Official BMNW Press Release: The MINI brand also registered sharp sales volume growth rates in the third quarter, with the number of cars sold rising by 25.2% to 57,315 units (third quarter 2006: 45,788 units). Sales volume for the nine-month period increased by 12.3% to 164,891 units (first nine months 2006: 146,851 units). A sales volume in excess of 220,000 MINI has been set as the target for the full year.
The rest of the BMW press release following…
>The BMW Group increased sales volume, revenues and earnings figures for the third quarter 2007 and is therefore well on its way towards achieving its earnings and sales volume targets for the full year. “Excluding the exceptional gain on the Rolls-Royce exchangeable bond, the BMW Group is still aiming to post a current year profit before tax that will be higher than the previous year’s record figure”, stated Norbert Reithofer, Chairman of BMW AG’s Board of Management in Munich on Tuesday. The company is also heading towards a sales volume for the year of over 1.4 million vehicles, with growth in the high single-digit percentage range. All three brands are forecast to achieve new retail sales volume records.
>Third-quarter revenues of the BMW Group rose by 19.2% to euro 13,778 million (third quarter 2006: euro 11,557 million) on the back of increased sales volumes. Profit before tax improved by 6.3% to euro 765 million (third quarter 2006: euro 720 million), whilst the net profit rose even more sharply by 77.7% to euro 803 million (third quarter 2006: euro 452 million) partly as a result of tax effects.
>The BMW Group saw its revenues for the nine-month period grow by 11.1% to euro 40,412 million (first nine months 2006: euro 36,368 million). The group profit before tax amounted to euro 2,682 million (first nine months 2006: euro 3,248 million /-17.4%). Adjusted for the exceptional gain on the partial settlement of the exchangeable bond on shares in the British engine manufacturer, Rolls-Royce plc, London, the profit before tax would have decreased by only 9.4%. The group profit after tax was euro 2,143 million (first nine months 2006: euro 2,187 million /-2.0%).
>During the period from January to September, earnings were affected by various factors including the cost of market launches and production start-ups for numerous new models, high raw material costs, substantial expenditure for the development of even more efficient and fuel-saving engines and the on-going weakness of the US dollar and Japanese yen. The BMW Group uses hedging instruments to reduce the impact of unfavourable exchange rate fluctuations. All of the main currencies are fully hedged for the business year 2007. The negative full-year impact of exchange rate factors will not exceed the level of euro 666 million recorded last year. The company was also confronted with higher purchase prices for steel, precious metals and other materials. The additional cost is likely to be on a similar scale to the previous year’s level of euro 178 million.
>Reithofer: rigorous implementation of strategic realignment
>The BMW Group is currently working intensively to implement the company’s future strategic realignment, announced at the end of September. “The BMW Group will focus its attention on profitability and increasing value over the long term”, explained Reithofer. The BMW Group has set itself some ambitious interim targets for the first five years: the company aims to achieve retail sales of more than 1.8 million vehicles per annum by 2012. On the automobiles side of the business, the company is targeting a return on capital employed (RoCE) of 26% and a return on sales of between 8% and 10% from 2012 onwards.
>Slight increase in workforce
>The BMW Group had a worldwide workforce of 107,731 employees at the end of the third quarter 2007, 0.7% more than one year earlier (107,027 employees).
>The number of employees working in the Automobiles and Motorcycles segments was practically unchanged despite the sharp growth of business. This is a clear indication that the company is making good progress in productivity terms in its core business. The increase in the workforce was mainly due to two acquisitions made in the area of financial services.
>Numerous new models launched
>The new BMW 6 Series CoupÃƒÂ© and Convertible came onto the markets during the third quarter. The BMW 1 Series CoupÃƒÂ© and the MINI Clubman will go on sale from November onwards. A four-seater convertible will be added to the 1 Series in the near future.
>The BMW Group’s product initiative will be continued, as previously announced, in conjunction with the new strategic realignment. The successful X Series will be further expanded to include the Sports Activity Vehicle X1. The BMW X6 is scheduled to come on the market in 2008. In addition, a four-door Gran Turismo will be built along the lines of the CS concept study, previously presented in Shanghai. One further result of the new strategy is that plans are underway to open up a completely new segment based on a new vehicle concept. This is currently being pursued in the form of the Progressive Activity Sedan (PAS), which will add a range of intelligent solutions designed to enhance the functionality of new sedans.
>The MINI brand will be broadening its range with the introduction of a new model, the Sports Activity Vehicle. The Rolls-Royce brand will also expand its model range when the coupÃƒÂ© version comes onto the market as the third variant of the Phantom. Plans are also underway for a further Rolls-Royce model which will be positioned in price and size terms at a level somewhat below the Rolls-Royce Phantom. In the motorcycles business, the product ranges of both the BMW and Husqvarna brands will be expanded during the coming years.
>BMW Group remains the world’s leading premium manufacturer
>Third-quarter sales of the BMW Group rose by 12.8% to 364,564 units (third quarter 2006: 323,064 units). The number of cars sold during the first nine months of the year increased by 7.2% to 1,094,849 units (first nine months 2006: 1,021,534 units). The EfficientDynamics measures taken to optimise performance and consumption give the company a real competitive advantage and had a positive impact on sales performance. The BMW Group forecasts that some 700,000 vehicles in Europe will have been equipped with EfficientDynamics technology by 2008. By the end of this year, the figure is likely to be in the region of 400,000 vehicles.
>The number of BMW brand cars sold in the nine-month period to September went up by 6.3% to 929,379 units (first nine months 2006: 874,208 units). The sales volume for the period from July to September rose by 10.8% to 306,964 units (third quarter 2006: 277,088 units).
>The number of Rolls-Royce brand vehicles handed over to customers during the nine-month period rose by 21.9% to 579 units (first nine months 2006: 475 units) thanks to the new Cabriolet Drophead CoupÃƒÂ©, which has been available since July. The sales volume for the third quarter jumped by 51.6% to 285 units (third quarter 2006: 188 units).
>Automobile segment reports revenues and earnings growth
>Third-quarter revenues of the Automobile segment grew faster than sales volume, with segment revenues rising by 18.2% to euro 13,107 million (third quarter 2006: euro 11,088 million). Profit before tax improved by 15.2% to euro 704 million (third quarter 2006: euro 611 million) on the back of a good sales volume performance. Segment revenues for the nine-month period amounted to euro 38,782 million (first nine months 2006: euro 35,262 million), 10.0% ahead of the corresponding figure last year. Profit before tax fell by 8.8% to euro 2,114 million (first nine months 2006: euro 2,319 million). Segment earnings were adversely affected by exchange rate fluctuations, higher raw material prices, market launch and production start-up costs for new models and higher research and development costs. As already announced, the BMW Group forecasts that full-year earnings of the Automobile segment will surpass the previous year’s result. “Following the successful launch of various models in recent months, we forecast an even faster sales volume growth rate in the fourth quarter 2007 which will increase earnings of the Automobile segment”, explained Reithofer.
>Good performance by the Motorcycle segment
>The Motorcycle segment increased its third quarter sales volume by 1.4% to 23,549 units (third quarter 2006: 23,230 units) thanks to new models. The number of motorcycles sold in the nine-month period went up by 4.3% to 82,779 units (first nine months 2006: 79,333 units). Third-quarter segment revenues fell by 6.8% to euro 259 million (third quarter 2006: euro 278 million), whereas the segment profit before tax improved to euro 5 million (third quarter 2006: euro 4 million/+25%). The pre-tax profit for the nine-month period was euro 95 million (first nine months 2006: euro 89 million), representing a 6.7% improvement. Segment revenues edged up by 1.2% to euro 1,022 million (first nine months 2006: euro 1,010 million).
>Financial services segment continues profitable growth
>The Financial services segment continued to grow profitably in the third quarter despite stiff competition and rising interest rates. The profit before tax improved by 4.9% to euro 191 million (third quarter 2006: euro 182 million), while revenues rose by 32.0% to euro 3,569 million (third quarter 2006: euro 2,703 million). In balance sheet terms, the segment’s business volume increased by 16.5% to reach euro 49,491 million at 30 September 2007. The number of lease and financing contracts in place with dealers and retail customers increased by 14.5% to a total of 2,539,701 contracts. The proportion of new cars of the BMW Group leased or financed by the Financial Services segment during the first nine months of the year was 44.7%, 2.5 percentage points above the proportion recorded for the corresponding period in 2006.