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.
