Q2 record can’t prevent BMW from first half decline

A SUBDUED Eurozone car market has failed to dent the second quarter performance of vehicle manufacturer BMW – although first half performance was down on last year

The German business achieved record sales over the three-month period with revenue reaching £17,056 (2012: €19,552m) and pre-tax profits coming in at £1,773m (2012: €2,032m).

Within the group’s automotive sector, growth across global markets was 8.3%. The figure was boosted by a 15% growth in sales in China and a 10% increase in Japan.

In total, 506,321 (2012: 475,011) BMW, Mini and Rolls-Royce cars were sold during the second quarter; 6.6% more than in the previous year.

Norbert Reithofer, BMW chairman, said: “The BMW Group achieved a strong second quarter performance despite the headwinds on many automobile markets in Europe. At 9.6%, the operating margin in the Automotive segment was at the top end of our targeted range.”

Group revenues for the six-month period amounted to £32,362m (€ 37,098m), down 1.1% on 2012, with six-month EBIT at £3,583m (€4,107m), a fall of 6.7%.

Sales volumes rose by 6% to a new six-month record of 954,521 units (2012: 900,539).

In the automotive segment revenues increased by 4.8% in the second quarter to £15,877m (€18,201m).  The group said as a result of high expenditure on new technologies, the impact of the changed regional sales mix and weak car markets in Europe, segment EBIT amounted to £1,532m (€1,756m), a drop of 13%. Pre-tax profit for the period from April to June amounted to£1,437m (€1,648m), a fall of 5.7%.
For the six-month period, segment revenues increased by 1.7% to £29,754m (€34,108m), with EBIT of £2,912m (€3,338m), a fall of 14.4%.

The BMW brand recorded worldwide growth of 8.3% in the second quarter with sales of 422,844 units (2012: 390,516 units). During the first six months of the year, 804,248 BMW brand cars (2012: 747,064 units) were sold, 7.7% up on the previous year. The BMW X1 as well as the 3, 5, 6 and 7 Series all asserted their positions as market leaders in their relevant segments.

Mini achieved Q2 sales of 82,644 units (2012: 83,665), a decline of 1.2%, almost matching the previous year’s record performance. The same also applies to the six-month period, in which it sold 148,798 units (2012: 151,875), a decline of 2%.

Rolls-Royce sold 833 luxury vehicles to customers in the second quarter (2012: 830), an increase of 0.4%, and 1,475 in the first half, a decline of 7.8%.

Sale volume growth came across on almost all continents. In Asia the BMW Group sold 272,943 vehicles in the first six months of the year, 14.3% more than one year earlier. This performance included 30,525 units in Japan (+10.1%) and 183,208 units in the Chinese mainland (+15%).

In the US the figure was 9.7% up at 213,867 units, including 173,156 (+8.9%) sold in the USA.

In Europe sales reached 436,709 units, a decline of 0.1%.

In outlook, the group said that despite economic conditions in Europe likely to remain weak during the second half, it remained confident of meeting full year expectations.

“We continue to target sales volume growth for the full year in the single-digit range and hence a new sales volume record. Due to high levels of expenditure for new technologies and models as well as investment in the production network, we continue to predict a group profit before tax for 2013 on a similar scale to 2012,” added Reithofer.