The BMW Group released its fiscal year 2019 results today, and successfully completed the set goals throughout the year. Among them, driven by the strongest product offensive in history, especially the continuous increase in the market share of large luxury cars, BMW Group’s annual sales exceeded 2.53 million vehicles for the first time, and its annual total revenue exceeded 100 billion euros for the first time.
“In the extremely challenging year of 2019, our profitability has gradually improved in each quarter, which confirms the correctness of our product strategy and the effectiveness of the company’s strategy.” BMW Group Chairman Zipse said, “We firmly believe in the company’s The ability to innovate, to be committed, to lead change, and to be ready for all changes when they first emerge. Now we’re going full steam ahead, and the time is right.”
In 2019, BMW’s core business grew against the trend, and its profitability improved steadily
The overall market environment in 2019 is challenging. Compared with 2018, in addition to the additional research and development expenditures for future travel in the early stage, the increasing proportion of electric vehicles has also correspondingly increased manufacturing costs. Reserves also have a negative impact and downward pressure on earnings.
Against the backdrop of a downturn in the overall auto market, the core business of the BMW Group has continued to grow against the trend. The Group’s profitability has steadily improved in each quarter of last year, demonstrating a strong ability to resist risks.
In 2019, BMW Group sales reached a new record, with a total of 2,538,367 deliveries, an increase of 2.2%. Among them, the delivery volume in the Chinese market exceeded 720,000 for the first time.
The group’s total revenue exceeded 100 billion for the first time, reaching 104.21 billion euros, an increase of 7.6%. Since 2016, under the guidance of the “New First Strategy”, the BMW Group has actively deployed the high-end segment of the high-end car market, and has launched a total of 8 new large luxury car products. In 2019, the gradual increase in sales of these products will bring a significant boost to the group’s total revenue.
Affected by the provision for EU antitrust litigation of 1.4 billion euros in the first quarter and the high level of early-stage research and development expenditures, the group’s profit before interest and taxes in 2019 was 7.411 billion euros. Changes in exchange rates and raw material prices also had an adverse effect on this. The annual pre-tax profit was 7.118 billion euros, the pre-tax profit rate was 6.8%, and the net profit was 5.022 billion euros.
According to the 2019 financial results, the BMW Group Board of Directors and the Supervisory Board will propose to shareholders at the annual general meeting on May 14, 2020, a dividend of 2.5 euros per share for ordinary shares and a dividend of 2.52 euros per share for preferred shares. The total amount of dividends is about 1.65 billion euros, accounting for 32.8% of net profit. “Winning the trust of our investors has always been a top priority for us. We hope that they, like our employees, will contribute to the company’s success,” said Dr. Peter, BMW Group Board Member responsible for corporate finance.
The BMW Group is adopting faster digital processes and a more streamlined architecture, shortening the development cycle of new models, and regularly evaluating and simplifying the model series to support the launch of more electric models. In addition, in the areas of indirect procurement as well as material and production costs, the BMW Group strengthens internal synergies and continuously improves efficiency.
Dr. Peter said: “Continued spending on future technologies such as electric mobility requires financial support. Therefore, we will continue to focus on business performance and efficiency, comprehensively improve financial strength and business performance by optimizing core businesses, and continue to promote a sustainable future mobility strategy.”
Steady growth in the automotive business, and the strategy for large luxury vehicles has shown results
In 2019, the automotive business revenue climbed to 91.682 billion euros, a year-on-year increase of 6.8%. Affected by the payment of provisions in the first quarter and the high early research and development expenses, the profit before interest and taxes was 4.499 billion euros. The EBIT margin was 4.9 percent; excluding the aforementioned provisions, the EBIT margin would have been 6.4 percent. Profit before tax was 4.467 billion euros. Although capital expenditures rose and net profit fell, the automotive business contributed 2.567 billion euros in free cash flow.
In 2019, BMW brand vehicles delivered a total of 2,185,793 vehicles to global customers, achieving a year-on-year growth of 3.3%. The launch of new models such as the BMW 8 Series has led to a particularly significant increase in the sales of large luxury cars, with an overall increase of about 75%, and a total of more than 100,000 vehicles were sold. Pure electric BMW i3 sold nearly 40,000 units, an increase of 13%.
The MINI brand is focused on achieving profitable growth in an extremely competitive market segment, with sales of 347,474 units in 2019. The plug-in hybrid MINI Cooper SE Countryman ALL4 model was a hit, with sales up around 28 percent to nearly 17,000 units.
The Rolls-Royce brand hit a record sales record in its 116-year history, with a total of 5,100 vehicles delivered worldwide, a year-on-year increase of 21.6%, and sales growth in all regions.
Sales volume of motorcycle business grew steadily throughout the year
BMW Motorrad achieved steady growth as scheduled in 2019, delivering a total of 175,162 motorcycles and large scooters to customers, a year-on-year increase of 5.8%. Motorcycle business revenue increased to 2.368 billion euros, a year-on-year increase of 9%. EBIT increased by 10.9 percent to 194 million euros. The EBIT margin was 8.2 percent, unchanged from the previous year and within the target range of 8 to 10 percent. Profit before tax was EUR 187 million, an increase of 10.7% compared to 2018.
Financial Services Business Maintained Steady Growth
In 2019, the financial services business of the BMW Group continued to perform well. In the past year, 2,003,782 new contracts were signed with retail customers, achieving a growth of 5%. The contracts for financing and leasing business of retail customers reached 5,973,682, a year-on-year increase of 4.7%. Operating income totaled 29.598 billion euros, an increase of 6.8%. Pre-tax profit reached 2.272 billion euros, an increase of 6% over the same period last year.
Annual sales in the Chinese market exceeded 720,000 vehicles
In 2019, the BMW Group sold a total of 724,733 BMW and MINI vehicles in the Chinese market, a year-on-year increase of 14%, ranking first among China’s high-end automakers. In the past year, the company’s “2+4” China strategy has presented a new pattern: BMW Brilliance’s Shenyang production base is undergoing comprehensive technological upgrades and expansions, and has built the world’s first automobile production base applying 5G technology; the beam car project has been successfully launched; Solid progress has been made in the fields of “new four modernizations”, especially in innovative fields such as autonomous driving, electric travel and interconnected services. In 2020, BMW will further expand its investment in China, “in China, for China, and for the world”, strengthen its brand and product strength, and continue to make efforts in the fields of digital customer experience and new energy vehicles.
