In a report that seems to present a mixed picture there are some positive elements to focus on.While 2009 was a challenging business environment, the forth quarter results do lead one to believe a corner may have been turned, portending potentially improved results for 2010.Improved profitability in the face of decreasing revenues indicates an efficiency improvement for the company that if sustainable could substantially improve earnings as the global economy moves out of the recession.Further a stable dividend indicates management confidence in the future growth prospects for the firm.Without a full financial statement to review it ‘s difficult to identify the source of the efficiencies created, but the release does reflect the lead position BMW Group has taken in the market and suggests they are well positioned to take advantage of an improving economy going forward.
Official Release:Munich. The BMW Group recorded positive earnings for the financial year 2009 as planned despite the ongoing worldwide financial and economic crisis. Profit before tax rose by 17.7% to euro 413 million (2008: euro 351 million). Net profit amounted to euro 210 million (2008: euro 330 million/-36.4%) due to the higher effective tax rate. Revenues decreased moderately by 4.7% to euro 50,681 million (2008: euro 53,197 million). Based on the proposal of the Board of Management and Supervisory Board, the dividend will remain unchanged against the previous year at euro 0.30 per share of common stock and euro 0.32 per share of preferred stock.
“We performed well in 2009 despite difficult market conditions worldwide. Our cost management and efficiency improvement measures had a positive impact, even though the effects of the worldwide financial and economic crisis were still being felt“, statedNorbert Reithofer, the Chairman of the Board of Management of BMW AG on Thursday in Munich. “We are proposing a dividend for 2009 despite the difficult economic climate, demonstrating the confidence we have in our operating strength, and we also want our shareholders to participate in the company’s performance“, continued Reithofer.
Automobiles segment records fourth-quarter EBIT of euro 93 million
Earnings of the Automobiles segment fell in 2009 due to lower unit sales brought about by the weak economies worldwide.Nevertheless, thanks to a more stable market environment towards the end of the year, the segment was able to generate a fourth-quarter profit before financial result (EBIT) of euro 93 million. For the full year, the segment recorded negative EBIT of euro 265 million (2008: positive EBIT of euro 690 million) and a loss before tax of euro 588 million (2008: profit before tax of euro 318 million). Revenues fell to euro 43,737 million (2008: euro 48,782 million).
In total, the BMW Group sold 1,286,310 BMW, MINI and Rolls-Royce brand vehicles in 2009 (2008: 1,435,876 units/-10.4%). This performance enabled the BMW Group to increase its market share in the premium segment and, as previously announced, to retain its position as the world’s leading premium manufacturer.
A total of 1,068,770 BMW brand cars (2008: 1,202,239 units/-11.1%) were sold in 2009, putting the BMW brand once again well ahead of relevant competitors in the premium segment. Strong sales increases were achieved by the BMW 7 Series (52,680 units/+35.7%), the BMW X6 (41,667 units/+56.8%) and the BMW Z4 (22,761 units/+26.4%). In Germany, both 7 Series (7,439 units/+74.8%) and the BMW X5 (10,933 units/-31.9%) and X6 (4,940 units/+51.0%) finished the year as clear leaders in their relevant segments. Since their launch at the end of October 2009 up to the end of the year, 8,499 units of the BMW X1 and 3,052 units of the 5 Series Gran Turismo had been sold worldwide.
The MINI brand sold 216,538 units worldwide in 2009 (2008: 232,425 units/-6.8%). The model mix remained at a high level: more than one half of the brand’s customers (53.6%) opted for the MINI Cooper, with 26.2% selecting the MINI Cooper S and 20.2% the MINI One.
Rolls-Royce sold 1,002 motor cars (2008: 1,212 units/-17.3%) during the year, thus remaining the clear market leader in the ultra-luxury segment. The new Rolls-Royce Ghost made a good start, with 167 vehicles handed over to customers in December 2009.
The BMW Group grew strongly in 2009 in the emerging markets of China (90,536 units/+37.5%), Brazil (6,398 units/+118.8%) and India (3,619 units/+24.4%), achieving new sales records in all three markets. “We plan to grow our sales again in China, Brazil and India in the current year “, stated Reithofer. Germany was the largest single market for the company in 2009 for its BMW and MINI brand cars, with a total of 258,012 units (2008: 284,786 units/-9.4%) sold. With 33,517 cars handed over to customers, the MINI brand recorded its most successful year in Germany to date. The BMW Group also plans to increase sales in the German market during 2010, and hence, to increase market share in the premium segment.
In the USA, the BMW Group sold 241,727 vehicles (2008: 303,190 units/-20.3%) during the past year. The BMW brand, with 196,502 units sold, remained the best performing European premium car brand in the USA. The BMW Group forecasts that sales will increase in the US market during the current year.
EBIT of euro 19 million for Motorcycles segment in 2009
The earnings performance of the Motorcycles segment in 2009 was also adversely affected by difficult business conditions. EBIT fell to euro 19 million (2008: euro 60 million). Segment revenues totalled euro 1,069 million (2008: euro 1,230 million). With 87,306 units (2008: 101,685 units/-14.1%) sold worldwide, BMW Motorcycles recorded a moderate drop in sales volume compared to the market as a whole.
Sharp rise in earnings of Financial Services segment
Earnings of the Financial Services segment rose considerably in 2009 following a significant burden last year due to additional charges for residual value and credit risks. The EBIT rose to euro 355 million (2008: negative EBIT of euro 216 million). Segment revenues totalled euro 15,798 million (2008: euro 15,725 million). The increase in the credit loss ratio to 0.84% (2008: 0.59%) was in line with expectations.
The volume of new retail customers contracts declined by 15.8% to euro 24,709 million. The proportion of new BMW and MINI brand cars financed by the Financial Services segment amounted to 49.0%, up by 0.5 percentage points compared to the previous year.
Workforce of approximately 96,000 employees at end of 2009
The BMW Group’s workforce decreased over the past year as a result of a combination of natural attrition, pre-retirement part-time working arrangements and voluntary employment contract termination agreements. The BMW Group workforce comprised 96,230 employees at the end of the year (December 31, 2008: 100,041 employees/-3.8%) worldwide. The number of trainees remained at a high level, namely 3,915 compared to 4,102 one year earlier.
BMW Group cautiously optimistic for 2010
The worldwide financial and economic crisis will continue to have an impact on the automobile industry during the current year. The BMW Group will, however, grow profitably thanks to new models and the expected gradual global economic recovery in 2010. “We are heading into the new year cautiously optimistic. Our new models will provide us with a tailwind over the course of the year. We fully intend to remain the world’s leading provider of premium cars in 2010 and plan to increase sales within the single digit percentage range to over 1.3 million vehicles“, added Reithofer.
One of the most important model developments in 2010 is the new BMW 5 Series which will be launched at the end of March, thus providing further momentum from the beginning of the second quarter. The new BMW X1 and BMW 5 Series Gran Turismo models – both of which were very successfully launched at the end of 2009 – will also have a positive impact on sales performance in 2010. The MINI Countryman will be introduced onto the markets during the current year.
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Further information on the Group Financial Statements 2009 will be available at the Annual Accounts Press Conference to be held in Munich on 17 March 2010.
The BMW Group
With its three brands — BMW, MINI and Rolls-Royce – the BMW Group is one of the world’s most successful premium manufacturers of cars and motorcycles. It operates internationally with 24 production sites in 13 countries and a global sales network with representation in more than 140 countries.
During the financial year 2009, the BMW Group sold approximately 1.29 million cars and more than 87,000 motorcycles worldwide. The profit before tax for 2009 was euro 413 million, revenues totalled euro 50.68 billion. At 31.December 2009, the BMW Group had a workforce of approximately 96,000 employees.
Long-term thinking and responsible action have long been the foundation of the BMW Group’s success. Striving for ecological and social sustainability along the entire value-added chain, taking full responsibility for our products and giving an unequivocal commitment to preserving resources are prime objectives firmly embedded in our corporate strategies. For these reasons, the BMW Group has been sector leader in the Dow Jones Sustainability Indices for the last five years.