06.11.2007
Third-quarter revenues and earnings up
BMW Group confirms earnings and sales volume targets for 2007
Munich.
The BMW Group increased sales volume, revenues and earnings figures for
the third quarter 2007 and is therefore well on its way towards
achieving its earnings and sales volume targets for the full year.
“Excluding the exceptional gain on the Rolls-Royce exchangeable bond,
the BMW Group is still aiming to post a current year profit before tax
that will be higher than the previous year’s record figure”, stated
Norbert Reithofer, Chairman of BMW AG’s Board of Management in Munich
on Tuesday. The company is also heading towards a sales volume for the
year of over 1.4 million vehicles, with growth in the high single-digit
percentage range. All three brands are forecast to achieve new retail
sales volume records.
Third-quarter revenues of the BMW Group
rose by 19.2% to euro 13,778 million (third quarter 2006: euro 11,557
million) on the back of increased sales volumes. Profit before tax
improved by 6.3% to euro 765 million (third quarter 2006: euro 720
million), whilst the net profit rose even more sharply by 77.7% to euro
803 million (third quarter 2006: euro 452 million) partly as a result
of tax effects.
The BMW Group saw its revenues for the
nine-month period grow by 11.1% to euro 40,412 million (first nine
months 2006: euro 36,368 million). The group profit before tax amounted
to euro 2,682 million (first nine months 2006: euro 3,248 million
/-17.4%). Adjusted for the exceptional gain on the partial settlement
of the exchangeable bond on shares in the British engine manufacturer,
Rolls-Royce plc, London, the profit before tax would have decreased by
only 9.4%. The group profit after tax was euro 2,143 million (first
nine months 2006: euro 2,187 million /-2.0%).
During the period
from January to September, earnings were affected by various factors
including the cost of market launches and production start-ups for
numerous new models, high raw material costs, substantial expenditure
for the development of even more efficient and fuel-saving engines and
the on-going weakness of the US dollar and Japanese yen. The BMW Group
uses hedging instruments to reduce the impact of unfavourable exchange
rate fluctuations. All of the main currencies are fully hedged for the
business year 2007. The negative full-year impact of exchange rate
factors will not exceed the level of euro 666 million recorded last
year. The company was also confronted with higher purchase prices for
steel, precious metals and other materials. The additional cost is
likely to be on a similar scale to the previous year’s level of euro
178 million.
Reithofer: rigorous implementation of strategic realignment
The
BMW Group is currently working intensively to implement the company’s
future strategic realignment, announced at the end of September. “The
BMW Group will focus its attention on profitability and increasing
value over the long term”, explained Reithofer. The BMW Group has set
itself some ambitious interim targets for the first five years: the
company aims to achieve retail sales of more than 1.8 million vehicles
per annum by 2012. On the automobiles side of the business, the company
is targeting a return on capital employed (RoCE) of 26% and a return on
sales of between 8% and 10% from 2012 onwards.
Slight increase in workforce
The
BMW Group had a worldwide workforce of 107,731 employees at the end of
the third quarter 2007, 0.7% more than one year earlier (107,027
employees). The number of employees working in the Automobiles and
Motorcycles segments was practically unchanged despite the sharp growth
of business. This is a clear indication that the company is making good
progress in productivity terms in its core business. The increase in
the workforce was mainly due to two acquisitions made in the area of
financial services.
Numerous new models launched
The
new BMW 6 Series Coupé and Convertible came onto the markets during the
third quarter. The BMW 1 Series Coupé and the MINI Clubman will go on
sale from November onwards. A four-seater convertible will be added to
the 1 Series in the near future.
The BMW Group’s product
initiative will be continued, as previously announced, in conjunction
with the new strategic realignment. The successful X Series will be
further expanded to include the Sports Activity Vehicle X1. The BMW X6
is scheduled to come on the market in 2008. In addition, a four-door
Gran Turismo will be built along the lines of the CS concept study,
previously presented in Shanghai. One further result of the new
strategy is that plans are underway to open up a completely new segment
based on a new vehicle concept. This is currently being pursued in the
form of the Progressive Activity Sedan (PAS), which will add a range of
intelligent solutions designed to enhance the functionality of new
sedans.
The MINI brand will be broadening its range with the
introduction of a new model, the Sports Activity Vehicle. The
Rolls-Royce brand will also expand its model range when the coupé
version comes onto the market as the third variant of the Phantom.
Plans are also underway for a further Rolls-Royce model which will be
positioned in price and size terms at a level somewhat below the
Rolls-Royce Phantom. In the motorcycles business, the product ranges of
both the BMW and Husqvarna brands will be expanded during the coming
years.
BMW Group remains the world’s leading premium manufacturer
Third-quarter
sales of the BMW Group rose by 12.8% to 364,564 units (third quarter
2006: 323,064 units). The number of cars sold during the first nine
months of the year increased by 7.2% to 1,094,849 units (first nine
months 2006: 1,021,534 units). The EfficientDynamics measures taken to
optimise performance and consumption give the company a real
competitive advantage and had a positive impact on sales performance.
The BMW Group forecasts that some 700,000 vehicles in Europe will have
been equipped with EfficientDynamics technology by 2008. By the end of
this year, the figure is likely to be in the region of 400,000 vehicles.
The
number of BMW brand cars sold in the nine-month period to September
went up by 6.3% to 929,379 units (first nine months 2006: 874,208
units). The sales volume for the period from July to September rose by
10.8% to 306,964 units (third quarter 2006: 277,088 units).
The
MINI brand also registered sharp sales volume growth rates in the third
quarter, with the number of cars sold rising by 25.2% to 57,315 units
(third quarter 2006: 45,788 units). Sales volume for the nine-month
period increased by 12.3% to 164,891 units (first nine months 2006:
146,851 units). A sales volume in excess of 220,000 MINI has been set
as the target for the full year.
The number of Rolls-Royce brand
vehicles handed over to customers during the nine-month period rose by
21.9% to 579 units (first nine months 2006: 475 units) thanks to the
new Cabriolet Drophead Coupé, which has been available since July. The
sales volume for the third quarter jumped by 51.6% to 285 units (third
quarter 2006: 188 units).
Automobile segment reports revenues and earnings growth Third-quarter
revenues of the Automobile segment grew faster than sales volume, with
segment revenues rising by 18.2% to euro 13,107 million (third quarter
2006: euro 11,088 million). Profit before tax improved by 15.2% to euro
704 million (third quarter 2006: euro 611 million) on the back of a
good sales volume performance. Segment revenues for the nine-month
period amounted to euro 38,782 million (first nine months 2006: euro
35,262 million), 10.0% ahead of the corresponding figure last year.
Profit before tax fell by 8.8% to euro 2,114 million (first nine months
2006: euro 2,319 million). Segment earnings were adversely affected by
exchange rate fluctuations, higher raw material prices, market launch
and production start-up costs for new models and higher research and
development costs. As already announced, the BMW Group forecasts that
full-year earnings of the Automobile segment will surpass the previous
year’s result. “Following the successful launch of various models in
recent months, we forecast an even faster sales volume growth rate in
the fourth quarter 2007 which will increase earnings of the Automobile
segment”, explained Reithofer.
Good performance by the Motorcycle segment
The
Motorcycle segment increased its third quarter sales volume by 1.4% to
23,549 units (third quarter 2006: 23,230 units) thanks to new models.
The number of motorcycles sold in the nine-month period went up by 4.3%
to 82,779 units (first nine months 2006: 79,333 units). Third-quarter
segment revenues fell by 6.8% to euro 259 million (third quarter 2006:
euro 278 million), whereas the segment profit before tax improved to
euro 5 million (third quarter 2006: euro 4 million/+25%). The pre-tax
profit for the nine-month period was euro 95 million (first nine months
2006: euro 89 million), representing a 6.7% improvement. Segment
revenues edged up by 1.2% to euro 1,022 million (first nine months
2006: euro 1,010 million).
Financial services segment continues profitable growth
The
Financial services segment continued to grow profitably in the third
quarter despite stiff competition and rising interest rates. The profit
before tax improved by 4.9% to euro 191 million (third quarter 2006:
euro 182 million), while revenues rose by 32.0% to euro 3,569 million
(third quarter 2006: euro 2,703 million). In balance sheet terms, the
segment’s business volume increased by 16.5% to reach euro 49,491
million at 30 September 2007. The number of lease and financing
contracts in place with dealers and retail customers increased by 14.5%
to a total of 2,539,701 contracts. The proportion of new cars of the
BMW Group leased or financed by the Financial Services segment during
the first nine months of the year was 44.7%, 2.5 percentage points
above the proportion recorded for the corresponding period in 2006. * * * The full Interim Report to 30 September 2007 is available for download at www.bmwgroup.com/ir . The BMW Group – an Overview 3rd quarter 2007 3rd quarter 2006 Change in % Vehicle production Automobiles units 371,569 329,143 12.9 Motorcycles units 20,299 22,279 -8.9 Deliveries to customers Automobiles units 364,564 323,064 12.8 Thereof: BMW units 306,964 277,088 10.8 MINI units 57,315 45,788 25.2 Rolls-Royce units 285 188 51.6 Motorcycles units 23,549 23,230 1.4 Workforce at end of quarter 107,731 107,027 0.7 Operating cash flow euro million 1,687 255 558.0 Revenues euro million 13,778 11,557 19.2 Thereof: Automobiles euro million 13,107 11,088 18.2 Motorcycles euro million 259 278 -6.8 Financial Services euro million 3,569 2,703 32.0 Reconciliations euro million -3,157 -2,512 - Profit before tax euro million 765 720 6.3 Thereof: Automobiles euro million 704 611 15.2 Motorcycles euro million 5 4 25.0 Financial Services euro million 191 182 4.9 Reconciliations euro million -135 -77 -75.3 Income taxes euro million 38 -268 - Net profit euro million 803 452 77.7 Earnings per share2 euro 1.22/1.22 0.69/0.69 76.8/76.8
Jan. – Sept. 2007 Jan. – Sept. 2006 Change in % Vehicle production Automobiles units 1,160,247 1,028,949 12.8 Motorcycles units 88,866 83,350 6.6 Deliveries to customers Automobiles units 1,094,849 1,021,534 7.2 Thereof: BMW units 929,379 874,208 6.3 MINI units 164,891 146,851 12.3 Rolls-Royce units 579 475 21.9 Motorcycles units 82,779 79,333 4.3 Workforce at end of quarter 107,731 107,027 0.7 Operating cash flow euro million 4,476 3,998 12.0 Revenues euro million 40,412 36,368 11.1 Thereof: Automobiles euro million 38,782 35,262 10.0 Motorcycles euro million 1,022 1,010 1.2 Financial Services euro million 10,101 8,310 21.6 Reconciliations euro million -9,493 -8,214 - Profit before tax euro million 2,682 3,248 -17.4 Thereof: Automobiles euro million 2,114 2,319 -8.8 Motorcycles euro million 95 89 6.7 Financial Services euro million 563 535 5.2 Reconciliations euro million -90 305 - Income taxes euro million -539 -1,061 49.2 Net profit euro million 2,143 2,187 -2.0 Earnings per share euro 3.27/3.28 3.33/3.34 -1.8/-1.8 |