobile plants have a ability and a coherence to accommodate high
patron direct during all times. But we are contingent on functioning
supply chains.

 

There are, of course, opportunities to be found in each challenging
situation. We are holding advantage of these and have reacted quickly
and evenly in new months. Activities have ranged from
register optimisation to tolerable potency measures in all areas
of a company. We are progressing a movement of a past few months
and actively moulding a mutation of a company.

 

Thank you.