Q3 2011: Best third quarter in BMW Group’s history

News | November 3rd, 2011 by 4
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  • Best third quarter in BMW Group’s history
  • Profit before financial result rises to euro 1,716 million
  • Profit before tax increases to euro 1,644 million
  • Automotive segment EBIT up to euro 1,819 million
  • Automotive segment EBIT margin improved to 11.9%
  • Reithofer reaffirms targets for full year 2011

The BMW Group remains on its successful course. “We have recorded the best third quarter in the company’s history. During this period, we achieved new records for sales volume, revenues and earnings. The main reasons for this excellent performance have been strong demand worldwide for our vehicles and considerable efficiency improvements”, stated Norbert Reithofer, the Chairman of the Board of Management of BMW AG on Thursday in Munich.

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Revenues rose by 3.8% to euro 16,547 million (2010: euro 15,940 million). The third-quarter profit before financial result (EBIT) climbed by 44.0% to euro 1,716 million (2010: euro 1,192 million) and the profit before tax (EBT) went up by 21.0% to euro 1,644 million (2010: euro 1,359 million). Group net profit improved by 23.8% to euro 1,082 million (2010: euro 874 million). The number of vehicles sold during the three-month period from July to September increased by 9.0% to a new record of 399,218 units (2010: 366,190 units).

New sales volume, revenues and earnings records were also achieved for the nine-month period. Revenues were 15.4% higher at euro 50,472 million (2010: euro 43,731 million). EBIT surged by 92.8% to euro 6,474 million (2010: euro 3,358 million), while the profit before tax rose to euro 6,160 million (2010: euro 3,166 million). This corresponds to an improvement of 94.6%. The nine-month profit after tax doubled to euro 4,103 million (2010: euro 2,032 million). The total number of BMW, MINI and Rolls-Royce brand vehicles delivered to customers up to the end of September increased by 16.0% to 1,232,584 units (2010: 1,062,216 units).

EBIT margin of 12.8% for automotive segment over nine-month period

Sales volumes of all three group brands were at record levels in the third quarter and for the nine-month period. This is reflected in the revenues and earnings performance for the relevant periods. Automotive segment revenues in the third quarter went up by 8.0% to euro 15,344 million (2010: euro 14,210 million). EBIT climbed by 57.9% to euro 1,819 million (2010: euro 1,152 million), yielding an EBIT margin for the Automotive segment of 11.9%. The segment profit before tax improved to euro 1,745 million (2010: euro 1,285 million; +35.8%).

Nine-month segment revenues increased by 20.3% to euro 46,391 million (2010: euro 38,551 million). EBIT rose sharply to euro 5,935 million (2010: euro 2,760 million), resulting in an EBIT margin for the period of 12.8%. The segment profit before tax improved to euro 5,647 million (2010: euro 2,443 million).

Free cash flow for the nine-month period totalled euro 3,035 million. Adjusted for the injection of equity to one entity in the Financial Services segment and the acquisition of ING Car Lease, free cash flow totalled approximately euro 3.9 billion. The equivalent figure for the third quarter was euro 462 million. The acquisition of ING Car Lease, seasonally higher capital expenditure and a rise in working capital, mainly in conjunction with the BMW 1 Series and 3 Series model changes, were some of the factors holding down free cash flow. Adjusted for ING Car Lease, free cash flow in the period from July to September was euro 711 million.

The number of BMW brand cars sold in the third quarter increased by 8.2% to 332,066 units (2010: 306,982 units). Between January and September, sales of the core brand rose by 14.5% to 1,021,927 units (2010: 892,737 units); this is the first time that the BMW brand has exceeded the one million mark in the first nine months of a year.

The various models of the X Series continued to perform exceedingly well during the period from January to September. Sales of the BMW X1 increased sharply again and were up by 30.4% to 94,294 units (2010: 72,294 units). The new BMW X3 continued to be popular with customers, with worldwide sales more than doubling to 83,754 units (2010: 35,252 units). The BMW X5 remains market leader worldwide in its segment with a total of 75,055 units (2010: 74,655 units) sold during the nine-month period.

The picture is a similar one for the BMW 5 Series. In total, 250,566 units (2010: 155,648 units) were sold in the first nine months of the year, an increase of 61.0% against the corresponding period last year. The BMW 6 Series recorded a sales volume of 5,314 units, 3.2% up on the previous year (2010: 5,149 units). The 6 Series Coupé became available in September 2011 and is set to generate additional demand during the final quarter of the year. The BMW 7 Series continues to perform well, with nine-month sales of the BMW flagship rising to 48,842 units (2010: 47,349 units; +3.2%).

The sales volume of the BMW 1 Series – which is now approaching the end of its product life-cycle – totalled 129,041 units between January and September (2010: 151,681 units). The second generation of the BMW 1 Series was launched in mid-September and will spur demand in the last three months of the current year.

288,077 units of the BMW 3 Series were sold during the first nine months of the year (2010: 295,608 units). The new BMW 3 Series Sedan was presented to the public in mid-October and will be launched on the markets worldwide on 11 February 2012. “The customers’ response to the new BMW 3 Series has been excellent. We are confident that the new BMW 3 Series will continue the success story of this model series”, emphasised Reithofer.

The MINI brand also achieved a new sales volume record, with sales up in the third quarter by 13.4% to 66,303 units (2010: 58,450 units). In total, 208,216 units (2010: 167,751 units) were sold during the nine-month period, an increase of 24.1% over the previous year. Sales of the MINI Countryman improved further to 61,986 units. The MINI Coupé came onto the markets in September as the fifth model variant.

The Rolls-Royce brand also continues to perform well. 849 units (2010: 758 units; +12.0%) were handed over to customers during the third quarter. In the nine-month period to the end of September, sales rose by 41.3% to a new sales volume record figure of 2,441 units (2010: 1,728 units).

The BMW Group increased its sales volume figures in almost all of the world’s regions in the first nine months of 2011. In Europe, the number of cars sold rose by 10.0% to 635,403 units. Sales increased by 9.5% to 209,772 units in Germany and by 9.7% to 128,382 units in Great Britain. Growth was also recorded in Italy (54,349 units; +8.3%) and France (49,233 units; +2.2%).

Nine-month sales in North America rose to 245,903 units, 13.9% ahead of the previous year’s corresponding figure. The number of vehicles handed over to customers in the USA increased by 14.2% to 219,962 units.

The BMW Group also registered continued growth in Asia, where a sales volume of 282,476 units (+36.8%) was recorded in the first nine months of the year. A total of 178,232 units (+45.9%) was sold in China. In Japan, the number of cars sold rose by 7.6% to 34,591 units.

Sales volume and revenues up for Motorcycles segment

Third-quarter sales volume in the Motorcycles segment increased by 6.5% to 28,862 units (2010: 27,094 units), comprising 26,312 BMW brand motorcycles (2010: 24,493 units; +7.4%) and 2,550 Husqvarna brand motorcycles (2010: 2,601 units). Segment revenues were 14.8% higher at euro 334 million (2010: euro 291 million). As a result of the realignment of the Husqvarna Group, EBIT slipped to a loss of euro 16 million (2010: profit of euro 2 million), while the result before tax dropped to a loss of euro 17 million (2010: euro 0 million).

Nine-month revenues increased by 9.3% to euro 1,181 million (2010: euro 1,081 million). The Motorcycles segment reports a positive EBIT for the period of euro 62 million (2010: euro 88 million) and a profit before tax of euro 60 million (2010: euro 83 million). The number of motorcycles sold in the first nine months of the year increased by 4.7% to 92,972 units (2010: 88,768 units), comprising 86,892 (2010: 81,508) BMW brand and 6,080 (2010: 7,260) Husqvarna brand motorcycles.

Positive performance by Financial Services segment

The Financial Services segment put in another good performance in the third quarter 2011. Segment revenues totalled euro 4,276 million (2010: euro 4,278 million), thus remaining at a similar level to the previous year. The segment’s profit before tax rose by 11.3% to euro 354 million (2010: euro 318 million).

Nine-month revenues edged up by 1.3% to euro 12,640 million (2010: euro 12,480 million). Profit before tax jumped by 66.2% to euro 1,527 million (2010: euro 919 million).

The number of lease and financing contracts in place with dealers and retail customers at the end of the nine-month period grew by 5.1% to 3,303,635 contracts. The number of new financing and lease contracts signed in the period from January to September rose by 10.0% to 882,961 contracts. The leasing business grew by 19.8%, while credit financing increased by 6.1%.

Number of employees increased

The BMW Group’s workforce increased during the period ended 30 September. The number of employees worldwide increased by 4.1% to 100,389 employees at the end of the reporting period (2010: 96,402). One of the reasons for this was the acquisition of ING Car Lease. Skilled workers and engineers were also recruited in order to keep pace with the ongoing strong demand for BMW Group vehicles and to focus on developing new technologies.

The provision of training for young people plays an important role for the BMW Group, with a total of 1,661 apprentices taking up their careers with the BMW Group during the third quarter.

Reithofer: on track to achieve targets for the full year

In view of strong demand for its cars worldwide, the BMW Group remains confident for its full-year performance. “We are on track to achieve our targets for the full year”, stated Reithofer. The expectation remains that group earnings and sales volumes for the full year 2010 will be significantly higher than in the previous year. “We are still aiming to achieve a record-breaking profit before tax and to increase sales volume by over 10% to a new high of more than 1.6 million vehicles“, continued Reithofer.

For the full year, the BMW Group continues to forecast an EBIT margin of over 10% for its Automotive segment and a return on capital employed (RoCE) of over 26%. In the Financial Services segment, the aim is to achieve a significant improvement in pre-tax profit and a return on equity of over 18%. All of these targets are based on the assumption that economic and political conditions as well as the global economy remain stable.

The BMW Group remains committed to achieving its stated long-term profitability targets. The BMW Group is striving to achieve a sustainable EBIT margin in its Automobiles segment of between 8% and 10% in 2012 and beyond. Depending on political and economic developments, however, actual margins may end up being above or below the targeted range.

he BMW Group – an overview

3rd quarter                               2011 3rd quarter 20 10 Change

in %

Deliveries to customers
Automobiles                                               units 399,218 366,190 9.0

BMW                                               units

332,066 306,982 8.2
MINI                                                units 66,303 58,450 13.4
Rolls-Royce                                      units 849 758 12.0
Motorcycles                                                                             units 28,862 27,094 6.5

BMW                                                        units

26,312 24,493 7.4
Husqvarna                                               units 2,550 2,601 -2.0
Workforce at end of quarter [1] 100,389 96,402 4.1
Operating cash flow [2] euro million 1,534 1,764 -13.0
Revenues euro million 16,547 15,940 3.8

Automobiles                                     euro million

15,344 14,210 8.0
Motorcycles                                               euro million 334 291 14.8
Financial Services                            euro million 4,276 4,278 0.0
Other Entities                                   euro million 1 1
Eliminations                                               euro million -3,408 -2,840
Profit before financial result euro million 1,716 1,192 44.0

Automobiles                                     euro million

1,819 1,152 57.9
Motorcycles                                               euro million -16 2
Financial Services                            euro million 364 308 18.2
Other Entities                                               euro million -153 0
Eliminations                                                euro million -298 -270 -10.4
Profit before tax euro million 1,644 1,359 21.0

Automobiles                                     euro million

1,745 1,285 35.8
Motorcycles                                               euro million -17 0
Financial Services                            euro million 354 318 11.3
Other Entities                                            euro million -187 40
Eliminations                                                euro million -251 -284 11.6
Income taxes euro million -562 -485 -15.9
Net profit euro million 1,082 874 23.8
Earnings per share [3] euro

1.64/1.64 1.33/1.33 23.3/23.3

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

[2] Automobiles segment

[3] earnings per share in accordance with IAS 33 for common and preferred stock shares



January – September 2011 January – September 2010 Change

in %

Deliveries to customers
Automobiles units 1,232,584 1,062,216 16.0

BMW                                               units

1,021,927 892,737 14.5
MINI                                                units 208,216 167,751 24.1
Rolls-Royce                                      units 2,441 1,728 41.3
Motorcycles                                                                             units 92,972 88,768 4.7

BMW                                                        units

86,892 81,508 6.6
Husqvarna                                               units 6,080 7,260 -16.3
Workforce at end of quarter [1] 100,389 96,402 4.1
Operating cash flow [2] euro million 5,761 4,172 38.1
Revenues euro million 50,472 43,731 15.4

Automobiles                                     euro million

46,391 38,551 20.3
Motorcycles                                               euro million 1,181 1,081 9.3
Financial Services                            euro million 12,640 12,480 1.3
Other Entities                                    euro million 3 3
Eliminations                                                euro million -9,743 -8,384
Profit before financial result euro million 6,474 3,358 92.8

Automobiles                                      euro million

5,935 2,760
Motorcycles                                               euro million 62 88 -29.5
Financial Services                            euro million 1,506 900 67.3
Other Entities                                   euro million -115 -74 -55.4
Eliminations                                               euro million -914 -316
Profit before tax euro million 6,160 3,166 94.6

Automobiles                                     euro million

5,647 2,443
Motorcycles                                               euro million 60 83 -27.7
Financial Services                            euro million 1,527 919 66.2
Other Entities                                   euro million -270 -33
Eliminations                                               euro million -804 -246
Income taxes euro million -2,057 -1,134 -81.4
Net profit euro million 4,103 2,032 101.9
Earnings per share [3] euro 6.23/6.24 3.09/3.10 101.6/101.3

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

[2] Automobiles segment

[3] earnings per share in accordance with IAS 33 for common and preferred stock shares

[Source: BMW]