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Slide 2: BMW Group Quarterly Statement up to September 30, 2023
Good morning, ladies and gentlemen!
Slide 3: Highlights of BMW Group Performance in Q3 and YTD September
The BMW Group had a strong performance in the third quarter with solid sales growth and positive financial key figures.
In the third quarter, the Group’s EBT margin was 10.6%, and for the nine-month period from January to September, it was 11.9% – surpassing the strategic target of 10%.
The Automotive Segment’s EBIT margin was 9.8% for the third quarter and 10.3% for the year up to September. Without depreciation of BBA assets, the margins were 10.8% for Q3 and 11.4% for nine months.
After a successful third quarter, the BMW Group expects a positive business development in the fourth quarter. All segments are on track to meet their goals for the year.
Now, let’s take a closer look at the business figures for the third quarter and the first nine months.
Slide 4: BMW Group in Q3
Starting with the Group figures, the earnings before tax for the third quarter were consistent with last year, at just under 4.1 billion euros. The year-to-date pre-tax earnings decreased by about 6.8 billion euros, but this includes a one-time income from the revaluation of equity interests in BBA last year. Looking at the underlying operating result, Group earnings were 900 million euros higher year-on-year in the first nine months.
Slide 5: Automotive Retail units, BEV units, Auto revenue and Auto EBIT
Now, let’s focus on the Automotive Segment. In the third quarter of 2023, the BMW Group delivered just under 622,000 vehicles to customers, a 5.8% increase compared to the previous year. Year to date September, deliveries rose 5.1% to around 1.84 million vehicles.
The order books are filled, and new models like the BMW 5 Series will contribute to future sales growth. The BMW Group sold around 94,000 all-electric vehicles in Q3 and just under 247,000 for the nine-month period. The share of battery-electric vehicles in total sales continues to grow, reaching 15.1% in Q3. The sales of all-electric vehicles are expected to receive a further boost from the launch of the new BMW i5 in the fourth quarter.
The Automotive Segment’s operating result for the third quarter was just over 3.1 billion euros, with an EBIT margin of 9.8%. Year to date September, the EBIT margin was 10.3%.
Slide 6: Automotive Segment EBIT in Q3
Looking at the Automotive Segment’s operating result in more detail, the year-on-year comparison shows that Q3 2023 was impacted by currency and raw material positions, mainly due to currency translation effects from the Chinese renminbi. Higher vehicle sales, favorable model mix, and pricing effects contributed to a tailwind. Research and development expenses increased, reflecting investments in electrification, digitalization, and new models. Sales and administrative costs also increased, partly due to digitalization projects. Other cost changes included material and logistics costs.
Slide 7: Automotive Segment Free Cash Flow in Q3
Free cash flow in the Automotive Segment was 2.6 billion euros in the third quarter. The strong quarterly result and change in working capital contributed to this figure. Capital expenditure and depreciation had a negative impact, while changes in provisions and other items boosted free cash flow. At the end of September, free cash flow stood at around 5.8 billion euros. In the fourth quarter, there will be a significant increase in capital expenditure, and costs and higher tax payments will weigh on free cash flow.
Slide 8: Financial Services Segment YTD September
In the Financial Services Segment, new financing and leasing contracts with retail customers decreased by 5.6% year to date September, mainly due to higher interest rates. However, new business in financial services showed a positive trend in Q3, with contracts with end customers rising by 5.7% compared to Q3 2022. Segment earnings before tax decreased by 8.3%, reflecting higher refinancing costs and a smaller total portfolio size.
Slide 9: Motorcycles Segment in Q3
In the Motorcycles Segment, sales in the third quarter were on par with the high level of Q3 2022. The EBIT margin for the quarter was -0.6%, and for the first nine months, it was 12.0%.
Slide 10: Outlook 2023
The BMW Group expects stable business development for the rest of the year and confirms its guidance for the financial year 2023 for all segments, assuming geopolitical and macroeconomic conditions do not significantly deteriorate. In the Automotive Segment, a solid increase in deliveries is planned, with an EBIT margin between 9 and 10.5% and a Return on Capital Employed (RoCE) between 18 and 22%. The Motorcycles Segment is projected to report higher sales, with an EBIT margin between 8 and 10% and a RoCE between 21 and 26%. The Financial Services Segment aims for a Return on Equity (RoE) between 16 and 19% for the full year.
Slide 11: BMW Group performs as it transforms
The BMW Group’s third-quarter results showcase its performance capabilities. With an attractive product portfolio and a long-term strategy, the Group remains cautiously optimistic about the future. Continuous profitable growth and disciplined cost management support the BMW Group’s business success and investments in emission-free mobility. The Group’s financial strength allows it to shape its own future and create value.