BMW Announces Record Profit Levels for 2017 Despite Big Investments

Interesting, News | March 8th, 2018 by 1
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Last year proved to be quite profitable for BMW despite investing over €1 billion euros in research and development. Today, the accountants in Munich presented …

Last year proved to be quite profitable for BMW despite investing over €1 billion euros in research and development. Today, the accountants in Munich presented the financial results for 2017 and it turns out the Germans enjoyed their eight successive record year despite high upfront expenditure. In addition, the BMW Group delivered more than 100,000 electrified vehicles to customers for the first time in a single year, firmly underpinning the Group’s role as a pioneer and key driver of electric mobility.

Automotive sales volume increased by 4.1% to a new record level of 2,463,526 units in 2017 (2016: 2,367,603 units). With its three premium automotive brands, BMW, MINI and Rolls-Royce, the BMW Group asserted its position as the world’s leading manufacturer of premium vehicles. Deliveries of electrified vehicles jumped by an incredible 65.6% to 103,080 units, driven by the all-electric BMW i3 sales. The Germans want to increase the sales volume of electrified vehicles to at least 140,000 units in 2018 and bring more than half a million electrified vehicles onto the roads by the end of 2019, showing no  sign of slowing down.

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“We can look back on the most successful year in our corporate history and have achieved record levels for revenues and earnings for the eighth year in succession,” stated Harald Krüger, Chairman of the Board of Management of BMW AG in Munich today. “Since 2016, we have taken numerous strategic decisions to further grow our business on a sustainable basis in the years ahead.”

“Last year we allocated around one billion euros more on research and development than in 2016 – and nevertheless increased our operating profit. This is what we mean by sustained profitability,” said Nicolas Peter, Member of the Board of Management of BMW AG responsible for Finance. In 2017, the BMW Group raised research and development expenditure by 18.3% to € 6,108 million (2016: € 5,164 million). Expressed as a percentage of revenues, the research and development expenditure ratio at Group level rose to 6.2% (2016: 5.5%).

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At the Annual General Meeting on 17 May 2018, the Board of Management and the Supervisory Board will propose to shareholders that the dividend be increased to a new high of € 4.00 (2016: € 3.50) per share of common stock and € 4.02 (2016: € 3.52) per share of preferred stock. The distribution rate of 30.2% (2016: 33.3%) will be within the BMW Group’s target range of between 30 and 40%. “The proposal to raise the dividend by a significant amount is a clear sign of the Group’s confidence that it is ideally placed to perform well in the future on a sustainable basis,” said Krüger.

BMW won’t rest on its laurels though and expects worldwide deliveries of its vehicles to rise in 2018. The increasing availability of the new BMW X3 and the launch of new products such as the BMW Z4 or the 8 Series are likely to provide additional momentum. “This year we are targeting another new sales record, with deliveries slightly up on the previous year”, Krüger stated. At the same time, the BMW Group expects the political and economic environment to remain volatile.