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May 04, 2006
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In addition to the sharp increase in sales volume, the first quarter was also affected by external factors and a one-off gain of euro 375 million on the settlement of the exchangeable bond on Rolls-Royce plc shares. Group revenues rose to euro 11,618 million (first quarter 2005: euro 10,357 million), an increase of 12.2%. Adverse currency effects and high raw material prices in the first three months continued to have a negative impact on earnings; these adverse factors were compensated, however, to a large degree by on-going efficiency improvements. Profit before tax increased by 57.7% to euro 1,296 million (first quarter 2005: euro 822 million). Excluding the gain on the partial settlement of the exchangeable bond on Rolls-Royce plc shares, the pre-tax profit rose by 12.0% to euro 921 million, and was thus also well ahead of the previous year's result at an operating level. The profit after tax rose by 80.6% to euro 948 million (first quarter 2005: euro 525 million). The gain on the settlement of the exchangeable bond on Rolls-Royce plc shares (reported in the Reconciliations segment) had a more pronounced impact at this level since there was no tax impact. Earnings per share of common and preferred stock increased to euro 1.44 (first quarter 2005: euro 0.78). As a result of the jump in earnings, the pre-tax return on sales increased from 7.9% to 11.2%. Excluding the one-off gain, the return on sales remained stable at 7.9%. Cash flow continued to grow dynamically, rising by 25.5% to euro 1,631 million (first quarter 2005: euro 1,300 million). Operating cash flow was up by 9.4% to euro 1,221 million (first quarter 2005: euro 1,116 million). Currency effects and high raw material prices will continue to have an impact on business development in the current year, however to a lesser degree than in the previous year. This negative effect is partly attributable to the fact that less favourable currency hedge rates are in place than in the previous year; the effect will be felt mainly in the first half of 2006. The BMW Group will counter this development by means of continuous efficiency and productivity improvements. The targeted sales volume record and improvements in the product mix will also make a positive contribution to earnings. "In terms of operating results, the current year, excluding the one-off gain, will therefore be the best year in the company's history to date", underlined Dr. Panke. "We will continue our profitable growth course in the coming years and generate above-average returns compared to the industry as a whole", continued Dr. Panke. Number of jobs virtually unchanged The BMW Group had a worldwide workforce of 106,179 employees at the end of the first quarter 2006, 0.1% more than one year earlier (106,033 employees). Compared to 31 December 2005 (105,798 employees), the workforce increased by 0.4%. New models to be introduced The BMW Group is again bringing out numerous new models in 2006. With the Z4 Coupé and the Z4 M Coupé, the BMW Group will, from June 2006 onwards, be adding two particularly dynamic and sporty cars to its product range. The successor to the BMW 3 Series Coupé will also be introduced on the markets from September 2006 onwards. The product and market initiative will be continued with determination. In total, the investment in new products and product-driven production capacity expansion measures in the period from 2005 to 2009 will be in the region of euro 19 billion. This also includes two completely new model series which, as previously reported, are planned to come onto the markets from 2008 onwards. The MINI brand product range will be expanded within the next three years by a new model with greater functionality and a more spacious interior. A new Rolls-Royce Convertible will also expand the product range in the super-luxury segment. Position as the world's leading premium manufacturer strengthened In the first three months, the BMW Group has sold more vehicles than ever before in a first quarter, thus strengthening its position as the world's leading premium manufacturer. The total number of BMW, MINI and Rolls-Royce brand cars sold increased by 13.9% to 332,923 units (first quarter 2005: 292,236 units). The sales volume for the BMW brand went up by 18.3% to 283,297 units (first quarter 2005: 239,412 units). The sales volume recorded for the MINI brand fell to 49,519 units (-6.0%/ first quarter 2005: 52,698 units) due to measures aimed at increasing the production capacity of the Oxford plant in the medium-term to approximately 240,000 units per year. Within the super-luxury segment, Rolls-Royce Motor Cars delivered 107 Phantoms to its customers, 15.1% fewer than in the same quarter last year (126 Phantoms). After the launch of the Rolls-Royce Phantom version with an extended wheelbase in the Middle East and Asia/Pacific regions in 2005, this version will become available in the Americas region and in Europe in 2006. The profit before tax of the Automobile segment was adversely affected by the currency factors and higher raw material prices referred to above. At the same time, however, it benefited from a sharp rise in sales volume and favourable changes in the product mix and selling prices. Segment revenues increased overall by 12.8% to euro 11,231 million (first quarter 2005: euro 9,954 million). The segment profit after tax improved by 7.2% to euro 761 million (first quarter 2005: euro 710 million). Motorcycles business affected adversely by weather conditions Unfavourable weather conditions across large areas of Europe held down the sales volume of the Motorcycles segment during the first quarter. The sales volume for the first quarter fell to 19,051 units (first quarter 2005: 21,304 units/-10.6%). The BMW Group anticipates, however, that this shortfall will be made up over the course of the year. Segment revenues for the first quarter fell by only 1.6% to euro 313 million (first quarter 2005: euro 318 million). The profit before tax fell only slightly to euro 29 million (first quarter 2005: euro 31 million) thanks to a higher-value product mix. Financial services business remains on growth course The Financial Services segment continued to perform well during the first quarter 2006. The overall volume of new contracts signed with retail customers amounted to euro 5,949 million, surpassing the previous year's equivalent figure by 16.4% (first quarter 2005: euro 5,110 million). The number of lease and financing contracts increased by 11.9% to a total of 2,120,094 contracts. The proportion of new BMW Group cars financed by the Financial Services segment during the first three months was 41.5%, 0.8 percentage points below the high proportion recorded in the same quarter last year. The profit before tax of the Financial Services segment improved by 15.3% to euro 173 million (first quarter 2005 euro 150 million). * * * (May 03, 2006)
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