BMW Group Reports Best Half-Year Result to Date

MUNICH, Germany, Aug. 7 The BMW Group grew steadily and profitably in the second quarter 2001: sales, turnover and earnings rose once again. The company is also expecting developments to be positive in the rest of the year. The forecast is that the number of BMW and MINI brand vehicles sold by the end of the year 2001 might pass 900,000 for the first time. The current product and brand offensive will be consistently extended. In the second quarter 2001, BMW Group sales reached 10,608 million euro, which is an increase of 519 million euro (+ 5.1%) over the same quarter last year. Excluding the external Rover/Land Rover sales of the same quarter last year (1,778 million euro), the increase is 27.6 %. Over the half year, a 1,148 million euro (+ 6.1%) increase to 19,973 million euro was achieved. The BMW Group's profit from ordinary activities in the second quarter 2001 was 847 million euro, which is 325 million euro or 62.3% above the same quarter last year. In the first quarter 2001, profit including extraordinary earnings in the sum of 75 million euro from the sale of plots of land no longer required for operations had been 853 million euro. In the first half year 2001, profit from ordinary activities was 1,700 million euro. At 525 million euro, profit in the second quarter 2001 was 293 million euro (+ 126.3%) above the comparable value last year. The total profit for the first half year is therefore 934 million euro (+ 192.8%). The DVFA/SG result per share in the first half year 2001 is 1.52 euro (1st half year 2000: 0.51 euro). As of June 30, 2001, the BMW Group had a workforce of 94,765. In a direct comparison with the first half year 2000, there has been a decline in the number of staff employed of 11,840. Excluding the changes from the sale of Rover/Land Rover, the workforce compared with June 30, 2000 rose by 3.3%. For the first time, the BMW Group in Germany employed a workforce of more than 70,000. Here, staffing levels have risen by 3,500 to reach 71,025. Product offensive successfully continued "The BMW Group is consistently continuing its product and brand offensive. One of the milestones here, from autumn onwards, will be the new 7 series," stated Prof. Dr.-Ing. Joachim Milberg, Chairman of the Board of Management of BMW AG. "The 7 series," Professor Milberg continued "will set new standards in technology, driving dynamics, design and ease of operation and thus demonstrate the innovative power and leadership of the BMW Group." At the beginning of July, the MINI brand had an extremely successful sales start in Britain with the MINI One and the MINI Cooper. The launch in mainland Europe will follow in September. The second generation of the BMW 3 series compact, the new BMW M3 Convertible and the BMW X5 3.0d with a diesel in-series six-cylinder engine were successfully launched in June. As 2001 progresses, the high-performance BMW X5 4.6is and the model revision of the BMW 3 series will be launched in addition to the new 7 series. Second half year will continue positive The BMW Group expects sales to continue their positive developments in the second half of 2001. Thus, for the first time total deliveries of more than 900,000 BMW and MINI brand cars are anticipated for the full year. The BMW Group is consistently continuing its strategy to develop further market potentials. In the near future the new BMW 6 and 1 series and the expansion of the X family will significantly expand BMW's product portfolio. From 2003 the BMW Group will sell the Rolls-Royce cars in the supreme top-end segment. Expenditure on this wide range of new models will take its full effect in the second half of the current year, which will also see the introduction of MINI One/MINI Cooper and the new BMW 7 series will be incurred. In the light of the very positive operative development, the BMW Group is confident that even in this period of substantial expenditure on the Group's product and brand offensive the outstanding result achieved in the BMW Automobiles segment in the year 2000 will be reached once again. On Group level, the new orientation of the BMW Group will lead to a significant improvement of the result in 2001. An overview of the BMW Group - results by segment Sales in the BMW Automobiles segment increased considerably in the first half year (+ 19.3%) to 17,431 million euro (1st half year 2000: 14,609 million euro). In the first six months, profit from ordinary activities in the BMW Automobiles segment rose by 22.2% to 1,577 million euro. This figure is all the more satisfactory in view of the fact that it also takes account of the development costs for the product and brand offensive. All-time highs in volume sales and production made the first half year 2001 the best in the history of BMW Automobiles. New absolute record values have been achieved for sales every month since the beginning of the year. A total of 459,835 BMW brand vehicles had been sold by the end of June. With 276,987 units delivered to customers, the 3 series achieved a new record in the first half year 2001; this is 5.7 percent up on the previous year. In addition to the 3 series convertible introduced in 2000, the 3 series touring is the primary motivating force here. Deliveries of the 3 series saloon in its fourth year of production reached 163,374 units, which is an increase of 4,200 units (+ 2.6%) over the first half year 2000. With 107,805 vehicles sold in the first half year 2001, the 5 series was 3.5% above last year's levels; the model revision undertaken in autumn 2000 has been received positively by the market. The Sports Activity Vehicle X5, 35,587 of which were sold in the first half year, has had a major influence on the satisfactory half year figures. This marks an increase of 25,255 vehicles compared with the first half year 2000. The last vehicles of the existing 7 series were produced at the end of July. Before the introduction of the successor model, sales of the 7 series showed a decrease over the previous year, as expected, reaching 17,104 units (- 14.7%) at the end of June. BMW Motorcycles also set new records In the first half year, sales in the BMW Motorcycle segment reached 627 million euro (1st half year 2000: 547 million euro). This is an increase of 14.6%. Profit from ordinary activities rose in the first half year to 59 million euro -- an increase of 22.9%. With 50,117 motorcycles delivered to customers as of June 30, 2001, the BMW Motorcycles segment passed the 50,000 vehicle mark for the first time in a half year. This corresponds to an increase of 9.8 percent compared with the same period last year. BMW Motorcycles have successfully detached themselves from the general trend in the international markets, and have developed better than the respective market as a whole in nearly all sales regions. 5,820 units of the C1, launched in April 2000, were delivered to customers in the first half year. This is 59.5% more than in the corresponding period last year (3,649). BMW Financial Services expands product portfolio In the first half year 2001, BMW Financial Services continued to expand its strategic operations in fleet management, multibrand financing and direct banking. With its entry into the investment funds business in Germany, BMW Bank GmbH has opened up a business area offering a high growth potential. In cooperation with a well-known funds manager, the company is able to offer customers five innovative MultiManager funds on an exclusive basis. The investment business covered by the Direct Banking sector achieved a volume of 2.4 billion euro worldwide as of June 30, 2001. This represents an increase of 71.4% compared with June 30, 2000. Sales of BMW Financial Services reached a half year value of 3,719 million euro, which is 526 million euro (+16.5%) more than in the first half year 2000. The complete half year report can be accessed online at http://www.press.bmwgroup.com or in the Press department. The BMW Group: an Overview 2nd quarter 2nd quarter Change units/euro million 2001 2000 Vehicle production BMW(1) 231,656 210,787 9.9 % MINI 2,317 Motorcycles(2) 30,127 22,256 35.4 % Deliveries to customers BMW(3) 238,058 218,855 8.8 % Motorcycles(4) 32,263 27,869 15.8 % Workforce at end of quarter(5) 94,765 91,746 3.3 % Cash flow 1,056 665 58.8 % Sales(6) 10,608 10,089 5.1 % Profit from ordinary activities 847 522 62.3 % thereof: BMW Automobiles 764 728 4.9 % Rover Automobiles -- -338 BMW Motorcycles 39 31 25.8 % Financial Services 118 94 25.5 % Miscellaneous, consolidations -74 7 Taxes on profit 322 290 11.0 % Profit 525 232 126.3 % DVFA/SG result per share in Euro 0.82 0.33 148.5 % (1)in the second quarter 2000 plus 58,859 Rover/Land Rover vehicles (2)in addition 3,653 C1 (second quarter 2000: 7,034) (3)in the second quarter 2000 plus 82,604 Rover/Land Rover vehicles (4)in addition 4,425 C1 (second quarter 2000: 3,631) (5)106,605 employees including Rover/Land Rover as at June 30, 2000 (6)adjusted for Rover/Land Rover sales in the second quarter 2000 (euro 1,778 million), sales increased by 27.6% January 1- January 1- Change units/euro million June 30, 2001 June 30, 2000 Vehicle production BMW(1) 469,389 414,146 13.3 % MINI 2,317 Motorcycles(2) 53,481 43,718 22.3 % Deliveries to customers BMW(3) 459,835 420,955 9.2% Motorcycles(4) 50,117 45,626 9.8% Workforce at end of quarter(5) 94,765 91,746 3.3% Cash flow 2,000 1,204 66.1 % Sales(6) 19,973 18,825 6.1 % Profit from ordinary activities 1,700 719 136.4 % thereof: BMW Automobiles 1,577 1,290 22.2 % Rover Automobiles -762 BMW Motorcycles 59 48 22.9 % Financial Services 208 190 9.5 % Miscellaneous, consolidations -144 -47 -206.4 % Taxes on profit(7) 766 400 91.5 % Profit 934 319 192.8 % DVFA/SG result per share in Euro 1.52 0.51 198.0 % (1)from January 1, 2000-June 30, 2000 plus 192,236 Rover/Land Rover vehicles (2)in addition 7,740 C1 (as of June 30, 2000: 9,946) (3)from January 1, 2000-June 30, 2000 plus 189,753 Rover/Land Rover vehicles (4)in addition 5,820 C1 (as of June 30, 2000: 3,649) (5)as at June 30, 2000 106,605 employees including Rover/Land Rover (6) excluding Rover/Land Rover sales between January 1, 2000 and June 30, 2000 (euro 3,500 million) sales increased by 30,3 % (7)thereof in the first quarter 2001 euro 181 million impact of the tax reform in Germany (deferred taxes)