BMW Group Post Q1 Earnings of €10.185 Billion

Ken Zino of AutoInformed.com on BMW Group Post Q1 Earnings of €10.185 Billion

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The BMW Group during Q1 of 2022 posted today an earnings return before taxes margin of  39.3% compared to 2021 at 14.0% based on a Net Profit of €10.185 billion, up 256%.

The financial results saw Q1 revenues up 16.3% to €31.1 billion (2021: € 26.778 billion). Earnings per share grew to €15.33 from €4.26 a year ago. This significant increase is a result of the full consolidation of Brilliance China Automotive Holdings Ltd., or BBA. Without the consolidation effects, margin was 18.4%. (AutoInformed: BMW Takes Majority Share in Chinese JV Brilliance Automotive)

The JV has been fully consolidated since 11 February 2022, following the extension of the joint-venture agreement and the increase in shares held by BMW AG from 50% to 75%. Since this date, around 23,000 employees in China have been added to the BMW Group workforce number. The subsidiary contributed €3.287 billion to revenues from 11 February 2022 onwards.

The company also benefited from positive pricing and product mix effects and was able to expand its aftersales business. The continuing positive development in used car markets, especially the US and the UK, resulted in higher income from the sale of end-of-lease vehicles. Revenues also benefited from currency tailwinds. Strong pricing has also helped to partly compensate the headwinds from rising raw material and energy prices.

Slight increase in US deliveries: A total of 596,907 vehicles were delivered to customers in the first quarter. This figure was lower than the previous year’s all-time high (2021: 636,606 vehicles/‑6.2%), due to limited availability of components and wide-scale lockdowns in China. The rate of sales growth varied between different regions of the world: In the Americas and in the US, the BMW Group reported growth on a par with the prior-year quarter. In the Americas, the company delivered 99,169 vehicles to customers (2021: 96,352 vehicles; +2.9%). In the US, BMW Group sales reached 80,974 vehicles (2021: 78,067 vehicles; +3.7%), earning it a leading position in the US premium segment.

European markets: Saw a moderate decrease of 7.8% in BMW, MINI and Rolls-Royce deliveries (2022: 220,393 units; 2021: 239,018 units). Sales in Germany were slightly lower year-on-year, at 60,098 units (2021: 62,696 vehicles/-4.1%).

Sales in Asia primarily reflected COVID-related restrictions and renewed lockdowns in China, which led to a decrease in deliveries to 265,065 units (2021: 287,697 units; -7.9%). In China, the company delivered 208,953 vehicles to customers (2021: 230,193 vehicles/-9.2%).

Brands

During the first three months of 2022, the BMW brand delivered a total of 519,796 vehicles to customers – a decrease of 7.3% compared to the strong prior-year quarter (2021: 560,543 vehicles). 2022 marks the 50th anniversary year for BMW M. 39,055 high-performance models from BMW M went to customers, an increase of 3.1% (2021:37,894 vehicles).

At brand level, MINI sales for the first quarter were up slightly (75,487 vehicles; 2021: 74,683 vehicles, +1.1%) – mainly thanks to the electrified MINI Cooper SE* and MINI Countryman Plug-in Hybrid* models. Together, both models accounted for over 17% of total MINI sales.

Rolls-Royce Motor Cars delivered 1,624 vehicles to customers in the first quarter – an increase of 17.7% (2021: 1,380 vehicles). This sales growth mainly comes from the Rolls-Royce models Ghost and Cullinan.

Financial Services Segment

The Financial Services Segment had a total of 5,516,021 financing and leasing contracts with retail customers at the end of Q1 (31 December 2021: 5,577,011/-1.1%). The limited availability of new cars was also reflected in the number of new contracts. Between January and March 2022, a total of 433,429 new contracts were concluded with retail customers (2021: 489,066 contracts/‑11.4%). The positive development in the used car markets led to higher income from the sale of end-of-lease vehicles, with a corresponding positive effect on the segment’s financial figures.

First-quarter revenues showed a solid increase from € 7.9 billion to €8.5 billion (+7.3%). With significant growth of 28.0%, earnings before tax (EBT) in the Financial Services Segment rose to €1 billion (2021: € 0.78  billion). A main contributor was increased income from the resale of end-of-lease vehicles in the US and the UK. The percentage of BMW Group new vehicles leased or financed by the Financial Services Segment stood at 46.8% at the end of the first quarter (2021: 50.4%/‑3.6 %-points).

Motorcycles Segment

The Motorcycles Segment was again able to increase its sales volume in Q1, building on a successful prior year. A total of 47,403 BMW motorcycles and scooters were delivered to customers – up 11.3% compared to the same quarter of the previous year (2021: 42,592 units). Revenues climbed 6.1% to €0.79 billion (2021: € 0.75 billion). The segment’s earnings before financial result (EBIT) totaled €0.1 billion (2021: €0.135 billion/-20.0%), while the EBIT margin came in at 13.5%.

Inevitable Footnotes

1 Includes 96,133 units (2021: 175,838 units) delivered to customers by the BMW Brilliance Automotive Ltd., Shenyang, joint venture in the period from 1 January to 10 February 2022 (i.e., prior to the full consolidation of that entity in the BMW Group Financial Statements).

2 Ratio of Group earnings before taxes to Group revenues.

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