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BMW Group combines successful core business with future-focussed strategic decisions

Third quarter: Net profit up 15 percent +++ Automotive segment: EBIT margin remains in target range +++ Full year 2016: Forecast reaffirmed +++ E-mobility: Over 100,000 electrified BMW vehicles on the streets today +++ E-mobility: BMW Group to expand electrification of core brands to include MINI and BMW X3 battery versions

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Munich. The BMW Group continued to chart a course of profitable growth in
the third quarter 2016 and revealed how the next stages of its Strategy
Number ONE > NEXT will be implemented. As the world’s leading provider of
premium products and services for individual mobility, the BMW Group recorded
its best ever third quarter sales volume and net profit figures. The company also
published details regarding the second phase of its electrification strategy.


“We posted new record earnings and continued to grow profitably – thereby
maintaining a strong basis for the consistent implementation of our strategy,”
said Harald Krüger, Chairman of the Board of Management of BMW AG,
on Friday. “We are already achieving measurable success in the areas in which
the entire sector is judged, namely our successful electrification strategy, with
more than 100,000 electric vehicles on the roads already today, and our
consistent achievement of high profitability, which enables us to finance future
investments from our own resources.”


Krüger continued: “BMW i has always stood for a great deal more than
alternative powertrains: BMW i is our ‘spearhead of innovation’, ensuring that the
BMW Group maintains its pioneering technological role. We have already proved
this in the field of electric mobility – and we continue to write our own success
story in the fields of automated driving and digitalisation.”

 

Three years after the successful launch of BMW i, the BMW Group is now ready
to present the second phase of its electric mobility strategy. Alongside the
previously announced expansion of the BMW i model range to include the BMW
i8 Roadster and the BMW iNEXT, the BMW Group will press ahead with its plans
to systematically transfer all-electric, battery-powered mobility to its core brands.
The first step will be an all-electric MINI in 2019, followed by an all-electric BMW
X3 in 2020.


“We are absolutely convinced that the mobility of tomorrow is sustainable,” said
Krüger. “Years ago, we announced our unambiguous commitment to electric
mobility and achieved technological leadership in this field. Growing customer
demand confirms that we are on the right track and that now is the right time to
take the next steps.”

In the third quarter alone, the BMW Group delivered more than 18,000 electric
BMW i and BMW iPerformance vehicles to customers, twice the figure achieved
in the same period last year. For the full year 2016, the BMW Group expects to
sell more than 60,000 vehicles featuring either all-electric or plug-in hybrid
powertrains.

BMW Group posts best-ever figures for the first nine months of 2016
Third-quarter sales volume of the BMW Group’s three premium brands
(BMW, MINI and Rolls-Royce) climbed by 7.1% to reach 583,499 units
(2015: 545,062 units). These figures mark a new all-time high for a third quarter
and safeguard the BMW Group's position as the world’s leading manufacturer of
premium vehicles.

Third-quarter revenues rose by 4.6% to € 23,362 million
(2015: € 22,345 million). Adjusted for exchange rate factors, revenues increased
by 6.6%. At € 2,380 million, profit before financial result (EBIT) was slightlyhigher than one year earlier (2015: € 2,354 million; +1.1%). Group profit before tax (EBT) improved by 13.8% to € 2,575 million (2015: € 2,263 million).

Net profit climbed by 15.3% to € 1,821 million (2015: € 1,579 million), a new
record for a third quarter.

Nine-month sales recorded by the Automotive segment rose by 6.2% to
reach a new high of 1,746,638 units (2015: 1,644,810 units). The strategy of
striving to achieve an evenly balanced distribution of sales worldwide continued
to pay off, allowing fluctuations in individual markets to be compensated.

In the first nine months, Group revenues grew by 3.0% to € 69,229 million
(2015: € 67,197 million). Profit before financial result (EBIT) edged up by
2.2% to € 7,562 million (2015: € 7,400 million). Group profit before tax (EBT)
increased by 8.8% to set a new record of € 7,741 million (2015: € 7,114 million).
Group net profit rose by 11.7% to € 5,411 million (2015: € 4,844 million), also
marking a new record for the first nine months of a year.

Automotive segment: EBIT margin within target range

Third-quarter revenues of the Automotive segment grew by 2.8% to
€ 21,564 million (2015: € 20,970 million). As previously reported, upfront
expenditure for projects and activities connected with the implementation of
Strategy Number ONE > NEXT will affect earnings more in the second half-year
than in the first half-year. EBIT for the third quarter came in at € 1,837 million
(2015: € 1,912 million; -3.9%) million, resulting in an EBIT margin in the
Automotive segment of 8.5% (2015: 9.1%), still within the target range of
between 8 and 10%. At € 2,030 million, segment profit before tax was
significantly higher than the previous year (€ 1,845 million; +10.0%).

Nine-month segment revenues grew by 2.8% to € 63,250 million
(2015: € 61,513 million). EBIT increased to € 5,778 million (2015: € 5,525 million; +4.6%), resulting in an EBIT margin of 9.1%
(2015: 9.0%). Profit before tax climbed to € 6,041 million
(2015: € 5,323 million; +13.5%), the first time it has exceeded six billion euro in
the first three quarters.

 

In the third quarter, sales of BMW brand vehicles rose by 6.4% to reach a new
high of 493,379 units (2015: 463,739 units) for the period. The equivalent ninemonth
figure of 1,479,936 units (2015: 1,395,780 units; +6.0%) also broke all
existing records. Tailwind came from various sources, including contributions
made by the BMW Group’s flagship model, the BMW 7 Series, and the BMW X
models. Nine-month deliveries of the new BMW 7 Series were 65.8% up on
the previous year, outperforming all of its predecessors during the launch period.
Additional momentum is expected to come from the top model, the BMW
M760Li xDrive. Sales of the BMW X1 in the nine-month period jumped by
82.0% to 149,670 units, while the BMW X3 recorded a 16.5% increase to
116,702 units.


Sales of BMW’s electrified models continue to grow – particularly in Europe and
the USA. More than 40,000 BMW i and BMW iPerformance vehicles had
been delivered to customers by the end of September – and the upward trend is
rising steeply. In September alone, sales of electrified BMW models exceeded
the 7,000 mark.


Including the new BMW 740e as well as the BMW 330e and the
BMW 225xe Active Tourer launched in spring, the BMW Group already offers
a total of seven vehicle models that are either all-electric (such as the BMW i3) or
plug-in hybrids which combine an electric motor and a combustion engine.
Moreover, the additional version of the BMW i3 with significantly extended
electric range that came onto the market in July has also led to a noticeable
increase in demand.

 

MINI also increased higher sales figures for the third quarter, with the number of
vehicles sold worldwide rising by 10.8% to 89,179 units (2015: 80,488 units),
including significant contributions from the new MINI Clubman and MINI Convertible
models. Nine-month sales of MINI climbed by 7.2% to 264,077 units.
Rolls-Royce Motor Cars announced the best ever third quarter sales
performance in the history of the company, up 12.7% on the previous year.
Demand was seen across all Rolls-Royce models, combined with significant
interest in Dawn and Black Badge Wraith and Black Badge Ghost. Sales in the
nine-month period from January to September totalled 2,625 units, up 0.8% on
the previous year. This result is according to plan and the marque remains
optimistic for a strong year in 2016.

The upward trend for the BMW Group in Europe continued. Nine-month sales
in this region increased by 10.4% to 807,597 units. Double-digit growth was
recorded in a number of markets, including Great Britain (189,712 units;
+10.6%), France (62,340 units; +10.9%) and Italy (59,921 units; +17.7%).

Deliveries of BMW Group vehicles in Asia rose by 9.1% to 548,986 units during
the nine-month period, including sales on the Chinese mainland, which grew by
10.7% to 379,461 units. In Japan, sales volume rose by 9.5% to 55,408 units.

The number of vehicles sold in the Americas region between January and
September was 6.5% lower at 338,005 units, including 269,884 units (-8.7%)
delivered to customers in the USA.

Continued sales volume growth for Motorcycles segment

 

The Motorcycles segment continues to perform well. Worldwide sales of BMW motorcycles and maxi-scooters during the three-month period from July to

September totalled 35,290 units, 3.8% more than the previous year.

 

Third-quarter segment revenues amounted to € 451 million
(2015: € 454 million; -0.7%). Earnings were also down on the previous year,
mainly due to expenses incurred during the start-up phase of a number of
projects connected with implementing BMW Motorrad’s new strategy. EBIT
came in at € 32 million (2015: € 46 million; -30.4%), while profit before tax
also finished at € 32 million (2015: € 45 million; -28.9%).

The segment delivered 116,044 (2015: 112,411) motorcycles and maxiscooters
to customers during the first nine months of the year, an increase of
3.2% compared to the previous year. At € 1,650 million, segment revenues
were similar to the previous year (2015: € 1,643 million: +0.4%). EBIT
amounted to € 224 million (2015: € 273 million; -17.9%), while profit before
tax finished at € 223 million (2015: € 271 million; -17.7%).

Financial Services segment continues to perform well

The Financial Services segment continued to grow its business during the third
quarter, again setting new records. A total of 467,702 new contracts
(2015: 420,639 contracts: +11.2%) were signed between July and September
in conjunction with financing and leasing business. The number of lease and
financing contracts in place with retail customers at the end of the reporting
period increased to 4,599,674 contracts (30 September 2015: 4,227,586
contracts; +8.8%). Segment revenues rose significantly to € 6,403 million
(2015: € 5,621 million), 13.9% higher than in the previous year’s equivalent
three-month period. Profit before tax rose by 22.9% to € 568 million
(2015: € 462 million).

In total, 1,341,792 (2015: 1,222,165) new contracts were signed during the
first nine months of the year relating to financing and leasing business, 9.8%
more than the previous year. Segment revenues were 6.2% higher at € 18,940 million (2015: € 17,833 million). Profit before tax grew by 8.2% to
€ 1,641 million (2015: € 1,517 million).

Employee numbers increased

The workforce grew by 3.9% year-on-year as at 30 September. At the end of
the reporting period, 126,013 people were employed worldwide
(2015: 121,316 people). The BMW Group continues to concentrate its
recruitment efforts on attracting the engineers and skilled staff, including
software and IT experts, who are needed to keep pace with the constantly
growing demand for the company’s vehicles and to create the innovations which
will become the technologies of tomorrow.

BMW Group on course to achieve its financial targets for 2016

The BMW Group is confident it will achieve its projected targets for the current
financial year – largely thanks to its strong brands, its attractive product portfolio
and the expectation that international automobile markets will continue their
generally upward trend. These favourable factors contrast with high levels of
upfront expenditure for new technologies, fierce competition and rising
personnel expenses. The global political and economic environment is expected
to remain volatile.

The BMW Group reaffirms its targets for the full year. “We forecast slight
increases and hence new record figures for Automotive segment sales
volume and profit before tax in 2016,” stated Krüger. With its three premium
brands – BMW, MINI and Rolls-Royce – the BMW Group is firmly intent on
remaining the world's leading manufacturer of premium vehicles in 2016.

Automotive segment revenues are also set to grow slightly over the year, on
the back of increased sales volumes. The Automotive segment’s EBIT margin
in 2016 is forecast to remain within the targeted range of between 8 and 10%.

 

The BMW Group expects the Motorcycles segment to continue its upward
trend for the remainder of the current year. The new R NineT Scrambler and
G 310 R models have given the product portfolio additional breadth and are
attracting new customer groups. A “solid” year-on-year increase in sales
volume is forecast for the full year.


The successful business performance of the Financial Services segment is
expected to continue. Despite rising equity capital requirements worldwide, for
the financial year 2016 the BMW Group forecasts a return on equity (RoE) in
line with the previous year (2015: 20.2%) and therefore once again above the
target rate of at least 18%.


Forecasts for the current year are based on the assumption that worldwide
economic and political environment will not change significantly.BMW Group combines successful core business with future-focussed strategic decisions

* * *

 

 

 

The BMW Group – an overview

3rd quarter

2016

3rd quarter 2015

Change in %

Sales volume

    

Automotive

Units

583,499

545,062

7.1

Thereof:   BMW

Units

493,379

463,739

6.4

     MINI

Units

89,179

80,488

10.8

     Rolls-Royce

Units

941

835

12.7

Sales volume Motorcycles

Units

35,290

33,993

3.8

 

 

 

 

 

Workforce 1

 

126,013

121,316

3.9

 

 

 

 

 

EBIT margin Automotive Segment

Percent

8.5

9.1

-0.6 %points

 

 

 

 

 

Revenues

€ million

23,362

22,345

4.6

Thereof:   Automotive

€ million

21,564

20,970

2.8

   Motorcycles

€ million

451

454

-0.7

   Financial Services

€ million

6,403

5,621

13.9

   Other Entities

€ million

1

1

-

   Eliminations

€ million

-5,057

-4,701

-7.6

 

 

 

 

 

Profit before financial result (EBIT)

€ million

2,380

2,354

1.1

Thereof:   Automotive

€ million

1,837

1,912

-3.9

   Motorcycles

€ million

32

46

-30.4

   Financial Services

€ million

576

465

23.9

   Other Entities

€ million

6

5

20.0

   Eliminations

€ million

-71

-74

4.1

 

 

 

 

 

Profit before tax (EBT)

€ million

2,575

2,263

13.8

Thereof:   Automotive

€ million

2,030

1,845

10.0

   Motorcycles

€ million

32

45

-28.9

   Financial Services

€ million

568

462

22.9

   Other Entities

€ million

40

5

-

   Eliminations

€ million

-95

-94

-1.1

 

 

 

 

 

Income taxes

€ million

-754

-684

-10.2

Net profit

€ million

1,821

1,579

15.3

Earnings per share 2

2.75/2.75

2.39/2.39

15.1

1 Figures exclude dormant employment contracts, employees in the work and non-work phases of pre-retirement part-time working arrangements and low wage earners

2 Earnings per share of common stock/preferred stock

The BMW Group – an overview

Jan. – Sept. 2016

Jan. – Sept.

2015

Change in %

Sales volume

    

Automotive

Units

1,746,638

1,644,810

6.2

Thereof:   BMW

Units

1,479,936

1,395,780

6.0

MINI

Units

264,077

246,426

7.2

Rolls-Royce

Units

2,625

2,604

0.8

Sales volume Motorcycles

Units

116,044

112,411

3.2

 

 

 

 

 

Workforce 1

 

126,013

121,316

3.9

 

 

 

 

 

EBIT margin Automotive Segment

Percent

9.1

9.0

+0.1 %points

 

 

 

 

 

Revenues

€ million

69,229

67,197

3.0

Thereof:   Automotive

€ million

63,250

61,513

2.8

   Motorcycles

€ million

1,650

1,643

0.4

   Financial Services

€ million

18,940

17,833

6.2

   Other Entities

€ million

4

4

-

   Eliminations

€ million

-14,615

-13,796

-5.9

 

 

 

 

 

Profit before financial result (EBIT)

€ million

7,562

7,400

2.2

Thereof:   Automotive

€ million

5,778

5,525

4.6

   Motorcycles

€ million

224

273

-17.9

   Financial Services

€ million

1,696

1,523

11.4

   Other Entities

€ million

29

139

-79.1

   Eliminations

€ million

-165

-60

-

 

 

 

 

 

Profit before tax (EBT)

€ million

7,741

7,114

8.8

Thereof:   Automotive

€ million

6,041

5,323

13.5

   Motorcycles

€ million

223

271

-17.7

   Financial Services

€ million

1,641

1,517

8.2

   Other Entities

€ million

84

126

-33.3

   Eliminations

€ million

-248

-123

-

 

 

 

 

 

Income taxes

€ million

-2,330

-2,270

-2.6

Net profit

€ million

5,411

4,844

11.7

Earnings per share 2

8.19/8.20

7.35/7.36

11.4/11.4

1 Figures exclude dormant employment contracts, employees in the work and non-work phases of pre-retirement part-time working arrangements and low wage earners

2 Earnings per share of common stock/preferred stock

 

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