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

Posted on 05. Nov, 2016 by in BMW Canada

Good morning, Ladies and Gentlemen,

 

The BMW Group achieved good in a third entertain of 2016 and
continued a certain business expansion from a initial half of the
year. EBIT domain in a Automotive Segment stays within a target
range, during 9.1%, for a initial 9 months. Sales, revenues and Group
pre-tax gain all reached new all-time highs for a year to the
finish of September. We are also progressing a desirous superintendence for
a full year. In a initial 9 months of a year, a BMW Group
delivered roughly 1.75 million vehicles to business – 6.2% some-more than
a prior year.

 

In China, BMW Group deliveries exceeded a expectations. More than
379,000 cars were sole by a finish of Sep – an boost of 10.7%.

Both locally constructed and alien models did well. The
long-wheelbase chronicle of a new BMW X1 and a other X models are
proof generally renouned with business in China. Despite lifecycle
factors, sales of a BMW 3 Series and a BMW 5 Series continued to
perform good here. Sales expansion in Europe continued to be
dynamic, with double-digit growth. The categorical sales drivers were our
compress vehicles and X models. The new BMW 7 Series also continues to
make poignant gains. The US automobile marketplace stays rarely competitive
with a BMW Group focusing on a scold change between volume and
profitability. The association continues to advantage from a process of
globally offset sales.

 

 

During a march of fine-tuning a strategy, a BMW Group made
some pivotal decisions to beam a association into a future. The company
is operative tough to exercise these measures by targeted
investments in tomorrow’s mobility. In a initial 9 months of this
year, we fake brazen with many opposite projects, including
foundation of a product choice and topics associated to digitalisation.

 

Third-quarter Group revenues climbed 4.6% to € 23.36 billion, but
were dampened rather by banking headwinds. Adjusted for currency
interpretation effects, revenues rose in line with sales, by 6.6%. At the
finish of a initial 9 months, revenues reached € 69.23 billion.
Pre-tax gain climbed 13.8% between Jul and Sep to € 2.58
billion. As good as certain handling business expansion during Group
level, an alleviation in a financial outcome also contributed to this
poignant increase. This was especially due to a certain outcome of
a satisfactory marketplace gratefulness of commodity derivatives.

 

The BMW Group’s pre-tax gain for a initial 9 months totalled €
7.74 billion, an boost of 8.8%. At Group level, a EBT domain for
a year to a finish of Sep was 11.2%. As it implements its
strategy, a BMW Group is creation targeted investments to enhance its
indication choice and arise new business segments. The association invested
a sum of € 1.97 billion in products and apparatus in a year to the
finish of September. This figure is reduce than final year since there
were fewer product launches.

 

The capex ratio was 2.8% for a initial 9 months, and 4.0% for the
quarter. In a fourth quarter, collateral output is expected to be
aloft as a outcome of a common anniversary factors. We design a capex
ratio for a full year to be on a standard with final year, as planned.
Research and expansion spending for a initial 9 months totalled €
3.33 billion and was therefore tolerably reduce than in 2015. The
prior year’s figure enclosed high expansion costs for a launch
of a BMW 7 Series, a X1 and a 2 Series Gran Tourer, among other effects.

Third-quarter RD activities especially clever on preparations
for new high-volume models. Additional concentration areas enclosed increasing
car connectivity and serve expansion of motorist assistance systems.

 

The RD ratio for a initial 9 months was 4.8%. The
fourth-quarter figure will be higher, especially due to a ramp-up of the
new BMW 5 Series. For a full year, as planned, we design it to be on
standard with final year’s level.

BMW Group liquidity stood during € 11.46 billion during a finish of September,
confirming a company’s financial strength.

 

Let’s take a demeanour during a gain opening in a sold segments.

In a Automotive Segment, the association sole a total
of 1.75 million vehicles in a year to a finish of September. This
represents an boost of 6.2% and a new all-time high: Over 100,000
some-more vehicles were delivered to business than in a same duration last
year. Third-quarter sales reached only underneath 584,000 vehicles – an
boost of 7.1% year-on-year. In a initial 9 months, revenues rose
by 2.8% to € 63.25 billion. The boost in revenues was dampened
somewhat by banking headwinds. Adjusted for this effect, revenues for
a year to a finish of Sep climbed 4.4%. Third-quarter revenues
totalled € 21.56 billion. This also represents an boost of 2.8%.

 

Automotive EBIT for a year to a finish of Sep reached € 5.78
billion. This is a slight boost of 4.6% compared to a same period
of final year. EBIT for a third entertain decreased somewhat to € 1.84
billion. We are now operative tough to exercise Strategy Number
ONE NEXT. This, and a renovation of pivotal high-volume models, once
again compulsory upfront investments in a third quarter. We are also
investing into a serve expansion of electro-mobility and
projects associated to digitalisation. The association has continued to
partisan competent specialists for these critical destiny projects.
Workforce expansion and aloft crew costs from a collectively
bargained compensate boost in Germany as of a 1st of Jul impacted
gain in a third quarter.

Due to indication change-overs and ramp-ups, prolongation will be reduce in
a second half of a year than in a initial 6 months, as planned.
The ensuing effects of register valuations will impact gain in
a second half of a year. Competition stays heated in a number
of automotive markets. Although prices have mostly stabilised in
Europe and China, pricing stays a plea in North America, in particular.

 

As already mentioned, a handling EBIT domain stood during 9.1% after
a initial 9 months of a year. The EBIT domain for a third
entertain also remained within a desirous aim operation of 8-10%, during 8.5%.

 

The financial outcome for a Automotive Segment improved
significantly in a third entertain – augmenting by € 260 million as
compared to a third entertain 2015. As already mentioned, this growth
especially stems from a certain satisfactory marketplace gratefulness effects of
commodity derivatives. The third-quarter at-equity result, which
essentially includes a gain grant from a Chinese joint
try BBA and losses in tie with a interest acquired in the
mapping use HERE, totalled € 162 million. As usual, we anticipate
aloft costs in a fourth quarter. This will moderate gain development.

 

The financial position in a Automotive Segment continued its
certain trend. Free money upsurge stood during € 3.42 billion during a finish of
September. We design giveaway money upsurge in a Automotive Segment to
sojourn clever and to surpass a aim of € 3 billion over a full
year. At a finish of a third quarter, net financial resources amounted
to € 16.72 billion.

 

The Financial Services Segment continued a expansion trend in the
third quarter. A sum of scarcely 468,000 new contracts were concluded
with business between Jul and September. This represents a
poignant boost of 11.2%. Business in a Chinese marketplace was
quite successful.

Over 1.34 million contracts were resolved with sell business in
a initial 9 months, 9.8% some-more than a prior year. The overall
volume of new business climbed around 9.0% to € 40.63 billion.

 

In a third quarter, credit financing, in particular, saw
poignant expansion of 14.8%. The commission of leasing contracts
remained fast during around one third of sum new business. The dynamic
expansion in new business is also reflected in a sum series of
contracts. As of a 30th of Sep 2016, a Financial Services
Segment confirmed 4.60 million contracts with sell customers
worldwide. This represents an boost of 8.8% over a prior year.

 

The Asia/Pacific shred once again reported double-digit expansion of
18.7%, while a Europe/Middle East/Africa shred posted a solid
boost of 8.5%. The Americas and a EU Bank also contributed to
this successful development.

 

The invasion rate – a commission of new vehicles financed or
leased by Financial Services – has increasing to 49.0% during a finish of
a third quarter. This is 2.9 commission points aloft than for the
same duration of final year, especially due to a poignant expansion in
credit financing.

 

BMW Group Financial Services continues a clever performance. The
certain expansion in new business is reflected in revenues and
earnings. Segment revenues for a year to a finish of Sep rose
by 6.2% to € 18.94 billion. Earnings before taxation climbed roughly 8.2%
over a same duration to € 1.64 billion. Pricing on a international
used-car markets remained comparatively fast from a prior year. We
are constantly monitoring residual value trends as partial of our
extensive risk government activities. The credit detriment ratio of
0.30% stays really low.

 

Overall, a risk conditions in a shred stays stable, with
clever direct for financial services products. We design this positive
business opening to continue in a fourth entertain of 2016.

 

The Motorcycles Segment also posted a clever third quarter. More than
116,000 BMW motorcycles were delivered to business in a initial nine
months – an boost of 3.2%. Revenues for a initial 9 months
reached € 1.65 billion and were therefore on a standard with 2015. Segment
EBIT for a same duration stood during € 224 million, that was reduce than
a prior year.

 

BMW Motorrad is focusing a efforts on implementing a plan and
expanding a indication portfolio. This requires poignant upfront
investments this year, that are reflected in shred earnings. The
vital indication descent continues. In October, a Bagger K 1600 B –
a bike specifically designed for a American marketplace – distinguished its
universe premiere in Los Angeles. BMW Motorrad is also expanding its
successful Heritage family with a R NineT Pure and R NineT Racer
also presented final month. The BMW G 310 R is a genuine BMW in the
shred next 500 cc that will open adult totally new marketplace potential
worldwide. Based on this clever product momentum, we design sales for
a full year 2016 to strech a new all-time high.

 

Let’s pierce on to a opinion for a fourth quarter.

 

Costs generally arise towards a finish of a year, so we design this
to have a dampening outcome on earnings. Capital output will also
be aloft in a final 3 months of a year, especially due to the
start of prolongation and ramp-up of a new BMW 5 Series. The BMW Group
is focusing on a desirous targets for a year. Assuming conditions
sojourn stable, we can endorse a superintendence from a commencement of a year.

 

  • 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
    revenues and deliveries.
  • We intend to keep a EBIT domain for a Automotive Segment
    within a aim operation of 8-10%.
  • For BMW Motorrad, we foresee a plain boost and a new all-time
    high in sell sales for a full year 2016.
  • In a Financial Services Segment, we design lapse on equity to
    sojourn during final year’s turn – and therefore above a aim of at
    slightest 18%.

Depending on a domestic and mercantile situation, tangible business
opening could, however, differ from stream expectations.

The profitability mezzanine of 8-10% for a automotive business will
sojourn a target, also in a entrance years. In 2007, we geared our
association towards profitability. Recent years have shown that
forward-looking government regulating pivotal opening indicators also makes
a association some-more strong in times of crisis. Strategy Number ONE
NEXT is a judicious prolongation of this idea. The BMW Group has a strong
core business. It gives us a financial precedence to make targeted
investments in destiny projects, such as serve expansion of
electro-mobility, unconstrained pushing and digitalisation.

As we pierce forward, a BMW Group will continue to actively figure the
mobility of a destiny – focusing on tolerable business management
and fast profitability during a high level.

 

Thank you.

 

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