New BMW 5 Series Enhances Group Performance; Earnings for the Third Quarter 2003 Up 5.1% Against Previous Year
MUNICH, Germany, Nov. 6, 2003 -- BMW Group's third quarter 2003 was dominated by the worldwide market introduction of the new BMW 5 Series Limousine, 24,063 units of the new BMW 5 Series were delivered to customers during the period from its launch, at the beginning of July, up to the end of September 2003. The Group also presented an array of other new products, including the BMW X3 and the BMW 6 Series. Bolstered by continuing high demand for the MINI, the BMW Group was able to increase the overall volume of cars sold. In conjunction with the presentation of the Group's quarterly figures, Dr. Helmut Panke, Chairman of the Board of Management of BMW AG commented: "2003 is a crucial year for the BMW Group's current product and market initiative. The new models are generating significant momentum and will play an important role in enabling the BMW Group to achieve its stated objective of surpassing the previous year's sales volume for all brands."
270,439 BMW, MINI and Rolls-Royce brand cars were delivered to customers in the third quarter 2003, an increase of 3.2% (third quarter 2002: 262,066 units). The BMW Group therefore sold 815,308 units during the first nine months of 2003, 1.2% more than in the corresponding period last year (January to September 2002: 805,808 units).
Group revenues for the third quarter 2003 were down by 0.3% to euro 9,945 million 2002 (third quarter 2002: euro 9,971 million). As in the first half of 2003, this slight reduction was attributable mainly to the weakness of the US dollar against the euro. Total revenues for the first nine months of 2003 were euro 30,458 million, a reduction of 5.8% compared to the corresponding period last year (January to September 2002: euro 32,338 million).
Quarterly earnings of the BMW Group were affected again in the third quarter by structure-related expenditure and market launch costs for the new models.
Despite this, the profit from ordinary activities for the third quarter 2003, at euro 724 million, was 5.1% higher than in the previous year (third quarter 2002: euro 689 million), mainly as a result of rising vehicle sales. On a nine month basis, the profit from ordinary activities was euro 2,501 million, and thus 8.1% below the corresponding period in 2002 (January to September 2002: euro 2,720 million).
Dr. Helmut Panke stated: "The financial year 2003 is progressing as anticipated, also in earnings terms. The upward trend signalled in earlier periods actually materialised in the third quarter and will continue to gain in momentum during the remainder of the year. Despite substantial expenditure incurred in conjunction with the product and market initiative, we will, from today's perspective, be able to match the previous year's record-level earnings on a group level."
The BMW Group reports a net profit of euro 445 million for the third quarter 2003, a 2.8% improvement (third quarter 2002: euro 433 million). Net income for the first nine months of 2003 was euro 1,523 million. The short-fall against the comparable figure for the previous year (January to September 2002: euro 1,694 million) has therefore continued to decrease and now stands at 10.1%.
3,480 new jobs created since the beginning of the year
At 30 September 2003, the BMW Group had a workforce of 104,691 employees, 3.1% more than at 30 September 2002 (101,565 employees). The comparable number of employees at 30 September 2002, after adjusting for disposals and transfers of group companies, was 101,339, so that the increase on a comparable basis was 3.3%. Since the beginning of the year, the BMW Group has created 3,480 new jobs.
In early September 2003, 1,229 young people commenced their vocational training with the BMW Group. Overall, a total of 4,340 apprentices were employed by the Group at the end of the third quarter 2003, 2.7% more than at the same date last year.
Automobiles segment reports improved earnings
Revenues of the Automobiles segment for the third quarter 2003, at euro 9,069 million, were 3.1% below the previous year's level (third quarter 2002: euro 9,360 million), mainly as a consequence of the weakness of the US dollar against the euro. The Automobiles segment generated revenues of euro 28,089 million in the first nine months of 2003, 2.5% below the corresponding period last year (January to September 2002: euro 28,823 million).
The profit from ordinary activities of the Automobiles segment for the third quarter 2003 improved perceptibly following the introduction of the new BMW 5 Series and, at euro 570 million, was 73% higher than last year (third quarter 2002: euro 531 million). The profit from ordinary activities for the first nine months of 2003 was euro 2,057 million, and thus 14.4% lower than the same period last year (January to September 2002: euro 2,403 million).
223,135 BMW brand cars were sold during the third quarter 2003, an increase of 1.6% compared to last year (third quarter 2002: 219,617 units). However, on a nine month basis, the sales volume has not yet reached the previous year's level. In the nine month period to the end of September 2003, a total of 678,107 BMW brand cars was sold, 3.3% fewer than in the corresponding period last year (January to September 2002: 700,947 units).
Sales of MINI brand cars continue to surpass expectations. In the third quarter 2003, the BMW Group sold more MINI brand cars than ever before in a single quarter. 47,252 units were delivered to customers, an increase of 11.3% (third quarter 2002: 42,449 units). A total of 137,130 MINI brand cars was sold during the period January to September 2003, 30.8% more than in the corresponding period last year (January to September 2002: 104,861 units). This new record figure underlines the success of the MINI brand.
The number of Rolls-Royce motor cars sold is still being influenced by the build-up of production at the Goodwood plant. The receipt of several hundred advance orders for the current year confirms the success of this unique motor car.
With dealers' stocks and demonstration and display vehicles now in place, 71 vehicles have been delivered to customers to date. The BMW Group expects to manufacture approximately 500 Rolls-Royce Phantoms in 2003. Once this year's build-up phase has been completed, the installed capacity at the Goodwood plant will permit an annual volume of approximately 1,000 Rolls-Royce Phantoms.
Market conditions remain difficult for the Motorcycles segment
Despite continued difficult market conditions, sales of the Motorcycles segment in the third quarter increased by 2.8% to 22,029 units, and were therefore, for the first time in 2003, higher than the equivalent quarter of the previous year (third quarter 2002: 21,433 units). On a nine month basis, however, sales were lower than the corresponding period last year. 73,618 BMW motorcycles were sold in the nine months to the end of September 2003, 1.3% fewer than in the corresponding period last year (January to September 2002: 74,619 units).
As in preceding months, the weakness of the US dollar against the euro had a negative impact on the revenues of the Motorcycles segment. Revenues for the third quarter were down by 6.0% to euro 221 million (third quarter 2002: euro 235 million). Revenues for the first nine months of 2003 totalled euro 854 million, a decrease of 3.8% compared to the previous year (January to September 2002: euro 888 million).
The planned launch of new models in 2004 resulted in higher up-front expenditure in the third quarter 2003, reducing earnings of the Motorcycles segment accordingly. A loss from ordinary activities of euro 15 million was recorded for the third quarter 2003, an 87.5% deterioration compared to the corresponding quarter last year (third quarter 2002: loss of euro 8 million). The profit from ordinary activities for the first nine months of 2003 fell by 9.9% to euro 73 million (January to September 2002: euro 81 million).
Financial Services segment still growing
The Financial Services segment again reported a sharp increase in new business in the third quarter 2003 and thus remains on growth course. The proportion of new BMW and MINI brand cars financed or leased via the Financial Services segment in the first nine months of 2003 was 39.2%, well above the level achieved in the same period last year (35.0%).
The total business volume of the Financial Services segment as disclosed in the balance sheet amounted to euro 28,008 million at the end of the third quarter 2003, an increase of 7.3% compared to 30 September 2002 (euro 26,111 million).
The profit from ordinary activities for the third quarter 2003 increased by 7.1% to euro 120 million (third quarter 2002: euro 112 million). On a nine month basis, the profit from ordinary activities improved by 19.0% to euro 345 million (January to September 2002: euro 290 million).
BMW Group in figures
3rd quarter 3rd quarter Change
2003 2002 in %
Vehicle production
Automobiles units 273,167 270,119 1.1
Motorcycles(1) units 14,938 16,014 -6.7
Deliveries to customers
Automobiles units 270,439 262,066 3.2
Motorcycles(2) units 22,029 21,433 2.8
Workforce at the end
of quarter(3) 104,691 101,565 3.1
Cashflow euro million 1,092 1,023 6.7
Revenues euro million 9,945 9,971 -0.3
Profit from ordinary
activities euro million 724 689 5.1
Thereof:
Automobiles euro million 570 531 7.3
Motorcycles euro million -15 -8 -87.5
Financial
Services euro million 120 112 7.1
Reconciliations euro million 49 54 -9.3
Income taxes euro million -279 -256 -9.0
Net profit euro million 445 433 2.8
Earnings per share
in euro(4) euro 0.66/0.66 0.64/0.64 3.1/3.1
(1) excluding 1,048 C1 in the 3rd quarter 2002.
(2) excluding 1,523 C1 in the third quarter 2003 (3,583 C1 in the 3rd
quarter 2002)
(3) The comparable number of employees at 30 September 2002 after
adjusting for disposals and transfers of group companies was
101,339.
(4) for common/preferred stock in accordance with IAS 33. In computing
earnings per share of preferred stock, earnings to cover the
additional dividend of euro 0.02 per share of preferred stock are
spread over the quarters of the corresponding financial year.
1 January to 1 January to Change
30 September 30 September in %
2003 2002
Vehicle production
Automobiles units 827,598 819,378 1.0
Motorcycles(1) units 73,206 73,472 -0.4
Deliveries to customers
Automobiles units 815,308 805,808 1.2
Motorcycles(2) units 73,618 74,619 -1.3
Workforce at the end
of quarter(3) 104,691 101,565 3.1
Cash flow euro million 3,320 3,401 -2.4
Revenues euro million 30,458 32,338 -5.8
Profit from
ordinary
activities euro million 2,501 2,720 -8.1
Thereof:
Automobiles euro million 2,057 2,403 -14.4
Motorcycles euro million 73 81 -9.9
Financial Services euro million 345 290 19.0
Reconciliations euro million 26 -54 -
Income taxes euro million -978 -1,026 4.7
Net profit euro million 1,523 1,694 -10.1
Earnings per
share in euro(4) euro 2.26/2.27 2.52/2.53 -10.3/-10.3
(1) excluding 4,163 C1 in the nine months to 30 September 2002.
(2) excluding 4,029 C1 in the nine months to 30 September 2003 (8,829 C1
to 30 September 2002).
(3) The comparable number of employees at 30 September 2002 after
adjusting for disposals and transfers of group companies was
101,339.
(4) for common/preferred stock in accordance with IAS 33. In computing
earnings per share of preferred stock, earnings to cover the
additional dividend of euro 0.02 per share of preferred stock are
spread over the quarters of the corresponding financial year.