BMW Group announced growth in unit sales, revenue and profits for the third quarter of 2019 and said it was well on the way to achieving its full year targets. But the nine month results were not so rosy.
Q3 profit before tax (EBT) increased 23.4% to EUR2,248m and EBT margin rose to 8.4% from 7.4%.
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Net profit was up 11.5% to EUR1,546m.
The group claimed record third quarter deliveries up 3.6% to 613,361 units across its BMW, Mini and Rolls-Royce brands.
Revenues was up 7.9% to EUR26,667m and EBIT improved by about a third to EUR2,289m though last year’s results were depressed by the change to WLTP regulations as well as higher expenditure for goodwill and warranty measures.
Profits for the first nine months of 2019 were hit by a provision of EUR1.4bn for costs arising from EU Commission antitrust proceedings which the group plans to contest.
Hence EBIT fell 29.1% to EUR5,079m and EBT was down 35.3% to EUR5,063m with EBT margin of 6.8% versus 10.8% a year ago. Net profit fell 37.1% to EUR3,614m.
Unit sales rose 1.7% to 1,866,198.
“The efficiency-boosting measures we have implemented are bearing fruit: we are performing at a high level in comparison with our competitors and considering the difficult conditions our business is facing. Nonetheless, we aspire to achieve more than that,” said BMW finance chief Nicolas Peter.
“Upfront expenditure on the technology of the future such as e-mobility needs to be financed.”
BMW brand sales increased 2.2% to 1,601,397 units in the first nine months of 2019.
Mini sales fell 1.8% to 261,024 and new models boosted Rolls-Royce 42% to 3,777.
Group net profit increased at a double-digit percentage rate, helped to some extent by a base effect from the previous year’s reported figures. Moreover, profitability has continued to improve over the course of the nine-month period. To compensate for the high upfront expenditure on future-oriented technologies, the BMW Group is working hard on continually improving efficiency.
“At the nine-month stage, we are well on our way to achieving our targets for the year as a whole,” said chairman Oliver Zipse.
The group expects “a slight increase” in unit sales for full year 2019 and EBIT margin of 8% to 10%.
