BMW Group maintains successful course

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Munich. The BMW Group is maintaining its course for
profitable growth in a volatile business environment. The company once
again reaffirmed its leading position in the global premium segment,
with a solid increase in sales to 621,699 premium automobiles
in the third quarter and 1,836,563 units
over the nine-month-period (Q3 2022: 587,744
units/+5.8%; 2022: 1,747,838 units/+5.1%).

The BMW Group combined this growth with a strong financial
performance: The EBT margin for the first nine months
came in at 11.9% (2022: 19.6%; Q3:
10.6%
; Q3 2022: 11.0%), with an EBIT margin
in the Automotive Segment of 10.3%
(2022: 8.7%; Q3: 9.8%; Q3 2022: 8.9%). Excluding
depreciation for BBA assets from the purchase price allocation, the
EBIT margin was 10.8% in the third
quarter(Q3/2022: 10.1%) and 11.4%
(Sept YTD/2022: 11.7%) after nine months.

The company is still on track to deliver an EBIT margin in
the Automotive Segment
of between 9-10.5%
for the full year and solid growth in customer
deliveries
. These gains are mostly expected to come from
higher-priced models and fully-electric vehicles. By the third
quarter, battery-electric vehicles accounted for 15.1%
of total sales, already meeting the 15% target planned for
the full year (2022: 8.9%/+69.7%). Over the nine-month period, the
percentage of BEVs climbed to 13.4% (2022: 7.3%/+83.6%).

“Our third quarter showed once again that strong products generate
strong demand – across all drive technologies. This puts us right on
track to meet the higher targets we set ourselves in August,” said
Oliver Zipse, Chairman of the Board of Management of BMW
AG
, on Friday. “In parallel with today’s successful business,
we are also setting the course for the future: With the BMW Vision
Neue Klasse, we presented nothing less than the future of the car at
the IAA MOBILITY. In this way, we are already bringing the mobility
for the next decade to the roads in 2025.”

The growth trend for BMW continued in many of the world’s automotive
markets in the third quarter: Compared to the previous year, the
supply situation improved – making it easier to meet demand for
vehicles. BMW Group deliveries trended higher in the main regions of
the Americas and Europe, while Asia was on a par with last year.
Germany and Europe made significant gains (Europe: 221,735
units/+12.9%; Germany: 68,569 units/+12.4%) and the US market posted
solid growth of 7.7%, with a total of 92,218 vehicles delivered to
customers (2022: 85,631 units). In China, the BMW Group delivered
210,659 units in China (2022: 214,565/-1.8%). From January to
September, the BMW brand saw a slight increase in the market (+3.4%),
thus exceeding the overall Chinese market development (+2.4%). Total
BMW Group deliveries in China rose to 603,920 vehicles (594,089
units/+1.7%) in the year to the end of September. The slightly reduced
increase year on year was mainly due to MINI model change.

The biggest increase was in deliveries of battery-electric
models
.Between July and September, the BMW
Groupsold a total of 93,931 fully-electric
vehicles
(2022: 52,305 vehicles/+79.6%). In
the year to the end of September, BEV deliveries almost doubled,
climbing 92.6% to 246,867
units (2022: 128,195 units). This sales growth
derived largely from the BMW brand, with BEV
deliveries up 119.3% in the first nine months.

The company is pushing forward with electrification of its product
range: With the launch of the new BMW i5* and the upcoming Rolls-Royce
Spectre*, all three premium brands will have at least one
fully-electric variant across the relevant segments. By 2024, one in
five of the company’s new vehicles will be a BEV; by 2025, one in four.

Growth is expected to get a further boost in the fourth quarter from
the BMW Group’s diverse and attractive product line-up, including the
all-new 7 Series models, the BMW 5 Series and the BMW X1, which is
particularly popular in Europe.

Slight increase in Group revenues

Group revenues increased slightly in the third
quarter to € 38,458 million
(2022: € 37,176
million/+3.4%),with solid growth in
the year to the end of September to
112,530
million (2022: € 103,088
million/+9.2%). In addition to full integration of
the operating business of BMW Brilliance Automotive Ltd. (BBA) into
the Automotive Segment, higher sales volumes and positive product mix
effects supported the increase. Headwinds came from currency
translation effects, especially for the Chinese renminbi and US
dollar. In the year to the end of September, the greatest negative
impact came from volume-related manufacturing cost.

By the end of September 2023, BBA’s operating result had been fully
and uniformly integrated due to full consolidation; in the prior-year
period, this was only the case from 11 February 2022. This must be
factored into the year-on-year comparison.

Group research and development spending for the year
to the end of September totalled € 5,223 million
(2022: € 4,894 million/+6.7%) – which represents a
solid increase from last year. In addition to development expenses for
new models such as the new BMW 5 Series and those of the NEUE KLASSE,
R&D spending was primarily focused on further electrification and
digitalisation of the vehicle fleet and automated driving. For
example, the innovative “BMW OS 9” operating system is being rolled
out this year. The partially automated, “hands-free” Level 2+ driving
functions in the new 5 series and the highly automated Level 3
functions have also been advanced.

The R&D ratio (according to the German Commercial
Code)
came in at 4.6% (2022: 4.7%; -0.1 %-points).

The BMW Group’s capital expenditure for the first
nine months was significantly higher, at
5.078

million (2022: € 4.680 million/+8.5%). In the third
quarter, the capital expenditure of
1.847
million was focused on accelerating the ramp-up of
electrification and topics related to digitalisation (2022: € 1.751
million/+5.5%). The highest expenditure was caused by
the fifth and sixth generation e-modular kits and the plant
construction in Debrecen, Hungary.

The capex ratio for the year to the end of September
was 4.5% and remained on a par with the previous year
(2022: 4.5%). Capital expenditure in the fourth quarter will lead to
an increase in capex ratio to around 6% for the full year.

Q3 Group earnings on a par with last year

Group earnings before tax (EBT) for the third quarter
were on a par with last year at
4,063 million (2022: € 4,100
million/-0.9%). The EBT includes a financial result
of € -289 million (2022: € 418 million), which was primarily affected
by fair-value assessment in interest rate hedging transactions. The
EBT margin for this period was
10.6% (2022: 11.0%). Group net profit
amounted to
2,931
million in the third quarter (2022:
3,175 million/-7.7%).

In the year to the end of September, the BMW Group reported
pre-tax earnings of € 13,414
million
(2022: € 20,256 million/-33.8%). As part of the full
consolidation of BBA, the revaluation of previously held shares in BBA
of € 7.7 billion had substantially boosted the BMW Group’s financial
result, Group earnings and Group net profit in 2022. Due to this base
effect, these key figures were significantly lower in the year to the
end of September 2023.

The financial result for this period totalled
-656 million (2022: € 9,757 million) and was
primarily affected by the fair value development of interest rate
hedges. Group EBT margin came in at
11.9% (2022: 19.6%). In the year to the end of
September, Group net profit totalled
9,551 million (2022: € 16,407 million/-41.8%).

 

BMW AG continues share repurchase programme

The second share repurchase programme worth up to € 2.0 billion, was
launched in July 2023 and is on track. It led to the repurchase of
2,659,869 shares of common stock and 530,588 shares of preferred
stock, which were recognised as treasury shares. During the third
quarter, the 24,123,400 own shares (22,199,529 common shares and
1,923,871 preferred shares) acquired between July 2022 and June 2023
as part of the first € 2.0 billion share repurchase programme were
retired. The share capital was reduced by € 24,123,400.

Solid Q3 EBIT in Automotive Segment, significant increase in
YTD September

In the Automotive Segment, third-quarter
revenues were on a par with last year at
32,096 million
(2022: € 32,290
million/-0.6%). Excluding currency translation
headwinds, especially from the Chinese renminbi and the US dollar,
revenues posted solid growth of +6.5%.

Tailwind came from higher sales volumes. In the nine-month-period,
also a positive pricing effect contributed to the solid increase in
revenues of 6.7% (adjusted for currency translation
effects: +10.9%) to
94,994 million (2022: € 89,031 million).

Higher vehicle sales in turn increased sales costs, which were also
relieved by currency effects. In addition, depreciation from the
purchase price allocation for BBA assets of around € 0.3 billion was
included in the cost of sales in the third quarter (2022: € 0.4 billion).

 

Earnings before financial result
(EBIT) for the third quarter profited from higher
sales volume and amounted to € 3,135 million (2022: €
2,873 million/+9.1%). The strong operating
performance of the Automotive Segment was underlined by the
year-on-year increase in its EBIT margin, which came
in at 9.8% (2022: 8.9%). Excluding depreciation for
BBA assets from the purchase price allocation, the EBIT margin was
10.8% (Q3/2022: 10.1%).

In the year to the end of September, the Automotive Segment posted
significant growth, with an EBIT of
9,810 million (2022: € 7,703
million/+27.4%). The EBIT margin for the year to the
end of September came in at 10.3% (2022: 8.7%).
Excluding depreciation for BBA assets from the purchase price
allocation, the EBIT margin was 11.4% (Sept YTD/2022: 11.7%).

 

“We are steering our core business along a long-term, profitable
growth path. To do this, we are making significant investments in our
future: We are digitalising and electrifying our products and bringing
the entire company into a new era. We are strengthening our innovation
capabilities and creating value for our shareholders. The solid
customer demand shows us that we are on the right track,” said
Walter Mertl, member of the Board of Management responsible
for Finance
.

Free cash flow in the Automotive Segment came in at
2,618 million (2022: € 2,106
million/+24.3%)in the third quarter.
At the end of September 2023, it totalled
5,759 million (2022: € 9,876
million/-41.7%). The previous year still included the
positive one-time effect of € 5 billion from the full consolidation of
BMW Brilliance.

“The free cash flow in the Automotive Segment illustrates the
financial strength of our core business. Despite extensive investment
in the transformation of the company, we are benefiting, in a volatile
environment, from stable cash inflows. In the fourth quarter, we plan
to reduce our inventory – which will benefit free cash flow. On the
other hand, the increase of capex ratio to around 6% (September YTD:
4.5%) and the usual seasonal rise in costs as well as higher tax
payments will significantly weigh on our Q4 free cash flow,” said Mertl.

The company expects a free cash flow of at least € 6
billion
for the full year 2023.

 

Upward trend in Financial Services Segment

BMW Group Financial Services reported growth in the
number of new contracts and the volume of new retail business in the
third quarter.as the average financing volume per vehicle increased
during the reporting period.

The penetration rate, the percentage of new BMW
Group vehicles leased or financed by the Financial Services Segment,
for the third quarter was 38.0% (2022: 38.3%/-0.3 %-points).

The segment’s third-quarter pre-tax earnings saw
solid growth, to
747 million (2022: € 691 million/+8.1%).

In the year to the end of September, the segment reported earnings
before tax of
2,451 million (2022: € 2,672
million/-8.3%). The decline resulted from increased
refinancing costs and the lower contract portfolio. BMW Group
Financial Services benefited from continued high sales revenues for
lease returns.

Credit loss ratio remained at a historically low level of 0.15%. The
segment is adequately hedged against risk.

Motorcycles Segment steps up deliveries again in centenary year

The Motorcycles Segment delivered 52,037
BMW motorcycles and scooters to customers in the
third quarter, reaching the same high level as the previous year
(2022: 51,778 units/+0.5%). Thanks to its attractive
product line-up and, in particular, new models like the fascinating
Power Roadster M 1000 R, sales rose slightly to 164,908
units in the year to the end of September (2022: 159,333units/+3.5%).

Third-quarter segment revenues totalled
650 million
(2022: € 822 million/-20.9%;
excluding currency translation: -18.1%). Mainly due to the change in
the model launch calendar from the previous year, the EBIT for the
third quarter decreased to € -4 million (2022: € 87
million/-104.6%), resulting in a negative
EBIT margin of -0.6% (Q3 2022: 10.6%).

In the year to the end of September, BMW Motorrad
revenues
were up slightly, at € 2,571 million
(2022: € 2,485 million/+3.5%; excluding
currency translation: +5.5%). The segment
EBIT for the year to the end of September was down
slightly on the previous year at
308 million (2022: € 322
million/-4.3%). The EBIT margin for the first nine
months came in at 12.0% (2022: 13.0%).

The upcoming market launch of the new R 1300 GS in the fourth quarter
will be the most important product highlight of the year. As the
world’s most successful premium motorcycle, the redesigned Boxer GS,
with its many innovations, should be one of the segment’s main
profitable sales drivers.

 

BMW Group confirms guidance

The BMW Group forecasts overall growth for the global automotive
markets year on year. In Europe and in the US, markets should grow
robustly in 2023. The most optimistic forecast for China’s automotive
market expects a slight growth year on year.

For the rest of the year, the company expects stable business
development and confirms its forecast for financial year 2023 for all
segments. This assumes that the geopolitical and macroeconomic
conditions do not significantly deteriorate.

Due to improved vehicle availability, a healthy volume of orders and
positive volume development overall, the company is planning for
solid growth in deliveries to customers worldwide
in 2023.

Taking the sales volume guidance into account, the BMW Group expects
the EBIT margin in the Automotive Segment to be
within the range of 9 to 10.5% for the full year.

The forecast calls for a slight increase in deliveries in the
Motorcycles Segment for the full year. The
EBIT margin will remain within the target
range of

8 to 10%. Return on equity (RoE) in
the Financial Services Segment is projected to be
between 16-19%.

Group earnings before tax will decrease
significantly. Without the one-time effect of 2022, Group earnings
before tax for the year 2023 would be higher than the previous year.

These targets will be achieved with slightly higher employee numbers.

The BMW Group is committed to long-term, profitable growth as it
continues its transformation process. Through systematic investment
and a commitment to being a pacesetter and driving force for
innovation in its industry, the BMW Group aspires to a leading role in
the global premium segment.

The BMW Group in figures: Q3 2023

Q3 2023

Q3 2022

Change in %

Deliveries to customers

       

Automotive
1

units

621,699

587,744

5.8

Thereof:     
BMW

units

549,941

517,638

6.2

   
MINI

units

70,384

68,596

2.6

   
Rolls-Royce

units

1,374

1,510

-9.0

Motorcycles

units

52,037

51,778

0.5

 

 

 

 

Employees               (compared to 31. Dec.
2022)

149,475

 

Automotive Segment
EBIT margin

%

9.8

8.9

+0.9%-pts.

Motorcycles
Segment EBIT margin

%

-0.6

10.6

-11.2%-pts.

EBT margin BMW Group
2

%

10.6

11.0

-0.4%pts.

 

 

 

 

Revenues

€ million

38,458

37,176

3.4

thereof:     
Automotive

€ million

32,096

32,290

-0.6

Motorcycles

€ million

650

822

-20.9

Financial
Services

€ million

9,102

8,785

3.6

Other
Entities

€ million

3

3

0.0

Eliminations

€ million

-3,393

-4,724

-28.2

 

 

 

 

Profit before financial result (EBIT)

€ million

4,352

3,682

18.2

thereof:     
Automotive

€ million

3,135

2,873

9.1

Motorcycles

€ million

-4

87

-104.6

Financial
Services

€ million

740

679

9.0

Other
Entities


million

-8

-13

-38.5

Eliminations

€ million

489

56

773.2

 

 

 

 

Profit before tax (EBT)

€ million

4,063

4,100

-0.9

thereof:     
Automotive

€ million

3,043

2,963

2.7

Motorcycles

€ million

-2

89

-102.2

Financial
Services


million

747

691

8.1

Other
Entities


million

-5

296

-101.7

Eliminations

€ million

280

61

359.0

 

 

 

 

Income taxes

€ million

-1,132

-925

22.4

Net profit

€ million

2,931

3,175

-7.7

Earnings per share
(common/preferred)
3

 €

4.20

4.25

-1.2

1 Deliveries include joint venture BMW Brilliance
Automotive Ltd., Shenyang.

2 Ratio of Group earnings before taxes to Group revenues.

3  Common/preferred stock. Earnings per share of preferred
stock are calculated by distributing the earnings required to cover
the additional dividend of €0.02 per preferred share proportionally
over the quarters of the corresponding financial year.

The BMW Group in figures: Q3 YTD 2023

Q3 YTD 2023

Q3 YTD 2022

Change in %

Deliveries to customers

       

Automotive
1

units

1,836,563

1,747,838

5.1

Thereof:     
BMW1

units

1,621,267

1,533,866

5.7

   
MINI1

units

210,741

209,271

0.7

   
Rolls-Royce1

units

4,555

4,701

-3.1

Motorcycles

units

164,908

159,333

3.5

 

 

 

 

Employees               (as of 31. Dec.
2022)

149,475

 

Automotive Segment
EBIT margin

%

10.3

8.7

+1.6%-pts.

Motorcycles
Segment EBIT margin

%

12.0

13.0

-1.0 %-pt.

EBT margin BMW Group
2

%

11.9

19.6

-7.7%-pts.

 

 

 

 

Revenues

€ million

112,530

103,088

9.2

thereof:     
Automotive

€ million

94,994

89,031

6.7

Motorcycles

€ million

2,571

2,485

3.5

Financial
Services

€ million

26,723

26,036

2.6

Other
Entities

€ million

9

6

50.0

Eliminations

€ million

-11,767

-14,470

-18.7

 

 

 

 

Profit before financial result (EBIT)

€ million

14,070

10,499

34.0

thereof:     
Automotive

€ million

9,810

7,703

27.4

Motorcycles

€ million

308

322

-4.3

Financial
Services

€ million

2,449

2,627

-6.8

Other
Entities


million

-13

-187

-93.0

Eliminations

€ million

1,516

34

4358.8

 

 

 

 

Profit before tax (EBT)

€ million

13,414

20,256

-33.8

thereof:     
Automotive

€ million

9,611

15,909

-39.6

Motorcycles

€ million

311

326

-4.6

Financial
Services


million

2,451

2,672

-8.3

Other
Entities


million

112

1,258

-91.1

Eliminations

€ million

929

91

920.9

 

 

 

 

Income taxes

€ million

-3,863

-3,849

0.4

Net profit

€ million

9,551

16,407

-41.8

Earnings per share(common/preferred)
3

 €

13.90

23.88

-41.8

1 Deliveries include joint venture BMW Brilliance
Automotive Ltd., Shenyang.

 Ratio of Group earnings before taxes to Group revenues.
3 Common/preferred stock. Earnings per share of preferred
stock are calculated by distributing the earnings required to cover
the additional dividend of €0.02 per preferred share proportionally
over the quarters of the corresponding financial year.

GLOSSARY – explanatory comments on key performance indicators

 

BEV

Battery Electric Vehicle.

Deliveries to customers

A new or used vehicle is recorded as a delivery once it is handed
over to the end user (which also includes leaseholders under lease
contracts with BMW Financial Services). In the US and Canada, end
users also include (1) dealers when they designate a vehicle as a
service loaner or demonstrator vehicle and (2) dealers and other third
parties when they purchase a company vehicle at auction and dealers
when they purchase company vehicles directly from the BMW Group.
Deliveries may be made by BMW AG, one of its international
subsidiaries, a BMW Group retail outlet, or independent third-party
dealers. The vast majority of deliveries – and hence the reporting of
deliveries to the BMW Group – is made by independent third-party
dealers. Retail vehicle deliveries during a given reporting period do
not correlate directly to the revenues that the BMW Group recognises
in respect of that particular reporting period.

EBIT

Profit before financial result. Profit before financial result
comprises revenues less cost of sales, less selling and administrative
expenses and plus/minus net other operating income and expenses.

EBIT margin

Profit/loss before financial result as a percentage of revenues.

EBT

EBIT plus financial result.

EBT Margin

Profit/loss as a percentage of revenues.

PHEV

Plug-in-hybrid electric vehicle.

RoCE

Return on capital employed (RoCE). RoCE in the Automotive and
Motorcycles segments is measured on the basis of relevant segment
profit before financial result and the average amount of capital
employed – at the end of the last five quarters – in the segment
concerned. Capital employed corresponds to the sum of all current and
non-current operational assets, less liabilities that generally do not
incur interest.

RoE

Return on equity (RoE). RoE in the Financial Services segment is
calculated as segment profit before taxes, divided by the average
amount of equity capital – at the end of the last five quarters –
attributable to the Financial Services segment.

If you have any questions, please contact:

BMW Group Corporate Communications

 

Dr Britta Ullrich, Finance Communications

Telephone: +49 89 382-18364

Email: britta.ullrich@bmwgroup.com

Eckhard Wannieck, head of Communications BMW Group, Finance, Sales

Telephone: +49 89 382-24544

Email: eckhard.wannieck@bmwgroup.com

Media website: www.press.bmwgroup.com/deutschland

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 over 30 production sites
worldwide; the company has a global sales network in more than 140 countries.

In 2022, the BMW Group sold nearly 2.4 million passenger vehicles and
more than 202,000 motorcycles worldwide. The profit before tax in the
financial year 2022 was € 23.5 billion on revenues amounting to €
142.6 billion. As of 31 December 2022, the BMW Group had a workforce
of 149,475 employees.

The success of the BMW Group has always been based on long-term
thinking and responsible action. The company set the course for the
future at an early stage and consistently makes sustainability and
efficient resource management central to its strategic direction, from
the supply chain through production to the end of the use phase of all products. 

www.bmwgroup.com

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