New BMW 1 Series Officially Confirmed for the 2019 Launch



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Munich. On the road to future mobility, the BMW Group is taking strategic steps to improve its operating performance on a sustainable basis. In addition to systematically implementing its strategy NUMBER ONE> NEXT, the company is also focusing on faster processes, leaner structures and therefore greater efficiency. Given the many challenges facing the automotive industry today, the BMW Group is ensuring that it maintains its financial strength to decisively influence and shape individual mobility that is moving into the next decade, just as it has in recent ten years.

"After three years of Strategy NUMBER ONE> NEXT, we are firmly on the road, having established a strong position as one of the largest providers of electronic mobility in the world.We lead the European market and we will soon join the series production of our fifth generation Our first highly automated vehicle will be available in 2021 and we are already paving the way for the development of the next generation of revolutionary technology.We are joining forces with Daimler AG to create an even greater moment, "he said. Harald KrügerChairman of the Board of Management of BMW AG in Munich on Wednesday. "We need to work systematically on our operational excellence to leverage these strategic advances and ensure our ability to use our underlying strength to help shape the transformation of the industry from now on," he added.

To offset the increasing volume of upfront expenses needed to drive future mobility, the BMW Group is improving its business performance implementing a series of new models comprehensively. In the premium luxury class, for example, the new BMW 8 Series (both the Coupe and the Convertible) and the new BMW X7 have already made their debut. The fully refurbished BMW 7 Series is on its way to dealerships and will be accompanied by the launch of the BMW 8 Series Gran Coupé this year. The next step of the Group will be to rejuvenate and significantly expand its reach in the compact class. With this aim in mind, the next generation of the BMW 1 Series will be launched in the autumn of 2019 and the BMW 2 Series Grand Coupe, a new and highly emotional model, will be added to the compact segment in the spring of 2020, with the goal of attracting new customers.

High potential to increase efficiency with Performance> NEXT

Since 2017, the BMW Group has also consistently worked with Performance> NEXTto improve structural efficiency along the entire value chain. In this regard, numerous decisions have been taken or are already being implemented. In view of the increasing challenges and demands of resources, the Group intends to expand and intensify these efforts. By the end of 2022, it expects to leverage potential efficiencies totaling more than 12 billion euros. Many of the measures to reduce the complexity of the product will be fully realized in the following years.

"Our industry is witnessing a rapid transformation. In this environment, a sustained high level of profitability is crucial to continuing to drive change," he said. Nicolas PeterMember of the Board of Directors of BMW AG, Finance. "Given the many additional factors that negatively affect profits, we begin to introduce countermeasures at an early stage and make several far-reaching decisions. Discipline and a clear focus on rigorous implementation are essential as we seek to emerge from these challenges. stronger than ever. "

Performance> NEXT will also benefit from the fact that processes can be significantly accelerated by the new opportunities offered by the scan. For example, development times for new vehicle models will be reduced by up to one-third. Among other savings, digital simulations and virtual validation could eliminate the need for about 2,500 expensive prototype vehicles by the year 2024.

The BMW Group continues to recruit qualified workers and IT specialists in a selective way to participate in future-oriented projects such as digitization, autonomous steering and electric mobility. However, the target for 2019 is to keep the workforce at the level of the previous year. Compared to previous years, the scale of natural friction in the workforce has been exacerbated by demographic factors (including the baby boomer phenomenon), a situation that means that the BMW Group can focus even more intensely on issues that will shape the future and will increase efficiency. In addition, as of April 1, 2019, the BMW, MINI and Rolls-Royce automotive brands will be combined in a single Sales Division, clearly signaling a move toward even leaner processes and more efficient structures across the enterprise.

From the product side, from 2021, up to 50% of current production drivetrain variants will be eliminated in the transition to more sophisticated and flexible vehicle architectures. This approach will also enable the BMW Group to focus on the most sought after products. At the model level, no successor will be developed for the current generation of the BMW 3 Series Gran Turismo. In addition, the model portfolio is regularly evaluated with the objective of identifying potential reduce complexity. Opportunities for synergy and efficiency in indirect procurement, as well as materials and production costs, are also being leveraged.

Prepaid expense must remain high

The BMW Group intends to implement the measures described above to offset the continued high level of anticipated expenses needed to embrace the mobility of the future. Substantial volumes of future-oriented expenditures are again planned for 2019.

In € 5,029 million, capital expenditure in 2018 was 7.3% above the high level of the previous year (€ 4,688 million). The investment ratio increased to 5.2% (2017: 4.8%). The investments included work related to the introduction of new models at the Spartanburg, Dingolfing and Munich plants and the construction of the Group's plant in Mexico. As planned, Research and Development Expenditures in 2018 were significantly higher than in the previous year and amounted to 6.890 billion euros (2017: 6.108 billion euros, + 12.8%). R & D expenses for the year were therefore equivalent to 7.1% of the Group's revenues (2017: 6.2%). In addition to accelerating the launch of new models, the focus is also on future-oriented topics such as autonomous steering and the systematic expansion of electric mobility.

Pioneer systematically expands range of mobility products

With more than 350,000 units (more than 130,000 fully electric vehicles and more than 220,000 plug-in hybrids) delivered to customers by the end of 2018, the BMW Group is already a leading supplier of electric vehicles and expects to have more than half a million units by the end of the year. In early March, the new plug-in hybrid versions of the BMW 3 Series, BMW 7 Series, BMW X5 and BMW X3, which now come with extended electric range, were exhibited at the Geneva Motor Show. By the end of next year, the BMW Group will more than ten new or revised models equipped with fourth-generation ("Gen 4") electric transmission technology on the roads.

By the end of 2019, these will include the all-electric system. MINI Electric manufactured in the factory of Oxford and, from 2020, BMW iX3, which will be produced for the world market in Shenyang, China. Together with the pioneering BMW i3, BMW i4 and the BMW iNEXT, the Group will have five fully electric models in the market by 2021 and the number should rise to at least twelve models by 2025. Including the growing range of plug-in hybrids, the BMW Group's product portfolio will include at least 25 electrified models.

This wide range of electrified models offered will be made possible by highly flexible vehicle architectures and an equally agile global production system. In the future, the BMW Group will be able to manufacture models with fully electric (BEV), hybrid-electric (PHEV) and conventional (ICE) transmissions on a production line. The ability to integrate electronic mobility into its production network will enable the BMW Group to respond even more flexibly as demand grows.

The BMW Group is currently developing fifth generation of its electric power train, in which the interaction of electric motor, transmission, power electronics and battery will be perfected ahead. By integrating the electric motor, the transmission and the power electronics also play a role in cutting costs. In addition, the electric motor does not require rare earths, allowing the BMW Group to reduce its dependence on availability. The fifth generation of the Group's electric transmission technology will be installed for the first time in the BMW iX3 from 2020.

Cooperation for the next generation of autonomous driving

The BMW Group believes that long-term partnerships within a flexible, scalable and non-exclusive platform are key to advancing the industrialization of autonomous driving. As early as 2016, the BMW Group has established a non-exclusive platform with technology experts, suppliers and OEMs to bring technology to maturity in series and has now successfully consolidated work in this area in the Autonomous Driving Campus in Unterschleißheim, near Munich. The generation of technologies currently under development will enter series production as Level 3 automation in the BMW iNEXT in 2021, this vehicle will also be enabled at level 4 for pilot projects.

The BMW Group has joined forces with Daimler AG to promote the development of next generation of technologies necessary for autonomous driving. In late February, the two companies signed a Memorandum of Understanding (MoU) to jointly develop technologies that are vital for future mobility. Initially, the focus will be on advancing the development of state-of-the-art technologies for driver assistance systems, automated driving on highways and parking facilities (in each case up to SAE Level 4).

The BMW Group and Daimler AG see their partnership as a long-term, strategic cooperation and aim to make next-level technologies widely available by the middle of the next decade. Combining the excellent expertise of the two companies, it will boost their joint innovative strength. In addition, it will accelerate and accelerate the development of future generations of technology. The development of current generation technologies and the continued collaborations that both companies have in this field will remain unchanged and will continue as planned. Both parties will also explore additional partnerships with other technology companies and car manufacturers that could contribute to the success of the platform.

Major joint venture investments for mobility services

The BMW Group and Daimler AG are also working together in the field of mobility services, creating a new global player that provides sustainable urban mobility for its customers. The two companies are investing more than one billion euros to develop and better integrate their offerings for car sharing, walking, parking, billing and multimodal transport. The cooperation comprises five joint ventures: REACH NOW, CHARGE NOW, FREE NOW, PARK NOW and SHARE NOW.

The common view of course: the five services will increasingly merge to form a single portfolio of mobility services with a fully electric and autonomous vehicle fleet that collects and parks in an autonomous way and also interconnects with other modes of transport. This portfolio of services will be the cornerstone of the BMW Group's strategy as a mobility provider going forward. Cooperation represents the ideal approach to maximizing opportunities in a growing market, while covering the inevitable cost of investment.

Challenging conditions in fiscal year 2018

In terms of main businessThe BMW Group has always hoped that 2018 would be a challenging year. Compared to 2017, together with anticipated additional expenses for the mobility of the future, a negative impact of 3 million euros in the exchange rate and in the evolution of the prices of raw materials was considered in the profits expected for the year. As announced on September 25, 2018, several additional factors hampered business performance in the third quarter. Unlike many of our competitors, the BMW Group has implemented the WLTP Regulations early. The industry-wide change to the new WLTP test cycle has resulted in considerable supply distortions in Europe and unexpected intense competition as numerous models of competitors that have not yet received the WLTP certification were registered before the deadline of 1 of September. As part of its flexible production and sales strategy, the BMW Group has responded to the situation by reducing its volume planning to focus on the quality of profits. At the same time, increased statutory and non-statutory guarantee measures resulted in significantly higher additions to provisions in the Automotive segment. The ongoing international trade conflicts have also served to aggravate the market situation and fuel uncertainty. These circumstances have resulted in larger-than-expected distortions in demand and unexpected price pressure in several markets.

Even so, deliveries The BMW Group's three premium automotive brands (BMW, MINI and Rolls-Royce) grew 1.1% to a new record of 2,490,664 units in 2018 (2017: 2,463,526 units). € 97,480 million, Group Revenues were at the level of the previous year (2017: 98.282 million euros: -0.8%). Adjusted for monetary factors, they increased by 1.2%. Due to the various adverse aspects that emerged in the third quarter combined with high levels of initial research and development expenses, profit before financial result amounted to 9,121 million euros (2017: 9,899 million euros, -7.9%). At € 9,815 million, Group profit before tax in 2018 was moderately down on the previous year, but nevertheless, the second best result ever recorded in the company's history (2017: € 10.675 billion, -8.1%). In 10.1% (2017: 10.9%), the return on sales before taxes (EBT Margin)exceeded the target value of ten percent.

Group net income amounted to EUR 7 207 million (2017: EUR 8 675 million, -16.9%). In the previous year, net income was exceptionally high due to valuation effects of about € 1 billion in connection with the US tax reform. Despite the very challenging conditions, the Automotive segment generated free cash flow of € 2,713 million in 2018 (2017: € 4,459 million).

Based on the annual financial statements, the Board of Directors and the Supervisory Board shall propose the payment of dividend of € 3.50 per common share and € 3.52 per preferred share at the Annual General Meeting of May 16, 2019. This is the second highest payment in the company's history. The total payment of dividends will be € 2.3 billion, or 32.0% of net income (previous year: 30.3%3).

Automotive segment exposed to volatile business conditions

At € 85,846 million, Revenue from the automotive segment were at a level similar to the previous year (2017: € 85,742 million, + 0.1%). Influenced by the factors mentioned above and combined with high levels of initial spending on research and development,EBIT was EUR 6 182 million (2017: EUR 7 888 million, 21.6%). Due to several adverse factors, the EBIT Margin reached 7.2% (2017: 9.2%). Profit before tax amounted to 6,977 million euros (2017: 8,717 million euros, -20,0%).

A total of 2,125,026 BMW brand vehicles were delivered to customers worldwide (2017: 2,088,283 units + 1.8%). Like the BMW 5 Series (382,753 units + 10.2%), the BMW X family in particular benefited from strong demand during 2018, with world deliveries rising significantly in the previous year to 792,605 units (+ 12.1%), . The BMW X3 made an important contribution to this performance, delivering more than a third to 201,637 units (+ 37.7%).

Deliveries worldwide from MINI brand vehicles during the twelve-month period totaled 361,531 units (2017: 371,388 units, -2.8%). O MINI Countryman registered double-digit growth of 99,750 units (+ 17.5%). Almost every seventh MINI Countryman was a plug-in hybrid (13.3%).

In 2018, Cars Rolls-Royce achieved its best sales results in more than 100 years of corporate history, with 4,107 deliveries worldwide (2017: 3,362 units + 22.2%). Rolls-Royce Phantom contributed substantially to this performance.

While deliveries of the three automotive brands of the BMW Group Europe remained at the high level of the previous year (1,098,523, -0,3%), the Americas (457,715 units + 1.5%) and Asia (876,614 units + 3.3%) regions registered small growth. In China, volumes grew significantly as local production of the new BMW X3 was increased in the second half of the year. A total of 640,803 BMW Group vehicles were delivered to customers in the course of 2018 (+ 7.7%).

Motorcycle segment reviews the range of models

BMW Motorrad Revised its product scale in 2018 on a massive scale, adding nine new models. The production adjustments required during the ramp-up phase had a negative impact on deliveries during the first half of the year. Throughout the year, 165,566 BMW motorcycles and maxi-scooters were delivered to customers (2017: 164,153 units + 0.9%).

Revenue totaled 2,173 million euros (2017: 2,272 million euros, -4.4%). Profit before financial result reached € 175 million (2017: € 207 million, -15.5%), corresponding to a EBIT Margin of 8.1% (2017: 9.1%). Profit before tax amounted to 169 million euros (2017: 205 million euros, 17.6%).

Financial Services segment registers growth in the portfolio of contracts

O Financial Services Segment continued to perform well in 2018. In total, 1,908,640 new contracts were signed with retail customers in 2018 (2017: 1,828,604 + 4.4%). Ocontract portfolio with retail customers, 5,708,032 contracts as of December 31, 2018 (December 31, 2017: 5,380,785 contracts, + 6.1%). Segment Revenue totaled 28,165 million euros (2017: 27,567 million euros, + 2.2%). Profit before tax amounted to 2,161 million euros (2017: 2,207 million euros, -2.1%).

Slight increase in workforce

The BMW Group workers The Group continues to recruit qualified personnel and IT specialists in future-oriented areas such as digitization, standalone driving and electric mobility, totaling 134,682 employees as of December 31, 2018.

Business development in 2019 influenced by the challenging environment

The BMW Group sets ambitious goals even in politically and economically turbulent times. With your portfolio of young products, further rejuvenated by new models such as the BMW X7 and the seventh generation BMW 3 Series, the Group intends to remain the world's leading manufacturer in the premium segment, sustained by growth in all major sales regions. Taking into account the various changes to the model currently underway, it is expected that business will develop more strongly in the second half of the year.

In 2019, the BMW Group will continue to invest substantial amounts in new technologies and mobility of the future. However, costs are also being boosted in other areas, including the significantly higher cost of complying with stricter CO2 legislation. In this context, increasing manufacturing costs are likely to have a damping effect on earnings. In addition, unfavorable monetary factors and higher commodity prices are expected to have a medium-to-high three-digit negative impact. At the same time, the current issue of international trade disputes remains a source of uncertainty.

Taking all these factors into account, the BMW Group is confident in its ability to achieve volume growth Automotive segment, where it is driving a small increase in the number of deliveries to customers in 2019. Within a stable business environment, an EBIT margin in the range of 8 to 10% remains the ambition for the BMW Group. However, their ability to influence the underlying conditions is limited. Based on the prevailing conditions described above, an EBIT margin of 6 to 8% is forecast for the Automotive segment in 2019.

O Motorcycle Segment The forecast is for a solid increase in deliveries to customers, thanks to its range of rejuvenated models. As in 2018, the EBIT margin should be within the range of 8 to 10%. For your Financial services segment, the BMW Group predicts a return on equity at the previous year's level and thus above the underlying target of 14%.

In addition to the various negative influences described above, the fact that some positive valuation effects recorded in 2018 will not be repeated in 2019 will result in a significant decline in the Group's financial result. Group profit before tax Therefore, it is also expected to be well below the level of the previous year.

The forecasts for the current year are based on the assumption that the world economy and conditions will not change significantly. Any deterioration in the conditions could have a negative impact on the outlook.

The BMW Group will continue to vigorously implement the measures necessary to promote growth, improve performance and efficiency, thus creating the freedom to allow it Form the future and ensure their own competitiveness from now on. Thanks to its operational and financial strength, the BMW Group is in an excellent position to shape the current automotive transformation and further develop its structure. leadership role industry.

The BMW Group – an overview

2018

2017

Change in%

Customer deliveries

Automotive

units

2,490,664

2,463,526

1.1

hence: BMW

units

2,125,026

2,088,283

1.8

MINI

units

361,531

371,881

-2.8

Rolls Royce

units

4,107

3,362

22.2

Motorcycles

units

165,566

164.153

0.9

workers 1 (compared to 12/31/2017)

134,682

129,932

3.7

EBIT Margin Automotive Segment 3

%

7.2

9.2

-2,0% pts

Segment of EBIT margin motorcycles 3

%

8.1

9.1

-1.0% pts

BMW Group EBT Margin 3

%

10.1

10.9

-0.8% pts

Revenue 3

Millions of euros

97,480

98,282

-0.8

: Automotive3

Millions of euros

85,846

85,742

0.1

Motorcycles3

Millions of euros

2,173

2.272

-4.4

Financial services

Millions of euros

28,165

27,567

2.2

Other Entities

Millions of euros

6

7

-14.3

Eliminations3

Millions of euros

-18,710

-17,306

-8.1

Profit before financial result (EBIT) 3

Millions of euros

9,121

9,899

-7,9

: Automotive3

Millions of euros

6 182

7.888

-21.6

Motorcycles

Millions of euros

175

207

-15.5

Financial services

Millions of euros

2190

2194

-0.2

Other Entities

Millions of euros

-27

14

Eliminations3

Millions of euros

601

-404

Profit before tax (EBT) 3

Millions of euros

9,815

10,675

-8.1

: Automotive3

Millions of euros

6,977

8,717

-20.0

Motorcycles

Millions of euros

169

205

-17.6

Financial services

Millions of euros

2161

2,207

-2,1

Other Entities

Millions of euros

-45

80

Eliminations3

Millions of euros

553

-534

Income tax 3

Millions of euros

-2.575

-2,000

-28.8

Net income for the year 3.4

Millions of euros

7,207

8,675

-16.9

Earnings per share 2,3

10.82 / 10.84

13/07/13,09

-17.2 / -17.2

1 Excluding latent work contracts employed in the work phases and not working part-time work arrangements before retirement and low wages

2 Earnings per common share / preferred share

3 Data from the previous year adjusted due to the first application of IAS 15 magazine, see note [6] to the Group's Financial Statements

4 Amount for 2018 (including a loss of discontinued operations of € 33 million)

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