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Statement Oliver Zipse, Chairman of the Board of Management of BMW AG, Conference Call Quarterly Statement to 31 March 2024

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Ladies and Gentlemen,

The figures for the primary quarter of 2024 underline as soon as once more that: Our technique for long-term, worthwhile development is strong and efficient – particularly within the dynamic setting wherein we function.

These situations are the identical for all gamers inside our business. However, there are at present three distinct teams of economic actors, every with their very own strategy.

1. The newcomers: those who generate numerous hype with single merchandise. They usually have solely particular person technological highlights, reminiscent of most efficiency, the most important vary or the most important display screen. 
It stays to be seen whether or not the general package deal will meet excessive buyer expectations, particularly within the premium section, over your complete lifecycle.
Additionally, they face the problem of managing complexity as they scale up and develop. Market entry can be purchased with aggressive value positioning.

2. Then, there are the established producers, who’re making an attempt to repeat these new gamers’ strategy, however run the danger of shedding their very own identification.

3. And, lastly, there are a selection of producers who’re struggling to maintain tempo with change – and due to this fact stay entrenched of their conventional enterprise fashions.

In this aggressive house, the BMW Group continues to chart its personal, balanced course.

And we stay true to ourselves.

We analyse and anticipate each present and future developments with out prejudging the result. From this, we develop our strategic approaches. The capability to reply to market developments, buyer wants and new technological approaches is crucial.

This has earned us a number one place in e-mobility and, on the identical time, allowed us to take care of persistently excessive profitability, even in a risky setting.

For 9 quarters in a row, our EBIT margin within the Automotive Segment has been inside our goal vary of 8 – 10 % or increased, prefer it was within the first quarter of 2023. Walter Mertl already defined the explanations for this.

Our improvement efforts are centered on applied sciences that ship actual added worth for our clients. Decades of market expertise have taught us what our clients need all through your complete buyer journey. We use this information and our technological experience to create the right total idea.

This shouldn’t be straightforward to duplicate.

The BMW Group can be one of many few “true” world gamers within the automotive business. From manufacturing, to gross sales, to suppliers – we’re in a robust place in all main markets.

We have effectively established footprints in every area together with a local-for-local mindset.

This world strategy is our biggest power. It creates resilience, opens up alternatives and retains us versatile.

We are constructing on this to leverage our enterprise success – as we speak and sooner or later.

A take a look at world areas exhibits that markets and buyer demand proceed to develop in a extremely diversified means. Maintaining a presence in all main gross sales markets allows us to steadiness out these totally different developments.

Our distinctive BMW strategy permits us to reply flexibly to altering demand, particularly in terms of drive applied sciences.

But let me be fairly clear: We proceed to ramp up e-mobility at a quick tempo that our opponents can barely sustain with.

Just a number of weeks in the past, we hit an vital milestone: Since the market launch of the BMW i3, now we have delivered multiple million all-electric autos to clients. This confirms the attraction of our fully-electric product vary.

This can be backed up by our present figures within the Chinese BEV market. With development of greater than 18% in China within the first quarter, BMW outperformed each the full marketplace for electrical autos and the electrical premium section.

This means: We are gaining section share on the planet’s greatest e-mobility market.

However, our success in China is not only evident from the numbers. The BMW Group is held in excessive regard there as a “local player”.

I skilled this after I was a part of the enterprise delegation led by German Chancellor Olaf Scholz in April. And we had been additionally very happy that Premier Li Qiang took the time to go to the BMW Group stand at Auto China in Beijing.

We are assured about long-term financial prospects in China. We are due to this fact comprehensively making ready our three way partnership BBA’s manufacturing web site in Shenyang for future car fashions.

In late April, we signed a Memorandum of Understanding to this impact in Shenyang, for investments totalling round 2.5 billion euros.

Our extremely diversified electrical providing, throughout BMW, MINI and Rolls-Royce, is not only in demand in China, however worldwide.

With gross sales up by about 28 %, fully-electric autos as soon as once more made an vital contribution to the BMW Group’s gross sales development and earnings within the first quarter of 2024.

At Auto China, a number of weeks in the past, we offered two autos that may reinforce this pattern:

the all-new fully-electric MINI Aceman* and an replace to the electrical BMW i4*.

The BMW i4 comes straight from the guts of the BMW model and is a hit story in its personal proper. People love its mixture of e-drive, design and signature driving dynamics – all of the issues they affiliate with the BMW model.

More than 80,000 clients purchased a BMW i4 final 12 months – making it one of many best-selling BEVs in your complete premium section.

MINI can be persevering with on a path that’s simply as brand-authentic and fashionable.

The “New MINI Family” is an actual sport changer that reimagines the model’s distinctive British heritage in a completely new means for the long run.

The all-electric MINI Aceman brings recent impulses. With this newest addition, the New MINI Family now options three fashions that serve totally different segments and attraction to new buyer teams.

This will allow us to proceed and develop the MINI success story in our world markets.

Our development and financial success as we speak are laying a stable basis for the long run.

We are investing greater than ever in creating new merchandise, environment friendly applied sciences and automatic driving features, in addition to in digitalisation.

As the most important single funding within the historical past of the corporate, the NEUE KLASSE exhibits how we’re redefining the BMW model for the long run.

From design, to drive trains, to completely new types of digital interplay between human and machine – the NEUE KLASSE represents an enormous leap into the long run throughout nearly all fields of know-how.

All future BMW fashions will profit from this – no matter their drive know-how. In this fashion, we’re in a position to make sure that our clients at all times have the most recent know-how on board.

The NEUE KLASSE will begin out with a Sports Activity Vehicle and a sedan within the present 3 Series section.

We offered a glimpse of what this future will appear to be for BMW at our Annual Conference.

The BMW Vision Neue Klasse and the BMW Vision Neue Klasse X showcase each the consistency and the breadth of the NEUE KLASSE.
There is loads of room between the 2 autos for innovation and new fashions – and we intend to make use of it.

Ladies and Gentlemen,

The BMW Group is rising – regardless of the numerous totally different challenges we face. Even in instances of change, we ship optimistic monetary outcomes at a persistently excessive degree.

The course we’re charting as we speak will allow us to construct on this success sooner or later – throughout all our manufacturers and merchandise, with next-generation applied sciences and throughout the firm.

We are in a robust place globally and sustaining our management of the worldwide premium section.

We recognise that there are numerous new gamers seeking to achieve a foothold on this extremely engaging section – and, after all, we’re taking this very critically.

But this isn’t a one-way road. You might be certain of that: Every participant on this business, whether or not an formidable newcomer or a longtime producer, can be conserving a really shut eye on the BMW Group.

BMW

Statement Walter Mertl Member of the Board of Management of BMW AG, Finance, Conference Call Quarterly Statement to 31 March 2024

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Ladies and Gentlemen,

Good morning,

SLIDE 2: BMW Group Quarterly Statement to 31 March 2024

The BMW Group had a profitable begin into 2024.

Both gross sales and earnings for the primary quarter had been consistent with our expectations. This outcomes from the targeted implementation of our strategic priorities.

At the BMW Group, we’ve robust manufacturers and enticing merchandise, which create ongoing excessive demand and a worthwhile operational enterprise.

SLIDE 3: Highlights of BMW Group Performance in Q1 2024

In the primary three months, the BMW Group delivered slightly below 595,000 automobiles to clients. This is a slight enhance of 1.1 % over the identical interval of final yr.

Our all-electric automobiles, specifically, made an vital contribution, with development of 27.9 %.

If we have a look at the BMW model alone, that quantity was 40.6 %.

At the identical time, gross sales of fashions within the higher premium section additionally recorded important double-digit development of greater than 21 %.

The Group EBT margin for the primary quarter got here in at 11.4 %, which is above our strategic goal of 10 %.

The EBIT margin within the Automotive Segment was 8.8 %. This falls clearly inside our goal hall of 8 to 10 %.

Ladies and Gentlemen,

This quarter confirms as soon as once more that the BMW Group’s working enterprise persistently delivers robust outcomes.

We have a clearly outlined long-term plan. And we’ve important flexibility in our programs and processes. This permits us to adapt rapidly to developments and benefit from market alternatives.

On this foundation, we anticipate to function at a constant stage all through 2024.

SLIDE 4: BMW Group in Q1

Let’s check out the monetary figures for the primary quarter in additional element.

I’ll begin with a short overview at Group stage.

BMW Group revenues had been on par with the earlier yr.

Group earnings earlier than tax totalled round 4.2 billion euros, leading to a Group EBT margin of 11.4 %.

SLIDE 5: Automotive Retail Units, BEV Units, Auto Revenue and Auto EBIT

And now extra particulars on how the Automotive Segment carried out throughout key metrics.

In the primary three months, the BMW Group delivered 595,000 BMW, MINI and Rolls-Royce automobiles to clients.

The BMW model reported development of two.5 %.

Due to the upcoming mannequin changeovers MINI gross sales had been down 9.4 % from the earlier yr. The New MINI Family, comprising the Countryman*, the Cooper* and the Aceman*, will enhance MINI gross sales – notably within the second half of the yr.

This gross sales growth can also be mirrored in section revenues. Adjusted for forex translation results, revenues noticed a slight enhance of 1.5 %.

Both the upper gross sales quantity and optimistic product combine results from the higher worth section and BEV contributed to the rise in revenues in Q1 2024.

This is anticipated to offer a tailwind for revenues additionally within the the rest of 2024.

Furthermore, costs throughout the product portfolio are anticipated to be consistent with final yr’s stage.

The electrification of our product line-up continued to generate substantial gross sales momentum in the newest quarter.

Almost 83,000 fully-electric automobiles had been bought – or 13.9 % of our whole gross sales.

Taken collectively, BEV and plug-in hybrids accounted for about 21 % of whole gross sales within the first quarter.

EBIT for the interval from January to March was 2.7 billion euros, with an EBIT margin of 8.8 %.

This implies that the primary quarter of 2024 is consistent with the constant development in profitability for the reason that starting of 2022.

Q1 2023 was distinctive, as the results of inflation weren’t but absolutely mirrored within the working consequence.

I’ll present extra particulars on the Q1 year-on-year growth with the EBIT bridge.

SLIDE 6: Automotive Segment EBIT in Q1

Changes in commodity costs accounted for a optimistic influence of round 200 million euros. Currency results remained impartial.

For the complete yr 2024, we anticipate a optimistic internet steadiness from forex and commodity positions.

The internet steadiness of quantity, model-mix and pricing results is about 300 million euros decrease than for the primary quarter of 2023.

Increase in volumes made a slight optimistic contribution.

The double-digit development by fashions within the higher worth section virtually fully compensated the impact from the upper BEV share.

Starting with the second quarter of 2023, we started to see elevated competitors resulting from higher availability of automobiles available in the market. This led to a gradual softening of the worldwide worth setting for brand new and used vehicles, which has continued into the primary quarter of 2024.

For the complete yr 2024, we anticipate the online impact from quantity, combine and pricing to be barely optimistic, as deliberate.

We anticipate further momentum from fashions like the brand new BMW 5 Series, which is at present ramping up in markets throughout the globe. In China, it launched after the Lunar New Year vacation and has due to this fact solely been in showrooms for just a few weeks.

Full availability of the BMW 7 Series will even have a optimistic impact.

Moving on, we come to analysis and growth bills – which had been 200 million euros greater than within the prior-year first quarter.

Based on Group R&D expenditure, the R&D ratio in line with the German Commercial Code got here in at 5.4 %.

Our R&D actions stay targeted on the electrification and digitalisation of our complete car fleet. We are consistently growing enticing new fashions, just like the NEUE KLASSE or the subsequent era of the BMW X5.

Sales and administrative prices had been 100 million euros greater than the earlier yr. This is basically resulting from IT initiatives and the rise in personnel prices, which was carried out from the third quarter of 2023.

The headwind of 700 million euros from Other Cost Changes primarily outcomes from two areas.

The first is manufacturing prices.

Sales margins within the first quarter of 2023 nonetheless benefitted from a decrease stage of buying costs in 2022.

This led to a optimistic EBIT impact in Q1 2023 as inventories with decrease manufacturing prices had been bought.

Starting in Q2 2023, we noticed an elevation in prices that has carried by into Q1 2024.

Another purpose for the distinction in different price modifications is earnings from the resale of end-of-lease automobiles.

As anticipated, earnings was decrease than within the first quarter of 2023, but stays optimistic.

The normalisation we’ve been seeing within the used automobile market over the previous twelve to fifteen months has progressively continued.

SLIDE 7: Automotive Segment Free Cash Flow in Q1

Free cashflow within the Automotive Segment totalled about 1.3 billion euros within the first quarter of 2024.

The distinction to the primary quarter of 2023 primarily outcomes from the decrease EBT.

Inventory ranges rose through the first quarter, consistent with planning. This contributed to the change in working capital, which quantities to 1.2 billion euros.

The enhance in inventory will be certain that we are able to service the anticipated buyer demand.

The internet impact from capital expenditure and depreciation additionally decreased free money stream by 200 million euros.

Capital expenditure for January to March totalled round 1.3 billion euros. This was primarily allotted to new fashions and constructions, with a transparent give attention to electrification and digitalisation in addition to automated driving programs.

The capex ratio for the yr to the top of March was 3.6 %.

Changes in provisions and within the place different, resembling tax funds, had no internet influence on free money stream.

In the primary quarter of 2024, investments totalling 2.3 billion euros had been made into future fashions and improvements. Nevertheless, the Automotive section generated 1.3 billion euros in free cashflow.

For the complete yr, the BMW Group is focusing on a free cashflow above 6 billion euros within the Automotive section, regardless of the deliberate peak investments in R&D and capex in 2024.

The robust underlying free cashflow era helps our ongoing and constant shareholder return.

As a part of the share buyback program BMW AG has acquired shares equal to five.03 % of the share capital in place on March thirty first.

The second tranche of the second program with a quantity of 500 million euros is at present in progress and can be accomplished no later than June twenty eighth.

Currently we see no purpose to not proceed with tranche three instantly after conclusion of tranche two.

SLIDE 8: Financial Services Segment in Q1

In the Financial Services Segment, the optimistic development in new enterprise from the second half of 2023 continued by the primary three months of 2024.

The variety of new contracts concluded with retail clients elevated considerably by 21.5 % year-on-year to achieve 422,000 contracts. Financing for each new and used automobiles contributed to this development.

In line with this, the amount of recent enterprise grew by 22.1 % to only over 15.6 billion euros.

Segment earnings for the primary quarter amounted to 730 million euros – a lower of 215 million from the earlier yr.

This might be attributed each to greater credit score threat provisioning and the normalisation of earnings from the resale of lease returns.

The credit score loss ratio throughout the whole mortgage portfolio remained at a low charge of 0.21 %.

SLIDE 9: Motorcycles Segment in Q1

In the Motorcycles Segment, first-quarter deliveries decreased barely by 3.1 % year-on-year.

EBIT for the yr to the top of March totalled 106 million euros, with an EBIT margin of 12.2 %.

SLIDE 10: Outlook 2024

Ladies and Gentlemen,

After a profitable first quarter, we anticipate the stable enterprise efficiency to proceed all year long 2024.

Therefore, our steering for key efficiency indicators stays unchanged.

This is predicated on the belief that geopolitical and macroeconomic situations don’t deteriorate.

Group earnings earlier than tax are projected to lower barely.

In the Automotive Segment, we’re planning for slight year-on-year gross sales development – with the proportion of all-electric automobiles set to extend considerably.

We anticipate to see an EBIT margin of between 8 and 10 % and a Return on Capital Employed (RoCE) of between 15 and 20 %.

Sales ought to be barely greater within the Motorcycles Segment, too. The section’s EBIT margin ought to are available in at between 8 and 10 % and Return on Capital Employed (RoCE) ought to be between 21 and 26 %.

In the Financial Services Segment, we’re focusing on a Return on Equity (RoE) within the vary of 14 to 17 % for the complete yr.

SLIDE 11: BMW Group with Consistent Performance

Ladies and Gentlemen,

The BMW Group combines a strong monetary efficiency in its present enterprise with a long-term perspective for the longer term.

We have a spread of extremely enticing merchandise available in the market and we’re repeatedly growing new fashions that can set the usual for driving expertise, digitalisation and connectivity.

As deliberate for and beforehand introduced, our analysis and growth spending, and our capital expenditure, will respectively peak in 2024.

We anticipate our R&D ratio for the complete yr to be above 5 %, and the capex ratio above 6 %.

Our underlying profitability permits us to finance these investments sooner or later and on the identical time yield enticing returns to our shareholders.

We proceed to steer the corporate consistent with our strategic priorities. And we ship what we promise.

Our flexibility permits us to rapidly adapt to market fluctuations and to satisfy buyer demand throughout the globe.

This ensures that we capitalize on market developments and ship robust outcomes by constant execution.

Thank you.

BMW

Statement and Presentation Walter Mertl, Member of the Board of Management of BMW AG, Finance, BMW Group Annual Conference 2024

Ladies and Gentlemen,

Good morning!

2023 was one other profitable 12 months for the BMW Group. We delivered sturdy ends in the present enterprise, whereas securing our future viability by means of focused investments.

Strong demand for our enticing merchandise, higher availability of autos and an easing of the availability state of affairs led to a constructive quantity improvement. After the midway mark within the 12 months, we accordingly raised our steerage for each deliveries and EBIT margin within the Automotive Segment.

Thanks to our disciplined administration of the enterprise, we delivered but once more on all our targets. I’ll now take you thru our outcomes. 

SLIDE 3: BMW Group with Strong Performance and Solid Sales improve

For the complete 12 months, we delivered 2.55 million autos worldwide, which is 6.4% over 2022. We achieved vital development with our all-electric autos. Deliveries reached greater than 375,000 models, or roughly 15% of whole gross sales.

At 9.8%, the EBIT margin within the Automotive Segment was nicely inside the elevated hall of 9.0 to 10.5%. Excluding depreciation and amortisation for BBA belongings from the acquisition worth allocation of 1.4 billion euros, the EBIT margin was 10.8%.

The Group EBT margin of 11% exceeded our strategic goal of 10%.

We additionally continued to cut back CO2 emissions in our European fleet. With 102.1 grams per kilometer, we had been 26.4 grams – in different phrases 20.5% – beneath the goal set by the European Union.

SLIDE 4: BMW Group full-year 2023

At Group stage, our revenues reached 155.5 billion euros, which is 9% larger than 2022. Adjusted for forex translation results, revenues elevated by 13.1%. The improve was pushed by the upper supply volumes and constructive product combine results.

In 2023, our earnings earlier than tax at Group stage amounted to 17.1 billion euros. It is necessary to notice that Group earnings in 2022 of 23.5 billion euros included a one-off revenue of seven.7 billion euros. This was as a consequence of a technical accounting impact associated to BBA full consolidation, particularly the revaluation of our current fairness pursuits. Without this impact, Group earnings in 2023 had been 1.3 billion euros or 8% above 2022.

This additionally interprets by means of to earnings per share, that had been at 15.7 euros in 2022, excluding the one-off revenue from BBA. In 2023, earnings per share of 17.7 euros had been 12.8% above the earlier 12 months.

That brings me to the outcomes of the person segments.

I’ll begin with the Automotive Segment.

SLIDE 5: Automotive Retail Units, BEV Units, Auto 

Revenue and Auto EBIT

The BMW Group delivered 2.55 million autos to clients worldwide in 2023. This corresponds to strong development of 6.4% – according to our elevated steerage. Momentum got here specifically from fashions within the higher worth section, such because the BMW 7 Series, X7, and Ix*, in addition to from the all-new BMW X1.

Our all-electric autos proceed to be a key development driver.

In 2023, BEVs made up virtually 15% of our whole gross sales.

We additionally delivered over 190,000 plug-in hybrid autos. In whole, electrified autos due to this fact accounted for over 22% of gross sales through the 12 months. 

Revenues for the Automotive section totaled 132.3 billion euros. This quantities to a 7% improve year-on-year.

At virtually 13 billion euros, the section’s working consequence was over 20% larger than 2022. This resulted in an EBIT margin of 9.8%. This is each on the larger finish of our long-term strategic goal hall of 8-10%, and nicely inside the elevated goal hall of 9.0-10.5% for the 12 months 2023.

SLIDE 6: Automotive Segment EBIT full-year 2023

Looking on the working lead to element, the rise in Automotive EBIT benefited from a web impact of quantity, mannequin combine and pricing, yielding a tailwind of two.4 billion euros. This was primarily pushed by the upper quantity and better share of high finish autos, together with BMW M fashions, which compensated for the upper BEV share. As anticipated, we noticed some worth normalization within the new automotive and used automotive markets by means of the top of the 12 months.

Compared to 2022, we see that EBIT in 2023 was impacted by 600 million euros from the online stability of forex and uncooked materials positions. This distinction is principally as a consequence of forex results from the event of the Chinese renminbi and US greenback. Given decrease uncooked materials costs by means of the top of the 12 months, we noticed a slight tailwind in comparison with 2022. However, this was overcompensated by headwinds from elevated provider funds.

SLIDE 7: R&D Expenditure in full-year 2023

As deliberate, analysis and improvement expenditure rose considerably to 7.8 billion euros, virtually 600 million euros larger than the earlier 12 months. The R&D ratio for the 12 months got here in at 5.0%. Due to larger revenues, this is similar stage as 2022, though general spending elevated year-on-year.

Expenditure for R&D primarily targeted on three areas: the electrification and digitalization of the fleet; automated driving capabilities; and expenditure for brand new fashions.

Due to larger bills, largely for IT tasks, promoting & administrative bills elevated by about 400 million euros.

The place “Other cost changes” displays, amongst others, larger materials prices, as talked about at Q3, in addition to decrease residual worth income than the earlier 12 months. In 2022, a detrimental one-off affect of 1.8 billion euros was as a consequence of results associated to the first-time consolidation of BBA.

SLIDES 8 & 9: Automotive Segment Free Cash Flow full-year 2023

Moving on to the free cashflow outcomes for 2023.

At year-end, free money move within the Automotive Segment reached 6.9 billion euros. It must be famous that free cashflow within the earlier 12 months included a constructive impact of over 5 billion euros in web money acquired from BBA. Without this impact, our free money move in 2023 was virtually 900 million euros larger year-on-year, or a rise of 13%.

The change in working capital of two.7 billion euros primarily displays the rise in inventories to keep up inventory ranges in markets worldwide.  This ensured we now have enough provide, together with for brand new fashions, to fulfill the sturdy world market demand getting into the brand new 12 months.

SLIDE 10: Capital Expenditure full-year 2023

Capital expenditure for the 12 months totaled 8.8 billion euros. Our investments in 2023 primarily targeted on the fifth and sixth technology battery cell expertise, digitalization of merchandise and processes, and automobile tasks. In addition, we invested in building of our crops, for instance in Debrecen, Hungary, the place we are going to launch the NEUE KLASSE subsequent 12 months.

The capex ratio for the 12 months was 5.7%.

Changes in provisions had a constructive affect on free cashflow of 1.5 billion euros.

The place “other items” displays primarily tax funds.

SLIDE 11: Financial Services Segment full-year 2023

That brings me to our Financial Services section, a key enabler for our enterprise.

Financial Services is already an integral a part of the client journey, and can develop into much more necessary with the rollout of our direct company gross sales mannequin.

In 2023, the variety of new financing and leasing contracts concluded with retail clients got here in on the similar stage because the earlier 12 months with 1.5 million new contracts. This is a really strong consequence, contemplating the enterprise atmosphere with elevated rates of interest and a extremely aggressive panorama.

Business developed positively quarter for quarter. While new contracts with finish clients had been down 20% in Q1 year-on-year, in This fall contracts had been up by 17%.

The share of latest BMW Group autos both leased or financed

by the Financial Services section stood at 38.2% in 2023.

Average financing quantity per automobile elevated, as a consequence of an improved product combine within the automotive enterprise. Overall, new enterprise quantity elevated by 3.4% to 57.3 billion euros.

Segment earnings earlier than tax amounted to 2.96 billion euros. The lower displays primarily two components: larger refinancing prices as a consequence of rising rates of interest, in addition to the general declining contract portfolio.

Revenues from the resale of end-of-lease autos remained at a excessive stage, however had been decrease than earlier 12 months as used automotive costs began to normalize. We count on this pattern to proceed in 2024, resulting in a decrease consequence from off-lease autos.

At 0.18%, the credit score loss ratio remained at low stage.

After growing the goal vary for the 12 months to between 16 and 19 % in August, Return on Equity reached 17.2% for the full-year.

SLIDE 12: Motorcycles Segment full-year 2023

That brings me to the Motorcycles section.

In its a hundredth anniversary 12 months, the BMW Motorrad model achieved file deliveries, with over 209,000 models. An spectacular accomplishment!

All main gross sales areas noticed development in 2023, with explicit momentum coming from Europe with 4.7% and China with 2.8%.

The EBIT margin for the section reached 8.1%.

At 259 million euros, the section’s working consequence was on the similar stage as 2022.

SLIDE 13: Other Entities Segment / Eliminations full-year 2023

Finally, you see the mixed consequence from the Other Entities Segment and intersegment eliminations.

“Other Entities” recorded a loss in earnings earlier than tax of 100 million euros. The lower in comparison with 2022 was primarily pushed by detrimental honest worth measurement results on rate of interest hedging transactions.

Consolidations elevated in earnings earlier than tax to 1.3 billion euros. Lower eliminations related to the leasing enterprise had a constructive impact in comparison with the earlier 12 months.

SLIDE 14: Dividend and Increased Pay-out Ratio

Ladies and Gentlemen,

At the BMW Group, we stay targeted on making certain that our shareholders profit from the corporate’s success.

The Board of Management and the Supervisory Board will due to this fact suggest a dividend of 6.00 euros per share of frequent inventory and 6.02 euros per share of most well-liked inventory to the Annual General Meeting. This ends in a complete dividend payout of roughly 3.8 billion euros. The larger dividend payout and earnings per share in 2022 mirrored appreciable one-off results from the consolidation of BBA in our Group revenue. Adjusted for the one-off impact, the dividend in addition to earnings per share are larger in 2023.

The proposed dividend for 2023 represents a pay-out ratio of 33.7%. This is inside our long-term strategic goal vary of 30-40% and likewise notably larger than the payout ratio in 2022.

At the top of June 2023, we efficiently concluded the primary program of our share buyback at 2 billion euros, which was accepted on the Annual General Meeting in May 2022. On July third final 12 months, we launched the second program of as much as 2 billion euros, with the primary tranche concluding on December thirty first. In whole, 1.2 billion euros in share buyback had been accomplished in 2023. The second tranche, with a quantity of 500 million euros, began on January 2nd, and can be carried out by June 28, 2024, on the newest. The second share buyback program can be accomplished by December 31, 2025 on the newest.

Taking the proposed dividend and final 12 months’s share buyback collectively, the whole payout of 5 billion euros represents 92% of Auto free cashflow out there to BMW AG shareholders.

This underscores the monetary power and sturdy cashflow generated by our operations, which helps optimum shareholder return.

Moving on from 2023, what are we anticipating in 2024?

In the Automotive section, we count on slight development in volumes, pushed by our younger and enticing product portfolio. Specifically, we should always see vital development of our BEV share in addition to a double-digit development within the higher section.

We anticipate a rise in materials prices and provider funds. However, this must be offset by a web tailwind from FX and commodities. The web affect of quantity, combine and worth must be barely constructive, and we are going to take our disciplined method ahead into 2024. At similar time, decrease income from off-lease autos will weigh on Auto EBIT.

SLIDE 15: CapEx and R&D Ratios 2024

In 2024, we are going to hit our capex and R&D peak, as deliberate and communicated.

The continued implementation of our electrification and digitalization technique will result in higher analysis and improvement prices. Expenditure associated to the NEUE KLASSE, such because the additional improvement of the sixth-generation battery expertise and preparations within the manufacturing community, will even affect the Group’s earnings and ends in higher capital expenditure.

For the present monetary 12 months, we due to this fact count on a capex ratio above 6% and an R&D ratio above 5%. After 2024, each ratios will steadily return to our strategic corridors, which stay unchanged. For Capex: which means lower than 5%. And for the R&D ratio: between 4 and 5 %.

Despite the numerous funding in future applied sciences, we are going to generate above 6 billion euros in Automotive free cashflow in 2024.

Financial companies will profit from the upper auto gross sales and stabilization of the rate of interest atmosphere. However, a decline in used-car values will negatively affect the consequence. And, given the upper lease penetration fee, we are going to see a decrease eliminations consequence.

SLIDE 16: Outlook 2024

What will we count on for our key efficiency indicators in 2024?

In the Automotive Segment, deliveries of BMW, MINI and Rolls-Royce model autos are anticipated to rise barely year-on-year. The section’s EBIT margin ought to fall inside our strategic goal hall of 8 to 10 %. The share of all-electric autos relative to whole deliveries is anticipated to extend considerably in comparison with 2023.

In the Motorcycles Segment, deliveries are anticipated to extend barely, with an EBIT margin inside our goal vary of 8 to 10 %.

Return on Equity within the Financial Services section is forecast to land between 14% and 17%.

As anticipated, provide and demand proceed to normalize for brand new and used vehicles. It is due to this fact anticipated that revenues from remarketing lease returns can be decrease than 2023.

For the Group’s pre-tax revenue, we count on a slight lower. This is due primarily to the excessive stage of bills for analysis and improvement and capital expenditure, as outlined earlier than. The lower within the monetary companies enterprise will even contribute to the slight lower in Group revenue earlier than tax.

The Group’s headcount is forecast to extend barely.

Ladies and Gentlemen,

At the BMW Group, our sturdy manufacturers and enticing merchandise have lengthy fashioned the muse for our success – and can proceed to take action sooner or later. We allocate our capital in investments effectively, according to our long-term technique. At the identical time, we stay targeted on price self-discipline and profitability.

Our strategic perspective offers us readability on our constant path going ahead, whereas our operational excellence secures our future aggressive benefit and the general well being of the enterprise. Our excessive flexibility permits us to fulfill market demand and constantly ship on targets. And in 2023, it underpinned our worthwhile development. The improve in our BEV gross sales to virtually 15% put us in a robust place to overachieve the CO2 targets. We additionally recorded development within the higher section, leading to a balanced and worthwhile combine.

As you realize, our trade is understood for its excessive complexity, for lengthy life-cycles, and for powerful regulatory necessities, that are ever-increasing. That is why our planning horizon all the time spans a number of years. As the Vision NEUE KLASSE X proves, our technique ensures that we anticipate traits within the trade to stay forward.

We are absolutely dedicated to ship on our long-term strategic goal of an 8-10% EBIT margin yearly.

And we ship what we promise. We have the best product line-up and the flexibleness to fulfill buyer wants throughout the globe. And our product providing is rising.

We will due to this fact proceed with our worthwhile development and likewise fulfill our targets, assuming market situations stay secure. As everybody has seen within the BEV market in China, this isn’t all the time a given. At the BMW Group, we are going to keep our balanced steering of a number of particular person goals to attain all of our strategic priorities.

Our sturdy efficiency at this time is paving our highway to tomorrow’s continued success. We stay assured concerning the 2024 monetary 12 months and past.

And now it’s time to listen to from Oliver once more: he’ll present you what we now have within the pipeline throughout all manufacturers to drive our success within the coming years.

BMW

Statement by Oliver Zipse, Chairman of the Board of Management of BMW AG, Conference Call Quarterly Statement to 30 September 2023

– Check against delivery –

Good day, everyone.

Before I discuss current developments, I want to address the recent change in the Board of Management of BMW AG.

As you all know, Jochen Goller was appointed to the Board of Management, effective November 1st. Jochen Goller has had various roles in China and the UK and has successfully managed our activities in China since 2018 as head of the MINI brand.

Meanwhile, Sean Green, previously Senior Vice President of Sales and Marketing at our BBA joint venture, will now be responsible for our business in China.

Jochen Goller takes over for Pieter Nota, who led our Customer, Brands and Sales Board division since 2018.

Under Pieter Nota’s leadership, the BMW Group significantly increased its global market share. During this time, the BMW brand also regained its position at the top of the premium segment and expanded it further.

I would like to express my sincere thanks to Pieter Nota and wish Jochen Goller the best as he begins his new role.

I recently returned from a trip to Asia, where I visited Beijing and attended the Japan Mobility Show in Tokyo. This trip reaffirmed that there is no one-size-fits-all solution for today’s and tomorrow’s mobility. Our world is diverse, and we need different technological solutions to meet customer needs and comply with various regulatory requirements worldwide.

In China, electric vehicles dominate, although plug-in hybrids and hydrogen fuel cell vehicles also play a role in decarbonizing mobility. For example, a significant number of taxis in Beijing already run on hydrogen.

In the third quarter of this year, we experienced business growth worldwide, thanks to our wide range of premium vehicles across all drive technologies.

In China, pure electric vehicles performed exceptionally well, with sales more than tripling in the first nine months compared to the same period last year.

In Japan, the demand for all-electric cars is still relatively low, with more focus on plug-in hybrids and combustion engine cars. However, Japanese manufacturers, especially, are stepping up their efforts in the electric vehicle market, as seen at the Japan Mobility Show with their concept cars and fully-electric options.

Japan has recognized the importance of hydrogen early on, and our BMW iX5 Hydrogen pilot vehicle has been well received there.

As a global premium manufacturer, the BMW Group remains committed to technology-driven decarbonization of mobility. Our strong sales and financial figures are evidence of this, and we will continue on this path in the future. We recently presented the all-electric iX2 as the latest example of our commitment, alongside the BMW X2.

The iX2 is a digital champion, featuring the new BMW Operating System 9, which provides a comprehensive range of digital features and functions, including gaming and streaming capabilities. These features, such as optimized touch controls and integrated voice control, provide our customers with a unique digital experience in their cars.

In early next year, we will continue our rollout of new all-electric products with the world premiere of the new BMW 5 Series Touring. This model will offer the same drivetrain options as the sedan, including the all-electric i5 Touring, giving us a distinct advantage in a popular segment, especially in Europe.

Our goal remains to have more than half of our global sales from all-electric cars well before 2030.

To achieve this, we are further expanding our leading role in battery cell technology. Our competence center in Parsdorf near Munich is laying the technological foundations for efficient and resource-saving battery cell production, and we are sharing this knowledge with our suppliers to set benchmarks in production, quality, performance, cost, and ecological impact.

Recently, we inaugurated the competence center in Parsdorf, where sample production of the sixth-generation round cells has begun. These cells have up to 20% higher energy density and up to 60% reduced CO2 footprint in cell production. This translates to benefits for our customers, such as up to 30% faster charging speed and up to 30% higher range according to WLTP.

Following our “local-for-local” principle, we are also ensuring that high-voltage battery assembly takes place near our vehicle plants to secure our production and reduce the carbon footprint. Production facilities for the sixth generation of BMW high-voltage batteries are being built in Debrecen, Hungary; Woodruff, South Carolina, in the US; San Luis Potosí, Mexico; and Shenyang, China. We are also planning a high-voltage battery assembly site in Irlbach-Straßkirchen to supply our vehicle production in Bavaria, which received majority support in a recent referendum to continue the planning process.

In terms of future products, we provided a preview of the NEUE KLASSE at the IAA MOBILITY in September. The BMW VISION Neue Klasse represents a new approach to individual mobility that is more human, intelligent, and responsible. For example, the materials used in the NEUE KLASSE will help reduce its carbon footprint, and it features the Panoramic Vision Display, providing a unique experience for all passengers.

The NEUE KLASSE is not just another BMW car; it is a new generation of products. Within 24 months, we will release six models, from SAVs to sedans, all powered by electric drivetrains.

MINI is also undergoing a complete electrification transformation, with plans to be fully electric by 2030. At the IAA MOBILITY, we showcased two key members of the new MINI family: the MINI Cooper 3-Door and the MINI Countryman. The next fully-electric MINI, the MINI Aceman, is set to make its world premiere in April 2024 in the premium-compact car segment. The new MINI family is produced by our Chinese joint-venture partner, Spotlight, as well as in our plants in Leipzig and Oxford.

Rolls-Royce, our second British brand, is also transitioning to exclusive electric models by the early 2030s. Preparations for the sales launch of the first electric Rolls-Royce are underway, with the Spectre scheduled for release by the end of the year. Torsten Müller-Ötvös, who has led Rolls-Royce since 2010, will retire, and Chris Brownridge will take over as the new leader.

In the realm of BMW Motorrad, we recently celebrated the brand’s centenary with German Chancellor Olaf Scholz. Under Markus Schramm’s leadership, BMW Motorrad expanded its product range, entered new markets, and achieved record-breaking years. Markus Flasch has taken over as the new leader, bringing his experience from BMW M GmbH and the mid-size and luxury class and Rolls-Royce product line.

While we continue to expand and refine our product range, digitalizing the customer interface is a top priority. Our new direct sales model for MINI will soon launch in Europe, following a successful rollout in China. This model offers full price transparency and seamless integration of online and offline consulting options for customers. It also provides an attractive business model for our retailers, and our European retailers have already signed contracts. This direct sales model gives the BMW Group direct access to customers, allowing us to curate an entirely new customer experience, exemplified by our “Proactive Care” service, which uses data analytics and AI to detect potential vehicle problems proactively.

In conclusion, the BMW Group’s strategic approach is continuing to yield success in 2023. Our diversified position, with a broad product portfolio and global production sites, is reinforced by recent recognition from TIME magazine and Statista, where we ranked in the top ten of the world’s top 750 companies and were the highest-rated automotive manufacturer worldwide. Internally, our Employee Survey reaffirmed the positive mood within the company, with our employees expressing pride in working for the BMW Group and supporting our goals.

Thank you.

BMW

South Korea hosts BMW Ladies Championship with top women’s golfers

The BMW Ladies Championship, taking place from 19th to 22nd October 2023 at Seowon Valley Country Club in South Korea, will feature an elite field of women golfers. Nelly Korda from the USA will be making her first appearance at this tournament, adding to the excitement. In addition, BMW will provide two fully electric hole-in-one cars as prizes.

The BMW Ladies Championship marks an important stage in the Ladies Professional Golf Association (LPGA) Tour. It is the starting point for the final phase of the season, which concludes with the CME Group Tour Championship in Florida, USA, at the end of November.

Lydia Ko, a New Zealander who was born in South Korea, is the defending champion. Last year, she won the tournament with an impressive final round score of 65 at Oak Valley Country Club. This year, she will be competing just a few kilometers from her birthplace in Seoul. However, Ko will face tough competition as the field for this year’s championship is exceptionally strong.

The tournament will feature eight of the top ten players on the LPGA ranking list known as the “Race to the CME Globe.” Additionally, all four major winners from 2023 – Lilia Vu (USA), Yin Rouning (CHN), Allisen Corpuz (USA), and Celine Boutier (FRA) – will be participating. The field also includes eight out of the twelve players who won the prestigious Solheim Cup for Europe in September in Malaga, Spain.

Nelly Korda, the 25-year-old daughter of former tennis player Petr Korda, will also be making her debut at the BMW Ladies Championship. Korda won the gold medal at the Tokyo Olympics in 2021, adding to the tournament’s high level of competition.

Similar to last year, there will be no cut at the BMW Ladies Championship, meaning all 78 players will receive prize money and earn points towards the “Race to the CME Globe.” These points are crucial as players aim to secure one of the 60 spots at the season finale and position themselves for a chance to win the season overall. Currently, Celine Boutier is leading the ranking list, with Esther Henseleit as the highest-ranked German player in 41st place.

Aside from playing for a share of the $2.2 million prize money, the golfers will also have an opportunity to win hole-in-one cars provided by BMW. If a player achieves a hole-in-one on the 14th hole, they will receive a BMW i5, while a BMW i7 awaits the first player to achieve a hole-in-one on the 16th hole. Last year, history was made when both hole-in-one prizes were won on the same day during the third round, a first in BMW’s long history of involvement in international golf.

The BMW Ladies Championship made its debut in 2019 at LPGA International Busan and returned to the same venue two years later. Last year, the tournament took place at Oak Valley Country Club. This year’s championship will be held at Seowon Valley Country Club, located roughly an hour’s drive from Seoul. The golf course layout, specifically the West and South Courses, has been redesigned by renowned golf course architect David Dale to provide a more dynamic, challenging, and tactical experience, including the addition of 86 new bunkers.