Statement by Dr. Friedrich Eichiner, Member of a Board of Management of BMW AG, Finance, Conference Call Interim Report to 30 Jun 2016

Posted on 03. Aug, 2016 by in BMW Canada

Good morning Ladies and Gentlemen,

 

The BMW Group’s certain business opening continued in a second
entertain of 2016. It was a company’s strongest-ever entertain – sales
grew by 5.7%, with some-more than 605,000 BMW, MINI and Rolls-Royce brand
vehicles delivered to customers. Group pre-tax gain also reached a
new all-time high for a singular quarter. Thanks to this positive
business expansion and a healthy opinion for a second half of
2016, we continue to endorse a superintendence for a full year.

 

Despite augmenting sensitivity in all regions of a world, a BMW
Group stays rarely profitable. The EBIT domain for a Automotive
shred stood during 9.5%. This was a 25th uninterrupted entertain in which
a handling EBIT domain was within or above a aim operation of
8-10%. The BMW Group’s strength lies in profitability and fortitude at
a high level. This shows clearly that a association has a resources it
needs to figure mobility of a future.

 

The tolerable profitability of a core business lays the
substructure for us to deposit in a destiny of a company. The Strategy
Number ONE NEXT we presented in a open emphasised this and is
now being implemented step by step. Initial signs of success are
already visible, confirming a approach. We continue to
evenly exercise a strategy.

 

The plan of essential expansion and globally offset sales
continues to compensate off for a BMW Group. This allows us to compensate
for sensitivity in sold markets and regions of a world.

 

I would initial like to contend a few difference about a sales conditions in
a second quarter. In Europe, a certain trend continued. Both
Northern and Southern European markets contributed to a boost in
deliveries. The referendum in a UK had not nonetheless impacted sales in the
second quarter.

 

The BMW Group also had a good second entertain in China. This was
partly due to a fast macroeconomic sourroundings and a attractive
indication line-up. The locally-produced long-wheelbase chronicle of a X1,
that has been accessible given a finish of May, will beget further
movement in a second half of a year. In a reward shred of the
US car market, new car registrations for a first
half-year trended somewhat lower. Competition has serve intensified
– partly due to a clever dollar. Having optimised a inventories,
we design a sales conditions to brace over a march of the
year. Nevertheless, a marketplace will sojourn severe in a second
half of 2016.

 

Higher tellurian sales volumes were also reflected in revenues. Group
revenues for a initial half-year reached € 45.87 billion – adult 2.3%
year-on-year. Adjusted for banking interpretation effects, revenues
increasing by 4.7%. Quarterly revenues were also somewhat aloft during €
25.01 billion. BMW Group pre-tax gain for a initial 6 months
exceeded € 5 billion for a initial time, during € 5.17 billion. This
represents a plain boost of 6.5% over a prior year. Group EBT
for a second entertain climbed 8.4% to € 2.80 billion. At Group level,
a EBT domain for a second entertain stood during 11.2% and therefore
stays during a really high level.

 

The BMW Group is creation targeted investments to secure a future
competitiveness. The association invested around € 1.04 billion in
products and apparatus in a initial half of 2016. Capital expenditure
was aloft final year due to a ramp-up of new models. The capex ratio
for a initial 6 months stood during 2.3%. In a second half of the
year, collateral investment is approaching to be higher, due to indication launches
and a common anniversary factors. In addition, a upfront investments
for vital projects we mentioned progressing will generally have an impact
in a second half of 2016. We design a capex ratio for a full
year to be on standard with final year and next a 5% aim as planned.

 

Research and expansion spending for a initial half of 2016
(according to a HGB – German Commercial Code) totalled € 2.10
billion and was therefore during a same spin as a prior year.
RD activities generally clever on a expansion of new
car projects and architectures. Additional concentration areas embody the
serve expansion of a Connected Drive offering, new
driver-assistance systems, and investment in choice drive
technologies. The RD ratio for a initial half-year was 4.6% –
somewhat next a long-term aim operation of 5- 5.5%, due to ramp-up
costs and anniversary factors. We design a ratio for a full year to
be on standard with that of final year.

 

BMW Group liquidity stood during € 12.63 billion during a finish of Jun 2016,
confirming that a association has plain financial resources. Let’s now
take a demeanour during gain opening in a sold segments,
starting with a Automotive Segment.

 

In a initial 6 months, deliveries of a BMW, MINI and Rolls-Royce
brands rose by 5.8% to some-more than 1.16 million vehicles. Sales growth
was also reflected in aloft revenues of € 41.69 billion. This
represents a slight boost of 2.8% compared with a prior year.
Adjusted for banking interpretation effects, revenues rose by 5.2%. In
a second quarter, shred revenues climbed by 5.6% to € 22.87
billion. The boost in revenues was however dampened by currency
interpretation effects.

 

Automotive EBIT climbed 9.1% to strech € 3.94 billion in a first
half of a year. Second-quarter EBIT also increasing significantly to
€ 2.18 billion. As already mentioned, a EBIT domain remained in the
top half of a aim mezzanine of 8-10%. The figure for both the
initial half-year and second entertain was during 9.5%.

 

Earnings benefitted in sold from aloft sales volumes. The BMW
Group continues to deposit in destiny projects, such as automated
pushing and mobility services, and is recruiting competent specialists
for these areas. Over a six-month period, a BMW Group workforce
increasing by 3.4% to a sum of 123,597 employees, that has also
increasing a cost base. Pricing on a tellurian automobile markets remains
challenging. Competition is heated – generally in a US. In
response, a BMW Group continues to concentration on sustainable, essential growth.

 

The segment’s financial outcome for a initial half-year softened by €
205 million from a prior year – generally due to a certain effect
of a symbol to marketplace gratefulness of commodity derivatives.

 

Our Chinese corner try BBA contributed € 241 million to the
at-equity outcome for a six-month period. This figure is € 43 million
reduce than a prior year due to launch costs of new models.

 

And now a few difference about a financial conditions in a Automotive
Segment. Free money upsurge totalled € 2.52 billion during a finish of the
second entertain and is therefore on standard with final year. We design free
money upsurge for a full year to sojourn above a aim of € 3 billion.
At a finish of a second quarter, net financial resources in the
Automotive Segment totalled € 16.49 billion.

 

Let’s pierce on to a Financial Services Segment. The segment
achieved good in a initial 6 months, final some-more than 874,000
new leasing and financing contracts with sell customers. This
represents a plain boost of 9.1% over a initial half of final year.
The volume of new business climbed 7.0% to € 26.35 billion over the
same period.

 

The increasing series of contracts also reflected a positive
expansion of new business. As of a 30th of June, BMW Group
Financial Services confirmed scarcely 4.5 million contracts with retail
customers, 8.3% some-more than a prior year. Both leasing and
financing contracts contributed to this plain growth. The strongest
expansion was once again reported in a Asia/Pacific region, where the
sum series of contracts climbed by 17.4%. The Europe/Middle
East/Africa and Americas regions and a EU Bank also posted plain growth.

 

The invasion rate – a commission of new BMW Group vehicles
financed or leased by a Financial Services Segment – stood during 47.4%
for a initial 6 months of a year. This is an boost of 2.3
commission points over a prior year.

Demand for financial services products stays dynamic. BMW Group
Financial Services continues to essay for a good change between
leasing and financing.

 

The certain business expansion of a initial half-year lifted
pre-tax gain somewhat to € 1.07 billion. The figure for a second
entertain was € 503 million. Pricing on a general used-car
markets remained mostly fast in a second quarter. The credit loss
ratio of 0.29% for a initial half-year stays really low.

 

The Financial Services Segment adopts a active proceed to risk
government and has done suitable risk provisions. We design the
segment’s certain business expansion to continue via the
rest of a year. Let’s now take a demeanour during a Motorcycles Segment:
BMW Motorrad posted record half-year sales for a fourth time in
duration – offered some-more than 80,000 motorcycles for a initial time
in a six-month period. Europe was a clever expansion driver, with Asia,
quite China, also achieving energetic sales increases. The
renouned R 1200 GS enduro is still a undisputed top-selling BMW
Motorrad model: some-more than 14,000 were delivered to customers. Its
sister model, a R 1200 GS Adventure, also stays rarely successful.
Sales total for a R NineT Roadster continue to surpass expectations.

 

Segment revenues for a initial half of 2016 reached € 1.20 billion.
EBIT for a same duration totalled € 192 million. This diminution from
final year’s record figure generally stems from aloft costs for strategic
projects. In a second half of a year, we design a serve sales
boost from strategically-important new models like a G 310 R, which
will take BMW Motorrad into a shred next 500 cc. The
R NineT Scrambler is also receiving really certain feedback from the
open forward of a marketplace launch. We design to see this positive
expansion continue in a Motorcycles shred in a second half of
a year, corroborated by a immature and appealing indication line-up.

 

I would now like to speak about a opinion for a second half of the
year. Profitable expansion is a concentration of a Strategy Number ONE
NEXT. We are steering a association formed on pivotal opening indicators
and a superintendence we released during a start of a year – that assumes
that mercantile and domestic conditions do not mellow significantly.

 

Upfront investments for destiny projects and measures to exercise our
Strategy Number ONE NEXT will have a larger impact on earnings
in a second half of a year than in a initial 6 months. Higher
crew costs from a collectively bargained compensate boost in
Germany as of a 1st of Jul will also have a dampening effect. In
perspective of a doubt surrounding domestic developments worldwide,
a business sourroundings is approaching to be some-more cautious.

The association stays committed to a desirous targets for 2016.

  • The BMW Group expects to see a slight boost in pre-tax earnings
    for a full year.
  • The Automotive Segment is targeting slight increases in both sales
    and revenues.
  • We intend to keep a EBIT domain for a Automotive Segment
    within a 8-10% aim range.
  • Since deliveries of BMW motorcycles in Europe, Latin America and
    Asia were aloft than approaching in a initial half of a year, we now
    foresee a plain boost in sales for a full year 2016.    
  • In a Financial Services Segment, we design lapse on equity to
    sojourn during final year’s spin – and therefore above a aim of at
    slightest 18%.

 

Naturally, tangible business opening might deviating from a present
forecast, depending on tellurian conditions. The BMW Group remains
confident about a second half of a year. With a plan of
globally offset sales, a association is good positioned for a future.

 

Once again, a clever business opening in a initial 6 months
confirms a factors that set this association apart: high profitability,
fortitude and sustainability.

 

This spin of opening provides a BMW Group with a financial
coherence to rise new business areas and expostulate innovation. This,
in turn, secures a destiny competitiveness and long-term success.

 

Thank you.

 

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