BMW announced their second quarter financial results this week with their motorcycle division seeing increased sales volume and revenue growth but profits dropped slightly. Second-quarter revenue for BMW Motorrad rose by 15.9% to € 475 million (2012: € 410 million) but profit before financial result (EBIT) fell to € 46 million (2012: € 48 million; -4.2%) with profit before tax to € 45 million (2012: € 47 million). A total of 40,209 motorcycles (2012: 34,816 units) were sold during the period from April to June worldwide — an increase of +15.5%.
For the first six months of the year, motorcycle segment revenues increased by 6.2% to € 911 million (2012: € 858 million). EBIT improved by 14.1% to € 97 million (2012: € 85 million) and the profit before tax by 13.1% to € 95 million (2012: € 84 million). Sales volume in this period rose by 9.7% to 64,941 units (2012: 59,189 units), a new record for a first six-month period.
Sales were helped with the February launch of the new F800GT and a number of special models (R1200R, R1200RT and R1200GS Adventure) to mark BMW Motorrad’s 90th anniversary. This was followed in March by the updated R1200GS. And finally, the new F800GS Adventure has been available to customers since mid-June.
BMW Motorrad USA meanwhile reported sales of 1,346 motorcycles in July, an increase of 31.1% from the total of 1,027 motorcycles sold in July 2012. July’s result lifts Motorrad’s annual growth rate to more than 21% over last year in an industry that declined over 5% through June.
Once again, the new 2013 R1200GS was the leading model in the US, with sales of 201 units, contributing strongly to the increase in R-Series (+47%) with total boxer sales of 506 units in July compared to 344 units last year. The six-cylinder K1600GT (+37%) and K1600GTL (+34%) helped drive a 27% increase in K-Series models with 234 units compared to 184 units in July 2012. Positive customer reaction to the recently launched F800GT and F800GS Adventure drove increases in F-Series volumes with sales up 126% compared to July 2012 with 319 units compared to 141 a year ago while demand for the C650GT maxi-scooter continues to outstrip supply.
Updated 8/7/2013: BMW has provided additional updated sales numbers today. From January through July 2013, BMW Motorrad says it delivered a total of 76,182 (prev. yr: 69,329 units) motorcycles and maxi-scooters to customers, 9.9% more than in the previous year. Of these, 11,241 (prev. yr: 10,140 units) vehicles were delivered in the month of July, a rise of 10.9% and the best result ever recorded in a July month. The undisputed sales winner was the new, water-cooled R1200GS, with 17,296 units sold. Germany continues to be BMW Motorrad’s strongest individual market by some distance, followed by the USA, Italy, France, Brazil, and the UK.
Heiner Faust, head of sales and marketing at BMW Motorrad said, “After our record sales for the first half of the year 2013, our July result is extremely pleasing. With 11,241 vehicles sold, we are 10.9% above the already strong July result of 2012. There has never been a July in which we have sold so many vehicles. As of July, we are slightly 10% above the previous year’s level and are on course for a new sales record for 2013. The R1200GS has emerged as an extremely strong starter in terms of sales. This model leads the BMW Motorrad rankings list of best-selling models by some distance. All in all, we can be absolutely satisfied with our model mix so far. For example, after the big GS, our best selling motorcycles are the F700GS and F800GS/GS Adventure mid-class enduros, at 12,289 units sold, and this despite a significant widening of the competitors’ field. Our K1600GT und GTL luxury touring models sold 5,141 up to and including July. Also doing well are the S1000RR and HP4 with a total of 6,254 units sold and the maxi-scooters with 6,531 units. A total of 11,574 customers chose the R1200RT, R1200GS Adventure and R1200R, which are still supplied with the air-cooled boxer engine.” (End Update)
Overall, BMW Group increased worldwide revenues and profits in the second quarter and reaffirmed its mildly positive outlook for the rest of the year. They expect further sales volume growth for the motorcycle division thanks to attractive new models such as the R1200GS mentioned earlier. This they expect will bring a further rise in segment revenues and earnings. For those interested in the all the numbers check out BMW’s summary:
BMW Group achieves strong second quarter
The BMW Group achieved a new sales volume record in the second quarter within a challenging market environment and was also able to raise revenues as well as profit before and after tax. Second quarter Group revenues rose to € 19,552 million (2012: € 19,202 million; +1.8%). High levels of investment on new technologies, increased personnel costs and greater competition caused profit before financial result (EBIT) to reach € 2,068 million (2012: € 2,267 million; -8.8%), with a Group EBIT margin of 10.6%.
Profit before tax (EBT) for the period from April to June rose to € 2,032 million (2012: € 1,976 million; +2.8%). Group net profit increased by 9.0% to € 1,392 million (2012: € 1,277 million). 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.
Group revenues for the six-month period amounted to € 37,098 million (2012: € 37,495 million; -1.1%). Six-month EBIT totalled € 4,107 million (2012: € 4,401 million/-6.7%), while profit before tax finished at € 4,035 million (2012: € 4,056 million; -0.5%), only marginally short of the previous year’s level. The EBIT margin for the six-month period was 11.1%. Group net profit increased by 2.9% to € 2,704 million (2012: € 2,629 million). Sales volume rose by 6.0% to a new six-month record of 954,521 units (2012: 900,539 units), underscoring the BMW Group’s position as the world’s leading manufacturer of premium vehicles.
Automotive segment: Second quarter EBIT of € 1,756 million
Automotive segment revenues increased by 4.8% in the second quarter to € 18,201 million (2012: € 17,366 million). 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 € 1,756 million (2012: € 2,018 million; -13.0%), resulting in an EBIT margin of 9.6%. Profit before tax for the period from April to June amounted to € 1,648 million (2012: € 1,748 million; -5.7%).
For the six-month period, segment revenues increased by 1.7% to € 34,108 million (2012: € 33,525 million). EBIT amounted to € 3,338 million (2012: € 3,898 million; -14.4%) and profit before tax was € 3,164 million (2012: € 3,570 million; -11.4%). The EBIT margin in the first six months of 2013 was 9.8%.
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. MINI achieved a second-quarter sales volume of 82,644 units (2012: 83,665 units; -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 units; -2.0%). Rolls-Royce Motor Cars handed over 833 luxury vehicles to customers in the second quarter (2012: 830; + 0.4%) and 1,475 (2012: 1,600; -7.8%) in the first half of the year.
The BMW Group was able to record sales volume growth 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 includes 30,525 units sold in Japan (+10.1%) and 183,208 units sold on the Chinese mainland (+15.0%). The number of cars sold by the BMW Group in the Americas in the first half of the year was 9.7% up at 213,867 units, including 173,156 (+8.9%) sold in the USA. In Europe the BMW Group recorded a sales volume of 436,709 units in the period from January to June, similar to the previous year’s level (-0.1%).
Positive performance by Financial Services segment
The Financial Services segment continued to perform well during the second quarter 2013. Segment revenues were 3.9% higher at € 5,058 million (2012: € 4,866 million). Profit before tax went up by 8.4% to € 467 million (2012: € 431 million). Six-month revenues grew by 2.3% to € 9,888 million (2012: € 9,666 million). Profit before tax climbed by 5.9% to € 916 million (2012: € 865 million).
The number of new financing and lease contracts signed worldwide increased by 12.2% to 388,290 contracts (2012: 346,034) in the second quarter and by 11.7% to 728,618 contracts (2012: 652,018) in the six-month period. The number of lease and financing contracts in place with dealers and retail customers at 30 June grew by 7.9% to 3,986,306 contracts (2012: 3,693,474).
Workforce increased by 4.8%
The BMW Group’s workforce at June 30, 2013 increased by 4.8% compared to one year earlier. The BMW Group had a worldwide workforce of 106,870 employees at the end of the second quarter 2013 (2012: 102,007 employees). The increase was attributable to the growing need for engineers and skilled workers in order to keep pace with continued strong demand on the one hand and to push ahead with innovations and develop new technologies on the other.
BMW Group remains committed to its targets for the full year 2013
Economic conditions are likely to remain challenging in the coming months, especially in Western Europe. Weak markets in Europe and increased competition will continue to create challenges for the BMW Group in the second half of the year. The BMW Group remains committed to its targets for 2013 within a volatile economic environment: “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”, Reithofer reaffirmed.
Despite the aforementioned additional costs, the Automotive segment continues to forecast an EBIT margin of between 8% and 10% for the current year. This range is also seen as a sustainable EBIT margin for the time beyond 2013. However, depending on political and economic conditions, actual margins could end up being above or below the targeted range.
The Financial Services segment is also expected to continue to perform strongly and remains committed to achieving a return on equity of at least 18%.
Forecasts for the current year are based on the assumption that worldwide economic and political conditions will not change significantly.