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BMW Canada

Statement Dr Nicolas Peter, Member of a Board of Management of BMW AG, Finance, Conference Call Quarterly Report to 30 Sep 2019

Ladies and Gentlemen, Good morning! In a initial 9 months of the
year, business expansion has so distant met a expectations. In the
third quarter, all segments are on march for growth, as planned. As
expected, a financial total have softened from entertain to quarter
via a year. In a severe and intensely flighty business
environment, we are on lane to accommodate a goals for a full year.

Group revenues for a third entertain showed plain year-on-year
growth, as expected, reaching 26.67 billion euros. This reflects in
sold a clever opening of a immature product portfolio as
good as certain banking interpretation effects, among other factors.
Specifically, new models like a X3 and X4 are now entirely available
and proof really renouned with customers. We have significantly
stretched a choice in a rarely essential oppulance shred with the
new 8 Series models, a new 7 Series and X5 as good as a X7.

Overall, a handling business continued to rise in line with our
expectations in a third quarter. Thanks to a clever opening of
a models in a mostly disappearing marketplace environment, a EBIT margin
in a Automotive Segment reached 6.6% for a quarter, despite
continued high upfront investments. The bottom outcome from a high
costs compared with a marketplace turmoil ensuing from the
transition to a WLTP and guaranty issues also had a certain impact
compared to 2018. As expected, a financial outcome for a initial nine
months was significantly reduce than a prior year. In the
at-equity result, aloft BBA gain were some-more than equivalent by the
designed stream waste of a YourNow companies.

However, quite in civic areas we see good intensity with
YourNow to strech new customers, generally in Europe and Latin
America. Positive gratefulness effects in tie with final year’s
merger of DriveNow negatively impacted a year-on-year
comparison. The net change of a one-time appreciation outcome from
pooling a mobility services with Daimler this year and impairment
waste due to practiced business expectations during particular YourNow
companies totalled +60 million euros in a year to a finish of
September. As in a prior quarters, gratefulness effects from
seductiveness rate derivatives significantly dampened a financial result.

Group gain before taxation climbed 23.4% in a third entertain to
around 2.25 billion euros. Due to a effects from a prior year I
already mentioned and a altogether certain business development, the
EBT domain increasing year-on-year to 8.4% – notwithstanding significantly
aloft losses for a expansion of new technologies. Third-quarter
investigate and expansion costs according to IFRS were 14.2% higher
than a prior year. In a 9 months to a finish of September,
they were already adult scarcely 370 million euros on 2018. The RD
ratio for a same duration was somewhat subsequent a prior year´s
figure during 5.9%.

Capital output also increasing significantly from Jan to
September, reaching 3.31 billion euros. At 4.4%, a capex ratio for
a year to date was somewhat aloft than it was final year. In
serve to upfront investments for new models such as a 1 Series, 3
Series and 4 Series, a categorical concentration was on foundation topics and
expansion activities for next-generation rarely programmed driving
systems. The prolongation of a MINI ELECTRIC began in Oxford this
month. The fifth era of a electric drivetrain, that we
grown in-house, will also be on a marketplace subsequent year beginning
with a iX3.

We done serve upfront investments for a expansion of new
technologies for a iNEXT and a next-generation infotainment
systems. Despite headwinds from a many destiny projects, a lower
financial result, as expected, and costs associated to a European
Commission’s antitrust proceedings, pre-tax gain for a first
9 months totalled 5.06 billion euros.

The EBT domain stood during 6.8%. This is still a high turn in
comparison with a competitors and deliberation a difficult
conditions a business is facing. However, we aspire to some-more than
that – since upfront investments in destiny technologies and
e-mobility have to be paid for. That is because we continue to work
evenly on those matters that distortion in a possess hands.

Through Performance NEXT, we have been invariably implementing
measures to serve urge a potency for a past dual years. We
intend to realize intensity of during slightest 12 billion euros opposite the
association in this proceed by 2022. Around half of this volume will be
realised by measures on a sales side – specifically, even more
systematic data-based sales government all a proceed to dealership
level, and surreptitious purchasing topics, including synergies from
bundling contracts some-more widely. Another concentration area with significant
precedence is a rebate of complexity in a expansion of new
products – as we have talked about in some-more fact on other occasions.
The full impact of these formula will come into outcome with the
particular indication launches. We are also essay to reduce personnel
costs, proceed element costs and collateral expenditure. Many of these
measures are already being implemented.

We are also optimising a use of collateral by targeted
collaborations and partnerships. This will not usually have a positive
impact on a cost structures – it will also concede us to pool
imagination and make us most faster. Our partnerships with Daimler on
unconstrained pushing and mobility services are good examples of this.  

Let’s pierce on to a particular segments. In a Automotive Segment,
revenues for a initial 9 months were somewhat aloft than the
prior year during 64.85 billion euros. Third-quarter revenues –
benefiting generally from certain brew effects from new models such as
a 8 Series and X7, as good as banking tailwinds – posted solid
expansion of 9.0%. Boosted by a energetic expansion in sales, the
segment’s handling gain for a third entertain climbed to 1.52
billion euros.

The prior year’s gain had been roughly impacted by the
marketplace turmoil ensuing from a transition to a WLTP and higher
supplies for peculiarity issues. Consequently, a EBIT domain was
aloft than a prior year, during 6.6%. As already mentioned, further
upfront investments for a ongoing indication descent and
foundation dampened earnings.

Including a sustenance we done in a initial entertain in connection
with a antitrust allegations by a European Commission, EBIT for
a year to a finish of Sep totalled 2.67 billion euros, with a
domain of 4.1%. This means we are on march for a practiced target
operation of 4.5 to 6.5% for 2019. Pre-tax gain for a third quarter
climbed to 1.53 billion euros, in line with a certain business
development. Impacted by a designed diminution in a financial result
and a sustenance done in a initial entertain in tie with the
antitrust allegations by a European Commission, gain for January
to Sep were significantly reduce year-on-year, during 2.99 billion
euros. As formerly announced, banking and commodity headwinds also
dampened earnings.

At a finish of a initial 9 months, giveaway money upsurge in a Automotive
Segment totalled 1.024 billion euros, generally due to reduce gain and
a aloft register rave than final year for a introduction of new
models. Due to a factors we talked about, we design giveaway money flow
for a full year to come to around dual billion euros.

Let’s pierce on to a Financial Services Segment – that once again
delivered a clever opening in a third quarter. In serve to
healthy portfolio growth, banking tailwinds also had a positive
impact. The risk conditions also remained really stable. As of 30
September, a shred managed a portfolio of around 5.4 million
sell contracts. More than 500,000 new contracts with retail
business were resolved in a third entertain alone. This positive
business expansion is also reflected in shred gain before tax
– that rose by 8.7% during a same duration to roughly 600 million
euros. In a year to a finish of September, pre-tax gain climbed
5.4% to usually underneath 1.8 billion euros.

The Motorcycles Segment also had a successful third quarter. With
sales expansion of 9.9%, a handling outcome also increasing to 35
million euros. In a year to a finish of September, roughly 137,000
motorcycles were delivered to customers. Segment gain before
financial outcome were adult 8.7% to 226 million euros. Accordingly, the
EBIT domain was 6.3% for a entertain and 12.1% for a initial 9 months.

We design this fast business expansion to continue in all
segments via a remaining months of a year. We are therefore
means to endorse a superintendence for 2019 – presumption that domestic and
mercantile conditions do not mellow significantly. One risk that
stays is a doubt surrounding a UK’s designed withdrawal
from a European Union. There is also a probability a tellurian trade
brawl could expand further, adversely inspiring business in the
final entertain of a year and beyond. In a Automotive Segment, we
design a slight boost in deliveries. This expansion will be
driven by a product movement from new models of a X-family like
a X7, a new 1 Series and a high-volume 3 Series Sedan and Touring.

In Europe, expansion in a initial 3 buliding has not been as
clever as foresee during a start of a year. We have therefore
practiced a volume formulation on an ongoing basement over a march of
a year to simulate stream marketplace developments. During a remaining
months of a year, we will say a transparent concentration on earnings
quality. Thanks to a stretchable prolongation network, we are means to
respond fast to changes in a business environment. China, on the
other hand, is now experiencing stronger expansion than predicted.
However, this is usually partly reflected in a handling result, since
it is mostly holding place during a BBA corner venture.

We design a segment’s EBIT domain for a full year to be within
a practiced aim operation of 4.5 to 6.5%. Without a outcome of the
sustenance we recognized in tie with a antitrust allegations
by a European Commission, a domain would be within a original
superintendence operation of 6-8%.

In a Motorcycles Segment, we are formulation for a plain boost in
deliveries. The EBIT domain should sojourn within a aim operation of
8-10%. In a Financial Services Segment, lapse on equity should be
on a standard with final year and above a aim figure of 14%. As
anticipated, a financial outcome decreased significantly. Therefore
we still design Group gain before taxation to be significantly lower
year-on-year, also as a outcome of a sustenance recognized in the
initial quarter. Despite all a hurdles in a stream business
environment, we find ourselves in a clever rival position.

We have desirous goals: We are operative tough to urge a earnings
and profitability. This mindset is deeply secure in a company. We
continue to draft a possess march – step by step, and with a clear
vital direction. This stays a proceed – also, and especially,
in a flighty environment.

Thank you.