Dividend of € 2.50 per share of common stock proposed
Munich. The BMW Group has successfully concluded the
financial year 2019, continuing the upward trend in profitability in
the fourth quarter. At the same time, between October and December
2019, revenues reached their highest level ever for a single quarter,
reflecting the growing proportion of vehicles from the upper luxury
segment. Over the full year, Group revenues exceeded 100 billion euros
for the first time and were more than twice as high as in 2009.
"In 2019, we improved our profitability from quarter to quarter
– despite a challenging market environment. This shows that we have
the right products on the road and that our strategy is
effective," stated the Chairman of the Board of Management of BMW
AG, Oliver Zipse, on Thursday in Munich. "We are
embracing the transformation of our industry with confidence and trust
in our innovative strength. We recognised the signs of change at an
early stage and made preparations accordingly. Our full potential is
now emerging – at exactly the right moment."
Unequivocal commitment to achieving CO2-targets
The BMW Group is continuously working to reduce the CO2-emissions of
its new car fleet. The company has always lived up to its voluntary
commitment and will achieve the CO2 fleet target for its European new
car registrations also this year. This is around 20 percent below last
year´s target. One third of that step can be achieved by further
improvements to conventional drivetrain systems and two-thirds by the
growth in the field of electrified vehicles. The BMW Group’s
endeavours to meet future mandatory CO2 and fuel consumption limits
are therefore based on the combined impact of Efficient
Dynamics technologies – which have been deployed by the BMW
Group since 2007 – and the ongoing electrification of vehicles.
BMW Group to offer five all-electric series models by end of 2021
As a pioneer of electric mobility, the BMW Group is already today a
leading manufacturer and supplier of electrified vehicles and is
currently in the process of expanding its range significantly. By the
end of 2021, the company intends to have more than one million
vehicles with all-electric or plug-in hybrid drivetrains on the roads.
At that stage, the BMW Group will offer five all-electric series
production vehicles. Alongside the BMW i3, demand for
which increased for the sixth year in succession, production of the
all-electric MINI Cooper SE* was commenced at the
Oxford plant (UK) towards the end of 2019. The BMW
iX3 will go into production this year at the plant in
Shenyang, China, followed in 2021 by the BMW iNEXT in
Dingolfing, Germany, and the BMW i4 at the Munich
plant – all of which will be equipped with fifth-generation electric
drivetrain technology.
By 2023, the BMW Group will already have 25 electrified models on the
roads – more than half of them all-electric. The key to achieving this
objective is having intelligent vehicle architectures that, with the
aid of a highly flexible production system, enable a model to be
powered fully electrically, as a plug-in hybrid or with a combustion
engine. With these prerequisites in place, the company is in an ideal
position to meet demand in each relevant market segment and offer its
customers a genuine power of choice between the
various drive types. By 2021, demand for electrified vehicles is
predicted to double compared to 2019. The BMW Group then expects to
see a steep growth curve up to 2025, with sales of electrified
vehicles growing on average by more than 30 per cent p.a.
High upfront expenditure for future mobility
In paving the way for the future of mobility, a substantial level of
upfront expenditure was again required during the period under
report. Research and development expenses for the
year 2019 in accordance with IFRS totalled € 5,952 million,
significantly up on the previous year (2018: € 5,320 million; +11.9%).
The growing proportion of electrified vehicles is also driving up
manufacturing costs. Exchange rate factors and rising prices for raw
materials also put downward pressure on earnings. Capital
expenditure for property, plant and equipment and other
intangible assets increased by 12.3% to € 5,650 million year-on-year
(2018: € 5,029 million) due to the first-time application of IFRS 16.
Investment was made mainly in connection with continuing the new model
initiative as well as the modernisation and flexibilisation of
existing plant structures.
Greater financial strength through Performance > NEXT
To compensate for the high upfront expenditure on future-oriented
technologies, the BMW Group remains committed to improving efficiency
continually as part of the Performance > NEXT
programme launched in 2017.
“Upfront expenditure in the technologies of the future such as
e-mobility needs to be financed. That is why we continue to work with
strong determination on those matters that lie in our own hands and
maintain a clear focus on performance and efficiency,” said
Nicolas Peter, Member of the Board of Management of BMW AG,
Finance. "By optimising our core business, we are systematically
ensuring greater financial strength and performance. We are growing in
the right segments, and therefore generating the funds needed to ramp
up our sustainable mobility strategy.”
A key aspect in this endeavour is to develop even faster digital
processes and leaner structures. The Performance > NEXT programme
is expected to generate efficiency savings in excess of 12 billion
euros by the end of 2022. Among other things, development times for
new vehicle models will be reduced by as much as one third. On the
product side, up to 50 per cent of traditional drivetrain
variants will be eliminated from 2021 onwards in the
transition to creating enhanced, intelligent vehicle architectures –
in favour of additional electrified drivetrains. It is in this area
that the full impact of these measures will come into effect,
particularly in the years after 2022.
Moreover, the model portfolio is regularly assessed with a view to
finding additional potential ways of reducing
complexity. Potential for greater synergy and efficiency in
indirect purchasing as well as in terms of material and production
costs is also being leveraged throughout the Group. The BMW Group is
also strengthening performance with an array of new models –
especially in segments where the rates of return are highest. One of
the Group's targets is to double its sales volume in the luxury
segment from 2018 to 2020.
Steady improvement in profitability and EBIT in financial year 2019
The BMW Group’s profitability and profit before financial result
improved from quarter to quarter over the course of 2019. The first
quarter was impacted by the recognition of a provision for € 1.4
billion following the receipt of a Statement of Objections from the EU
Commission in connection with ongoing antitrust proceedings. Group
profit before tax for the second half of 2019 then grew significantly
year-on-year (€ 4.3 billion; +18.8%).
Fourth quarter deliveries of BMW, MINI and
Rolls-Royce premium brand vehicles stood at 665,8031 units
and thus increased slightly compared to the previous year (2018:
656,8231 units; +1,4%1). Group
revenues rose significantly to € 29,366 million (2018:
€ 24,482 million; +19.9%) on the back of positive mix effects arising
from the significantly higher proportion of vehicles from the upper
luxury segment. The figure is the highest amount of revenues ever
recorded by the BMW Group in a single quarter and underlines the
attractiveness of the current product portfolio. Profit before
financial result also improved significantly to € 2,332
million (2018: € 1,765 million; +32.1%), while profit before
tax amounted to € 2,055 million (2018: € 1,800 million;
+14.2%). The pre-tax return on sales (EBT margin)
came in at 7.0% (2018: 7.4%).
In 2019, deliveries increased by 2.2%1 to
a new record of 2,538,3671 units (2018:
2,483,2921 units). At € 104,210 million, Group
revenues exceeded the 100 billion euro mark for the first
time (2018: € 96,855 million; +7.6%). Influenced by the
above-mentioned provision recognised in the first quarter as well as
by high levels of upfront expenditure for research and development,
profit before financial result for the financial
year 2019 finished at € 7,411 million (2018: € 8,933 million; -17.0%).
As expected, headwinds also came from negative developments in
currencies and raw materials prices.
In addition, as previously reported, positive valuation effects
recorded in 2018 were not repeated in 2019 and contributed to a
significant decline in the Group’s financial result. Profit
before tax finished accordingly at € 7,118 million (2018:
€ 9,627 million; -26.1%). The pre-tax return on sales (EBT
margin) was 6.8% (2018: 9.9%). Net profit
amounted to € 5,022 million (2018: € 7,064 million; -28.9%).
Based on the annual financial statements of BMW AG, the Board of
Management and the Supervisory Board will propose at the Annual
General Meeting on 14 May 2020 payment of a dividend
of € 2.50 per share of common stock and € 2.52 per share of preferred
stock, leading to a dividend payout ratio of 32.8% (2018: 32.0%) of
net profit. The total dividend payment would be approximately € 1.65
billion. "The trust of our investors has always been a high
priority for us," said Peter. "We want them to participate
in the success of the company, just like our employees are able to."
Free cash flow at solid level despite higher capital expenditure
Automotive segment revenues in the fourth quarter
2019 increased to € 26,829 million (2018: € 23,217
million; +15.6%) as a result of the positive mix effects described
above. Profit before financial result also improved
significantly to € 1,825 million (2018: € 1,452 million; +25.7%).
The EBIT margin therefore improved both
year-on-year and compared to the third quarter and amounted to 6.8%
(2018: 6.3%).
Segment revenues for the full year
2019 climbed to € 91,682 million (2018: € 85,846 million;
+6.8%). Influenced by the above-mentioned provision recognised in the
first quarter as well as by high levels of upfront expenditure for
research and development, profit before financial
result amounted to € 4,499 million (2018: € 6,182 million;
-27.2%). The EBIT margin came in at 4.9% (2018:
7.2%). Excluding the above-mentioned provision, the EBIT margin was
6.4%. Profit before tax amounted to € 4,467 million
(2018: € 6,977 million; -36.0%). Despite higher capital expenditure
and lower net profit, the segment generated a free cash
flow of € 2,567 million (2018: € 2,713 million; ‑5.4%).
In total, 2,185,7931
BMW brand vehicles were delivered to customers
worldwide in 2019 (2018: 2,114,9631 units;
+3.3%1). Growth was particularly strong in the upper luxury
segment, with volumes up by around 75%1 overall to more
than 100,0001 units, thanks to new models such as the
8 Series. Deliveries of the all-electric BMW i3 rose by
13%1 to nearly 40,0001 units.
Focusing on profitable sales growth in an extremely competitive
market segment, deliveries of MINI vehicles in 2019
totalled 347,4741 units (2018: 364,1351 units;
-4.6%1). The plug-in hybrid MINI Cooper S E Countryman
ALL4* was particularly popular, with deliveries up by around
28%1 to almost 17,0001 units.
Rolls-Royce Motor Cars recorded the best volume
performance in the marque's 116-year history with 5,1001
units delivered worldwide (2018: 4,1941 units;
+21.6%1). Growth was achieved in all regions, with North
America standing out again as the most important market. The past year
saw exceptional demand worldwide for the Cullinan and Black Badge models.
At 1,083,6691 units, deliveries of the BMW Group in
Europe exceeded the one-million mark for the fifth
consecutive year, even though the figure was slightly down on the
previous year's high level (1,097,1171 units;
-1.2%1). In contrast, deliveries in the
USA went up to 375,7511 units (2018:
355,3731 units; +5.7%1). The biggest growth
driver was China, where deliveries increased
significantly to 724,7331 units (2018: 635,8131
units; +14.0%1).
Motorcycles segment achieves targets for year
As predicted, BMW Motorrad recorded solid growth in 2019, with a
total 175,162 BMW motorcycles and maxi-scooters delivered to customers
(2018: 165,566 units; +5.8%). Segment revenues
increased to € 2,368 million (2018: € 2,173 million; +9.0%).
Profit before financial result improved to € 194
million (2018: € 175 million; +10.9%). The EBIT
margin for the segment finished at 8.2% (2018: 8.1%) and
therefore within the target range of 8 to 10%. Profit before
tax amounted to € 187 million (2018: € 169 million; +10.7%).
Financial Services segment continues positive performance
The Financial Services segment continued to perform
well in 2019. In total, 2,003,782 new contracts were
signed with retail customers in 2019 (2018: 1,908,640; +5.0%). The
contract portfolio with retail customers comprised
5,973,682 contracts at the end of the reporting period (31 December
2018: 5,708,032 contracts; +4.7%). Segment revenues
totalled € 29,598 million (2018: € 27,705 million; +6.8%).
Profit before tax amounted to € 2,272 million
(2018: € 2,143 million; +6.0%).
Workforce size at previous year’s level
As forecast, the BMW Group’s workforce at 31
December comprised 133,778 employees, similar to the level one year
earlier (2018: 134,682 employees; ‑0.7%). In particular, the Group
continues to recruit skilled workers and IT specialists in
future-oriented fields such as software development, digitalisation,
autonomous driving and e-mobility, as well as for its international
production network.
From the beginning of the financial year 2020, the key performance
indicator for the workforce size will be based solely on the number of
core and temporary employees. This change is in line with a
reorganisation of internal management, which focuses on these employee
groups. Employee groups such as apprentices, students gaining work
experience and doctoral students will not be included in this key
performance indicator in future, as they primarily serve to promote
the training of young people and to secure the next generation of
employees. Based on the new reporting methodology, the workforce
comprised 126,016 employees at 31 December 2019.
Supervisory Board
The Supervisory Board will propose to the Annual General Meeting on
14 May 2020 that Dr.-Ing. Norbert Reithofer, Chairman of the Company's
Supervisory Board, be re-elected and that Anke Schäferkordt,
supervisory board expert, be elected for the first time. In the event
of his re-election, Dr.-Ing. Reithofer has expressed his willingness
to stand again for the position of Chairman of the Supervisory Board.
In agreement with the Supervisory Board, Prof. Renate Köcher
relinquished her mandate early with effect from the end of the 2020
Annual General Meeting. The Supervisory Board would like to thank
Prof. Köcher for her steadfast cooperation and valuable work during
her tenure on the Supervisory Board since 2008.
* * *
Further information on the Group Financial Statements 2019 and the
outlook for the current year will be available at the BMW Group's
Annual Accounts Press Conference to be held in Munich on 18 March 2020.
*: Consumption and emission data:
MINI Cooper SE: fuel consumption combined:
0.0 l/100 km, power consumption combined 16.8-14.8 kWh/100 km, CO2
emissions combined: 0 g/km
MINI Cooper S E Countryman ALL4: fuel consumption
combined: 2.1-1.9 l/100 km, power consumption combined
13.9-13.5 kWh/100 km, CO2 emissions combined: 47-43 g/km
The BMW Group – an overview |
2019 |
2018 |
Change in % |
Deliveries to customers | | | | |
Automotive
1 | units |
2,538,367 |
2,483,292 |
2.2 |
thereof:
BMW1 | units | 2,185,793 | 2,114,963 | 3.3 |
MINI1 | units | 347,474 | 364,135 | -4.6 |
Rolls-Royce1 | units | 5,100 | 4,194 | 21.6 |
Motorcycles | units |
175,162 |
165,566 |
5.8 |
| | | | |
Workforce (compared
to 31.12.2018) |
133,778 |
134,682 |
-0.7 |
| | | | |
Automotive
segment EBIT margin | % | 4.9 | 7.2 | -2.3 % points |
Motorcycles
segment EBIT margin | % | 8.2 | 8.1 | 0.1 % points |
EBT margin BMW Group
2 | % |
6.8 |
9.9 |
-3.1 % points |
| | | | |
Revenues
2 | € million |
104,210 |
96,855 |
7.6 |
thereof:
Automotive | € million | 91,682 | 85,846 | 6.8 |
Motorcycles | € million | 2,368 | 2,173 | 9.0 |
Financial
Services2 | € million | 29,598 | 27,705 | 6.8 |
Other
Entities | € million | 5 | 6 | -16.7 |
Eliminations2 | € million | -19,443 | -18,875 | -3.0 |
| | | | |
Profit before financial result (EBIT)
2 | € million |
7,411 |
8,933 |
-17.0 |
thereof:
Automotive | € million | 4,499 | 6,182 | -27.2 |
Motorcycles | € million | 194 | 175 | 10.9 |
Financial
Services2 | € million | 2,312 | 2,172 | 6.4 |
Other
Entities | € million | 29 | -27 | - |
Eliminations2 | € million | 377 | 431 | -12.5 |
| | | | |
Profit before tax (EBT)
2 | € million |
7,118 |
9,627 |
-26.1 |
thereof:
Automotive | € million | 4,467 | 6,977 | -36.0 |
Motorcycles | € million | 187 | 169 | 10.7 |
Financial
Services2 | € million | 2,272 | 2,143 | 6.0 |
Other
Entities | € million | -96 | -45 | - |
Eliminations2 | € million | 288 | 383 | -24.8 |
| | | | |
Income taxes2 | € million |
-2,140 |
-2,530 |
15.4 |
Net profit
2,3 | € million |
5,022 |
7,064 |
-28.9 |
Earnings per share (common / preferred
stock) 2 | € |
7.47/7.49 |
10.60/10.62 |
-29.5/-29.5 |
1 Delivery figures have been adjusted retrospectively going back to
2015. The basis for the adjustments is a change in the methodology
used to collate data for the BMW Group's most important markets
(China, USA, Germany, UK, Italy and Japan). The retrospective
adjustment enables better comparability. Additional information can be
found on page 12.
2 Prior year figures adjusted due to first-time application of
revised IAS 16, see note 4 to the condensed Interim Group Financial
Statements for the six-month period ended 30 June 2019.
3 Value for 2018 includes -€ 33 million from discontinued operations;
value for 2019 includes +€ 44 million from discontinued operations.
The BMW Group – an overview |
4th quarter
2019 |
4th quarter
2018 |
Change in % |
Deliveries to customers | | | | |
Automotive
1 | units |
665,803 |
656,823 |
1.4 |
thereof:
BMW1 | units | 576,782 | 556,470 | 3.7 |
MINI1 | units | 87,628 | 98,816 | -11.3 |
Rolls-Royce1 | units | 1,393 | 1,537 | -9.4 |
Motorcycles | units |
38,230 |
38,773 |
-1.4 |
| | | | |
Workforce (compared
to 31.12.2018) |
133,778 |
134,682 |
-0.7 |
| | | | |
Automotive
segment EBIT margin | % | 6.8 | 6.3 | 0.5 % points |
Motorcycles
segment EBIT margin | % | -6.4 | -6.4 | 0.0 % points |
EBT margin BMW Group
2 | % |
7.0 |
7.4 |
-0.4 % points |
| | | | |
Revenues
2 | € million |
29,366 |
24,482 |
19.9 |
thereof: Automotive | € million | 26,829 | 23,217 | 15.6 |
Motorcycles | € million | 497 | 515 | -3.5 |
Financial
Services2 | € million | 7,617 | 6,898 | 10.4 |
Other Entities | € million | 1 | 2 | -50.0 |
Eliminations2 | € million | -5,578 | -6,150 | 9.3 |
| | | | |
Profit before financial result (EBIT)
2 | € million |
2,332 |
1,765 |
32.1 |
thereof: Automotive | € million | 1,825 | 1,452 | 25.7 |
Motorcycles | € million | -32 | -33 | 3.0 |
Financial
Services2 | € million | 452 | 478 | -5.4 |
Other Entities | € million | 22 | -49 | - |
Eliminations2 | € million | 65 | -83 | - |
| | | | |
Profit before tax (EBT)
2 | € million |
2,055 |
1,800 |
14.2 |
thereof: Automotive | € million | 1,478 | 1,631 | -9.4 |
Motorcycles | € million | -35 | -36 | 2.8 |
Financial
Services2 | € million | 475 | 438 | 8.4 |
Other Entities | € million | 85 | -150 | - |
Eliminations2 | € million | 52 | -83 | - |
| | | | |
Income taxes2 | € million |
-647 |
-470 |
37.7 |
Net profit
2,3 | € million |
1,408 |
1,319 |
6.7 |
Earnings per share (common / preferred stock)
2 | € |
2.09/2.10 |
1.98/1.99 |
5.6/5.5 |
1 Delivery figures have been adjusted retrospectively going back to
2015. The basis for the adjustments is a change in the methodology
used to collate data for the BMW Group's most important markets
(China, USA, Germany, UK, Italy and Japan). The retrospective
adjustment enables better comparability. Additional information can be
found on page 12.
2 Prior year figures adjusted due to first-time application of
revised IAS 16, see note 4 to the condensed Interim Group Financial
Statements for the six-month period ended 30 June 2019.
3 Value
for 2018 includes -€ 11 million from discontinued operations.
Additional information on delivery figures
In December 2019, BMW Group was informed by the U. S. Securities and
Exchange Commission (the SEC) that the SEC had commenced an inquiry
into BMW Group’s vehicle sales practices and reporting. On January 22,
2020, the SEC formally opened an investigation into potential
violations of U. S. securities laws by BMW Group relating to
disclosures regarding BMW Group’s unit sales of new vehicles. BMW
Group is reviewing the matter and cooperating with the SEC’s
investigation. Information on contingent liabilities is provided in
note 38 to the Group Financial Statements in the annual report.
The preparation of BMW Group’s retail vehicle delivery data involves
estimates and judgments and is subject to other uncertainties, including:
each of which may not correlate to a sale to a consumer or other end
user in the relevant reporting period.
See Glossary – Explanation of Key Figures – Deliveries for the
definition of deliveries (see below).
Retail vehicle deliveries during a given reporting period do not
correlate directly to the revenue that BMW Group recognises in respect
of such reporting period.
In connection with reviewing its sales practices and related
reporting practices, BMW Group also reviewed prior period retail
vehicle delivery data and separately determined that certain vehicle
deliveries were not reported in the correct periods. BMW Group has
revised the data on those vehicle deliveries that had not been
reported in the correct periods as further described below, and is
making, and will continue to make in the future, certain adjustments
to its policies and procedures in order to improve the reliability and
validity of its retail vehicle delivery data, in particular with
respect to the timing of the recognition of deliveries.
Specifically, the retail vehicle delivery data presented in the
annual report (years 2015 through 2019) and this media information
(years 2018 through 2019) have been revised by adjusting the data for
BMW Group’s six most significant markets to reflect the above. In the
years 2015 through 2019, these six markets (China, USA, Germany, UK,
Italy and Japan) represented on average 68.3% of BMW Group’s total
vehicle deliveries. For each of the years 2015 through 2019, these
revisions amounted to less than 1% of BMW Group’s total retail vehicle
deliveries. The retail vehicle delivery data for BMW Group’s other
markets have not been adjusted, as BMW Group believes the impact to be immaterial.
While BMW Group believes the retail vehicle delivery data presented
in the annual report and this media information to be materially
correct in accordance with BMW Group’s definition of deliveries,
challenges and further revisions of such data cannot be ruled out.
GLOSSARY – Explanation of Key Figures
Deliveries
A new or used vehicle will be recorded as a delivery once handed over
to the end user (which also includes leaseholders under lease
contracts with BMW Financial Services). In the US and Canada, end
users also include (1) dealers when they designate a vehicle as a
service loaner or demonstrator vehicle and (2) dealers and other third
parties when they purchase a company vehicle at auction and dealers
when they purchase company vehicles directly from BMW Group.
Deliveries may be made by BMW AG, one of its international
subsidiaries, a BMW Group retail outlet, or independent third party
dealers. The vast majority of deliveries – and hence the reporting to
BMW Group of deliveries – is made by independent third party dealers.
Retail vehicle deliveries during a given reporting period do not
correlate directly to the revenue that BMW Group recognises in respect
of such reporting period.
EBIT
Abbreviation for “Earnings Before Interest and Taxes”, equivalent in
the BMW Group income statement to “Profit / loss before financial
result”. This is comprised of revenues less cost of sales, selling and
administrative expenses and the net amount of other operating income
and expenses.
EBIT margin
Profit / loss before financial result as a percentage of revenues.
EBT
EBIT plus financial result.
For queries, please contact:
Corporate Communications
Max-Morten Borgmann, Corporate Communications
Telephone: +49 89 382-24118,
Fax: +49 89 382-24418
Max-Morten.Borgmann@bmwgroup.com
Mathias Schmidt, Head of Corporate and Culture Communications
Telephone: +49 89 382-24544,
Fax: +49 89 382-24418
Mathias.M.Schmidt@bmw.de
Internet: www.press.bmwgroup.com
E-mail: presse@bmwgroup.com
The BMW Group
With its four brands BMW, MINI, Rolls-Royce and BMW Motorrad, the BMW
Group is the world’s leading premium manufacturer of automobiles and
motorcycles and also provides premium financial and mobility services.
The BMW Group production network comprises 31 production and assembly
facilities in 15 countries; the company has a global sales network in
more than 140 countries.
In 2019, the BMW Group sold over 2,538,0001 passenger
vehicles and more than 175,000 motorcycles worldwide. The profit
before tax in the financial year 2019 was € 7.118 billion on revenues
amounting to € 104.210 billion. As of 31 December 2019, the BMW Group
had a workforce of 133,778 employees.
The success of the BMW Group has always been based on long-term
thinking and responsible action. The company has therefore established
ecological and social sustainability throughout the value chain,
comprehensive product responsibility and a clear commitment to
conserving resources as an integral part of its strategy.
www.bmwgroup.com
Facebook: http://www.facebook.com/BMWGroup
Twitter: http://twitter.com/BMWGroup
YouTube: http://www.youtube.com/BMWGroupView
Instagram: https://www.instagram.com/bmwgroup
LinkedIn: https://www.linkedin.com/company/bmwgroup/