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BMW Group sees growth in second quarter, looks to future

Posted On Friday, 04 August 2017 02:49 Written by
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After a strong performance in the first half of 2017, the BMW Group is now focusing on expanding electric mobility and automated driving. The BMW iNEXT will set new standards in both of these fields and will act as a technological spearhead. It will be manufactured at Plant Dingolfing from 2021, underlining the significance of Germany for future technologies and as a centre of competence for electric mobility. Germany will also serve as a key location for the development of autonomous driving. As part of the co-operation arrangements established with Intel and Mobileye, the first engineers from all three companies will move to the new development campus in Unterschleißheim near Munich in the course of the current year. Moreover, one year since the co-operation began, a number of other prestigious partners including Delphi and Continental have also joined the project.

“Huge changes lie ahead in the world of mobility and it is vital that our company is in top shape to tackle them. Strategy NUMBER ONE > NEXT sharpens our innovative edge and strengthens our core business,” commented Harald Krüger, Chairman of the Board of Management of BMW AG. “We are advancing rapidly in the field of electric mobility, today and into the future. No established competitor has been able to put as many electrified vehicles onto the roads as we have. In the future, our flexible architecture will enable us to decide quickly which and how many models to build with combustion, plug-in hybrid or all-electric drive systems. This flexibility in our product range is our key to success in times of volatility and uncertain forecasts.”

A successful core business, geared to generating long-term profitability, remains the backbone of the BMW Group, providing the underlying strength to determine the shape of mobility going forward. The BMW Group recorded growth in the second quarter 2017 in terms of volumes, revenues and earnings. This performance was boosted by the new BMW 5 Series, the launch of which in early 2017 marked the start of the largest model offensive in the BMW Group’s history. Forty new and updated models of the Group’s three premium brands, BMW, MINI and Rolls-Royce, will be brought to market during the current and the following year.

“Our customers are excited by the new 5 Series model. Since its market launch and throughout the second quarter it continues to achieve considerable market success. We are confident that the BMW Group, with its three premium brands, will set a new record for deliveries to customers in 2017 and remain the foremost provider of premium mobility,” said Krüger. “Together with the success of our products, our strategy of focusing on profitable growth in the USA is also paying dividends.”

The model offensive also extends the upper-premium segment. Through the targeted addition of vehicles with great emotive appeal – such as the new BMW 8 Series – the BMW Group aims to achieve significant volume growth in this segment by 2020. The segment also includes the BMW 7 Series and the future BMW X7. In addition, the BMW Group is raising the bar in terms of profitability in order to ensure its long-term business success.

“Sustained profitability is and remains an integral part of our Strategy NUMBER ONE > NEXT, ensuring we have the necessary resources to take on the challenge of shaping the future of mobility,” stated Nicolas Peter, member of the BMW AG Board of Management responsible for Finance. “This is why we are focusing on the needs of our customers and the relevant technologies of tomorrow. Using our corporate values as the starting point, we ensure our structures enable future-oriented, cooperative ways of working, while setting clear priorities for the allocation of our resources. We are deliberately reducing the degree of complexity in our products and processes. We always act with foresight, a steady hand and from a position of strength, as we never lose sight of the long-term strategy and sustained success of the BMW Group as a whole. This combination of constancy and dependability is the hallmark of the BMW Group and will remain so in the future.”

The BMW Group’s broad range of electrified vehicles was particularly popular during the first six months of the current year. Deliveries of BMW i3 and i8 models, the BMW iPerformance plug-in hybrids and the new plug-in hybrid version of the MINI Countryman totalled 42,573 units, some 80% up on the previous year (2016: 23,681 units). “We remain firmly on track to deliver more than 100,000 electrified vehicles for the first time in a single year,” Krüger stated.

BMW Group achieves volume, revenue and earnings growth

Deliveries of BMW, MINI and Rolls-Royce brand vehicles in the second quarter 2017 rose by 4.6% to 633,582 units (2016: 605,534 units). Group revenues between April and June went up by 3.1% to € 25,799 million (2016: € 25,014 million). Profit before financial result (EBIT) amounted to € 2,929 million, 7.5% up on the previous year’s figure (€ 2,725 million). Profit before tax (EBT) grew to € 3,055 million (2016: € 2,798 million; +9.2%), resulting in an EBT margin for the Group of 11.8% (2016: 11.2%). Net profit rose by 13.6% to € 2,214 million (2016: € 1,949 million).

Deliveries in the first half of the year increased by 5.0% to 1,220,819 units (2016: 1,163,139 units). Group revenues grew by 7.4% to € 49,247 million (2016: € 45,867 million). Profit before financial result (EBIT) climbed by 7.6% to € 5,575 million (2016: € 5,182 million). Profit before tax (EBT) for the six-month period amounted to € 6,060 million (2016: € 5,166 million), 17.3% up on the previous year, boosted in part by a positive valuation effect recorded in the first quarter. The EBT margin for the six-month period came in at 12.3% (2016: 11.3%). Group net profit jumped by 21.5% to € 4,363 million (2016: € 3,590 million).

Motorcycles segment records highest delivery volume figure to date

The Motorcycles segment performed extremely well in the second quarter. Deliveries to customers in the period from April to June rose by 12.3% to a new all-time high of 52,753 units (2016: 46,966 units). Revenues grew by 12.8% to € 696 million (2016: € 617 million). Profit before financial result rose by 6.1% to € 104 million (2016: € 98 million), giving an EBIT margin of 14.9% for the quarter (2016: 15.9%). Profit before tax increased by 6.2% to € 103 million (2016: € 97 million).

During the first six months of the year, a total of 88,389 BMW motorcycles and maxi-scooters were delivered to customers (2016: 80,754 units; +9.5%). Revenues grew by 10.0% to € 1,319 million (2016: € 1,199 million). Profit before financial result increased by 19.3% to € 229 million (2016: € 192 million), resulting in an EBIT margin of 17.4% for the six-month period under report (2016: 16.0%). Profit before tax improved by 19.4% to € 228 million (2016: € 191 million).

Outlook for 2017: BMW Group forecasts new record figures

The BMW Group is confident of achieving 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 are offset by high levels of upfront expenditure for new technologies, intense competition and rising personnel expenses. The global political and economic environment is expected to remain volatile.

“We forecast slight increases, and hence new record figures, for automotive segment deliveries and profit before tax in 2017,” stated Krüger. “With the first half-year now behind us, we are confident of achieving the targets set for the full year. We can therefore begin the second half of the year with cautious optimism. That said, we also continue to expect higher expenditure over the course of the year in connection with key technological and strategic projects on the one hand and the roll-out of the largest model offensive in the history of the BMW Group on the other. Other factors to bear in mind are the politically volatile environment and high upfront expenditure for electric mobility and autonomous driving.”

Press release courtesy of BMW group


Matt M. Myftiu

Matt Myftiu has been a journalist for two decades with a focus on technology, NASCAR and autos.

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