Strong first quarter for the BMW Group

The BMW Group has made a successful start to 2005 despite difficult market conditions. The car sales volume achieved during the first three months was a new quarterly record. Despite the expenditure incurred to introduce the new BMW 3 Series Sedan and the revised BMW 7 Series, the BMW Group was also able to post a pleasing result for the quarter, once again proving its underlying strength.

At euro 10,357 million, group revenues during the first three months of 2005 were down by 4.1% (first quarter 2004: euro 10,805 million). This reduction was due primarily to model life-cycle factors in the Automobiles segment and to the weakness of the US dollar against the euro. The reported profit was affected adversely by external factors. In particular, significantly higher raw material prices, currency factors and increased competitive pressure all had a negative impact during the first quarter 2005. However, sales volume growth and continuous efficiency improvement measures within the enterprise enabled the BMW Group to compensate these effects to a large extent. Against this background, the BMW Group was able to generate a profit before tax of euro 812 million (-4.6% / first quarter 2004: euro 851 million).

The net profit of euro 519 million was almost at the same high level achieved in the same quarter last year (-0.8% / first quarter 2004: euro 523 million). This equates to earnings of euro 0.77 per share of common and preferred stock (first quarter 2004: euro 0.78). The return on sales, at 7.8%, was stable (first quarter 2004: 7.9%). Cash flow continued to grow dynamically, rising by 12.9% to euro 1,294 million (first quarter 2004: euro 1,146 million).

“The first three months of 2005 support our positive expectations for the full year. Despite adverse external factors and the model change of the Group’s strongest-selling model series, our goal of achieving approximately the high earnings level of 2004 remains unchanged”, stated Helmut Panke, Chairman of the Board of Management of BMW AG.

Slight increase in workforce
The BMW Group had a worldwide workforce of 106,033 employees at the end of the first quarter 2005, 0.9% more than one year earlier (31 March 2004: 105,123 employees). Compared to 31 December 2004 (105,972 employees), the number of employees was largely unchanged (+0.1%).

Numerous new models in the course of 2005
The BMW Group will again be introducing numerous new models onto the market during 2005. In addition to the new BMW 3 Series Sedan, which has been available in Europe since 5 March, the revised BMW 7 Series and the high performance BMW M5 and BMW M6 models have gone into production. From spring onwards, the dynamic four-wheel xDrive system will also be available for the first time in a BMW Sedan, namely in the BMW 525xi and 530xi. On top of this, the new BMW 3 Series Touring and the BMW 130i will come onto the market in September. The BMW Group also announced in mid-March that it would continue to broaden the range of vehicles on offer by bringing out two new model series in the coming years.

Automobiles segment: strong sales volume growth in the first quarter
BMW, MINI and Rolls-Royce brand car sales rose during the first quarter 2005 by 8.2% to 292,207 units, the highest level ever achieved by the Group in a first quarter (first quarter 2004: 269,973 units). At 239,387 units, the number of BMW brand cars sold between January and March 2005 surpassed the previous year’s equivalent figure by 7.8% (first quarter 2004: 222,067 units). 52,694 MINI brand cars were delivered to customers, an increase of 10.3% (first quarter 2004: 47,766 units). Rolls-Royce Motor Cars handed over 126 Phantoms to customers during the quarter, down by 10.0% (first quarter 2004: 140 Phantoms).

The weakness of the US dollar against the euro, together with model life-cycle induced factors, held down the revenues and earnings performance of the Automobiles segment for the first quarter 2005. Whereas segment revenue increased by 2.2 % to euro 9,954 million (first quarter 2004: euro 9,744 million), segment profit before tax fell by 5.4% to euro 702 million (first quarter 2004: euro 742 million).

Motorcycles: sharp increase in sales volume in the first quarter
The Motorcycles segment has started the financial year 2005 with a sharp increase in sales volume. 21,304 BMW motorcycles were delivered to customers, an increase of 18.8% (first quarter 2004: 17,935 motorcycles). The product offensive initiated in 2004 had a positive effect on segment performance, with the full availability of the K1200 S and R1200 RT contributing to good growth rates.

Segment revenues for the first quarter 2005 rose by 12.8% to euro 318 million (first quarter 2004: euro 282 million). The segment profit before tax increased by 10.7% to euro 31 million (first quarter 2004: euro 28 million).

Financial services business remains on growth course
The Financial Services segment continued to perform well during the first quarter 2005. The overall volume of new contracts signed with retail customers amounted to euro 5,110 million, surpassing the previous year’s equivalent figure by 9.6% (first quarter 2004: euro 4,663 million). The proportion of new BMW Group cars financed by the Financial Services segment during the first three months went up from 39.5% to 42.3%.

The segment profit before tax for the first quarter 2005 increased by 13.6% to euro 150 million (first quarter 2004: euro 132 million).

 Text courtesy of BMW AG