GERMANY: BMW Q1 profit down 19.7% as product launch offensive costs bite
BMW operating profit for the first quarter of 2003 fell 17.9% to euro 830 million (first quarter 2002: euro 1,011 million) in line with expectations of the BMW Group. The decrease was attributable mainly to the continued high level of expenditure for the product and market offensive and to the expected lower sales volume of BMW brand cars.
Net profit of the BMW Group for the first quarter 2003 decreased by 19.3% to euro 510 million (first quarter 2002: euro 632 million).
During the first quarter 2003, the BMW Group sold 261,573 cars, slightly higher (+0.4%) than the number sold in the equivalent period last year (first quarter 2002: 260,462). Whilst the sales volume of BMW brand cars fell by 7.3% to 215,767 units (first quarter 2002: 232,771) due to model life-cycle induced effects, the Mini brand was again able to record strong growth and increased sales by 65.4% to 45,805 units (first quarter 2002: 27,691).
Total group revenues for the first quarter 2003 amounted to euro 10,272 million, 4.6% below the record revenues recorded in the first quarter of the previous year (first quarter 2002: euro 10,768 million).
BMW Group recruited 1,242 new employees during the first three months of 2003, mainly for development and production. Compared to 31 March 2002 (98,128 employees), the workforce has increased by 4,509 employees or 4.6%.
The revised versions of the BMW 3 series have been on sale since the end of March and the new Z4 Roadster is now also available in Europe. The redesigned 5 series will be launched mid-year and the 6 series and the X3 will be presented at the end of 2003. A diesel Mini One D, will be launched in Europe at the end of May.
The new models will make a significant contribution to ensuring that the sales volume of BMW brand cars for the full year will surpass last year's level, BMW claims. This is based on the assumption that the global political and economic situation will continue to stabilise and, particularly in Germany, progress with economic and social reforms will be made.
Despite the exceptionally high level of expenditure in conjunction with the product and market offensive, which will mainly impact the results of the automobiles segment in 2003, the BMW Group is still aiming to match previous year's earnings on a full year basis.
Revenues of the automobiles segment fell marginally during the first quarter 2003 to euro 9,373 million, 1.2% lower than in the same period last year (first quarter 2002: euro 9,485 million).
The profit from ordinary activities for the first quarter 2003 was affected by the exceptionally high level of expenditure in conjunction with the product and market offensive. The profit from ordinary activities for the first quarter 2003 amounted to euro 719 million, a decrease of 21.3% (first quarter 2002: euro 914 million).
Revenues of the motorcycles segment for the first quarter 2003 amounted to euro 304 million (first quarter 2002: euro 302 million), an increase of 0.7%. The profit from ordinary activities for the period amounted to euro 30 million, similar to the level recorded in the same period last year.
International motorcycle markets saw a trend towards declining volumes during the first three months of 2003. The motorcycles segment was thus unable to repeat the high sales volume achieved in the equivalent quarter in 2002. The segment sold 20,901 motorcycles (- 3.8% / first quarter 2002: 21,736 units) and 933 BMW C1 (-38.4% / first quarter 2002: 1,515 units) and thus fell short of the record numbers sold in the previous year.
The financial services segment continued to perform well during the first quarter 2003 thanks to unabated growth in the number of financing contracts for BMW and Mini brand cars. A total of 370,759 new financing contracts was signed on a worldwide basis during the first quarter 2003, an increase of 8.9% (first quarter 2002: 340,353 new contracts).
The profit from ordinary activities of the financial services segment for the first quarter 2003 rose by 33.8% to euro 107 million (first quarter 2002: euro 80 million).
The total business volume of the financial services segment as disclosed in the balance sheet amounted to euro 27,061 million (31 March 2002: euro 26,368 million), an increase of 2.6%.Compared to 31 December 2002 (euro 26,505 million), total business volume increased by 2.1%.
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