E-mobility drives BWM Group targets

Worldwide
Published:  02 August, 2019

BMW Group says its operations remained well on course during the second quarter, despite a challenging market environment, with the German car manufacturer achieving improvements in both earnings and profitability compared with the first quarter.


Against the prevailing market trend, the BMW Group delivered more vehicles to customers than ever before in the first half of 2019, thereby gaining segment share in key markets. “At the six-month stage, we are on course to meet our targets for the full year. We are inspiring customers with new products and once again succeeded in increasing automobile deliveries to a new record level in the first half of the year," said Harald Krüger, Chairman of the Board of Management, BMW AG. E-mobility is said to continue to be a major focus for the Group, with the launch of 25 electrified models initially announced for 2025 being brought forward to 2023. By 2021, deliveries of electrified vehicles are predicted to double compared to 2019. The BMW Group then expects to see a steep growth curve up to 2025, with the volume of electrified vehicles delivered forecast to grow on average by more than 30% per year.

To accommodate these developments towards e-mobility, substantial upfront expenditure was again necessary during the period under report and, in line with expectations, has exceeded the high level seen in 2018. Second-quarter research and development expenses totalled €1,400 million, 5.9% more than the previous year. According to BMW, unfavourable exchange rate factors and rising prices for raw materials had a dampening impact on earnings between April and June, with competition remaining fierce on many markets.

Second-quarter Group revenues up slightly
In the second quarter 2019, the BMW Group set a new record for vehicle sales, comprising 647,504 BMW, MINI and Rolls-Royce premium vehicles (2018: 637,878 units; +1.5%) delivered; largely attributed to the contribution of the BMW Brilliance Automotive joint venture in China. Group revenues in the quarter rose to €25,715 million (2018: €24,993; +2.9%). Affected by upfront expenditure for future mobility, profit before financial result (EBIT) amounted to €2,201 million, lower than in the previous year (2018: €2,739 million; -19.6%). Profit before tax (EBT) amounted to €2,053 million (2018: € 2,866 million; -28.4%) and net profit amounted to €1,480 million (2018: € 2,076 million; -28.7%).

During the first six months of 2019, the BMW Group delivered a total of 1,252,837 vehicles to customers (2018: 1,242,507 units; +0.8%). At €48,177 million, Group revenues were slightly up on the previous year (2018: €47,658 million; +1.1%). Earnings in the first half of the financial year 2019 were impacted by a provision of approximately € 1.4 billion recognised in the first quarter in connection with the Statement of Objections received from the EU Commission relating to ongoing antitrust proceedings. Accordingly, at €2,790 million, profit before financial result (EBIT) reported for the six-month period was significantly lower than in the previous year (2018: € 5,446 million; -48.8%). Group profit before tax (EBT) amounted to €2,815 million (2018: € 6,005 million; -53.1%), corresponding to an EBT margin of 5.8% (2018: 12.6%). The BMW Group reports six-month Group net profit of € 2,068 million (2018: € 4,358 million; -52.5%).