For those that just live for numbers, here’s news of another banner financial year for MINI’s parent company, BMW Group (via BMW Press):
The BMW Group proved its underlying strength in 2004 again and continued to grow profitably. Despite difficult market conditions, the BMW Group has succeeded in strengthening earnings potential by pursuing its premium brand strategy. The profit from ordinary activities rose by 10.9% to a new high of euro 3,554 million (2003: euro 3,205 million).
The net profit increased by 14.1% to euro 2,222 million (2003: euro 1,947 million). Earnings per share were euro 3.30 (2003: euro 2.89) per share of common stock and euro 3.32 (2003: euro 2.91) per share of preferred stock. Cash flow increased by 15.1% to euro 5,167 million (2003: euro 4,490 million). Despite the currency impact, revenues in 2004, at euro 44,335 million, were 6.8% higher than in the previous year (2003: euro 41,525 million). The return on sales at a group level thus improved by 0.3 percentage points to 8.0% (2003: 7.7%).
“The BMW Group is now reaping the benefits of the up-front expenditure previously incurred to launch new products and to expand the international sales organisation”, stated Helmut Panke, Chairman of the Board of Management of BMW AG. “Over the past years, we have taken on a new dimension with our range of vehicles, market presence and financial strength and are now stronger than ever before”, continued Mr. Panke. “This ability to perform strongly and profitably allows us to continue emphatically on our course of growth and expansion.”
As recently announced, the BMW Group will therefore continue to expand its product portfolio by bringing out two new model series. The Company thus opens up opportunities to increase sales volume and profitability in the future by taking advantage of the increasingly differentiated development of the various segments of the international automobile markets. Both of the new series will contribute actively to the future growth of the BMW Group and thus enhance the value of the business.
In the light of the high level of profitability and the expectation that 2005 will also progress successfully, the Board of Management and the Supervisory Board will propose an increased dvidend at the Annual General Meeting to be held on May 12, 2005. This follows on from the dividend increase already made in the previous year. Subject to approval, the unappropriated profit available for distribution in BMW AG of euro 419 million (2003: euro 392 million) will be used to pay a dividend of euro 0.62 for each common stock share (2003: euro 0.58), 6.9% higher than in the previous year, and a dividend of euro 0.64 for each preferred stock share (2003: euro 0.60), 6.7% higher than in the previous year.
Share buy-back proposed
In addition, the Board of Management and the Supervisory Board of BMW AG will propose at the Annual General Meeting that the shareholders pass a resolution authorising the buy-back of up to 10% of the Company’s share capital. The aim of this measure is to reduce the share capital by withdrawing the shares from circulation. This is commensurate with the sustainable ability to generate profits from operations. The positive development of cash flows over the past years has enabled the BMW Group to accumulate a substantial level of cash funds and to achieve a solid equity ratio. Cash flow will continue to grow dynamically over the coming years.
Automobiles segment: sharp rise in profit
In 2004, the Group introduced more new models onto the market than ever before. The BMW X3, the BMW 6 Series coupe and Cabrio models and the BMW 5 Series Touring were all launched during the first half of the year, to be followed in the second half of the year by the BMW 1 Series and the MINI Convertible.
As announced during the past week at the Geneva Automobile Salon, the BMW Group will continue to expand its range of vehicles, first of all, by launching two new BMW brand model series. One of the model series will give a new meaning, in typical BMW fashion, to the concept of space; the combination of functionality and variability means that this product will differ from everything that has been on offer before. Driver and passenger alike will experience a new defined and individualised sense of space, combined with the dynamic driving performance and elegant, sporty look of a BMW. The second of the two new model series brings together the raised seating arrangements and four-wheel drive qualities of a Sports Activity Vehicle with the exterior feel of a coupe and the driving characteristics of a sporty passenger car. The first model will be manufactured in the BMW production network in Germany, and the second will be manufactured at the Spartanburg plant in the USA.
The profit before taxes of the Automobiles Segment for the financial year 2004 amounted to euro 3,159 million, 14.4% higher than the result for the previous year (2003: euro 2,761 million). Revenues rose by 11.0% to euro 42,544 million (2003: euro 38,317 million).
With 1,208,732 BMW, MINI and Rolls-Royce brand cars sold in 2004, the BMW Group beat the sales volume record set in the previous year by 9.4% (2003: 1,104,916 cars).
For the first time in its history, the BMW brand surpassed the one million mark with sales of 1,023,583 cars (+10.3% / 2003: 928,151 units). Altogether, sales of MINI brand cars rose to 184,357 units in 2004, an increase of 4.5% compared to the previous year (2003: 176,465 units). 792 Rolls-Royce Phantoms were handed over to customers in the past year (2003: 300 units). This is the largest number of Rolls-Royce brand vehicles to have been sold for 14 years. The Rolls-Royce Phantom is therefore the indisputable market leader in the luxury segment.
Motorcycles segment just below previous year’s level
The reported results of the Motorcycles segment in 2004 have been affected by the substantial level of up-front expenditure for new models. The profit from ordinary activities fell by 38.0% to euro 31 million (2003: euro 50 million). At euro 1,029 million, revenues were 2.5% below the corresponding figure for the previous year (2003: euro 1,055 million). A total of 92,266 motorcycles was sold, just below the record sales volume achieved in the previous year (2003: 92,962 units / -0.7%).
Financial Services segment: growth course continued
The volume of new customer financing contracts rose by 19.1% to euro 20,759 million, and hence a new record level (2003: euro 17,423 million). The proportion of new BMW and MINI cars financed by the Financial Services segment in 2004 rose to 42.0% (2003: 38.3%). The Financial Services segment continued to see sharp growth, a development which was matched by a very pleasing improvement in earnings. At euro 515 million, the segment’s profit from ordinary activities was 13.9% higher than in the previous year (2003: euro 452 million).
Capital expenditure remains at a high level
In 2004, the BMW Group invested euro 3,226 million in property, plant and equipment and intangible assets. In addition, development expenditure of euro 1,121 million has been recognised as assets in accordance with IAS, so that total capital expenditure for 2004 amounted to euro 4,347 million. This represents an increase of 2.4% compared to the previous year (2003: euro 4,245 million).
Production volume increased
As a result of the product offensive, the BMW Group also achieved new record figures in production volume terms. In total, 1,250,345 BMW, MINI and Rolls-Royce brand cars were manufactured, 11.7% more than in the previous year (2003: 1,118,940 cars).
Obviously the big hurdles in the years to come for BMW and MINI will be the dollars continued slide against the Euro. 2005 and 2006 will surely be interesting!