BMW Group records sharp growth in earnings
First-quarter revenues, sales volume and earnings of the BMW Group all improved sharply compared to the previous year. Group revenues grew by 8.1% to euro 12,443 million (first quarter 2009: euro 11,509 million). The profit before tax increased to euro 508 million (first quarter 2009: loss of euro 198 million), while the profit after tax improved to euro 324 million (first quarter 2009: loss of euro 152 million). The profit before financial result (EBIT) was euro 449 million (first quarter 2009: loss of euro 55 million). The total number of BMW, MINI and Rolls-Royce brand vehicles sold increased by 13.8% to 315,614 units (first quarter 2009: 277,264 units).
“The BMW Group has made a good start to 2010. We increased earnings significantly in the first quarter and are now back on a growth course on almost all car markets”, stated Norbert Reithofer, Chairman of the Board of Management of BMW AG on Wednesday in Munich. “The BMW Group continues to make good progress with its Strategy Number ONE”, he added.
With demand for premium vehicles rising and the launch of new BMW 5 Series certain to add momentum from the second quarter onwards, the company can look forward to the remainder of the year with some optimism: “We expect that earnings will grow dynamically over the course of the year”, Reithofer pointed out.
The BMW Group is well on its way towards achieving its targets for the full year: “We are aiming to achieve significantly higher group earnings in 2010 than in 2009, thus making a tangible step towards achieving the targets we have set for 2012” stated Reithofer. For the year 2012, the BMW Group is targeting an EBIT margin for its Automobiles segment within an unchanged range of between 8% and 10%.
Attractive products and the gradual recovery of the global economy will contribute to rising sales volumes for the BMW Group: “We intend to remain the world’s leading provider of premium cars in 2010 and plan to increase our sales volume within a solid single-digit percentage range to over 1.3 million vehicles”, underlined Reithofer.
As previously reported, the Automobiles, Motorcycles and Financial Services segments are all expected to report better earnings in 2010. The EBIT margin of the Automobiles segment is forecast to grow within a low single-digit percentage range.
The Automobiles segment performed well during the first quarter. The segment profit improved sharply due to higher sales volumes worldwide, a higher-value model-mix and better selling prices. The segment’s positive EBIT of euro 291 million (first quarter 2009: negative EBIT of euro 251 million) more than tripled compared to the fourth quarter 2009 (Q4 2009: euro 93 million). The segment profit before tax increased to euro 220 million (first quarter 2009: loss before tax of euro 471 million), whilst revenues rose by 11.1% to euro 10,672 million (first quarter 2009: euro 9,605 million).
Sales volumes were up on almost all European and Asian markets as well as in the USA. Growth rates were particularly high in Asia, with sales jumping by 55.7% to 58,918 units. In China (including Hong Kong and Taiwan), the BMW Group more than doubled the number of cars sold to 36,607 units (+100.5%).
Business also grew significantly in North America with a sales volume of 60,734 units (+9.2%). The number of cars sold in the USA rose by 7.5% to 55,141 units. The various markets in Europe developed inconsistently, with sales rising overall by 4.4% to 177,031 units.
The BMW brand recorded worldwide growth of 13.8% in the first quarter with sales of 265,809 units (first quarter 2009: 233,498 units). The BMW 7 Series registered strong growth (+54.1%) with a sales volume of 14,245 units (first quarter 2009: 9,246 units). The BMW 7 Series is thus the world’s best-selling model range in its segment. The BMW ActiveHybrid7 is also receiving a very positive response from customers. The first vehicles have been handed over to customers and the model will become available worldwide over the course of summer 2010. The BMW X1, introduced at the end of October 2009, is also performing well with 19,657 units sold during the first quarter 2010. 4,484 units of the 5 Series Gran Turismo were sold during the same period.
The sales volume of the BMW X5 increased by 4.8% to 22,897 units (first quarter 2009: 21,853 units) and that of the X6 by 21.2% to 10,826 units (first quarter 2009: 8,931 units). The BMW Z4 is selling very well with customers, quadrupling sales volume to 6,461 units (first quarter 2009: 1,563 units). The BMW 1 Series (47,909 units) and the BMW 3 Series (91,619 units) both recorded a growth rate of 2.4%, while sales of the BMW X3 (down by 9.3% to 11,693 units) and the BMW 6 Series (down by 39.1% to 1,340 units) fell due to model life-cycle factors.
This was also the case for the BMW 5 Series Sedan and Touring vehicles, sales of which fell by 3.4% to 39,162 units as a result of the model change. The new 5 Series Sedan has been on the market since the end of March and the new 5 Series Touring will follow in mid-September. “Order-intake for the new 5 Series is excellent”, commented Reithofer.
The number of MINI brand cars sold increased by 13.6% to 49,526 units (first quarter 2009: 43,592 units) comprising the MINI Convertible (5,954 units), the Clubman (7,404 units) and the MINI (36,168 units). The MINI Countryman will go on sale worldwide in the second half of 2010, additionally stimulating sales demand.
The Rolls-Royce brand recorded its best first-quarter sales volume performance to date, with sales up by 60.3% to 279 units (first quarter 2009: 174 units). The new Rolls-Royce Ghost, of which 158 units were sold during the period, was extremely successful.
Inventories increased as a result of strong growth in China and the market introduction of the new 5 Series Sedan. The longer time taken to transport vehicles to the emerging markets, particularly in Asia, requires production in advance. This increase in inventories in turn resulted in a euro 445 million increase in working capital for the Automobiles segment. This was the main factor for the first-quarter decrease in free cash flow (euro – 323 million). Liquidity remained at a high level during the first quarter, finishing the period at euro 9.7 billion.
BMW Motorrad recorded improved first-quarter revenues and earnings thanks to increased sales volumes, thus bucking the worldwide trend on the motorcycle markets. Segment revenues rose by 21.0% to euro 351 million (first quarter 2009: euro 290 million). Segment EBIT increased by 14.3% to euro 32 million (first quarter 2009: euro 28 million) and the profit before tax improved by 15.4% to euro 30 million (first quarter 2009: euro 26 million).
Sales of BMW brand motorcycles in the first quarter increased by 20.9% to 20,840 units (first quarter 2009: 17,232 units). The S 1000 RR, which was launched in December 2009, is now available worldwide. The technical upgrade of the R 1200 GS and the revised R 1200 RT have been available since February 2010.
The Financial Services segment performed well during the first quarter, continuing the positive development seen in recent months. At euro 4,004 million (first quarter 2009: euro 4,003 million), segment revenues were virtually identical to the previous year. The pre-tax profit improved to euro 222 million (first quarter 2009: euro 72 million) due to new business with better margins and significantly lower refinancing costs. First-quarter segment EBIT increased to euro 213 million (first quarter 2009: euro 70 million).
At 31 March 2010, the Financial Services segment was managing a portfolio of 3,107,568 lease and credit financing contracts, 3.3% more than in the previous year. The Credit financing and lease businesses grew perceptibly during the first quarter. The number of new contracts rose by 7.4% to a total of 243,343 contracts worldwide. The growth of credit financing, up 11.0% on the first quarter last year, contributed especially to this performance. Lease business volumes were at a similar level to the previous year (-0.5%). Lease contracts and credit financing accounted for 28.9% and 71.1% of new business respectively. The proportion of new cars of the BMW Group financed or leased by the Financial Services segment was 46.8%, 1.1 percentage points below the proportion recorded one year earlier.
The BMW Group had a workforce of 95,787 employees at the end of the first quarter (31 March 2009: 99,112 employees), 3.4% fewer than one year earlier. Compared to the end of 2009 (96,230 employees) the workforce remained virtually unchanged (-0.5%).