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BMW Group reports EBIT of euro 921 million for 2008

+++ Group liquidity strengthened despite difficult market conditions +++ Free cash flow almost at break-even in Automobiles segment +++ Substantial improvements at operating level +++ Group earnings affected by financial and economic crisis +++ Dividend of euro 0.30 proposed for common stock +++

Corporate Finance, Facts, Figures

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Group liquidity strengthened despite difficult market conditions
Free cash flow almost at break-even in Automobiles segment
Substantial improvements at operating level
Group earnings affected by financial and economic crisis
Dividend of euro 0.30 proposed for common stock

Munich. The BMW Group's performance held up well in 2008 despite difficult
market conditions. "The BMW Group has been able to make improvements at an
operating level in the midst of extremely difficult economic times", stated
Reithofer Norbert, Chairman of the Board of Management of BMW AG, on Thursday
in Munich. "Cost structures have been further optimised and, thanks to rigorous
management of free cash flow, the BMW Group is in a very solid financial
position", he added.
Difficult economic conditions nevertheless took a toll on the BMW Group's
reported figures for 2008. Just taking the additional risk provision expense
for re-sidual value risks -- caused by the weak used car markets -- and for
bad debts (euro 1,968 million in total) plus one-time personnel expenses of
euro 455 million, earnings were reduced by exceptional expenses amounting to
euro 2,423 million.
The profit before financial result (EBIT) of the BMW Group fell accordingly to
euro 921 million in 2008 (2007: euro 4,212 million/-78.1%). The profit before
tax was euro 351 million (2007: euro 3,873 million/-90.9%) while the net profit
came in at euro 330 million (2007: euro 3,134 million /-89.5%). Group revenues
fell relatively moderately to euro 53,197 million (2007: euro 56,018
million/-5.0%).

Adjusted EBIT margin of 6.3% in the financial year 2008

Adjusted for the exceptional expense for risk provision and personnel costs
referred to above, EBIT would have been euro 3,344 million and the EBIT margin
would have been 6.3%. Unadjusted, the EBIT margin in 2008 was 1.7%.

High level of exceptional expense recorded in the fourth quarter

The expense recorded in the fourth quarter 2008 for the exceptional items
referred to above totalled euro 1,128 million, comprising euro 931 million for
risk provisions and euro 197 million for one-off personnel expenses. The
negative fourth-quarter EBIT was euro 718 million (fourth quarter 2007:
positive EBIT of euro 1,308 million). Net of these exceptional items referred
to, the Group would have reported positive EBIT of euro 410 million.
Fourth-quarter revenues fell by 18.2% to euro 12,772 million (2007: euro 15,606
million).

Fixed costs reduced / greater savings planned for costs of material

The BMW Group made good progress in 2008 at an operating level, which is
reflected in reduced fixed costs and substantial cost savings in the area of
purchasing. "We have set ourselves the task, by 2012, of surpassing the euro 4
billion of material cost reductions targeted in conjunction with the strategy
Number ONE", announced Reithofer.

Group liquidity strengthened

In addition, the BMW Group's liquidity was further strengthened in 2008,
despite the turmoil on the capital markets. Holdings of cash funds and
marketable securities increased by 86.3% to euro 8,107 million (2007: euro
4,352 million). The net interest-bearing assets in the Automobiles segment
increased to euro 9,046 million, compared to euro 7,354 million in 2007. The
Group has therefore been able to start the new business year with a very solid
financial position.
"We prepared ourselves early on and swiftly for severe business conditions, for
example by taking immediate steps to bring production volumes into line with
lower demand, and thus enabling us to further optimise working capital. This is
also reflected in reduced inventory levels", emphasised Reithofer. With a
negative figure of euro 81 million, the BMW Group was almost able to achieve a
break-even free cash flow in 2008 in its Automobiles segment.

Dividend in line with earnings performance

As a result of decreased earnings, the Board of Management and the Supervisory
Board will propose to shareholders at the Annual General Meeting on 14 May 2009
that a dividend of euro 0.30 (2008: euro 1.06) be paid on each share of common
stock and of euro 0.32 (2008: euro 1.08) on each share of preferred stock. "We
want to pay a dividend even in difficult economic times, demonstrating both the
confidence we have in our operating strength and the interest in our
shareholders", emphasised Reithofer.

EBIT of Automobiles segment down to euro 690 million

The Automobiles segment profit for 2008 was severely affected by the increased
risk provision for residual value risks and measures to reduce the size of the
workforce, totalling euro 1,363 million. EBIT fell by 80.0% to euro 690 million
compared to euro 3,450 million one year earlier. The profit before tax fell to
euro 318 million (2007: euro 3,232 million /-90.2%). Revenues generated by the
Automobiles segment totalled euro 48,782 million (2007: euro 53,818 million
/-9.4%). Adjusted for the exceptional items discussed above, the segment EBIT
would have been euro 2,053 million. This would be equivalent to an EBIT margin
of 4.2% (2007: 6.4%). Unadjusted, the segment EBIT margin in 2008 was 1.4%.
Unsurprisingly in the face of difficult business conditions in 2008, the BMW
Group was not able to match the previous year's record sales volume figure. In
total, the BMW Group sold 1,435,876 BMW, MINI and Rolls-Royce brand vehicles in
2008 (2007: 1,500,678 units/-4.3%). The Group therefore recorded its
second-best annual sales volume figure in its history (behind 2007).
Despite the fact that the whole automobile industry faced huge challenges in
2008, the BMW Group was nevertheless able to achieve new sales volume records
for its MINI and Rolls-Royce brands. One of the main contributing factors
enabling the sales volume decrease to be kept to a moderate 4.3% was the BMW
Group's "Efficient Dynamics" technology which is designed to reduce fuel
consumption and CO2 emissions. All new BMW and MINI models are now equipped
with this technology as a standard feature. In Europe alone, some 830,000
vehicles equipped with Efficient Dynamics were handed over to customers in 2008.
1,202,239 BMW brand vehicles (2007: 1,276,793 units/-5.8%) were sold worldwide
in 2008, well ahead of the volumes achieved by relevant competitors in the
premium segment. MINI was again able to increase the number of units sold, thus
setting a new sales volume record. In total, 232,425 units were sold, 4.3% more
than in the previous year.
Rolls-Royce Motor Cars sold 1,212 units in 2008 (2007: 1,010 units)
corresponding to a sales volume growth of 20.0%. This was the fifth annual
increase in succession, ensuring that Rolls-Royce remains the undisputed market
leader in the ultra-luxury segment.

Motorcycles segment reports EBIT of euro 60 million

The earnings performance of the Motorcycles segment in 2008 was influenced by
difficult business conditions. EBIT fell to euro 60 million (2007: euro 80
million/-25.0%) and the profit before tax dropped to euro 51 million (2007:
euro 71 million/-28.2%). Revenues totalled euro 1,230 million (2007: euro 1,228
million/+0.2%). BMW Motorrad was almost able to match its previous year's
record sales volume figure despite unfavourable business conditions on the
world's motorcycle markets. In total, 101,685 BMW motorcycles (2007: 102,467
units) were sold in 2008 (-0.8%).

Financial Services segment earnings adversely affected by financial crisis

The earnings performance of the Financial Services segment was severely
impaired in 2008 by a number of factors, including the recognition of a risk
provision expense of euro 1,057 million for residual value risks and bad debts.
The segment reported a loss before tax of euro 292 million (2007: profit before
tax of euro 743 million). Adjusted for exceptional factors, the segment would
have reported a profit before tax of euro 765 million and a return on equity of
19.1% (2007: 18.1%). The Financial Services segment increased its revenues to
euro 15,725 million (2007: euro 13,940 million/+12.8%).
The volume of new retail customer contracts rose by 3.1% to euro 29,341
million. The proportion of new BMW and MINI brand cars financed by the
Financial Services segment amounted to 48.5%, up by 3.8 percentage points
compared to the previous year. This increase was largely attributable to the
higher proportion of credit financing, while lease financing remained fairly
constant.

Capital expenditure below previous year's level

Capital expenditure, at euro 4,204 million (2007: euro 4,267 million/-1.5%),
was lower than in the previous year. The main focus of capital expenditure was
on product investments in conjunction with the production start-ups of new
models such as the BMW 7 Series, the Z4, the X1 and the MINI Convertible as
well as infrastructure investments. Capital expenditure for property, plant and
equipment and other intangible assets increased by 1.6% to euro 2,980 million
(2007: euro 2,934 million). In addition, euro 1,224 million (2007: euro 1,333
million/-8.2%) of development expenditure was recognised as assets in
accordance with IFRS. The capitalisation ratio, at 42.7%, was therefore similar
to the previous year's level (42.4%).

Workforce reduced

The number of employees was reduced over the past year as a result of the
previously reported personnel-related measures, the sale of business units,
normal staff attrition and the expiry of temporary contracts. At the end of
2008, the worldwide workforce comprised 100,041 employees (31 December 2007:
107,539 employees), 7.0% fewer than one year earlier. Approximately 4,000
voluntary employment contract termination agreements had been signed by the end
of December. In addition, almost 1,800 posts were reduced following the sale of
the Cirquent Group to NTT Data. The number of trainees at the year-end (4,102)
remained at a high level (31 December 2007: 4,281).

* * *

Further information on the Group Financial Statements 2008 will be available at
the Annual Accounts Press Conference to be held on 18 March 2009 in Munich.

In order to provide even more transparent financial reporting information, the
BMW Group adopted IFRS 8 early in the financial year (mandatory from the
beginning of 2009) and has disclosed additional information on the Group's
segments on a voluntary basis. Related information can be found on the Investor
Relations section of the BMW Group's website (www.bmwgroup.com/IR).

The BMW Group - an Overview
2008 2007 Change
in %
Vehicle production
Automobiles 1,439,918 1,541,503 -6.6
Thereof:
BMW units 1,203,482 1,302,774 -7.6
MINI units 235,019 237,700 -1.1
Rolls-Royce units 1,417 1,029 37.7
Motorcycles units 104,220 104,396 -0.2

Vehicle deliveries
Automobiles 1,435,876 1,500,678 -4.3
Thereof:
BMW units 1,202,239 1,276,793 -5.8
MINI units 232,425 222,875 4.3
Rolls-Royce units 1,212 1,010 20.0
Motorcycles units 101,685 102,467 -0.8

Workforce at end of year1 100,041 107,539 -7.0

Revenues euro million 53,197 56,018 -5.0
Capital expenditure euro million 4,204 4,267 -1.5
Operating cash flow2 euro million 4,471 6,246 -28.4
EBIT euro million
921 4,212 -78.1
Thereof:
Automobiles euro million 690 3,450 -80.0
Motorcycles euro million 60 80 -25.0
Financial Services euro million -216 717 -
Profit before tax euro million 351 3,873 -90.9
Income taxes euro million -21 -739 -
Net profit euro million 330 3,134 -89.5
Earnings per share3 euro 0.49/0.51 4.78/4.80 -
Dividend per share of
common/preferred stock euro 0.30/0.32 1.06/1.08 -
1 figures exclude dormant employment contracts, employees in the work and
non-work phases of pre-retirement part-time arrangements and low wage earners.
2 Automobiles segment.
3 earnings per share in accordance with IAS 33 for common and preferred stock
shares.


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Telephone: (+ 49 89) 382-24118, Fax: (+ 49 89) 382-24418

Marc Hassinger, Business and Finance Communications
Telephone: (+49 89) 382-23362, Fax: (+49 89) 382-24418
Media Website: www.press.bmwgroup.com
e-mail: presse@bmwgroup.com

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