(AGENPARL) – gio 21 marzo 2024 Corporate Communications
Media Information
21 March 2024
– Check against delivery –
Statement
Walter Mertl
Member of the Board of Management of BMW AG, Finance
Annual Conference for the Business Year 2023
Munich, 21 March 2024, 09.00 a.m.
Ladies and Gentlemen,
Good morning!
2023 was another successful year for the BMW Group. We delivered
strong results in the current business, while securing our future
viability through targeted investments.
Strong demand for our attractive products, better availability of
vehicles and an easing of the supply situation led to a positive
volume development. After the halfway mark in the year, we
accordingly raised our guidance for both deliveries and EBIT margin
in the Automotive Segment.
Thanks to our disciplined management of the business, we delivered
yet again on all our targets. I’ll now take you through our results.
SLIDE 3: BMW Group with Strong Performance and Solid Sales
increase
For the full year, we delivered 2.55 million vehicles worldwide, which
is 6.4% over 2022. We achieved significant growth with our allelectric vehicles. Deliveries reached more than 375,000 units, or
approximately 15% of total sales.
Company
Bayerische
Motoren Werke
Aktiengesellschaft
Postal address
BMW AG
80788 Munich
Telephone
+49 89-382-24118
Internet
http://www.bmwgroup.com
At 9.8%, the EBIT margin in the Automotive Segment was well
within the increased corridor of 9.0 to 10.5%. Excluding depreciation
and amortisation for BBA assets from the purchase price allocation
of 1.4 billion euros, the EBIT margin was 10.8%.
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
The Group EBT margin of 11% exceeded our strategic target of
We also continued to reduce CO2 emissions in our European fleet.
With 102.1 grams per kilometer, we were 26.4 grams – in other
words 20.5% – below the target set by the European Union.
SLIDE 4: BMW Group full-year 2023
At Group level, our revenues reached 155.5 billion euros, which is
9% higher than 2022. Adjusted for currency translation effects,
revenues increased by 13.1%. The increase was driven by the higher
delivery volumes and positive product mix effects.
In 2023, our earnings before tax at Group level amounted to 17.1
billion euros. It is important to note that Group earnings in 2022 of
23.5 billion euros included a one-off profit of 7.7 billion euros. This
was due to a technical accounting effect related to BBA full
consolidation, namely the revaluation of our existing equity interests.
Without this effect, Group earnings in 2023 were 1.3 billion euros or
8% above 2022.
This also translates through to earnings per share, that were at 15.7
euros in 2022, excluding the one-off profit from BBA. In 2023,
earnings per share of 17.7 euros were 12.8% above the previous
year.
That brings me to the results of the individual segments.
I’ll start with the Automotive Segment.
SLIDE 5: Automotive Retail Units, BEV Units, Auto
Revenue and Auto EBIT
The BMW Group delivered 2.55 million vehicles to customers
worldwide in 2023. This corresponds to solid growth of 6.4% – in
line with our increased guidance. Momentum came in particular from
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
models in the upper price segment, such as the BMW 7 Series, X7,
and Ix*, as well as from the all-new BMW X1.
Our all-electric vehicles continue to be a key growth driver.
In 2023, BEVs made up almost 15% of our total sales.
We also delivered over 190,000 plug-in hybrid vehicles. In total,
electrified vehicles therefore accounted for over 22% of sales during
the year.
Revenues for the Automotive segment totaled 132.3 billion euros.
This amounts to a 7% increase year-on-year.
At almost 13 billion euros, the segment’s operating result was over
20% higher than 2022. This resulted in an EBIT margin of 9.8%.
This is both at the higher end of our long-term strategic target
corridor of 8-10%, and well within the increased target corridor of
9.0-10.5% for the year 2023.
SLIDE 6: Automotive Segment EBIT full-year 2023
Looking at the operating result in detail, the increase in Automotive
EBIT benefited from a net effect of volume, model mix and pricing,
yielding a tailwind of 2.4 billion euros. This was mainly driven by the
higher volume and higher share of top end vehicles, including BMW
M models, which compensated for the higher BEV share. As
expected, we saw some price normalization in the new car and used
car markets through the end of the year.
Compared to 2022, we see that EBIT in 2023 was impacted by 600
million euros from the net balance of currency and raw material
positions. This difference is mainly due to currency effects from the
development of the Chinese renminbi and US dollar. Given lower raw
material prices through the end of the year, we saw a slight tailwind
compared to 2022. However, this was overcompensated by
headwinds from increased supplier payments.
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
SLIDE 7: R&D Expenditure in full-year 2023
As planned, research and development expenditure rose significantly
to 7.8 billion euros, almost 600 million euros higher than the
previous year. The R&D ratio for the year came in at 5.0%. Due to
higher revenues, this is the same level as 2022, although overall
spending increased year-on-year.
Expenditure for R&D mainly focused on three areas: the
electrification and digitalization of the fleet; automated driving
functions; and expenditure for new models.
Due to higher expenses, mostly for IT projects, selling &
administrative expenses increased by about 400 million euros.
The position “Other cost changes” reflects, amongst others, higher
material costs, as mentioned at Q3, as well as lower residual value
profits than the previous year. In 2022, a negative one-off impact of
1.8 billion euros was due to effects related to the first-time
consolidation of BBA.
SLIDES 8 & 9: Automotive Segment Free Cash Flow full-year 2023
Moving on to the free cashflow results for 2023.
At year-end, free cash flow in the Automotive Segment reached 6.9
billion euros. It should be noted that free cashflow in the previous
year included a positive effect of over 5 billion euros in net cash
acquired from BBA. Without this effect, our free cash flow in 2023
was almost 900 million euros higher year-on-year, or an increase of
The change in working capital of 2.7 billion euros mainly reflects the
increase in inventories to maintain stock levels in markets worldwide.
This ensured we have sufficient supply, including for new models, to
meet the robust global market demand entering the new year.
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
SLIDE 10: Capital Expenditure full-year 2023
Capital expenditure for the year totaled 8.8 billion euros. Our
investments in 2023 primarily focused on the fifth and sixth
generation battery cell technology, digitalization of products and
processes, and vehicle projects. In addition, we invested in
construction of our plants, for example in Debrecen, Hungary, where
we will launch the NEUE KLASSE next year.
The capex ratio for the year was 5.7%.
Changes in provisions had a positive impact on free cashflow of 1.5
billion euros.
The position “other items” reflects primarily tax payments.
SLIDE 11: Financial Services Segment full-year 2023
That brings me to our Financial Services segment, a key enabler for
our business.
Financial Services is already an integral part of the customer journey,
and will become even more important with the rollout of our direct
agency sales model.
In 2023, the number of new financing and leasing contracts
concluded with retail customers came in at the same level as the
previous year with 1.5 million new contracts. This is a very solid
result, considering the business environment with elevated interest
rates and a highly competitive landscape.
Business developed positively quarter for quarter. While new
contracts with end customers were down 20% in Q1 year-on-year,
in Q4 contracts were up by 17%.
The share of new BMW Group vehicles either leased or financed
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
by the Financial Services segment stood at 38.2% in 2023.
Average financing volume per vehicle increased, due to an improved
product mix in the automotive business. Overall, new business
volume increased by 3.4% to 57.3 billion euros.
Segment earnings before tax amounted to 2.96 billion euros. The
decrease reflects primarily two factors: higher refinancing costs due
to rising interest rates, as well as the overall declining contract
portfolio.
Revenues from the resale of end-of-lease vehicles remained at a
high level, but were lower than previous year as used car prices
started to normalize. We expect this trend to continue in 2024,
leading to a lower result from off-lease vehicles.
At 0.18%, the credit loss ratio remained at low level.
After increasing the target range for the year to between 16 and 19
percent in August, Return on Equity reached 17.2% for the full-year.
SLIDE 12: Motorcycles Segment full-year 2023
That brings me to the Motorcycles segment.
In its 100th anniversary year, the BMW Motorrad brand achieved
record deliveries, with over 209,000 units. An impressive
accomplishment!
All major sales regions saw growth in 2023, with particular
momentum coming from Europe with 4.7% and China with 2.8%.
The EBIT margin for the segment reached 8.1%.
At 259 million euros, the segment’s operating result was at the same
level as 2022.
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
SLIDE 13: Other Entities Segment / Eliminations full-year 2023
Finally, you see the combined result from the Other Entities Segment
and intersegment eliminations.
“Other Entities” recorded a loss in earnings before tax of 100 million
euros. The decrease compared to 2022 was mainly driven by
negative fair value measurement effects on interest rate hedging
transactions.
Consolidations increased in earnings before tax to 1.3 billion euros.
Lower eliminations associated with the leasing business had a
positive effect compared to the previous year.
SLIDE 14: Dividend and Increased Pay-out Ratio
Ladies and Gentlemen,
At the BMW Group, we remain focused on ensuring that our
shareholders benefit from the company’s success.
The Board of Management and the Supervisory Board will therefore
propose a dividend of 6.00 euros per share of common stock and
6.02 euros per share of preferred stock to the Annual General
Meeting. This results in a total dividend payout of approximately 3.8
billion euros. The higher dividend payout and earnings per share in
2022 reflected considerable one-off effects from the consolidation of
BBA in our Group profit. Adjusted for the one-off effect, the dividend
as well as earnings per share are higher in 2023.
The proposed dividend for 2023 represents a pay-out ratio of
33.7%. This is within our long-term strategic target range of 3040% and also notably higher than the payout ratio in 2022.
At the end of June 2023, we successfully concluded the first program
of our share buyback at 2 billion euros, which was approved at the
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
Annual General Meeting in May 2022. On July 3rd last year, we
launched the second program of up to 2 billion euros, with the first
tranche concluding on December 31st. In total, 1.2 billion euros in
share buyback were completed in 2023. The second tranche, with a
volume of 500 million euros, started on January 2nd, and will be
carried out by June 28, 2024, at the latest. The second share
buyback program will be completed by December 31, 2025 at the
latest.
Taking the proposed dividend and last year’s share buyback
together, the total payout of 5 billion euros represents 92% of Auto
free cashflow available to BMW AG shareholders.
This underscores the financial strength and robust cashflow
generated by our operations, which supports optimal shareholder
return.
Moving on from 2023, what are we expecting in 2024?
In the Automotive segment, we expect slight growth in volumes,
driven by our young and attractive product portfolio. Specifically, we
should see significant growth of our BEV share as well as a doubledigit growth in the upper segment.
We anticipate an increase in material costs and supplier payments.
However, this should be offset by a net tailwind from FX and
commodities. The net impact of volume, mix and price should be
slightly positive, and we will take our disciplined approach forward
into 2024. At same time, lower profits from off-lease vehicles will
weigh on Auto EBIT.
SLIDE 15: CapEx and R&D Ratios 2024
In 2024, we will hit our capex and R&D peak, as planned and
communicated.
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
The continued implementation of our electrification and digitalization
strategy will lead to greater research and development costs.
Expenditure related to the NEUE KLASSE, such as the further
development of the sixth-generation battery technology and
preparations in the production network, will also impact the Group’s
earnings and results in greater capital expenditure.
For the current financial year, we therefore expect a capex ratio
above 6% and an R&D ratio above 5%. After 2024, both ratios will
gradually return to our strategic corridors, which remain unchanged.
For Capex: that means less than 5%. And for the R&D ratio: between
4 and 5 percent.
Despite the significant investment in future technologies, we will
generate above 6 billion euros in Automotive free cashflow in 2024.
Financial services will benefit from the higher auto sales and
stabilization of the interest rate environment. However, a decline in
used-car values will negatively impact the result. And, given the
higher lease penetration rate, we will see a lower eliminations result.
SLIDE 16: Outlook 2024
What do we expect for our key performance indicators in 2024?
In the Automotive Segment, deliveries of BMW, MINI and RollsRoyce brand vehicles are expected to rise slightly year-on-year. The
segment’s EBIT margin should fall within our strategic target corridor
of 8 to 10 percent. The share of all-electric vehicles relative to total
deliveries is expected to increase significantly compared to 2023.
In the Motorcycles Segment, deliveries are expected to increase
slightly, with an EBIT margin within our target range of 8 to 10
percent.
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
Return on Equity in the Financial Services segment is forecast to land
between 14% and 17%.
As expected, supply and demand continue to normalize for new and
used cars. It is therefore expected that revenues from remarketing
lease returns will be lower than 2023.
For the Group’s pre-tax profit, we expect a slight decrease. This is
due primarily to the high level of expenses for research and
development and capital expenditure, as outlined before. The
decrease in the financial services business will also contribute to the
slight decrease in Group profit before tax.
The Group’s headcount is forecast to increase slightly.
Ladies and Gentlemen,
At the BMW Group, our strong brands and attractive products have
long formed the foundation for our success – and will continue to do
so in the future. We allocate our capital in investments efficiently, in
line with our long-term strategy. At the same time, we remain
focused on cost discipline and profitability.
Our strategic perspective gives us clarity on our consistent path
going forward, while our operational excellence secures our future
competitive advantage and the overall health of the business. Our
high flexibility allows us to meet market demand and consistently
deliver on targets. And in 2023, it underpinned our profitable growth.
The increase in our BEV sales to almost 15% put us in a strong
position to overachieve the CO2 targets. We also recorded growth in
the upper segment, resulting in a balanced and profitable mix.
As you know, our industry is known for its high complexity, for long
life-cycles, and for tough regulatory requirements, which are everincreasing. That is why our planning horizon always spans several
years. As the Vision NEUE KLASSE X proves, our strategy ensures
that we anticipate trends in the industry to remain ahead.
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Statement Walter Mertl, Member of the Board of Management of BMW AG, Finance,
Annual Conference 2024
We are fully committed to deliver on our long-term strategic target of
an 8-10% EBIT margin every year.
And we deliver what we promise. We have the right product line-up
and the flexibility to meet customer needs across the globe. And our
product offering is growing.
We will therefore continue with our profitable growth and also fulfill
our targets, assuming market conditions remain stable. As everyone
has seen in the BEV market in China, this is not always a given. At
the BMW Group, we will maintain our balanced steering of multiple
individual objectives to achieve all of our strategic priorities.
Our strong performance today is paving our road to tomorrow’s
continued success. We remain confident about the 2024 financial
year and beyond.
And now it’s time to hear from Oliver again: he’ll show you what we
have in the pipeline across all brands to drive our success in the
coming years.
BMW iX xDrive40: Electric consumption, combined WLTP in kWh/100 km: 19.9; Electric range, WLTP in km: 429