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BMW Group Q2 Financial Report

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BMW Group success continues in second quarter

August 5, 2014

Group revenues in second quarter at € 19.9 billion
Profit before tax increases to € 2.66 billion
Automotive segment EBIT margin rises to 11.7%
Six-month revenues increase to € 38.1 billion
Six-month EBT grows to € 4.8 billion
BMW Group reaffirms sales volume and earnings forecast


Munich. The BMW Group increased sales volume, revenues and Group earnings in both the second quarter and the first half of 2014, thereby continuing its successful business development.

Group revenues increased in the second quarter by 1.8% to reach € 19,905 million (2013: € 19,552 million) for this three-month period. Business benefited perceptibly from an increase in sales volume, with exchange rate factors damping the scale of the increase in revenues. EBIT rose by 26.0% to € 2,603 million (2013: € 2,066 million) on the back of an improved model and regional mix. Group profit before tax (EBT) climbed 30.9% to a new high of € 2,660 million (2013: € 2,032 million). The pre-tax return on sales was 13.4% (2013: 10.4%). Group net profit climbed by 27.2% to € 1,771 million (2013: € 1,392 million).

The total number of BMW, MINI and Rolls-Royce brand cars delivered to customers worldwide increased by 5.3% in the second quarter to a new record of 533,187 units for this three-month period (2013: 506,321 units).

Group revenues for the six-month period increased year-on-year by 2.8% to € 38,140 million (2013: € 37,098 million). Here too, exchange rate factors held back the scale of the increase. EBIT rose by 14.4% to € 4,693 million (2013: € 4,104 million) and profit before tax climbed 19.6% to € 4,826 million (2013: € 4,035 million). Group net profit increased by 19.6% to € 3,233 million (2013: € 2,704 million). BMW Group sales volume increased 6.9% to 1,020,211 units in the first half of the year (2013: 954,521 units) - the first time that more than one million vehicles have been sold in the first half of the year. With this performance, the BMW Group was able to maintain its position as the world's leading premium car company.

"The BMW Group increased sales volume, revenues and Group earnings in both the second quarter and the six-month reporting periods, continuing the successful development of our business," said Norbert Reithofer, Chairman of the Board of Management of BMW AG, on Tuesday in Munich.

Automotive segment: EBIT at € 2.16 billion in second quarter

Strong demand for BMW Group vehicles had a positive impact on the Automotive segment's performance in the period under report. Second-quarter revenues increased by 1.7% to € 18,504 million (2013: € 18,201 million), although the rate of growth was dampened by the exchange rate factors referred to above. The improved model mix also gave a boost to EBIT, which rose by 23.1% to € 2,161 million (2013: € 1,755 million) and which corresponded to an EBIT margin of 11.7% (2013: 9.6%). Segment profit before tax jumped by 36.5% to € 2,250 million (2013: € 1,648 million).

First six-month revenues rose 2.8% to € 35,063 million (2013: € 34,108 million). EBIT increased by 12.2% to € 3,741 million (2013: € 3,335 million), while segment profit before tax increased by 23.0% to € 3,893 million (2013: € 3,164 million). The EBIT margin finished the six-month period at 10.7% (2013: 9.8%) and the pre-tax return on sales was 11.1% (9.3%).

The BMW brand recorded a new sales high in the period under report, with deliveries in the second quarter up by 8.3% to 458,088 units (2013: 422,844 units) and in the first six-month period by 10.2% to 886,347 units (2013: 804,248 units). The BMW 3, 5 and 6 Series as well as the X5 each led the world market in their segments.

The sales performance of the BMW 3 Series during the first half of the year was on a par with the previous year, with a sales volume of 236,289 units (2013: 237,700 units; -0.6%). It should be noted, however, that the Coupé and Convertible variants are now positioned as part of the BMW 4 Series. Altogether, a sales volume of 47,031 units was recorded for the BMW 4 Series. The number of BMW 5 Series vehicles sold between January and June increased by 7.6% to 193,560 units (2013: 179,833 units). The BMW 6 Series and BMW 7 Series were close to the previous year’s level with six-month sales figures of 13,734 units (2013: 14,012 units; -2.0%) and 26,378 units (2013: 27,100 units; -2.7%) respectively.

The various models of the BMW X family also continue to enjoy a high degree of popularity. Sales of the BMW X1 rose 0.4% to 79,344 units (2013: 79,061 units), while those of the BMW X3 increased 6.2% to a total of 82,830 units (2013: 77,959 units). The BMW X5 also continues to sell extremely well, with sales rising 29.7% to 68,283 units (2013: 52,651 units).

The innovative BMW i3 electric vehicle was handed over to a total of 5,396 customers during the first half of the year. This model has been available in Japan and the USA since the second quarter; it will go on sale in China from October. Sales figures are therefore set to increase further over the coming months as the vehicle becomes more widely available.

As expected, sales of MINI brand vehicles decreased year-on-year as a result of the MINI Hatch model change, both in the second-quarter with sales of 74,028 units (2013: 82,644 units; -10.4%) and in the first half-year period with sales of 131,896 units (2013: 148,798 units; -11.4%). The latest sales figures for the MINI Hatch, which made its first appearance in the showrooms in March, are already reflecting the positive response to the third generation of this automobile icon. In June, 12,862 units were handed over to customers, 3.2% more than in the same month last year (2013: 12,460 units).

In the ultra-luxury segment, Rolls-Royce Motor Cars increased worldwide sales by 28.6% to 1,071 units (2013: 833 units) in the second quarter and by 33.4% to 1,968 units (2013: 1,475 units) in the first half of the year. Demand remains strong for the Rolls-Royce Wraith. The Ghost Series II, which will become available in autumn, is also attracting a great deal of attention from customers.

In line with its strategy of achieving an evenly balanced worldwide sales distribution, the BMW Group recorded growth in all major sales regions in the first half of the year.

In Europe,sales rose 2.2% to total 446,188 units (2013: 436,709 units) in the first half of the year. The number of vehicles sold in Germany grew 0.6% compared to the same period last year with a total of 134,308 units delivered (2013: 133,454 units). Sales in Great Britain increased by 1.8% to 96,180 units (2013: 94,434 units).

Since the beginning of the year, the BMW Group has sold a total of 322,943 vehicles (2013: 272,943 units) in Asia, surpassing the previous year's six-month figure by 18.3%. Some markets in this region registered double-digit growth. Sales on the Chinese mainland in this period grew by 23.1% to 225,490 units (2013: 183,208 units).

The BMW Group also recorded six-month sales growth in the Americas, with the number of vehicles sold rising 3.5% to 221,280 units (2013: 213,867 units). Sales in the USA increased 5.1% to 182,008 units (2013: 173,156 units).

Motorcycles segment records best-ever half-year results

Second-quarter revenues of the Motorcycles segment grew by 11.2% to € 528 million (2013: € 475 million). EBIT increased 19.6% to € 55 million (2013: € 46 million) and profit before tax rose 20.0% to € 54 million (2013: € 45 million). The number of motorcycles sold increased by 5.1% to a new second-quarter record of 42,259 units (2013: 40,209 units).

Segment revenues in the first half of the year increased by 9.8% to € 1,000 million (2013: € 911 million). EBIT rose by 22.7% to € 119 million (2013: € 97 million) and profit before tax grew 23.2% to € 117 million (2013: € 95 million). Sales volume for the six-month period increased by 9.3% to 70,978 units (2013: 64,941 units). With these figures, BMW Motorrad recorded the best six-month period in its 90-year history of motorcycle manufacturing.

Financial Services remains on course

The positive development in the Financial Services segment continued during the second quarter 2014. Segment revenues were 1.9% higher at € 5,155 million (2013: € 5,058 million). Profit before tax was € 458 million (2013: € 467 million; -1.9%).

Six-month revenues rose 1.6% to € 10,045 million (2013: € 9,888 million). Profit before tax stood at € 918 million (2013: € 916 million; +0.2%).

In the first six months of the year, a total of 728,914 new contracts (2013: 728,618 contracts) were signed in the financing and leasing business. The portfolio of lease and financing contracts in place with dealers and retail customers at 30 June 2014 was up 5.8% to a total of 4,218,318 contracts (2013: 3,986,306 contracts).

Workforce size increased

The size of the BMW Group workforce at 30 June 2014 was 5.3% higher than at the same time last year. Overall, the BMW Group had a worldwide workforce of 112,500 employees (2013: 106,870 employees). The increase is attributable to the growing need for engineers and skilled workers who are required to keep pace with rising demand for vehicles and to push ahead with innovations and develop new technologies.

BMW Group reaffirms its sales volume and earnings forecast

Following its strong performance in the first half of the year, the BMW Group reaffirms its sales volume and earnings forecast for the full year 2014. “We are on track to achieve our targets for the full year,” said Reithofer. Within a market environment which continues to be challenging, deliveries to customers (2013: 1,963,798 units) and Group profit before tax (2013: € 7,913 million) are both expected to rise significantly.

"After our record sales volume performance in the first half of the year, we are now targeting a significant increase in the number of vehicles delivered to customers in the current year and hence a new sales record of over two million vehicles," Reithofer stated.

Such significant sales growth would also have a positive impact on Group profit before tax: "We are aiming for a Group profit before tax figure, which will be significantly higher than in the previous year," explained Reithofer.

In the second half of the year, however, the pace at which earnings increase will be influenced by high levels of expenditure for new technologies; the development of new technologies to reduce CO2 emissions in line with increasing regulatory requirements plays a significant role here. The global economy also faces risks.

The Automotive segment continues to strive in 2014 to achieve an EBIT margin within a range of 8 to 10% (2013: 9.4%). However, depending on economic and political developments, actual margins could end up being above or below the targeted range. In view of the dampening effect of exchange rates, the BMW Group predicts that automotive business revenues will increase solidly in the forecast period (2013: € 70,629 million).

Tailwind is expected to come from the 16 new models and model revisions which the BMW Group is launching in the current year. These include the 4 Series Gran Coupé and the BMW i8 plug-in hybrid sports car, which entered the market in June. The all-new BMW X4 and the revised BMW X3 went on sale in July. The first customer deliveries of the BMW 2 Series Active Tourer and the BMW M4 Convertible will take place in September.

The Motorcycles segment is also expected to continue to perform well over the year as a whole. Despite difficult conditions on international motorcycle markets, sales are forecast to be up slightly on the previous year (2013: 115,215 units).

The Financial Services segment should also remain on growth course in 2014. As a consequence of growth-related investments, the return on equity is likely to decrease slightly (2013: 20.2%), but is expected to achieve the BMW Group's minimum required level of 18%.

The BMW Group's forecasts for the current year are based on the assumption that political and economic conditions remain stable in 2014.

[Matski]

Shame they're not listing the model sales by bodystyle anymore Just by series.

[lasovan]

that's really good news!

[Downeaster1]

Originally Posted by Matski

Shame they're not listing the model sales by bodystyle anymore Just by series.

True. I'm curious to know how many GT models they didn't sell.

[1M_@teewhybs]

Originally Posted by Downeaster1

True. I'm curious to know how many GT models they didn't sell.

+1