Record year for BMW Group in 2014

News | March 12th, 2015 by 1
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The BMW Group achieved its fifth record year in succession in 2014, underlining its position as the world’s leading premium car company.   “We continued …

The BMW Group achieved its fifth record year in succession in 2014, underlining its position as the world’s leading premium car company.

 

“We continued to perform well during the past year, achieving new highs for sales volume, revenues and group earnings,” stated Norbert Reithofer, Chairman of the Board of Management of BMW AG, on Thursday in Munich. “Tailwinds caused by high customer demand for our vehicles worldwide are driving up sales volumes. Our Strategy Number ONE, which we regularly refine as we go forward, continues to contribute to our business performance,” continued Reithofer.

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Group revenues grew by 5.7% in 2014 to € 80,401 million (2013: € 76,059 million). Profit before financial result (EBIT) rose by 14.3% to € 9,118 million (2013: € 7,978 million), thanks primarily to sales volume growth and a high-value model mix. Group profit before tax (EBT) increased by 10.3% to a new high level of € 8,707 million (2013: € 7,893 million). Net profit improved by 9.2% to € 5,817 million (2013: € 5,329 million), also a new record high for the BMW Group.

 

Sales volume surpassed the two-million mark for the first time in the BMW Group’s history, climbing by 7.9% to a total of 2,117,965 units (2013: 1,963,798 units).

 

Dividend of € 2.90 per share of common stock proposed

 

The Board of Management and the Supervisory Board will propose to shareholders at the Annual General Meeting on 13 May 2015 that the dividend be increased to a new high of € 2.90 (2013: € 2.60) per share of common stock and € 2.92 (2013: € 2.62) per share of preferred stock, corresponding to a distribution ratio of 32.7% (2013: 32.0%).

 

“Our proposal to pay a record dividend clearly reflects our intention to include shareholders in the BMW Group’s successful performance. The distribution rate of approximately 33% is clearly within the BMW Group’s target range of 30 – 40%,” commented Friedrich Eichiner, member of the Board of Management responsible for Finance.

 

Automotive segment profitability improved

 

Automotive segment revenues grew by 6.4% to € 75,173 million (2013: € 70,630 million) on the back of good sales volume figures and new models. EBIT increased by 8.9% to € 7,244 million (2013: € 6,649 million). The EBIT margin improved to 9.6% (2013: 9.4%) and was thus in the upper half of the segment’s targeted range of 8 – 10%. Segment profit before tax increased by 5.0% to € 6,886 million (2013: € 6,561 million).

 

The BMW brand retained its leading position in the premium segment in 2014 by posting a new record sales volume figure. Sales climbed by 9.5% to 1,811,719 units (2013: 1,655,138 units), driven in particular by the excellent performances of the BMW 3, 4 and 5 Series and the BMW X5, each of which led the world market in its own segment.

The BMW 2 Series recorded a total sales volume of 41,038 units in 2014. Sales of the BMW 3 Series remained at a high level in 2014 with 480,214 units sold (2013: 500,332 units). The Convertible and Coupé models have been incorporated into the BMW 4 Series since the end of 2013, as a result of which, the previous year’s total was not quite achieved. The BMW 4 Series performed exceedingly well, with sales volume of 119,580 units (2013: 14,763 units). The BMW 5 Series also continued its success story, with sales increasing to 373,053 units (2013: 366,992 units; +1.7%). Sales of the highly popular BMW X5 climbed steeply (by 37.4%) to 147,381 units (2013: 107,231 units).

BMW i vehicles are also on the road to success, recording a total sales volume of 17,793 units in the year under report. Worldwide sales of the BMW i3 totalled 16,052 units, a large proportion of which arose during the second half of the year, following the model’s launch in various major markets, including the USA. The BMW i8 achieved sales of 1,741 units since its market launch in summer 2014.

With a sales volume of 302,183 units, MINI maintained sales at the previous year’s high level, despite the changeover of the brand’s core model to its third generation (2013: 305,030 units; -0.9%). Sales of the MINI Hatch saw a 9.0% increase in sales on the previous year at 140,051 units (2013: 128,498 units). The number of MINI Countryman sold increased year-on-year by 5.0% to 106,995 units (2013: 101,897 units).

Rolls-Royce Motor Cars consolidated its position as market leader in the ultra-luxury segment in 2014, surpassing the 4,000-unit sales volume threshold for the first time. Overall, the number of vehicles sold during the year rose by 11.9% to 4,063 units (2013: 3,630 units), including 1,906 units (2013: 492 units) of the Wraith, launched in autumn 2013.

In line with its strategy of achieving a balanced distribution of worldwide sales, the BMW Group recorded sales volume growth in all major sales regions. The four largest sales markets for the BMW Group over the past year were China, the USA, Germany and Great Britain.

Within a more stable market environment, sales in Europe increased year-on-year by 6.4% to a total of 914,587 units (2013: 859,546 units). Sales volume was 5.1% higher in Germany at 272,345 units (2013: 259,219 units) and 8.4% higher in Great Britain at 205,071 units (2013: 189,121 units).

Markets in Asia continued to develop dynamically in 2014. The BMW Group sold 658,384 units (2013: 578,678 units) in this region, 13.8% more than the previous year. Sales on the Chinese mainland grew by 16.6% to 456,732 units (2013: 391,713 units).

The BMW Group also increased sales volume in the Americas region, with the number of vehicles sold increasing 4.0% to 482,257 units (2013: 463,822 units), including 396,961 units (2013: 376,636 units) sold in the USA (+5.4%).

 

Sharp increase in earnings for the Motorcycles segment

Motorcycles segment revenues grew 11.6% year-on year to € 1,679 million (2013: € 1,504 million). EBIT jumped by 41.8% to € 112 million (2013: € 79 million), while profit before tax advanced by 40.8% to € 107 million (2013: € 76 million). Sales volume increased by 7.2% to 123,495 units (2013: 115,215 units), thus outperforming the market as a whole. BMW Motorrad’s five largest markets were Germany, the USA, France, Italy and Brazil.

Financial Services segment remains on growth course

 

The Financial Services segment continued to perform well in 2014. Segment revenues were 3.6% higher at € 20,599 million (2013: € 19,874 million), while profit before tax increased by 6.4% to € 1,723 million (2013: € 1,619 million).

In total, 1,509,113 (2013: 1,471,385) new contracts were signed in conjunction with financing and leasing business, 2.6% more than in 2013. The portfolio of lease and financing contracts in place with dealers and retail customers at 31 December 2014 rose by 5.6% to a total of 4,359,572 contracts (2013: 4,130,002 contracts).

 

Increase in workforce and number of apprentices

The workforce increased by 5.4% compared to the previous year. Overall, the BMW Group had a worldwide workforce of 116,324 employees at the end of the reporting period (2013: 110,351 employees). The increase mainly reflected the need for engineers and skilled workers in order to keep pace with rising demand for vehicles on the one hand and to forge ahead with innovations and develop new technologies on the other.

The BMW Group has expanded its apprenticeship activities worldwide. During the past year, approximately 1,500 young people began an apprenticeship within the organisation, including youngsters in Germany. At the end of the reporting period, 4,595 young people worldwide were in vocational training and training programmes for young talent within the BMW Group.

BMW Group targets further sales volume growth in 2015

In view of its attractive model range and the market launch of 15 new models or model revisions over the course of 2015, the BMW Group forecasts an increase in sales volume worldwide. “We are targeting further sales volume growth worldwide in the current year and hence a new record level for deliveries,” stated Reithofer.

Supervisory Board

The Supervisory Board will propose to the shareholders at the Annual General Meeting to be held on 13 May 2015 that Prof. Henning Kagermann be re-elected and that Simone Menne, member of the Executive Board of Deutsche Lufthansa AG, and Dr Norbert Reithofer be elected to the Supervisory Board of BMW AG. The Chairman of the Supervisory Board, Prof. Joachim Milberg, and Wolfgang Mayrhuber have, with the understanding of the Supervisory Board, stepped down as members of that board with effect from the end of the Annual General Meeting on 13 May 2015.

 

The BMW Group – an overview 2014                2013* Change in %
Sales volume
Automotive units 2,117,965 1,963,798 7.9
Thereof:
BMW units 1,811,719 1,655,138 9.5
MINI units 302,183 305,030 -0.9
Rolls-Royce units 4,063 3,630 11.9
Motorcycles units 123,495 115,215 7.2
Workforce1 116,324 110,351 5.4
Revenues € million 80,401 76,059 5.7
Thereof:
Automotive € million 75,173 70,630 6.4
Motorcycles € million 1,679 1,504 11.6
Financial Services € million 20,599 19,874 3.6
Other Entities € million 7 6 16.7
Eliminations € million -17,057 -15,955 6.9
Profit before financial result (EBIT) € million 9,118 7,978 14.3
Thereof:
Automotive € million 7,244 6,649 8.9
Motorcycles € million 112 79 41.8
Financial Services € million 1,756 1,643 6.9
Other Entities € million 71 44 61.4
Eliminations € million -65 -437 85.1
Profit before tax (EBT) € million 8,707 7,893 10.3
Thereof:
Automotive € million 6,886 6,561 5.0
Motorcycles € million 107 76 40.8
Financial Services € million 1,723 1,619 6.4
Other Entities € million 154 164 -6.1
Eliminations € million -163 -527 69.1
Income taxes € million -2,890 -2,564 -12.7
Net profit € million 5,817 5,329 9.2
Earnings per share2 8.83/8.85 8.08/8.10 9.3/9.3

*Prior year figures partially adjusted in accordance with IAS 8

1 Figures exclude dormant employment contracts, employees in the work and non-work phases of pre-retirement part-time working arrangements and low wage earners

2 Earnings per share of common stock/preferred stock

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