COVID Effects: BMW AG FY Earnings Guidance – Zero

Motorcycle and automobile deliveries will be significantly below 2019.

The Board of Management of BMW AG today updated its guidance for the financial year 2020 to zero earnings on automobiles. In 2019, the BMW Group sold over 2.5 million passenger vehicles and more than 175,000 motorcycles worldwide. The profit before tax in the financial year 2019 was € 7.118 billion on revenues amounting to €104.210 billion. As of 31 December 2019, the BMW Group had a workforce of 126,016 employees.

“The decisive factor for the adjustment is that the measures to contain the corona virus pandemic are lasting longer in several markets and are thus leading to a broader negative impact than was foreseeable in mid-March, BMW said in a statement. “It is therefore apparent that delivery volumes in these markets will not-as was previously assumed-return to normal within a few weeks.”

The economic shifts caused by the pandemic make it difficult to provide a reliable forecast. The outlook is therefore subject to a high degree of uncertainty.

• BMW has widened the range for the EBIT margin for the Automotive segment and now expects a range between 0% and 3%.
• In the Financial Services segment, the return on equity is now forecast to fall moderately year-on-year.
• Motorcycles deliveries over the twelve-month period are now expected to be significantly below the previous year’s level. The EBIT margin for the segment is forecasted to be within a range of between 3% and 5%.
• Group profit before tax is still predicted to be significantly lower than in 2019.
• These targets come with a workforce slightly below the level of 2019. Reductions in staff numbers due to fluctuation will be used to manage the workforce size.

The updated guidance does not, in particular, include, a longer and deeper recession in major markets, a more severe economic slow-down in China as a result of recessions in other parts of the world, significant market distortions due to an even stronger competitive environment and possible implications caused by a second wave of infections and associated containment measures.

The BMW AG will publish further details on the outlook and the earnings figures for the first quarter of 2020 on 6 May 2020.