Statement by Dr. Friedrich Eichiner, Member of a Board of Management of BMW AG, Finance, Conference Call Quarterly Report to 31 Mar 2016

Posted on 03. May, 2016 by in BMW Canada

Ladies and Gentlemen,

 

Good morning from my side as well! The BMW Group done a positive
start to 2016. In a initial 3 months, automotive sales climbed to
over 550,000 vehicles. Both deliveries and Group gain before tax
reached new first-quarter highs; a EBIT domain of 9.4% for the
Automotive shred was also within a aim range.

 

The association is looking to build on a successful 2015 financial year –
and has set itself desirous targets for 2016. We are progressing our
superintendence for a full year. The initial entertain over our
expectations in a flighty marketplace environment.

 

In Europe, a reward brands are in clever direct and a BMW X
models sojourn generally popular. With a appealing product
portfolio, a BMW Group is in a good position. In China, sales
softened in a initial 3 months, after a weaker 2015. Our X models
and a revised 3 Series Sedan have been good perceived by customers.
The association also benefited from a healthy expansion of a overall
market. Over a march of a year, we design sales to accept a
serve boost from a new, locally constructed X1. Full accessibility of
a new 7 Series over a subsequent few months will also have a positive
impact. The BMW Group and a Chinese play network has blending to
new conditions in a market. In general, we still see growth
intensity in a Chinese market.

 

The US automobile marketplace has reached a high turn overall. The trend
towards SUVs continues in North America – partly due to low oil
prices. The BMW Group set a right march early on and is now in the
routine of expanding a prolongation ability for X models. We have
taken into comment a changes in direct for sedans and practiced our
planning. The measures we have implemented will have a certain impact
on a sales conditions in a second half of a year.

 

Let’s take a demeanour during gain opening during Group level.
First-quarter revenues totalled € 20.85 billion – and were therefore
on standard with final year. Compared with a prior year’s high level,
interpretation effects in several of a categorical currencies resulted in
reduce revenues. Adjusted for this factor, revenues increasing slightly.

BMW Group pre-tax gain increasing to € 2.37 billion – a slight
boost of 4.4% over a initial entertain of final year. At Group level,
a EBT domain stood during 11.4%. Our profitability therefore reached the
same high turn as a prior year.

 

The BMW Group continues to concentration a collateral output on
strengthening a destiny competitiveness. The association invested a total
of € 405 million in products, apparatus and other unsubstantial resources in
a initial quarter. This no longer includes capitalised development
costs. It is common for first-quarter collateral output to be lower.
The categorical concentration of collateral output was on preparations for the
ramp-up of new models. As already announced in March, we have
redefined a capex ratio – so that it no longer includes capitalised
expansion costs. As a result, we are now targeting a capex ratio of
reduction than 5% of revenue. In a initial quarter, a ratio stood at
1.9%, due to anniversary factors. The ratio for a full year should be
on a standard with final year. The figure for 2015 was 4.2%.

 

Research and expansion spending for a initial entertain (according to
HGB – German Commercial Code) reached € 974 million. This is an
boost of 5.2% over a same duration of final year. RD activities
in a initial 3 months strong on new car expansion and
enlightening destiny technologies, such as motorist assistance systems.
Further substructure of a car swift is another priority: The
3 Series and a 2 Series Active Tourer were expelled onto a market
as hybrid models in a initial quarter. This will be followed by the
plug-in hybrid various of a new 7 Series in a summer – that will
strengthen a company’s rival position and underline a focus
on tolerable mobility. The RD ratio for a initial entertain was
4.7%. As usual, this will boost over a march of a year. The
ratio for a full year should be on standard with final year’s turn of 5.6%.

 

BMW Group liquidity remained plain during € 11.2 billion during a finish of
March. This high turn of liquidity underscores a company’s
coherence and financial strength. The association has further
diversified a refinancing portfolio. Over a past dual months, the
BMW Group launched a initial open bond charity during attractive
conditions in China and a United States.

 

Let’s now take a demeanour during a particular segments, initial the
Automotive segment. Revenues for a initial entertain totalled € 18.81
billion and are therefore during a same high turn as final year. During
a stating period, interpretation effects of some vital currencies had
a dampening effect. First-quarter Automotive EBIT totalled € 1.76
billion – that is somewhat next final year’s figure. Dampening
effects resulted from aloft crew costs, as good as increased
debasement and selling costs. The EBIT domain for a Automotive
shred stood during 9.4% – therefore remaining in a top half of our
aim operation of 8-10%, like it did final year. As expected, pricing
will sojourn a plea in 2016.

 

Pricing run-down somewhat in a initial quarter, compared with
final year. During a initial 3 months, a car brew enclosed a
somewhat aloft commission of compress vehicles.

 

The gain grant of a Chinese corner try BBA, reported
in a at-equity result, was reduce than a prior year. This mostly
reflects preparations for a ramp-up of new vehicles. Over a course
of a year, a new, locally constructed X1 and a 2 Series Active
Tourer will yield certain momentum. The at-equity outcome for the
initial entertain also contains initial losses in tie with the
interest acquired in a mapping use HERE. The segment’s financial
outcome for a initial entertain was a disastrous volume of € 29 million.
This was an altogether alleviation of € 131 million year-on-year. This
certain expansion was generally due to a marketplace analysis of raw
element and banking derivatives. Pre-tax gain saw a solid
boost of 6.1% to € 1.73 billion.

 

Let’s take a brief demeanour during a segment’s money flow. Due to a € 971
million aloft boost in operative collateral compared with a same
duration in 2015, giveaway money upsurge in a Automotive shred decreased to
€ 532 million. As formerly announced, we design giveaway money upsurge for
a full year to be above € 3 billion. At a finish of a quarter, net
financial resources in a Automotive shred totalled € 17.5 billion.

 

Now, let’s pierce on to a Financial Services segment. BMW Group
Financial Services continued on a expansion trail in a initial quarter.
The concentration stays on essential new business and achieving a good
change between leasing and financing.

 

In a initial 3 months, a shred resolved some-more than 410,000
new financing and leasing contracts with business – 7.5% some-more than in
a initial entertain of final year. The volume of new business saw a solid
boost to € 12.46 billion. BMW Financial Services managed a
portfolio of 4.40 million patron contracts as per 31 March. This
represents an boost of 8.1% over a prior year. The
Asia/Pacific shred again reported poignant expansion of 18.3%. The
Americas and Middle East/Africa regions also achieved plain growth
rates. In a EU Bank, a portfolio of patron financing contracts
increasing by 3.5%.

 

The invasion rate – a commission of new BMW Group vehicles
financed or leased by a Financial Services shred – reached 46.1%
during a finish of a quarter. This is an boost of 1.2 percentage
points year-on-year. First-quarter pre-tax gain climbed 2.0% to
strech a sum of € 570 million.

 

The risk conditions in a shred remained mostly fast from the
prior year, in line with expectations. The reward shred of the
European used-car marketplace gifted a slight boost in prices in
a initial quarter. In North America, prices decreased slightly. The
credit risk conditions continued to improve. The credit detriment ratio for
a whole portfolio remained low, during 0.29%. We design residual value
and credit risks to sojourn fast for a stream year. The segment
takes a comprehensive, active proceed to risk government and makes
suitable supplies for business risks.

 

Let’s pierce on to a Motorcycles segment. The shred continued on
a successful march in a initial entertain of this year, after a
record year in 2015. In fact, BMW Motorrad had a best-ever start to
a motorcycle deteriorate with sales expansion of 7.7%. We delivered more
than 33,000 BMW motorcycles to business worldwide – a top ever
for a initial quarter. Increases were posted generally in Asia and Europe.
The segment’s certain business expansion is corroborated by a strong
indication line-up. The long-distance enduro, a BMW R 1200 GS and its
sister model, a BMW R 1200 GS Adventure, were in high direct in the
initial quarter. The BMW S 1000 RR and BMW S 1000 XR models were also
really popular.

 

Segment revenues reached a record first-quarter high of € 582 million
– an boost of 2.6% over a prior year. EBIT for a same period
decreased to € 94 million, due to aloft bound costs for projects
relating to plan implementation. We continue to work intensively
towards a desirous targets for 2020 – and design to see further
certain expansion altogether in a Motorcycles segment.

I would like to finish with a few difference about a opinion for the
company. The BMW Group will continue to aim profitable, sustainable
expansion in 2016. We design a certain business expansion of the
initial 3 months to continue over a march of a year.

 

We are committed to a targets for 2016 – presumption conditions remain
fast for a rest of a year.

 

  • The BMW Group is targeting a slight boost in pre-tax earnings
    for a full year.
  • The Automotive shred is approaching to news slight increases in
    both sales and revenues.
  • The EBIT domain for a Automotive shred will sojourn within the
    8-10% range.
  • With appealing new models, we design BMW Motorrad to news a
    slight boost in deliveries compared with a prior year.
  • For Financial Services, we design lapse on equity to sojourn on a
    standard with final year – and therefore above a aim of during slightest 18%.

 

I would like to emphasize that all a targets count on stable
domestic and mercantile conditions: Actual business opening may
deviating from a benefaction foresee if tellurian mercantile and political
uncertainties turn even larger than expected.

 

Over a entrance months and years, we will gradually be implementing
a Strategy NUMBER ONE NEXT. We are environment a march for the
destiny with targeted investments in new technologies and drivetrains –
and therefore in a competitiveness of a BMW Group. With its
stretchable structures and appealing indication line-up, a association is well-positioned.

 

The BMW Group stands for creation and financial strength. Our focus
on globally balanced, tolerable expansion allows us to offset
fluctuations in particular markets and respond flexibly to changing
conditions – generally in times of high volatility. Financial
strength, appealing reward brands and products as good as high
coherence form a plain substructure for a long-term success of the
BMW Group.

 

Thank you.

 

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