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01.08.2008
- ad hoc information - Information pursuant to § 15 WpHG (Securities Trading Act)
BMW Group adjusts outlook to difficult market conditions
- Risk provision expense increased to euro 695 million
- Expense of euro 107 million for personnel measures
- Higher raw material costs
- Market environment not expected to ease in second half of year
- Improvements at operating level in the first half of year – net of exceptional items
Business conditions for the automobile industry have deteriorated sharply over the past weeks. Rising oil and raw material prices, the weakness of the US dollar, the impact of the international financial crisis and a weaker US economy have made business conditions significantly more difficult.
As a result of the ongoing global financial crisis, the price level of pre-owned cars has dropped and consequently the revenues that can be generated on vehicles returned at the end of leases have not recovered. As a result of higher risk provisions and allowances for residual value risks and bad debts relating to financial services business, an additional expense of euro 695 million – including the euro 236 million recorded in the first quarter – has been recognised on the Group’s total portfolio. Expenditure in connection with previously announced measures to reduce the size of the workforce amounted to euro 107 million in the first half of the year.
The profit before tax for the six month period, at euro 1,243 million (first half-year 2007: euro 1,917 million), was down by 35.2%. Group net profit fell by 25.8% to euro 994 million (first half-year 2007: euro 1,340 million). As a result, the company has adjusted its profit forecast for 2008. The BMW Group is aiming to achieve a return on sales for the year of at least 4%. An EBIT margin of approximately 4% or higher is forecast for the Automobiles segment. Excluding the exceptional impact of higher risk provision and personnel expense, the BMW Group improved in operating terms.
Further inquiry note:
Marc Hassinger
Tel.: +49 (0) 89 382 23362
E-Mail: Marc.Hassinger@bmw.de
Bill McAndrews
Tel.: +49 (0) 89 382 22332
E-Mail: Bill.McAndrews@bmw.de
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