Friday, May 20, 2022

Strong increase in earnings and margin following full consolidation of China joint venture  

Munich. The BMW Group further strengthened its
competitive position as well as its profitability in the first quarter
of 2022, thanks to sustained high demand for its premium vehicles.

The company’s quarterly financial statements also include positive
effects from the full consolidation of the Chinese joint
venture, BMW Brilliance Automotive Ltd (BBA),
as previously announced.

Even without these effects, margins of BMW Group were strong – a
proof point of its financial strength in a volatile economic and
geopolitical environment. The Group’s earnings return before taxes
(EBT margin) was 39.3% in the first
quarter (2021: 14.0%). Without the revaluation of the existing
stake and consolidation effects arising from BBA’s full
consolidation
, the Group’s return on sales achieved 18.4%.

The automotive segment showed a similarly strong performance in the
first three months: The EBIT margin in the
Automotive segment was 8.9% (2021:
9.8%) and thus at the upper end of the target range for 2022.
Excluding the consolidation effects, the EBIT margin
amounts to 13.2%.

“The strength and resilience of the BMW Group are particularly
evident in this challenging environment: With a high level of
flexibility, operational excellence and the tremendous commitment of
our team, we are steering the company towards success, today and in
the future,” said Oliver Zipse, Chairman of the Board of
Management of BMW AG
on Thursday in Munich.

Significant increase in electrified vehicle deliveries

In the first quarter of 2022, sales of electrified vehicles
increased significantly – by 28% to
89,669 units (2021: 70,207 vehicles/+27.7%). As
planned, sales of pure electric vehicles more than
doubled to 35,289 units (2021: 14,161
vehicles/+149.2%). The BMW iX3* (2022: 11,200 vehicles; 2021: 2,330
vehicles) and the MINI Cooper SE* (2022: 8,925 vehicles; 2021: 5,852
vehicles) were the most in-demand fully-electric models, with sales
significantly higher than in the same quarter of the previous year.
Within a short time of being introduced onto the market, the
innovation flagships, the BMW iX and the BMW i4, are already
generating strong demand and high new orders. The fully-electric BMW
i7* luxury sedan and the BMW iX1*, as well as the fully-electric BMW
i3 in China, will expand the range of battery-electric models in 2022.

“We firmly believe that it is especially important in difficult times
not to stop doing the right things. That is why we are upping the pace
of the e-mobility ramp-up and accelerating the transformation towards
sustainable mobility. And with our holistic approach to reducing CO2
emissions from our vehicles throughout the value chain, we are making
an effective contribution to combatting climate change”, said
CEO Zipse.

The company aims to have more than two million fully-electric
vehicles
on the roads by 2025. This year
already, including pre-production vehicles, the BMW Group will have
15 fully-electric models in production – covering
around 90% of its current segments –and is on track
to deliver at least 10% of its annual sales volume in fully-electric vehicles.

Slight increase in US deliveries – supply bottlenecks continue

A total of 596,907 vehicles were delivered to
customers in the first quarter. This figure was lower
than the previous year’s all-time high (2021: 636,606 vehicles/‑6.2%),
due to limited availability of components and wide-scale lockdowns in
China. The rate of sales growth varied between different regions of
the world: In the Americas and in the US, the BMW Group reported
growth on a par with the prior-year quarter. In the
Americas,
the company delivered 99,169
vehicles
to customers (2021: 96,352 vehicles; +2.9%). In the
US, BMW Group sales reached 80,974
vehicles
(2021: 78,067 vehicles; +3.7%), earning it a leading
position in the US premium segment.

The European markets, on the other hand, saw a
moderate decrease of 7.8% in BMW, MINI and Rolls-Royce deliveries
(2022: 220,393 units; 2021: 239,018 units). Sales in
Germany were slightly lower year-on-year, at
60,098 units (2021: 62,696 vehicles/-4.1%).

Sales development in Asia primarily reflected
COVID-related restrictions and renewed lockdowns in China, which led
to a moderate decrease in deliveries to 265,065 units
(2021: 287,697 units; -7.9%). In China, the company
delivered 208,953 vehicles to customers (2021:
230,193 vehicles/-9.2%).

Premium brands MINI and Rolls-Royce grow sales

In the first three months of 2022, the BMW brand
delivered a total of 519,796 vehicles to customers –
a decrease of 7.3% compared to the strong prior-year quarter (2021:
560,543 vehicles). 2022 marks the 50th anniversary year for BMW M.
39,055 high-performance models from BMW M went to
customers, an increase of 3.1% (2021:37,894 vehicles).

At brand level, MINI sales for the first quarter
were up slightly (75,487 vehicles; 2021: 74,683
vehicles, +1.1%) – mainly thanks to the electrified
MINI Cooper SE* and MINI Countryman Plug-in Hybrid* models.
Together, both models accounted for over 17% of total MINI sales.

Rolls-Royce Motor Cars handed over 1,624
vehicles
to customers in the first quarter – an increase of
17.7% over the previous year (2021: 1,380 vehicles).
This sales growth mainly comes from the Rolls-Royce models Ghost and Cullinan.

Significant growth in Group revenues

First-quarter revenues climbed 16.3%
to € 31,142 million (2021: € 26,778 million). This
significant increase is a result of the full consolidation of
BBA
already referred to: The JV has been fully consolidated
since 11 February 2022, following the extension of the joint venture
agreement and the increase in shares held by BMW AG from 50% to 75%.
Since this date, around
23,000 employees in China have been added to the BMW
Group workforce number. The subsidiary contributed
3,287 million to revenues from 11 February 2022
onwards. The company also benefited from positive
pricing
and product mix effects and was able
to expand its aftersales business. The continuing
positive development in used car markets, especially the US and the
UK, resulted in higher income from the sale of end-of-lease vehicles.
Revenues also benefited from currency tailwinds. Strong pricing has
also helped to partly compensate the headwinds from rising raw
material and energy prices.

Group research and development spending totalled
1,391 million (2021: € 1,287 million/+8.1%) and was
therefore higher than the previous year. Spending was mainly focused
on new models, as well as further electrification and digitalisation
of the portfolio. Upfront investments were also made for the Neue Klasse.

The R&D ratio decreased to 4.5%
(2021: 4.8%) due to the increase in revenues.

Financial result and Group earnings – strong growth from BBA

Due to the full consolidation of BBA the Group financial
result
, in particular, saw a strong increase to
8,836 million
(2021: € 732 million). This is due to a
preliminary profit of € 7.7 billion from the revaluation of the
existing stake held in BBA. At the same time, the at-equity result
decreased (2022: € 260 million, 2021: € 429 million/-39.4%), since
earnings from BBA were only included until 10 February 2022, due to
full consolidation after that date.

Group earnings before tax (EBT) increased as a result
of this effect, reaching € 12,227 million (2020: €
3,757 million; +225.4%).

The Group EBT margin for the first quarter increased
significantly to 39.3% (2021: 14.0%). Without the
revaluation of the existing stake and consolidation effects arising
from BBA’s full consolidation, the Group’s EBT margin reached 18.4%.

Group net profit amounted to
10,185 million (2021: € 2,833 million; +259.5%).

 

Full consolidation boosts financial figures in Automotive Segment

The Automotive Segment significantly increased its first-quarter
revenues to € 26,726 million (2021: € 22,762
million/+17.4%), as a result of the full
consolidation. Positive pricing and product mix effects, combined with
currency tailwinds and continuing good conditions in the used car
markets – with the favourable residual value development that results
from this – also supported revenues.

Earnings before financial result (EBIT) for the first
quarter reached
2,367 million (2021: € 2,236 million/+5.9%). The
EBIT margin in the Automotive Segment for the same
period came in at 8.9% (2021: 9.8%).

The full consolidation of BBA has also led to consolidation effects
in the Automotive Segment: “Depreciation from the purchase price
allocation and eliminations of intercompany profits amounted to around
€ 1.2 billion. Without these effects the EBIT margin was at 13.2%.
This reflects the strength of our core segment in the first quarter –
especially in the face of difficult external conditions”, said
Nicolas Peter, member of the Board of Management responsible
for Finance.

The financial result for the segment totalled
8,053 million (2021: € 540 million). This was
positively impacted by the revaluation of the previously held stake in
BBA already referred to. Due to the effects described above,
segment earnings before tax
(EBT) for the first three months of 2022 amounted to
10,420 million (2021: € 2,776 million).

Free cash flow in the Automotive
Segment
of the first quarter of 2022 totalled as expected
4,816 million (2021: € 2,522 million). The
full consolidation of BBA contributed to this with
a cash inflow from investment activities of
5,011 million. The purchase price for the 25% of
shares acquired, in the amount of € 3,735 million, was paid in full in
cash. As previously announced, the BMW Group intends to deliver a free
cash flow of at least
12 bn. for the full year.

Financial Services Segment delivers high EBT growth

The Financial Services Segment had a total of
5,516,021 financing and leasing contracts with retail
customers
at the end of the first quarter (31 December 2021:
5,577,011/-1.1%). The limited availability of new cars was also
reflected in the number of new contracts. Between January and March
2022, a total of 433,429 new contracts were concluded
with retail customers (2021: 489,066 contracts/‑11.4%). The positive
development in the used car markets led to higher income from the sale
of end-of-lease vehicles, with a corresponding positive effect on the
segment’s financial figures.

First-quarter revenues showed a solid increase from
€ 7,906 million to € 8,486 million (+7.3%). With
significant growth of 28.0%,
earnings before tax
(EBT) in the Financial Services
Segment
rose to
1,007 million (2021: € 787 million). A main
contributor was increased income from the resale of end-of-lease
vehicles in the US and the UK.

The percentage of BMW Group new vehicles leased or
financed by the Financial Services Segment stood at
46.8% at the end of the first quarter (2021:
50.4%/‑3.6 %-points).

Motorcycles Segment increases deliveries and revenues

The Motorcycles Segment was once again able to increase its
sales volume in the first quarter, building on a
very successful prior year. A total of 47,403 BMW motorcycles
and scooters
were delivered to customers – up
11.3% compared to the same quarter of the previous
year (2021: 42,592 units). Revenues climbed
6.1% to
799 million (2021: € 753 million).

The segment’s earnings before financial result
(EBIT) totalled € 108 million (2021: € 135
million/-20.0%), while the EBIT margin came in at 13.5%.

BMW Group maintains its guidance – high volatility expected to continue

Bolstered by strong global demand for its attractive premium
vehicles, the BMW Group is maintaining its guidance for the year. The
company is closely monitoring the geopolitical situation, dominated by
the war in Ukraine, as well as the ongoing volatile price development
in the commodity and energy markets. The situation on commodities
markets is expected to remain tense. Energy prices are also likely to
remain at a high level. The BMW Group has therefore already taken the
initial impact of the prevailing situation into account in its outlook
for the financial year 2022. The war in Ukraine and rising inflation
rates are likely to exacerbate these developments. As in the financial
year 2021, the risk of supply bottlenecks for semiconductor components
required for production persists. Cur­rently, the situation is not
expected to ease until the second half of 2022 at the earliest.
Deliveries in the Automotive Segment
are therefore forecast to be on par with last year.
The EBIT margin is still expected to be within the
range of
7-9%.

Although a slight increase in
deliveries is forecast for the Motorcycles
Segment
, the EBIT margin should remain
within our target range of 8-10%. The performance
indicators for the Motorcycles Segment are only marginally affected by
the full consolidation of BBA.

In the Financial Services Segment, we expect
RoE to be between 14-17%. Compared
to reporting year 2021, the strong positive effects from the resale of
end-of-lease vehicles are expected to normalise.

The effects of the full consolidation of BBA are projected to lead to
significant growth in Group earnings before
tax
, despite the negative impacts from production adjustments.

The targets outlined in the company’s guidance are intended to be
achieved with slightly higher employee numbers,
excluding the employees from BBA.

Not factored into this forecast are: A significant tightening of
sanctions against Russia and / or counter­measures by Russia, an
escalation of the conflict outside Ukraine as well as a significant
prolongation or extension of the pandemic-related lockdown in China.

Regardless of these uncertainties, however, the situation remains
highly volatile, making it extremely difficult to accurately forecast
outcomes for the financial year 2022.

The BMW Group – an overview

1st Quarter 2022

1st Quarter 2021

Change in %

Deliveries to customers

       

Automotive
1

units

596,907

636,606

-6.2

thereof: 
BMW1

units

519,796

560,543

-7.3

 MINI1

units

75,487

74,683

1.1

 Rolls-Royce1

units

1,624

1,380

17.7

Motorcycles

units

47,403

42,592

11.3

 

 

 

Employees
                                     (as of
31 Dec. 2021)

118,909

 

Automotive Segment
EBIT margin

percent

8.9

9.8

-0.9 %-points

Motorcycles
Segment EBIT margin

percent

13.5

17.9

-4.4 %-points

EBT margin
2

percent

39.3

14.0

25.3 %-points

 

 

 

Revenues

€ million

31,142

26,778

16.3

thereof:  
Automotive

€ million

26,726

22,762

17.4

Motorcycles

€ million

799

753

6.1

Financial
Services


million

8,486

7,906

7.3

Other
Entities


million

1

1

Eliminations

€ million

-4,870

-4,644

4.9

 

 

 

Profit before financial result
(EBIT)

€ million

3,391

3,025

12.1

thereof:  
Automotive

€ million

2,367

2,236

5.9

Motorcycles

€ million

108

135

-20.0

Financial
Services


million

966

767

25.9

Other
Entities


million

-32

-6

Eliminations

€ million

-18

-107

-83.2

 

 

 

Profit before tax (EBT)

€ million

12,227

3,757

225.4

thereof:  
Automotive

€ million

10,420

2,776

275.4

Motorcycles

€ million

109

135

-19.3

Financial
Services


million

1,007

787

28.0

Other
Entities


million

685

141

Eliminations

€ million

6

-82

 

 

 

Income taxes

€ million

-2,042

-924

Net profit

€ million

10,185

2,833

259.5

Earnings per share
(common/preferred share)

 €

15.33/15.33

4.26/4.26

-/-

1 Includes 96,133 units (2021: 175,838 units) delivered to
customers by the BMW Brilliance Automotive Ltd., Shenyang, joint
venture in the period from 1 January to 10 February 2022 (i.e. prior
to the full consolidation of that entity in the BMW Group Financial Statements).

2 Ratio of Group earnings before taxes to Group revenues.

*Consumption/emissions data:

 

BMW iX3: Power consumption in kWh/100 km combined:
18.9-18.5 WLTP.

MINI Cooper SE: Power consumption in kWh/100 km
combined: 17.6-15.2 WLTP.

BMW i7: Power consumption in kWh/100 km combined:
19.6-18.4 WLTP

BMW iX1: Power consumption in kWh/100 km combined:
18.4-17.3 WLTP (forecast value based on vehicle’s prior development status).

MINI Cooper SE Countryman ALL4: fuel consumption in
l/100 km combined: 2.1-1.9 (NEDC), 2.1-1.7 (WLTP); power consumption
in kWh/100 km combined: 14.8-14.1 (NEDC), 15.9-14.8 (WLTP); CO2
emissions in g/km combined: 48-44 (NEDC). 47-39 (WLTP).

 

GLOSSARY – explanatory comments on key performance indicators

 

Deliveries to customers

A new or used vehicle is recorded as a delivery once its 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 the 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 of
deliveries to the BMW Group – is made by independent third-party
dealers. Retail vehicle deliveries during a given reporting period do
not correlate directly to the revenues that the BMW Group recognises
in respect of that particular reporting period.

EBIT

Profit before financial result. Profit before financial result
comprises revenues less cost of sales, less selling and administrative
expenses and plus/minus net other operating income and expenses.

EBIT margin

Profit/loss before financial result as a percentage of revenues.

EBT

EBIT plus financial result.

If you have any questions, please contact:

 

BMW Group Corporate Communications

 

Dr Britta Ullrich, Communications Finance

Telephone: +49 89 382-18364

Email: britta.ullrich@bmwgroup.com

Eckhard Wannieck, head of Communications BMW Group, Finance, Sales

Telephone: +49 89 382-24544

Email: eckhard.wannieck@bmwgroup.com

Media website: www.press.bmwgroup.com/global

Email: 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 2021, the BMW Group sold over 2.5 million passenger vehicles and
more than 194,000 motorcycles worldwide. The profit before tax in the
financial year 2021 was € 16.1 billion on revenues amounting to €
111.2 billion. As of 31 December 2021, the BMW Group had a workforce
of 118,909 employees.

The success of the BMW Group has always been based on long-term
thinking and responsible action. The company set its course for the
future early on and is making sustainability and resource efficiency
the focus of the company’s strategic direction – from the supply
chain, through production, to the end of the use phase, for all its products. 

www.bmwgroup.com

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