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Bayerische Motoren Werke AG
Quarterly Report • Nov 6, 2019
50_10-q_2019-11-06_603bef4c-edd1-4c15-ae61-00868e4cd8fd.pdf
Quarterly Report
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QUARTERLY STATEMENT
30 September 2019
CONTENTS
1 BMW GROUP AT A GLANCE
Page 4 BMW Group in Figures
2 INTERIM GROUP MANAGEMENT REPORT
Page 9 Report on Economic Position Page 9 General Economic Environment Page 10 Group Overview Page 12 Automotive Segment Page 18 Financial Services Segment Page 20 Report on Outlook, Risks and Opportunities Page 20 Outlook Page 22 Risks and Opportunities
3 INTERIM GROUP FINANCIAL STATEMENTS
- Page 24 Income Statement
- Page 28 Balance Sheet
- Page 30 Cash Flow Statement
4 OTHER INFORMATION
Page 33 Contacts
BMW GROUP AT A GLANCE
Page 4 BMW Group in Figures
1
BMW Group at a Glance
BMW Group in Figures
BMW GROUP IN FIGURES
Key performance indicators reported during the year
• 01
| 3rd quarter 2019 | 3rd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| Group | ||||
| Profit before tax1 | € million | 2,248 | 1,822 | 23.4 |
| Automotive segment | ||||
| Deliveries2 | units | 613,361 | 592,303 | 3.6 |
| EBIT margin3 | % (change in %pts) | 6.6 | 4.4 | 2.2 |
| Motorcycles segment | ||||
| Deliveries | units | 43,744 | 39,818 | 9.9 |
| EBIT margin3 | % (change in %pts) | 6.3 | 6.9 | – 0.6 |
1 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 126,878 units, 2018: 113,582 units).
3 Profit before financial result as percentage of segment revenues.
Further performance figures
• 02
| 3rd quarter 2019 | 3rd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| Automotive segment | ||||
| Deliveries | ||||
| BMW1 | units | 525,438 | 506,920 | 3.7 |
| MINI | units | 86,680 | 84,505 | 2.6 |
| Rolls-Royce | units | 1,243 | 878 | 41.6 |
| Total1 | 613,361 | 592,303 | 3.6 | |
| Production volume | ||||
| Total2 | 630,757 | 617,082 | 2.2 | |
| Financial Services segment | ||||
| New contracts with retail customers | 504,217 | 490,347 | 2.8 | |
| Free cash flow Automotive segment | € million | 714 | 98 | – |
| Group revenues3 | € million | 26,667 | 24,715 | 7.9 |
| Automotive | € million | 23,016 | 21,111 | 9.0 |
| Motorcycles | € million | 558 | 476 | 17.2 |
| Financial Services3 | € million | 7,471 | 7,219 | 3.5 |
| Other Entities | € million | 1 | 1 | – |
| Eliminations3 | € million | – 4,379 | – 4,092 | – 7.0 |
| Group profit before financial result (EBIT)3 | € million | 2,289 | 1,722 | 32.9 |
| Automotive | € million | 1,515 | 930 | 62.9 |
| Motorcycles | € million | 35 | 33 | 6.1 |
| Financial Services3 | € million | 606 | 528 | 14.8 |
| Other Entities | € million | 1 | 6 | – 83.3 |
| Eliminations3 | € million | 132 | 225 | – 41.3 |
| Group profit before tax (EBT)3 | € million | 2,248 | 1,822 | 23.4 |
| Automotive | € million | 1,533 | 1,003 | 52.8 |
| Motorcycles | € million | 35 | 31 | 12.9 |
| Financial Services3 | € million | 597 | 549 | 8.7 |
| Other Entities | € million | – 26 | 27 | – |
| Eliminations3 | € million | 109 | 212 | – 48.6 |
| Group income taxes3 | € million | – 702 | – 420 | – 67.1 |
| Profit/ loss from continuing operations3 | € million | 1,546 | 1,402 | 10.3 |
| Profit / loss from discontinued operations | € million | – | –15 | – |
| Group net profit3 | € million | 1,546 | 1,387 | 11.5 |
| Earnings per share3, 4 | € | 2.31 / 2.31 | 2.07 / 2.07 | 11.6 /11.6 |
| Group pre-tax return on sales3, 5 | % (change in %pts) | 8.4 | 7.4 | 1.0 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 126,878 units, 2018: 113,582 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 136,582 units, 2018: 142,381 units).
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
4 Common / preferred stock. In computing earnings per share of preferred stock, earnings to cover the additional dividend of €0.02 per share of preferred stock are spread over the quarters
of the corresponding financial year.
5 Group profit before tax as a percentage of Group revenues.
BMW Group at a Glance
BMW Group in Figures
BMW GROUP IN FIGURES
Key performance indicators reported during the year
• 03
| 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % | ||
|---|---|---|---|---|
| Group | ||||
| Profit before tax1 | € million | 5,063 | 7,827 | – 35.3 |
| Automotive segment | ||||
| Deliveries2 | units | 1,866,198 | 1,834,810 | 1.7 |
| EBIT margin3 | % (change in %pts) | 4.1 | 7.6 | – 3.5 |
| Motorcycles segment | ||||
| Deliveries | units | 136,932 | 126,793 | 8.0 |
| EBIT margin3 | % (change in %pts) | 12.1 | 12.5 | – 0.4 |
1 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 392,394 units, 2018: 328,800 units).
3 Profit before financial result as percentage of segment revenues.
Further performance figures
• 04
| 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % | ||
|---|---|---|---|---|
| Automotive segment | ||||
| Deliveries | ||||
| BMW1 | units | 1,601,397 | 1,566,216 | 2.2 |
| MINI | units | 261,024 | 265,935 | –1.8 |
| Rolls-Royce | units | 3,777 | 2,659 | 42.0 |
| Total1 | 1,866,198 | 1,834,810 | 1.7 | |
| Production volume | ||||
| Total2 | 1,925,758 | 1,933,396 | – 0.4 | |
| Financial Services segment | ||||
| New contracts with retail customers | 1,475,504 | 1,422,558 | 3.7 | |
| Free cash flow Automotive segment | € million | 1,024 | 2,042 | – 49.9 |
| Group revenues3 | € million | 74,844 | 72,373 | 3.4 |
| Automotive | € million | 64,853 | 62,629 | 3.6 |
| Motorcycles | € million | 1,871 | 1,658 | 12.8 |
| Financial Services3 | € million | 21,981 | 20,807 | 5.6 |
| Other Entities | € million | 4 | 4 | – |
| Eliminations3 | € million | –13,865 | –12,725 | – 9.0 |
| Group profit before financial result (EBIT)3 | € million | 5,079 | 7,168 | – 29.1 |
| Automotive | € million | 2,674 | 4,730 | – 43.5 |
| Motorcycles | € million | 226 | 208 | 8.7 |
| Financial Services3 | € million | 1,860 | 1,694 | 9.8 |
| Other Entities | € million | 7 | 22 | – 68.2 |
| Eliminations3 | € million | 312 | 514 | – 39.3 |
| Group profit before tax (EBT)3 | € million | 5,063 | 7,827 | – 35.3 |
| Automotive | € million | 2,989 | 5,346 | – 44.1 |
| Motorcycles | € million | 222 | 205 | 8.3 |
| Financial Services3 | € million | 1,797 | 1,705 | 5.4 |
| Other Entities | € million | –181 | 105 | – |
| Eliminations3 | € million | 236 | 466 | – 49.4 |
| Group income taxes3 | € million | –1,493 | – 2,060 | 27.5 |
| Profit/ loss from continuing operations3 | € million | 3,570 | 5,767 | – 38.1 |
| Profit / loss from discontinued operations | € million | 44 | – 22 | – |
| Group net profit3 | € million | 3,614 | 5,745 | – 37.1 |
| Earnings per share3, 4 | € | 5.37/ 5.38 | 8.62 / 8.63 | – 37.7 / – 37.7 |
| Group pre-tax return on sales3, 5 | % (change in %pts) | 6.8 | 10.8 | – 4.0 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 392,394 units, 2018: 328,800 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 381,416 units, 2018: 353,355 units).
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
4 Common / preferred stock. In computing earnings per share of preferred stock, earnings to cover the additional dividend of €0.02 per share of preferred stock are spread over the quarters of the corresponding financial year.
5 Group profit before tax as a percentage of Group revenues.
INTERIM GROUP MANAGEMENT REPORT
- Page 9 Report on Economic Position
- Page 9 General Economic Environment
- Page 10 Group Overview
- Page 12 Automotive Segment
- Page 18 Financial Services Segment
- Page 20 Report on Outlook, Risks and Opportunities
- Page 20 Outlook
- Page 22 Risks and Opportunities
Interim Group Management Report
Report on Economic Position General Economic Environment
REPORT ON ECONOMIC POSITION
Vehicle deliveries reach new all-time high
EBIT increases in third quarter
Financial Services business continues positive trend
GENERAL ECONOMIC ENVIRONMENT IN THE FIRST NINE MONTHS OF 2019
International automobile markets
From January to September 2019, international automobile markets performed weakly overall with new registrations down worldwide for the nine-month period (62.0 million units; – 3.5%). Key automobile markets developed as follows:
International automobile markets • 05
| Change in % | |
|---|---|
| Europe | –1.5 |
| thereof Germany | + 2.5 |
| thereof France | –1.6 |
| thereof Italy | –1.9 |
| thereof Spain | – 7.3 |
| thereof United Kingdom (UK) | – 2.5 |
| USA | –1.1 |
| China | – 8.0 |
| Japan | + 3.0 |
| Total | – 3.5 |
Interim Group Management Report
Report on Economic Position General Economic Environment
Group Overview
Group Overview
Automobile deliveries at record level
Despite the high level of economic and political uncertainty, stoked by international trade and customs policy developments as well as by Brexit, the BMW Group delivered a record number of automobiles in both the third quarter and the first nine months of 2019.
In a predominantly contracting market, third-quarter delivery figures for BMW, MINI and Rolls-Royce brand vehicles rose worldwide by 3.6 % to 613,361 1 units (2018: 592,303 1 units). Delivery volumes from January to September increased slightly to 1,866,198 2 units (2018: 1,834,810 2 units; + 1.7 %).
At 30 September 2019, the Financial Services segment had a portfolio of 5,414,506 contracts with retail customers (31 December 2018: 5,235,207 contracts; +3.4%). From July to September 2019, 504,217 new credit financing and leasing contracts were signed with retail customers (2018: 490,347 contracts; + 2.8%), bringing the total for the nine-month reporting period to 1,475,504 contracts (2018: 1,422,558 contracts; +3.7%).
Group revenues up slightly3
Group revenues for the nine-month period amounted to € 74,844 million (2018: € 72,373 million; + 3.4 %), up slightly year-on-year. On a currency-adjusted basis, Group revenues were also up slightly (+ 2.0 %). Driven by a favourable sales mix and currency effects, third-quarter revenues grew solidly to € 26,667 million (2018: € 24,715 million; + 7.9 %, currencyadjusted + 6.3 %). The previous year's figure was also affected by fierce competition relating to the introduction of Worldwide Harmonised Light Vehicle Test Procedures (WLTP).
The nine-month gross profit figure of € 13,170 million represented a moderate year-on-year decrease (2018: € 13,878 million; – 5.1 %). Earnings were negatively impacted by higher manufacturing costs due to stricter regulatory requirements as well as by higher raw materials prices and adverse currency factors. In addition, investments made in conjunction with the continued product offensive and the electrification of vehicles and autonomous driving caused research and development expenses to remain at a consistently high level.
Research and development ratios for the period from 1 July to 30 September • 06
| 2019 | 2018 | Change in % | ||
|---|---|---|---|---|
| Research and development expenses as a percentage of revenues | % (change in %pts) | 5.4 | 5.1 | 0.3 |
| Research and development expenditure ratio4 | % (change in %pts) | 6.1 | 6.9 | – 0.8 |
| Capitalisation rate5 | % (change in %pts) | 35.3 | 46.5 | –11.2 |
| Research and development expenses | € million | 1,451 | 1,271 | 14.2 |
| Expenditure in capitalised development costs | € million | 571 | 789 | – 27.6 |
| Amortisation | € million | – 404 | – 362 | 11.6 |
| Research and development expenditure6 | € million | 1,618 | 1,698 | – 4.7 |
Research and development ratios for the period from 1 January to 30 September • 07
| 2019 | 2018 | Change in % | ||
|---|---|---|---|---|
| Research and development expenses as a percentage of revenues | % (change in %pts) | 5.7 | 5.4 | 0.3 |
| Research and development expenditure ratio4 | % (change in %pts) | 5.9 | 6.2 | – 0.3 |
| Capitalisation rate5 | % (change in %pts) | 31.7 | 35.7 | – 4.0 |
| Research and development expenses | € million | 4,247 | 3,881 | 9.4 |
| Expenditure in capitalised development costs | € million | 1,411 | 1,591 | –11.3 |
| Amortisation | € million | –1,210 | –1,018 | 18.9 |
| Research and development expenditure6 | € million | 4,448 | 4,454 | – 0.1 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 126,878 units, 2018: 113,582 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 392,394 units, 2018: 328,800 units).
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
4 Research and development expenditure as a percentage of Group revenues.
5 Capitalised development costs as a percentage of research and development expenditure.
6 Research and development expenditure comprises research costs, non-capitalised development costs and capitalised development costs (excluding amortisation thereon).
Interim Group Management Report Report on Economic Position General Economic
Environment Group Overview At € 4,569 million (2018: € 3,954 million; + 15.6 %), third-quarter gross profit improved significantly compared to one year earlier, partly due to favourable selling price and model mix effects as well as lower expenses for goodwill and warranty measures. Higher manufacturing costs due to stricter regulatory requirements had an offsetting effect.
Group profit before financial result for the ninemonth period fell significantly to € 5,079 million (2018: € 7,168 million; – 29.1 %). In addition to the effects described above, the provision recognised during the first quarter of 2019 in connection with the EU Commission's antitrust proceedings was a significant negative factor. Further information is provided in note 6 to the Interim Group Financial Statements for the period ended 30 June 2019. The profit before financial result reported for the third quarter was significantly up on the previous year (€ 2,289 million, 2018: € 1,722 million; + 32.9 %) due to the positive effects described above.
The nine-month financial result was significantly down, finishing € 675 million lower than one year earlier. The € 157 million increase in earnings contributed by the Chinese joint venture BMW Brilliance Automotive Ltd., Shenyang, was more than offset by the at-equity loss of € 263 million recorded for the YOUR NOW companies. Other financial result in the previous year included a positive revaluation effect of € 209 million in conjunction with the takeover of DriveNow, while in the current financial year a onetime revaluation gain of € 329 million arose from the pooling of mobility services with the Daimler Group. Due to adjusted business expectations at individual YOUR NOW companies, impairment losses totalling € 269 million were recognised in the first nine months, including € 73 million recorded in the third quarter.
Furthermore, other financial result was affected by a negative fair value measurement impact of € 244 million recognised on interest rate hedges entered into in connection with refinancing the Financial Services business (2018: positive fair value measurement impact of € 39 million).
Group profit before tax was impacted by the same set of factors and fell accordingly to € 5,063 million (2018: € 7,827 million; – 35.3%).
Financing activities
Bonds amounting to € 16.5 billion and ABS transactions in the USA, the UK, China, Canada, Australia, Germany, South Africa and Japan totalling € 7.1 billion were issued during the nine-month period.
Impact of IFRS 16
The BMW Group has applied the new accounting requirements for leases in accordance with IFRS 16 (Leases) with effect from 1 January 2019. Explanatory information on the impact of IFRS 16 is provided in note 4 to the Interim Group Financial Statements for the period ended 30 June 2019.
Interim Group Management Report
Report on Economic Position General Economic Environment
Automotive Segment
Automotive Segment
Growth in Automobile deliveries bucks market trend
Despite a generally contracting market, the BMW Group registered new highs in terms of automobile deliveries with a young and attractive product portfolio. Apart from setting new records at Group level, the BMW and Rolls-Royce brands both achieved their best figures to date, not only for a third quarter, but also for the nine-month period as a whole.
During the third quarter of 2019, 525,438 1 BMW (2018: 506,920 1 units; + 3.7 %) and 86,680 MINI (2018: 84,505 units; + 2.6 %) brand vehicles were delivered to customers worldwide. In addition, Rolls-Royce Motor Cars delivered 1,243 units (2018: 878 units; + 41.6 %) during the three-month reporting period.
Deliveries during the first nine months comprised 1,601,3972 BMW (2018: 1,566,2162 units; + 2.2 %), 261,024 MINI (2018: 265,935 units; – 1.8 %) and 3,777 Rolls-Royce (2018: 2,659 units; + 42.0 %) brand vehicles.
Growth rate in China remains high
In total, 228,418 1 BMW, MINI and Rolls-Royce brand vehicles were sold in Asia during the third quarter
Automotive segment at a glance
• 08
| 3rd quarter 2019 | 3rd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| Deliveries1, 3 | units | 613,361 | 592,303 | 3.6 |
| Production4 | units | 630,757 | 617,082 | 2.2 |
| Revenues | € million | 23,016 | 21,111 | 9.0 |
| Profit before financial result (EBIT) | € million | 1,515 | 930 | 62.9 |
| EBIT margin3, 5 | % (change in %pts) | 6.6 | 4.4 | 2.2 |
| Profit before tax | € million | 1,533 | 1,003 | 52.8 |
| 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % | ||
|---|---|---|---|---|
| Deliveries2, 3 | units | 1,866,198 | 1,834,810 | 1.7 |
| Production6 | units | 1,925,758 | 1,933,396 | – 0.4 |
| Revenues | € million | 64,853 | 62,629 | 3.6 |
| Profit before financial result (EBIT) | € million | 2,674 | 4,730 | – 43.5 |
| EBIT margin3, 5 | % (change in %pts) | 4.1 | 7.6 | – 3.5 |
| Profit before tax | € million | 2,989 | 5,346 | – 44.1 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 126,878 units, 2018: 113,582 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 392,394 units, 2018: 328,800 units).
3 Key performance indicators reported on during the year.
4 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 136,582 units, 2018: 142,381 units).
5 Profit before financial result as percentage of Automotive segment revenues.
6 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 381,416 units, 2018: 353,355 units).
(2018: 214,559 1 units; + 6.5 %). The equivalent figure for the nine-month period rose by 6.8 % to 681,7732 units (2018: 638,4492 units). Business in China during the third quarter of 2019 was affected by the model change of the BMW 3 Series extendedwheelbase version at the end of June. Nonetheless, deliveries were well up on one year earlier, rising by 10.1 % to 176,232 1 units (2018: 160,047 1 units). Double-digit growth was also recorded for the period from January to September, with volumes up by 14.5 % to 526,8242 units (2018: 460,2002 units).
In Europe, automobile market performance as a whole was held down in particular by Brexit-driven uncertainty. Nevertheless, third-quarter deliveries of the BMW Group across Europe edged up to 259,051 units (2018: 253,935 units; + 2.0 %). During the first nine months of 2019, a total of 809,497 units were handed over to customers, similar to the previous year's level (2018: 816,037 units; – 0.8 %). In Germany, deliveries of the Group's three brands rose by 4.1 % between July and September to 78,293 units (2018: 75,215 units) and by a solid 6.5 % to 239,601 units for the ninemonth period (2018: 224,933 units). By contrast, deliveries in the UK were down on the previous year in both the third quarter (56,550 units, 2018: 57,433 units; – 1.5 %) and the nine-month period (177,448 units, 2018: 181,727 units; – 2.4 %) due to Brexit-related concerns.
Interim Group Management Report Report on Economic Position General Economic
Environment Automotive Segment In total, 112,513 BMW, MINI and Rolls-Royce brand vehicles were sold in the Americas region during the third quarter (2018:110,197 units; + 2.1 %), bringing the cumulative figure for the nine-month period to 334,785 units, almost on a par with the previous year's corresponding performance (2018: 336,258 units; – 0.4 %). In the USA, the BMW Group
recorded 3.6 % growth in the third quarter to 86,499 units (2018: 83,516 units) despite flat market performance as a whole. At 261,278 units, nine-month deliveries in the USA and across the remainder of the Americas region were very similar to the previous year (2018: 260,086 units; + 0.5 %).
Automotive segment deliveries of vehicles by region and market • 09
| in units | 3rd quarter 2019 | 3rd quarter 2018 | Change in % | 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % |
|---|---|---|---|---|---|---|
| Europe | 259,051 | 253,935 | 2.0 | 809,497 | 816,037 | – 0.8 |
| thereof Germany | 78,293 | 75,215 | 4.1 | 239,601 | 224,933 | 6.5 |
| thereof UK | 56,550 | 57,433 | –1.5 | 177,126 | 181,727 | – 2.5 |
| Americas | 112,513 | 110,197 | 2.1 | 334,785 | 336,258 | – 0.4 |
| thereof USA | 86,499 | 83,516 | 3.6 | 261,278 | 260,086 | 0.5 |
| Asia | 228,4181 | 214,5591 | 6.5 | 681,7732 | 638,4492 | 6.8 |
| thereof China | 176,2321 | 160,0471 | 10.1 | 526,8242 | 460,2002 | 14.5 |
| Other markets | 13,379 | 13,612 | –1.7 | 40,143 | 44,066 | – 8.9 |
| Total | 613,3611 | 592,3031 | 3.6 | 1,866,1982 | 1,834,8102 | 1.7 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 126,878 units, 2018: 113,582 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 392,394 units, 2018: 328,800 units).
BMW sets new volume records2 , X family with significant increase
The BMW brand achieved record delivery volumes for both the third quarter and the nine-month period. Business with the BMW family of X models developed very positively, while the BMW i models also made a marked contribution.
The model change of the extended-wheelbase version in China referred to above, combined with that of the Touring model, meant that the BMW 3 Series – with a total of 250,425 units worldwide – fell short of its previous year's performance for the nine-month period (2018: 278,499 units; – 10.1 %). A total of 260,318 units of the BMW 5 Series were delivered to customers between January and September (2018: 286,180 units; – 9.0 %). The new BMW 8 Series and Z4 models, which have been available since March, enjoyed a high level of demand, recording deliveries of 7,496 and 11,963 units respectively.
The BMW X family remained highly popular, with the nine-month worldwide delivery volume up by approximately one quarter to 706,259 units (2018: 564,542 units; + 25.1 %). The BMW X1 sales volume
figure of 199,243 fell short of the previous year's high level (2018: 213,633 units; – 6.7 %). By contrast, the BMW X3 performed extremely well during the first nine months of 2019, with deliveries jumping by 74.0 % to 230,497 units (2018: 132,478 units). During the same period, 116,475 units of the BMW X5 were handed over to customers (2018: 117,621 units; – 1.0 %). In the third quarter, however, this highly successful model recorded a significant increase, with deliveries up by almost one quarter to 40,128 units (2018: 32,314 units; + 24.2 %), mainly reflecting the availability of additional engine variants on the Chinese market during the third quarter. The BMW X2, which has been in showrooms since March 2018, also recorded extremely dynamic growth over the nine-month period, with deliveries up by 70.5 % to 72,281 units (2018: 42,395 units). Since its market launch in March 2019, 25,125 customers worldwide have taken delivery of the new BMW X7.
Interim Group Management Report Report on Economic
| Position | ||||
|---|---|---|---|---|
| General Economic | ||||
| Environment |
• 10
| Report on Economic Position |
1 January to | 1 January to | ||
|---|---|---|---|---|
| General Economic Environment |
in units | 30 September 2019 |
30 September 2018 |
Change in % |
| Automotive Segment | ||||
| BMW 1 Series | 128,159 | 149,659 | –14.4 | |
| BMW 2 Series | 93,040 | 116,295 | – 20.0 | |
| BMW 3 Series | 250,425 | 278,499 | –10.1 | |
| BMW 4 Series | 58,442 | 84,197 | – 30.6 | |
| BMW 5 Series | 260,318 | 286,180 | – 9.0 | |
| BMW 6 Series | 18,350 | 20,246 | – 9.4 | |
| BMW 7 Series | 35,965 | 41,078 | –12.4 | |
| BMW 8 Series | 7,496 | – | – | |
| BMW Z4 | 11,963 | – | – | |
| BMW X1 | 199,243 | 213,633 | – 6.7 | |
| BMW X2 | 72,281 | 42,395 | 70.5 | |
| BMW X3 | 230,497 | 132,478 | 74.0 | |
| BMW X4 | 44,789 | 31,233 | 43.4 | |
| BMW X5 | 116,475 | 117,621 | –1.0 | |
| BMW X6 | 17,849 | 27,182 | – 34.3 |
BMW X7 25,125 – – BMW i 30,980 25,520 21.4 BMW total 1,601,397 1,566,216 2.2
* Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 392,394 units, 2018: 328,800 units).
Automotive segment deliveries of BMW vehicles by model series*
MINI reports volume growth in third quarter
Worldwide deliveries of the MINI brand increased slightly in the third quarter by 2.6 % to 86,680 units (2018: 84,505 units). Over the nine-month period, however, they remained slightly down on the previous year at 261,024 units (2018: 265,935 units; – 1.8 %).
The number of MINI Countryman vehicles delivered during the first nine months of the current year edged up by 2.6 % to 73,344 units (2018: 71,490 units), whereas the MINI Hatch (3- and 5-door models) was slightly down year-on-year at 132,363 units (2018: 133,963 units; – 1.2 %).
Automotive segment deliveries of MINI vehicles by model variant
• 11
| in units | 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % |
|---|---|---|---|
| MINI Hatch (3- and 5-door) | 132,363 | 133,963 | –1.2 |
| MINI Convertible | 24,736 | 25,813 | – 4.2 |
| MINI Clubman | 30,581 | 34,669 | –11.8 |
| MINI Countryman | 73,344 | 71,490 | 2.6 |
| MINI total | 261,024 | 265,935 | –1.8 |
Interim Group Management Report Report on Economic Position General Economic Environment
Automotive Segment
Significant growth for Rolls-Royce
Rolls-Royce Motor Cars delivered 3,777 vehicles to customers worldwide between January and September 2019, recording a very substantial increase of 42.0% as well as a new record for the first nine months of a year (2018: 2,659 units). This performance was boosted
in particular by the new Rolls-Royce Cullinan*. This latest addition to the brand's portfolio continued to attract a high level of customer interest, resulting in 1,780 units being delivered during the nine-month reporting period.
Automotive segment deliveries of Rolls-Royce vehicles by model variant • 12
| in units | 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % |
|---|---|---|---|
| Phantom | 455 | 578 | – 21.3 |
| Ghost | 522 | 711 | – 26.6 |
| Wraith /Dawn | 1,020 | 1,370 | – 25.5 |
| Cullinan* | 1,780 | – | – |
| Rolls-Royce total | 3,777 | 2,659 | 42.0 |
Share of electrified automobiles influenced by model changes
The number of electrified vehicles delivered to customers by the BMW Group during the first nine months of the current year was influenced in particular by the BMW X5 and 3 Series model changes. In total, 96,570 units of the BMWi, BMWe and MINI Electric brands were delivered worldwide, slightly down on the
previous year's record level (2018: 97,543 units; – 1.0%). Demand for the BMWi3 remained high, as a result of which deliveries rose by over 20% to 28,833 units (2018: 23,644 units; + 21.9%). The MINI Countryman* was also highly popular as a plug-in hybrid, with 11,999 units delivered worldwide during the nine-month reporting period (2018: 8,826 units; + 36.0%).
Automotive segment deliveries of electrified models
| • 13 | |
|---|---|
| in units | 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % |
|---|---|---|---|
| BMW i | 30,980 | 25,520 | 21.4 |
| BMW e | 53,591 | 63,197 | –15.2 |
| MINI Electric | 11,999 | 8,826 | 36.0 |
| Total | 96,570 | 97,543 | –1.0 |
*Fuel consumption and CO2 emissions information are available on page 22.
Interim Group Management Report
Report on Economic Position General Economic Environment Automotive Segment
Segment revenues increase
Automotive segment revenues for the nine-month period were slightly up on the previous year at € 64,853 million (2018: € 62,629 million; + 3.6 %; currency-adjusted + 2.1 %). Third-quarter revenues rose solidly to € 23,016 million (2018: € 21,111 million; + 9.0 %; currency-adjusted + 7.4 %). Currency and product mix factors, including in particular sales of the BMW X7 and 8 Series, had a positive impact on segment revenues in the first nine months, especially in the third quarter. Segment revenue growth was also boosted by increased revenues generated by business with the joint venture BMW Brilliance Automotive Ltd., Shenyang.
The rise in cost of sales in both the nine-month period and third quarter was mainly attributable to adverse currency factors and higher raw materials prices as well as increased manufacturing costs due to stricter regulatory requirements. The favourable sales mix effects described above also contributed to the rise in manufacturing costs. Increased amortisation recognised on capitalised development projects as well as higher ongoing research and development expenses continued to have an impact. The bulk of these expenses related to new vehicle models in conjunction with the continued product offensive, including the development of the iNEXT. Third-quarter cost of sales in the previous financial year included an expense of € 679 million recognised for goodwill and warranty measures in connection with the exhaust gas recirculation cooler.
The expense for recognising a provision for the ongoing EU Commission's antitrust proceedings referred to above is included in other operating expenses. Accordingly, nine-month segment EBIT dropped significantly to € 2,674 million (2018: € 4,730 million; – 43.5 %), while the EBIT margin fell to 4.1 % (2018: 7.6 %; – 3.5 percentage points). Third-quarter EBIT came in at € 1,515 million (2018: € 930 million; + 62.9 %), corresponding to a margin of 6.6 % (2018: 4.4 %; + 2.2 percentage points).
Segment profit before tax for the nine-month period amounted to € 2,989 million and was therefore down significantly on the previous year (2018: € 5,346 million; – 44.1 %). The corresponding figure for the third quarter was a profit of € 1,533 million (2018: € 1,003 million; + 52.8 %).
17
Free cash flow Automotive segment
Free cash flow Automotive segment for the period from 1 January to 30 September
Report on Economic Position General Economic Environment Automotive Segment
Interim Group Management Report
• 14
| in € million | 2019 | 2018 | Change |
|---|---|---|---|
| Cash inflow (+)/ outflow (–) from operating activities | 6,144 | 6,290 | –146 |
| Cash inflow (+)/ outflow (–) from investing activities | – 5,151 | – 4,175 | – 976 |
| Net investment in marketable securities and investment funds | 31 | – 73 | 104 |
| Free cash flow Automotive segment | 1,024 | 2,042 | –1,018 |
The decrease in free cash flow generated by the Automotive segment in the first three quarters of 2019 was mainly attributable to lower earnings and to the higher planned increase in working capital compared to the previous year, whereby the latter mainly reflected the build-up of inventories in conjunction with the introduction of new and predominantly higher-value models such as the BMW 8 Series and X7. Additional contributing factors were higher investments in financial assets and property, plant and equipment, the latter mainly in connection with the BMW 1 and BMW 3 Series model changes. Following the adoption of IFRS 16, lease payments are now included in cash flows from financing activities. In the first nine months of 2019, this change had a positive effect of € 338 million on free cash flow. If IFRS 16 had been applied similarly in the previous year, free cash flow would have been positively impacted by approximately the same amount.
Net financial assets comprised the following:
| Net financial assets Automotive segment | ||
|---|---|---|
| • 15 |
| in € million | 30. 9. 2019 | 31.12. 2018 | Change |
|---|---|---|---|
| Cash and cash equivalents | 10,537 | 8,631 | 1,906 |
| Marketable securities and investment funds | 4,464 | 4,321 | 143 |
| Intragroup net financial assets | 3,317 | 7,694 | – 4,377 |
| Financial assets | 18,318 | 20,646 | – 2,328 |
| Less: external financial liabilities* | – 3,395 | –1,158 | – 2,237 |
| Net financial assets Automotive segment | 14,923 | 19,488 | – 4,565 |
*Excluding derivative financial instruments.
The increase in external financial liabilities was mainly attributable to the recognition of lease liabilities amounting to € 2.3 billion, recognised in connection with the first-time application of IFRS 16. Further information is provided in note 4 to the Interim Group Financial Statements for the period ended 30 June 2019.
Report on Economic Position General Economic Environment
Financial Services Segment
Financial Services Segment
Financial Services business continues to grow
Financial Services segment revenues continued to grow between January and September 2019 on the back of portfolio growth and favourable currency factors (currency-adjusted: + 3.2%). The reduction of selling expenses and the ongoing generally stable risk situation also contributed to the positive earnings trend.
In balance sheet terms, the segment's business volume increased due to currency factors and portfolio growth in financing and leasing business with retail customers.
New business with retail customers remains buoyant
Financing and leasing business with retail customers grew slightly, with the number of new contracts signed between January and September rising by 3.7 % to 1,475,504 new contracts (2018: 1,422,558 new contracts). As in the previous quarters, growth was largely attributable to the higher volume of credit financing business in China. New leasing business grew by a solid 7.0%, primarily on the back of strong performances in Europe and the USA. Overall, new
Financial Services segment at a glance • 16
| credit financing business climbed by 2.1%. Leasing |
|---|
| accounted for 33.7% and credit financing for 66.3% of |
| new business in the nine-month period under report. |
Business concluded during this period included 297,678 newly signed credit financing and leasing contracts relating to pre-owned BMW and MINI brand vehicles (2018: 306,146 contracts), down slightly yearon-year (– 2.8%).
The total volume of all new credit financing and leasing contracts concluded with retail customers during the nine-month period amounted to € 44,497 million, a solid increase of 7.5% (2018: € 41,391 million).
Compared to the end of the previous financial year, the Financial Services segment's worldwide contract portfolio with retail customers grew slightly by 3.4% to 5,414,506 contracts at 30 September 2019 (31 December 2018: 5,235,207 contracts). This performance continues to be driven by significant growth (+ 13.7%) in the China region compared to 31 December 2018. The Europe / Middle East / Africa region (+ 4.0%) and the EU Bank1 region (+ 3.5%) also recorded growth. The contract portfolio with retail customers remained at a similar level to the end of the financial year 2018 (+ 0.3%) in the Americas region and decreased by 1.9% in the Asia / Pacific region.
| 3rd quarter 2019 | 3rd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| New contracts with retail customers | 504,217 | 490,347 | 2.8 | |
| Revenues2 | € million | 7,471 | 7,219 | 3.5 |
| Profit before financial result (EBIT)2 | € million | 606 | 528 | 14.8 |
| Profit before tax2 | € million | 597 | 549 | 8.7 |
| 1 January to 30 September 2019 |
1 January to 30 September 2018 |
Change in % | ||
|---|---|---|---|---|
| New contracts with retail customers | 1,475,504 | 1,422,558 | 3.7 | |
| Revenues2 | € million | 21,981 | 20,807 | 5.6 |
| Profit before financial result (EBIT)2 | € million | 1,860 | 1,694 | 9.8 |
| Profit before tax2 | € million | 1,797 | 1,705 | 5.4 |
| 30. 9. 2019 | 31. 12. 2018 | Change in % | ||
|---|---|---|---|---|
| Contract portfolio with retail customers | 5,414,506 | 5,235,207 | 3.4 | |
| Business volume in balance sheet terms2, 3 | € million | 138,917 | 133,147 | 4.3 |
1 EU Bank comprises BMW Bank GmbH, its branches in Italy, Spain and Portugal and its subsidiary in France.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
3 Calculated on the basis of the lines Leased products and Receivables from sales financing (current and non-current) of the Financial Services segment balance sheet.
Interim Group Management Report Report on Economic Position
General Economic Environment
Financial Services Segment
During the first nine months of the year, 51.4 %* of new BMW Group vehicles were either leased or financed by the Financial Services segment (2018: 49.4%; + 2.0 percentage points), whereby the increase was primarily attributable to growth in credit financing business in China.
*The calculation only includes automobile markets in which the Financial Services segment is represented by a consolidated entity or a branch office.
Slight growth in fleet business
In the fleet management business, the BMW Group – operating under the brand name Alphabet – is one of Europe's foremost leasing and full-service providers. Alphabet offers leasing and financing arrangements as well as other specific services to commercial customers. A portfolio of 711,524 contracts was in place at 30 September 2019 (31 December 2018: 700,080 contracts; + 1.6%).
Dealership financing slightly down
The total volume of dealership financing decreased slightly by 4.0 % during the nine-month period to € 19,619 million (31 December 2018: € 20,438 million).
Interim Group Management Report
Report on Outlook, Risks and Opportunities Outlook
REPORT ON OUTLOOK, RISKS AND OPPORTUNITIES
Global automobile markets expected to be down on previous year's level
BMW Group confirms revised outlook
OUTLOOK
The report on outlook, risks and opportunities describes the expected development of the BMW Group, including the significant risks and opportunities, from a Group management perspective. It contains forward-looking statements based on expectations and assessments that are subject to uncertainty. As a result, actual outcomes, including those attributable to political, legal and economic developments, could differ positively or negatively from those described below. Further information on this topic is provided in the Annual Report 2018 (Outlook, pp. 84, Risks and Opportunities, pp. 90).
Interim Group Management Report Report on Outlook,
Risks and Opportunities
Outlook
Overall assessment by Group management
Although business conditions will remain volatile, the BMW Group confirmed its adjusted outlook for the financial year 2019. While on the one hand numerous new automobile and motorcycle models as well as an expanded range of individual mobility-related services are likely to provide additional momentum, on the other hand various political and economic challenges could well have an offsetting effect. Research and development expenses will remain at a high level in view of important future-oriented projects. Manufacturing costs are also rising due to stricter regulatory requirements.
Accordingly, Group profit before tax is expected to decrease significantly compared to the previous year as previously announced. Against the market trend, Automotive segment deliveries to customers are expected to increase slightly and reach a new record level. At the same time, fleet carbon dioxide emissions are forecast to drop slightly. The Group intends to achieve its targets with a workforce similar in size to the previous year. As a result of the provision recognised in conjunction with ongoing antitrust proceedings, the Automotive segment EBIT margin is
BMW Group key performance indicators
expected to fall within a range of 4.5 to 6.5% in 2019, 1 to 1.5 percentage points below the originally targeted range of 6 to 8%. The RoCE 1 of the Automotive segment is expected to decrease significantly. The RoE 2 for the Financial Services segment should remain at the previous year's level. However, both performance indicators will be above their long-term targets of 26% (RoCE) and 14% (RoE) respectively. In the Motorcycles segment, deliveries to customers are predicted to show a solid increase, with the EBIT margin set to be within the target range of between 8 and 10% and the RoCE also showing a solid year-on-year increase.
Depending on the political, legal and economic situation and the risks and opportunities described in the Annual Report 2018, actual business performance could differ from current expectations.
Growing uncertainty, fuelled in particular by unresolved political situations such as Brexit and international trade and customs policies, may cause economic developments in many regions to deviate from expected trends and outcomes, with a correspondingly significant impact on the business performance of the BMW Group.
| 2018 reported |
2018 adjusted3 |
2019 Outlook4 |
||
|---|---|---|---|---|
| Group | ||||
| Profit before tax | € million | 9,815 | 9,627 | significant decrease |
| Workforce at year-end | 134,682 | – | in line with last year's level |
|
| Automotive segment | ||||
| Deliveries to customers5 | units | 2,490,664 | – | slight increase |
| Fleet emissions6 | g CO2 / km | 128 | – | slight reduction |
| EBIT margin | % | 7.2 | – | between 4.5 and 6.5 |
| Return on capital employed1 | % | 49.8 | – | significant decrease |
| Motorcycles segment | ||||
| Deliveries to customers | units | 165,566 | – | solid increase |
| EBIT margin | % | 8.1 | – | between 8 and 10 |
| Return on capital employed1 | % | 28.4 | – | solid increase |
| Financial Services segment | ||||
| Return on equity 2 | % | 14.8 | – | in line with last year's level |
1 RoCE in the Automotive and Motorcycles segments is measured on the basis of relevant segment profit before financial result and the average amount of capital employed in the segment concerned.
Capital employed corresponds to the sum of all current and non-current operational assets, less liabilities that do not incur interest.
2 RoE in the Financial Services segment is calculated as segment profit before taxes, divided by the average amount of equity capital attributable to the Financial Services segment balance sheet.
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
4 Based on adjusted figures.
5 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2018: 459,581 units).
6 EU-28.
• 17
Interim Group Management Report
Report on Outlook, Risks and Opportunities Risks and
Opportunities
RISKS AND OPPORTUNITIES
As a globally operating enterprise, the BMW Group is exposed to a broad range of risks and opportunities. The Group's corporate success is based on leveraging perceived opportunities as they present themselves. In order to drive growth, boost profitability, bolster efficiency and work in a sustainable way going forward, the BMW Group also needs to take calculated risks.
Compared with the overall risk situation presented in the Group Management Report 2018, the assessment of legal risks in conjunction with antitrust allegations made against five German car manufacturers has become more concrete following receipt of the Statement of Objections from the EU Commission. The EU Commission alleges that the manufacturers colluded to avoid competition in developing systems to clean the emissions of petrol and diesel passenger cars. The ongoing investigations concern only potential violations of competition law and not deliberate unlawful manipulation of the emission control system. The Statement of Objections leads the BMW Group to believe that it is probable ("more likely than not") that the Commission will issue a significant fine. If necessary, the BMW Group will contest the Commission's allegations with all the legal means at its disposal. In accordance with International Financial Reporting Standards, a provision of approximately € 1.4 billion was recognised in the first quarter of 2019 to take account of financial impacts that cannot yet be definitively assessed. Furthermore, the progress of the Brexit negotiations and developments in global trade policy will continue to be closely monitored and factored into the Group's forecasts as deemed appropriate. Further information on risks and opportunities as well as on the methods employed to manage them is also available in the "Report on risks and opportunities" section of the Annual Report 2018 (pp. 90).
Fuel consumption and CO2 emissions information • 18
| Model | Fuel consumption in l/100 km (combined) |
CO2 emissions in g / km (combined) |
Electric power consumption in kWh /100 km (combined) |
|
|---|---|---|---|---|
| MINI | ||||
| MINI Cooper SE Countryman ALL4 | 2.1–1.9 | 47– 43 | 13.9 –13.5 | |
| MINI Cooper SE | – | – | 16.8 –14.8 | |
| Rolls-Royce | ||||
| Cullinan | 15 | 341 | – |
INTERIM GROUP FINANCIAL STATEMENTS
Page 24 Income Statement
- Page 28 Balance Sheet
- Page 30 Cash Flow Statement
BMW Group Income Statement
BMW GROUP INCOME STATEMENT
Income Statements for Group and Segments for the period from 1 January to 30 September • 19
| Group | Automotive | Motorcycles | ||||
|---|---|---|---|---|---|---|
| in € million | 2019 | 2018* | 2019 | 2018 | 2019 | 2018 |
| Revenues | 74,844 | 72,373 | 64,853 | 62,629 | 1,871 | 1,658 |
| Cost of sales | – 61,674 | – 58,495 | – 55,193 | – 52,342 | –1,460 | –1,267 |
| Gross profit | 13,170 | 13,878 | 9,660 | 10,287 | 411 | 391 |
| Selling and administrative expenses | – 6,665 | – 6,800 | – 5,511 | – 5,621 | –186 | –184 |
| Other operating income | 455 | 514 | 461 | 536 | 2 | 2 |
| Other operating expenses | –1,881 | – 424 | –1,936 | – 472 | –1 | –1 |
| Profit/ loss before financial result | 5,079 | 7,168 | 2,674 | 4,730 | 226 | 208 |
| Result from equity accounted investments | 379 | 506 | 379 | 506 | – | – |
| Interest and similar income | 102 | 113 | 277 | 247 | 1 | – |
| Interest and similar expenses | – 297 | – 276 | – 472 | – 380 | – 5 | – 3 |
| Other financial result | – 200 | 316 | 131 | 243 | – | – |
| Financial result | –16 | 659 | 315 | 616 | – 4 | – 3 |
| Profit/ loss before tax | 5,063 | 7,827 | 2,989 | 5,346 | 222 | 205 |
| Income taxes | –1,493 | – 2,060 | – 875 | –1,416 | – 70 | – 54 |
| Profit/ loss from continuing operations | 3,570 | 5,767 | 2,114 | 3,930 | 152 | 151 |
| Profit / loss from discontinued operations | 44 | – 22 | 44 | – 22 | – | – |
| Net profit/ loss | 3,614 | 5,745 | 2,158 | 3,908 | 152 | 151 |
| Attributable to minority interest | 78 | 74 | 19 | 26 | – | – |
| Attributable to shareholders of BMW AG | 3,536 | 5,671 | 2,139 | 3,882 | 152 | 151 |
| Basic earnings per share of common stock in € | 5.37 | 8.62 | ||||
| Basic earnings per share of preferred stock in € | 5.38 | 8.63 | ||||
| Dilutive effects | – | – | ||||
| Diluted earnings per share of common stock in € | 5.37 | 8.62 | ||||
| Diluted earnings per share of preferred stock in € | 5.38 | 8.63 |
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
24
| Eliminations | Other Entities | Financial Services | ||||
|---|---|---|---|---|---|---|
| 2018* | 2019 | 2018 | 2019 | 2018* | 2019 | |
| Revenues | –12,725 | –13,865 | 4 | 4 | 20,807 | 21,981 |
| Cost of sales | 13,208 | 14,149 | – | – | –18,094 | –19,170 |
| Gross profit | 483 | 284 | 4 | 4 | 2,713 | 2,811 |
| Selling and administrative expenses | 8 | 15 | –18 | –17 | – 985 | – 966 |
| Other operating income | –149 | –144 | 95 | 82 | 30 | 54 |
| Other operating expenses | 172 | 157 | – 59 | – 62 | – 64 | – 39 |
| Profit/ loss before financial result | 514 | 312 | 22 | 7 | 1,694 | 1,860 |
| Result from equity accounted investments | – | – | – | – | – | – |
| Interest and similar income | – 974 | –1,319 | 838 | 1,142 | 2 | 1 |
| Interest and similar expenses | 926 | 1,243 | – 812 | –1,059 | – 7 | – 4 |
| Other financial result | – | – | 57 | – 271 | 16 | – 60 |
| Financial result | – 48 | – 76 | 83 | –188 | 11 | – 63 |
| Profit/ loss before tax | 466 | 236 | 105 | –181 | 1,705 | 1,797 |
| Income taxes | –185 | – 74 | – 42 | 55 | – 363 | – 529 |
| Profit/ loss from continuing operations | 281 | 162 | 63 | –126 | 1,342 | 1,268 |
| Profit / loss from discontinued operations | – | – | – | – | – | – |
| Net profit/ loss | 281 | 162 | 63 | –126 | 1,342 | 1,268 |
| Attributable to minority interest | – | – | – | – | 48 | 59 |
| Attributable to shareholders of BMW AG | 281 | 162 | 63 | –126 | 1,294 | 1,209 |
| Basic earnings per share of common stock in € | ||||||
| Basic earnings per share of preferred stock in € | ||||||
| Dilutive effects | ||||||
| Diluted earnings per share of common stock in € | ||||||
| Diluted earnings per share of preferred stock in € | ||||||
Income Statements for Group and Segments for the period from 1 January to 30 September
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
• 19
BMW Group Income Statement
BMW GROUP INCOME STATEMENT
Income Statements for Group and Segments for the period from 1 July to 30 September • 20
| Group | Automotive | Motorcycles | ||||
|---|---|---|---|---|---|---|
| in € million | 2019 | 2018* | 2019 | 2018 | 2019 | 2018 |
| Revenues | 26,667 | 24,715 | 23,016 | 21,111 | 558 | 476 |
| Cost of sales | – 22,098 | – 20,761 | –19,631 | –18,383 | – 461 | – 379 |
| Gross profit | 4,569 | 3,954 | 3,385 | 2,728 | 97 | 97 |
| Selling and administrative expenses | – 2,242 | – 2,281 | –1,835 | –1,867 | – 63 | – 65 |
| Other operating income | 140 | 202 | 153 | 216 | 2 | 1 |
| Other operating expenses | –178 | –153 | –188 | –147 | –1 | – |
| Profit/ loss before financial result | 2,289 | 1,722 | 1,515 | 930 | 35 | 33 |
| Result from equity accounted investments | 191 | 101 | 191 | 101 | – | – |
| Interest and similar income | 25 | 39 | 86 | 84 | – | – |
| Interest and similar expenses | –106 | –102 | –165 | –140 | – | – 2 |
| Other financial result | –151 | 62 | – 94 | 28 | – | – |
| Financial result | – 41 | 100 | 18 | 73 | – | – 2 |
| Profit/ loss before tax | 2,248 | 1,822 | 1,533 | 1,003 | 35 | 31 |
| Income taxes | – 702 | – 420 | – 470 | – 204 | –15 | – 2 |
| Profit/ loss from continuing operations | 1,546 | 1,402 | 1,063 | 799 | 20 | 29 |
| Profit / loss from discontinued operations | – | –15 | – | –15 | – | – |
| Net profit/ loss | 1,546 | 1,387 | 1,063 | 784 | 20 | 29 |
| Attributable to minority interest | 25 | 29 | 6 | 13 | – | – |
| Attributable to shareholders of BMW AG | 1,521 | 1,358 | 1,057 | 771 | 20 | 29 |
| Basic earnings per share of common stock in € | 2.31 | 2.07 | ||||
| Basic earnings per share of preferred stock in € | 2.31 | 2.07 | ||||
| Dilutive effects | – | – | ||||
| Diluted earnings per share of common stock in € | 2.31 | 2.07 | ||||
| Diluted earnings per share of preferred stock in € | 2.31 | 2.07 |
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
26
| Eliminations | Other Entities | Financial Services | ||||
|---|---|---|---|---|---|---|
| 2018* | 2019 | 2018 | 2019 | 2018* | 2019 | |
| Revenues | – 4,092 | – 4,379 | 1 | 1 | 7,219 | 7,471 |
| Cost of sales | 4,307 | 4,506 | – | – | – 6,306 | – 6,512 |
| Gross profit | 215 | 127 | 1 | 1 | 913 | 959 |
| Selling and administrative expenses | 4 | 11 | – 4 | – 7 | – 349 | – 348 |
| Other operating income | – 49 | – 62 | 30 | 33 | 4 | 14 |
| Other operating expenses | 55 | 56 | – 21 | – 26 | – 40 | –19 |
| Profit/ loss before financial result | 225 | 132 | 6 | 1 | 528 | 606 |
| Result from equity accounted investments | – | – | – | – | – | – |
| Interest and similar income | – 358 | – 444 | 313 | 383 | – | – |
| Interest and similar expenses | 345 | 421 | – 303 | – 361 | – 2 | –1 |
| Other financial result | – | – | 11 | – 49 | 23 | – 8 |
| Financial result | –13 | – 23 | 21 | – 27 | 21 | – 9 |
| Profit/ loss before tax | 212 | 109 | 27 | – 26 | 549 | 597 |
| Income taxes | –117 | – 34 | –18 | 7 | – 79 | –190 |
| Profit/ loss from continuing operations | 95 | 75 | 9 | –19 | 470 | 407 |
| Profit / loss from discontinued operations | – | – | – | – | – | – |
| Net profit/ loss | 95 | 75 | 9 | –19 | 470 | 407 |
| Attributable to minority interest | – | – | – | – | 16 | 19 |
| Attributable to shareholders of BMW AG | 95 | 75 | 9 | –19 | 454 | 388 |
| Basic earnings per share of common stock in € | ||||||
| Basic earnings per share of preferred stock in € | ||||||
| Dilutive effects | ||||||
| Diluted earnings per share of common stock in € | ||||||
| Diluted earnings per share of preferred stock in € | ||||||
Income Statements for Group and Segments for the period from 1 July to 30 September
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
• 20
Interim Group Financial Statements
BMW Group Balance Sheet
| BMW GROUP |
|---|
| BALANCE SHEET |
| Group | Automotive | Motorcycles | |||||
|---|---|---|---|---|---|---|---|
| in € million | 30. 9. 2019 | 1. 1. 20191 | 31.12. 20182 | 30. 9. 2019 | 31.12. 2018 | 30. 9. 2019 | 31.12. 2018 |
| Assets | |||||||
| Intangible assets | 11,398 | 10,971 | 10,971 | 10,892 | 10,472 | 114 | 95 |
| Property, plant and equipment | 22,264 | 22,163 | 19,801 | 21,785 | 19,372 | 384 | 399 |
| Leased products | 41,299 | 38,259 | 38,259 | – | – | – | – |
| Investments accounted for using the equity method | 4,057 | 2,624 | 2,624 | 4,057 | 2,624 | – | – |
| Other investments | 705 | 739 | 739 | 4,884 | 4,843 | – | – |
| Receivables from sales financing | 49,579 | 48,313 | 48,313 | – | – | – | – |
| Financial assets | 1,894 | 1,010 | 1,010 | 185 | 216 | – | – |
| Deferred tax | 2,219 | 1,640 | 1,638 | 3,358 | 3,043 | – | – |
| Other assets | 1,675 | 1,299 | 1,299 | 2,655 | 5,085 | 34 | 33 |
| Non-current assets | 135,090 | 127,018 | 124,654 | 47,816 | 45,655 | 532 | 527 |
| Inventories | 17,359 | 13,639 | 13,639 | 16,012 | 12,462 | 615 | 568 |
| Trade receivables | 2,866 | 2,546 | 2,546 | 2,575 | 2,287 | 134 | 167 |
| Receivables from sales financing | 40,165 | 38,700 | 38,700 | – | – | – | – |
| Financial assets | 6,159 | 6,675 | 6,675 | 4,826 | 4,988 | – | – |
| Current tax | 1,933 | 1,378 | 1,378 | 672 | 618 | – | – |
| Other assets | 10,203 | 9,906 | 9,906 | 27,734 | 22,016 | 1 | 2 |
| Cash and cash equivalents | 12,998 | 10,979 | 10,979 | 10,537 | 8,631 | 12 | 12 |
| Assets held for sale | – | 463 | 461 | – | 461 | – | – |
| Current assets | 91,683 | 84,286 | 84,284 | 62,356 | 51,463 | 762 | 749 |
| Total assets | 226,773 | 211,304 | 208,938 | 110,172 | 97,118 | 1,294 | 1,276 |
| Equity and liab ilities |
|||||||
| Subscribed capital | 658 | 658 | 658 | ||||
| Capital reserves | 2,118 | 2,118 | 2,118 | ||||
| Revenue reserves | 56,049 | 55,830 | 55,862 | ||||
| Accumulated other equity | –1,251 | –1,338 | –1,338 | ||||
| Equity attributable to shareholders of BMWAG | 57,574 | 57,268 | 57,300 | ||||
| Minority interest | 556 | 529 | 529 | ||||
| Equity | 58,130 | 57,797 | 57,829 | 38,123 | 39,778 | – | – |
| Pension provisions | 3,373 | 2,330 | 2,330 | 2,883 | 2,089 | 96 | 64 |
| Other provisions | 5,074 | 5,530 | 5,530 | 4,864 | 5,354 | 78 | 70 |
| Deferred tax | 896 | 1,762 | 1,773 | 704 | 1,016 | – | – |
| Financial liabilities | 73,704 | 66,744 | 64,772 | 2,247 | 1,017 | – | – |
| Other liabilities | 4,992 | 5,293 | 5,293 | 8,071 | 7,558 | 509 | 506 |
| Non-current provisions and liabilities | 88,039 | 81,659 | 79,698 | 18,769 | 17,034 | 683 | 640 |
| Other provisions | 7,196 | 5,871 | 5,871 | 6,748 | 5,433 | 107 | 101 |
| Current tax | 1,797 | 1,158 | 1,158 | 717 | 933 | – | – |
| Financial liabilities | 42,724 | 39,260 | 38,825 | 2,123 | 879 | – | – |
| Trade payables | 10,582 | 9,669 | 9,669 | 9,192 | 8,360 | 375 | 348 |
| Other liabilities | 18,305 | 15,826 | 15,826 | 34,500 | 24,639 | 129 | 187 |
| Liabilities in conjunction with assets held for sale | – | 64 | 62 | – | 62 | – | – |
| Current provisions and liabilities | 80,604 | 71,848 | 71,411 | 53,280 | 40,306 | 611 | 636 |
1 The figures to 1 January 2019 have been adjusted, based on the first-time application of IFRS 16.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
| Eliminations | Other Entities | Financial Services | ||||
|---|---|---|---|---|---|---|
| 31.12. 20182 | 30. 9. 2019 | 31.12. 2018 | 30. 9. 2019 | 31.12. 20182 | 30. 9. 2019 | |
| Assets | ||||||
| Intangible assets | – | – | 1 | 1 | 403 | 391 |
| Property, plant and equipment | – | – | – | – | 30 | 95 |
| Leased products | – 7,855 | – 7,827 | – | – | 46,114 | 49,126 |
| Investments accounted for using the equity method | – | – | – | – | – | – |
| Other investments | –10,765 | –10,891 | 6,660 | 6,711 | 1 | 1 |
| Receivables from sales financing | – 20 | – 47 | – | – | 48,333 | 49,626 |
| Financial assets | – 39 | – 94 | 695 | 1,708 | 138 | 95 |
| Deferred tax | –1,918 | –1,763 | 28 | 98 | 485 | 526 |
| Other assets | – 40,610 | – 41,180 | 33,956 | 36,859 | 2,835 | 3,307 |
| Non-current assets | – 61,207 | – 61,802 | 41,340 | 45,377 | 98,339 | 103,167 |
| Inventories | – | – | – | – | 609 | 732 |
| Trade receivables | – | – | 1 | 2 | 91 | 155 |
| Receivables from sales financing | – | – | – | – | 38,700 | 40,165 |
| Financial assets | – 98 | – 49 | 460 | 319 | 1,325 | 1,063 |
| – | – | 669 | 1,189 | 91 | 72 | |
| Other assets | – 65,968 | – 81,545 | 48,775 | 58,686 | 5,081 | 5,327 |
| Cash and cash equivalents | – | – | 351 | 241 | 1,985 | 2,208 |
| Assets held for sale | – | – | – | – | – | – |
| Current assets | – 66,066 | – 81,594 | 50,256 | 60,437 | 47,882 | 49,722 |
| –127,273 | –143,396 | 91,596 | 105,814 | 146,221 | 152,889 | |
| Equity and liab | ||||||
| Subscribed capital | ||||||
| Capital reserves | ||||||
| Revenue reserves | ||||||
| Accumulated other equity | ||||||
| Equity attributable to shareholders of BMWAG | ||||||
| Minority interest | ||||||
| –17,438 | –17,300 | 20,683 | 22,080 | 14,806 | 15,227 | |
| Pension provisions | – | – | 128 | 362 | 49 | 32 |
| Other provisions | – | – | – | – | 106 | 132 |
| – 3,841 | – 3,871 | 22 | 1 | 4,576 | 4,062 | |
| Financial liabilities | – 39 | – 94 | 44,624 | 53,585 | 19,170 | 17,966 |
| Other liabilities | – 40,272 | – 41,168 | 1,168 | 174 | 36,333 | 37,406 |
| Non-current provisions and liabilities | – 44,152 | – 45,133 | 45,942 | 54,122 | 60,234 | 59,598 |
| Other provisions | – | – | 9 | 9 | 328 | 332 |
| – | – | 17 | 17 | 208 | 1,063 | |
| Financial liabilities | – 98 | – 49 | 12,339 | 13,431 | 25,705 | 27,219 |
| Trade payables | – | – | 11 | 13 | 950 | 1,002 |
| Other liabilities | – 65,585 | – 80,914 | 12,595 | 16,142 | 43,990 | 48,448 |
| Liabilities in conjunction with assets held for sale | – | – | – | – | – | – |
| Current provisions and liabilities | – 65,683 | – 80,963 | ||||
| 24,971 | 29,612 | 71,181 | 78,064 | |||
| Total equity and liabilities | –127,273 | –143,396 | 91,596 | 105,814 | 146,221 | 152,889 |
1 The figures to 1 January 2019 have been adjusted, based on the first-time application of IFRS 16.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
Interim Group Financial Statements
BMW Group Cash Flow Statement
BMW GROUP CASH FLOW STATEMENT
Condensed Cash Flow Statement for the period from 1 January to 30 September • 21
| Group | ||
|---|---|---|
| in € million | 2019 | 2018* |
| Net profit | 3,614 | 5,745 |
| Profit / loss from discontinued operations | – 44 | 22 |
| Depreciation and amortisation of tangible, intangible and investment assets | 4,398 | 3,753 |
| Change in provisions | 943 | –191 |
| Change in leased products and receivables from sales financing | – 3,131 | – 3,783 |
| Change in deferred taxes | –1,166 | 422 |
| Changes in working capital | – 2,727 | –1,965 |
| Other | 717 | 549 |
| Cash inflow/outflow from operating activities | 2,604 | 4,552 |
| Total investment in intangible assets and property, plant and equipment | – 4,783 | – 4,681 |
| Net investment in marketable securities and investment funds | 10 | 153 |
| Other | – 546 | 323 |
| Cash inflow/outflow from investing activities | – 5,319 | – 4,205 |
| Cash inflow/outflow from financing activities | 4,719 | – 411 |
| Effect of exchange rate on cash and cash equivalents | –17 | 24 |
| Effect of changes in composition of Group on cash and cash equivalents | 32 | – 24 |
| Change in cash and cash equivalents | 2,019 | – 64 |
| Cash and cash equivalents as at 1 January | 10,979 | 9,039 |
| Cash and cash equivalents as at 30 September | 12,998 | 8,975 |
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019. In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
| Financial Services | Automotive | ||||
|---|---|---|---|---|---|
| 2018* | 2019 | 2018 | 2019 | ||
| Net profit | 1,342 | 1,268 | 3,908 | 2,158 | |
| Profit / loss from discontinued operations | – | – | 22 | – 44 | |
| Depreciation and amortisation of tangible, intangible and investment assets | 25 | 37 | 3,657 | 4,280 | |
| Change in provisions | 34 | 798 | 147 | 438 | |
| Change in leased products and receivables from sales financing | – 3,857 | – 2,945 | – | – | |
| Change in deferred taxes | 161 | – 713 | – 29 | – 39 | |
| Changes in working capital | 193 | –139 | – 2,193 | – 2,603 | |
| Other | – 947 | 93 | 778 | 1,954 | |
| Cash inflow/outflow from operating activities | – 3,049 | –1,601 | 6,290 | 6,144 | |
| Total investment in intangible assets and property, plant and equipment | – 7 | – 9 | – 4,593 | – 4,690 | |
| Net investment in marketable securities and investment funds | 50 | 41 | 73 | – 31 | |
| 6 | 3 | 345 | – 430 | ||
| Cash inflow/outflow from investing activities | 49 | 35 | – 4,175 | – 5,151 | |
| Cash inflow/outflow from financing activities | 3,110 | 1,779 | – 3,103 | 930 | |
| Effect of exchange rate on cash and cash equivalents | –13 | 10 | – 26 | – 44 | |
| Effect of changes in composition of Group on cash and cash equivalents | – | – | – 25 | 27 | |
| Change in cash and cash equivalents | 97 | 223 | –1,039 | 1,906 | |
| Cash and cash equivalents as at 1 January | 1,856 | 1,985 | 7,157 | 8,631 | |
| Cash and cash equivalents as at 30 September | 1,953 | 2,208 | 6,118 | 10,537 |
Condensed Cash Flow Statement for the period from 1 January to 30 September
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements at 30 June 2019.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
• 21
OTHER INFORMATION
Page 33 Contacts
Other Information
Contacts
CONTACTS Business and Finance Press
Telephone + 49 89 382-2 45 44 + 49 89 382-2 41 18 Fax + 49 89 382-2 44 18 E-mail [email protected]
Investor Relations
Telephone + 49 89 382-2 53 87 Fax + 49 89 382-1 46 61 E-mail [email protected]
The BMW Group on the Internet
Further information about the BMW Group is available online at www.bmwgroup.com. Investor Relations information is available directly at www.bmwgroup.com/ir. Information about the various BMW Group brands is available at www.bmw.com, www.mini.com and www.rolls-roycemotorcars.com.
This version of the Quarterly Statement is a translation from the German version. Only the original German version is binding.
