As expected, BMW posted a hefty 2009 decline in net earnings today, but there were signs of significant improvement to the trend in the fourth quarter and the company is being cautiously optimistic on the 2010 outlook.
BMW said that ‘thanks to a more stable market environment towards the end of the year’ the automobiles division was was able to generate a fourth quarter profit (EBIT) of EUR93m.
Net profit for the year was EUR210m, down 36.4% on 2008, with BMW blaming a higher effective tax rate and noting that pre-tax profit was up 17.7% to EUR413m.
BMW also said that the dividend will remain unchanged against the previous year at EUR0.30 per share of common stock and EUR0.32 per share of preferred stock.
Revenue dropped 4.7% to EUR50.68bn, as car sales were dented by the economic recession. BMW Group sold 1.28m cars in 2009, 10% down on the previous year. The company cited cost cutting measures as helping to provide valuable support the bottom line.
“We performed well in 2009 despite difficult market conditions worldwide. Our cost management and efficiency improvement measures had a positive impact, even though the effects of the worldwide financial and economic crisis were still being felt,” said Norbert Reithofer, the Chairman of the Board of Management of BMW AG on Thursday in Munich.
“We are proposing a dividend for 2009 despite the difficult economic climate, demonstrating the confidence we have in our operating strength, and we also want our shareholders to participate in the company’s performance, “ added Reithofer.
The company said that while the worldwide financial and economic crisis will continue to have an impact on the automobile industry during the current year, it hopes to grow profitably thanks to new models and the expected gradual global economic recovery in 2010.
“We are heading into the new year cautiously optimistic. Our new models [most notably the 5 Series] will provide us with a tailwind over the course of the year. We fully intend to remain the world’s leading provider of premium cars in 2010 and plan to increase sales within the single digit percentage range to over 1.3 million vehicles,” said Reithofer.
A total of 1,068,770 BMW brand cars (2008: 1,202,239 units/-11.1%) were sold in 2009. Strong sales increases were achieved by the BMW 7 Series (52,680 units/+35.7%), the BMW X6 (41,667 units/+56.8%) and the BMW Z4 (22,761 units/+26.4%). In Germany, both 7 Series (7,439 units/+74.8%) and the BMW X5 (10,933 units/-31.9%) and X6 (4,940 units/+51.0%) finished the year as ‘clear leaders in their relevant segments’ according to BMW. Since their launch at the end of October 2009 up to the end of the year, 8,499 units of the BMW X1 and 3,052 units of the 5 Series Gran Turismo had been sold worldwide.
The MINI brand sold 216,538 units worldwide in 2009 (2008: 232,425 units/-6.8%). More than one half of the brand’s customers (53.6%) opted for the MINI Cooper, with 26.2% selecting the MINI Cooper S and 20.2% the MINI One.
Rolls-Royce sold 1,002 motor cars (2008: 1,212 units/-17.3%) during the year. The new Rolls-Royce Ghost made a ‘good start’, with 167 vehicles handed over to customers in December 2009.
The BMW Group said it grew strongly in 2009 in the emerging markets of China (90,536 units/+37.5%), Brazil (6,398 units/+118.8%) and India (3,619 units/+24.4%), achieving new sales records in all three markets. Germany was the largest single market for the company in 2009 for its BMW and MINI brand cars, with a total of 258,012 units (2008: 284,786 units/-9.4%) sold. With 33,517 cars handed over to customers, the MINI brand recorded its most successful year in Germany to date.
In the USA, the BMW Group sold 241,727 vehicles in 2009 (2008: 303,190 units/-20.3%). The BMW brand, with 196,502 units sold, remained the best performing European premium car brand in the USA, said BMW. The BMW Group forecasts that sales will increase in the US market during the current year.