BMW lifted its annual profit margin forecast to between 9.5% and 10.5% from 7% to 9% previously forecasted. Furthermore, BMW raised their forecast for return on equity in its financial services segment to 20%-23% from 17%-20%. The positive earnings effects will positively impact Group earnings before taxes which remain forecast to increase significantly. The Free Cash Flow in the Automotive Segment is now expected to be around € 6.5 billion.
BMW’s new financial guidance comes despite facing a global semiconductor crisis which has affected several industries, including automotive. The chip shortage is expected to continue well into 2022.
“Whilst the semiconductor supply restrictions are expected to further impact production and deliveries to customers in the coming months, BMW AG expects that the continuing positive pricing effects for both new and pre-owned vehicles will overcompensate these negative sales volume effects in the current financial year,” BMW said in a statement earlier today.
Back in August BMW raised again its profit forecast after strong quarterly results, but there was one caveat reported at the time: the chip shortages could impact the second half of 2021.