Statement Dr Nicolas Peter, Member of the Board of Management of BMW AG, Finance, Conference Call Interim Report to 31 March 2021

Ladies and Gentlemen,

Good morning!

The BMW Group made a good start to the financial year 2021. Our operating result in the first quarter was at a very high level and we exceeded market expectations.

We achieved all of this despite growing headwinds from rising raw material prices and in a market environment that remains volatile due to the coronavirus pandemic. 

We were also able to maintain the supply of semiconductors in the first quarter. As a result, there were no interruptions in production during the reporting period. However, the situation remains difficult. 

Significantly improved pricing was a key driver for our strong Group earnings. Additionally, the positive trend of the second half-year in 2020 continued during the first quarter in all major regions of the world with over 636,000 vehicles delivered. 

In particular, our electrified vehicle fleet once again proved to be an engine for growth. Our sales of electrified vehicles more than doubled from the same period of last year to over 70,000 units (2020: 30,692, +129.8%). This means more than one in ten vehicles we sell is already electrified. This underlines the high – and steadily growing – importance of electromobility to our company. 

We took advantage of the past year to make ourselves more efficient and more profitable for the long term. In addition to the better pricing I mentioned before, this includes strict management of fixed costs, a focus on controlling our inventory levels and cost-efficient personnel structures. 

The company-wide Performance Programme continues to deliver important contributions to sustainable earnings growth.

Ladies and Gentlemen, 

All these factors are having a positive impact on our financial figures. 

Let’s now take a closer look at our financial performance. 

Group revenues for the first quarter of 2021 totalled around 26.8 billion euros (2020: 23.3 billion euros, +15.2%). Group earnings before tax reached 3.76 billion euros (2020: 798 million euros) and were therefore significantly higher than the previous year. The EBT margin stood at 14%. 

The development in pre-owned car markets also contributed to the margin increase through higher prices for the sale of end-of-lease vehicles. 

Manufacturing costs rose compared to the previous year, mainly driven by the overall increase in sales volume and the growing share of electrified vehicles. But also rising raw material prices contributed to the increase. These increases, however, were partially offset by lower risk provisioning. 

These results show that we remain on track with our transformation process. Today’s profitability will secure our future competitiveness. We continue to make systematic investments in important future areas of activity, such as digitisation and electrification. This year alone, two more all-electric vehicles will be released onto the market: the BMW i4 and the BMW iX – important milestones in our electromobility offensive. 

Research and development expenditure was almost on a par with last year, at around 1.3 billion euros (2020: 1.34 billion euros/-2.8%). Our R&D ratio of 4.8% was lower than in 2020, due to the company’s high revenues (2020: 5.7%). The ratio of capitalised development costs of 22.6% was also lower year-on-year (2020: 28.4%). 

The financial result of 732 million euros for the first quarter climbed more than 1.3 billion euros from the same period of last year (2020: -577 million euros). One the one hand, this was mainly due to significantly higher earnings of 503 million euros from BMW Brilliance Automotive, which had been heavily impacted in the previous year by China's lockdown in response to the pandemic (2020: 162 million euros). 

On the other hand, the other financial result improved significantly year-on-year to reach a total of 334 million euros. This was due in particular to positive valuation effects compared to the previous year. 

Group liquidity increased to 20.1 billion euros in the first quarter – reflecting the strong operating result and positive free cash flow (2020: 17.8 billion euros). Over the coming months, we will bring liquidity back within our target range of 17-18 billion euros.

Further information in the press release to download