In a challenging environment, the BMW Group ended the financial year 2021 with strong results, having achieved the targets it had set itself. The luxury vehicle manufacturer managed to significantly increase both Group profit before tax and net profit compared to the previous year, having already revised its forecast in May and September. Effects from factors such as valuation changes and forecast reversals contributed to this improvement. The BMW Group met the high expectations of its non-financial targets: For example, in fiscal year 2021, the percentage of total deliveries of electric vehicles increased significantly to 13%. In addition, CO2 of the BMW Group's European new vehicle fleet were reduced to 115.9 g/km (WLTP).
The company has accelerated the electrification of its product range, while significantly increasing its profitability.
"The past year clearly demonstrates that successful transformation is paying off. The strong earnings we achieved in fiscal 2021 are the result of a consistent strategy - with the right products at the right time," said Oliver Zipse, Chairman of the Board of Management of BMW AG, on Thursday in Munich. "This success is also due to our partners, and I would especially like to thank them for their hard work and passion. Together, we are proving that bold transformation and financial success are inextricably linked at BMW."
High profits for the Group the financial year 2021
The BMW Group ended the 2021 financial year with an all-time record in terms of revenue, profit before tax and net profit for the Group - all of which were significantly higher.
The deliveries have seen an increase 8,4%, reaching the 2.521.514 units, with the share of electric vehicles amounting to 13% (328,314 units / +70.4% from the previous year).
The income of Group amounted to 111,23 billion (previous year: € 98.99 billion / +12.4%). With a higher proportion of annuity vehicles, the BMW Group benefited from the positive effects of the product mix and improved pricing - both from new car sales and from the resale of vehicles that have completed the leasing programme. The smaller number of employees compared to the previous year and the modernization of the pension plan for employees in Germany resulted in lower cost of sales in the high three-digit million euro range. However, this was partially offset by higher costs for performance-based compensation in the cost of sales. Further headwinds resulted from higher raw material prices.
Electric mobility and digitalisation account for most of the spending R & D
Higher spending on research and development is an indication that the BMW Group is steadily moving towards transformation. Total expenditure on research and development in accordance with International Financial Reporting Standards (IFRS) increased significantly compared to the previous year to 6,29 billion (previous year: EUR 5,68 billion / +10,7%). Due to higher revenues, the ratio R & D 6,2%, according to the German Commercial Code, remained at the level of the previous year (previous year: 6.31 TP3T). In 2021, investments were allocated to new vehicle architectures and tools linked to the electric onslaught. Additional spending came from digital product development and automated driving.
Capital expenditure for property, plant and equipment and other intangible assets amounted to 5,01 billion in 2021 (2020: €3.92 billion / +27.8%). The large expansion of the electric product range and upcoming launches led to corresponding capital expenditures for the involved factories. The ratio capex of 4,5% was within the target range of <5% according to the program.
The BMW Group stated profit before economic result for the whole year 13,40 billion (previous year: EUR 4,83 billion / +177,4%). his earnings Group before tax also rose strongly, reaching all-time record highs 16,06 billion (previous year: EUR 5.22 billion / +207.5%). A positive effect of EUR 1 billion resulted from the partial reversal of the forecast for the EU antitrust proceedings following their conclusion in the second quarter.
The net profit of Group also rose to all-time record highs at 12,46 billion (previous year: EUR 3,85 billion / +223,1%).
Proportional dividend increase
Shareholders can also participate up to a certain extent in the success of the company. Based on the annual financial reports of BMW AG, the unallocated profit (according to the German Commercial Code) for distribution to shareholders amounts to 3,82 billion (previous year: EUR 1.25 billion / +205.4%). Maintaining the target range of 30-40% for the payout ratio, the Management Board and the Supervisory Board will propose μ prism Altitude 5,80€ Per common stock (previous year: 1,90€) and 5,82€ Per preferred stock (previous year: €1.92) at the Annual General Meeting on 11 May. The payout ratio is 30.7% (previous year: 32.5%).
"We intend to deliver on our promise and allow our shareholders to participate in the success of our company reliably and equitably. With a payout ratio of 30.7%, our shareholders will also be able to benefit from a strong fiscal year 2021," said Nicolas Peter , Member of the Board of Management of BMW AG, Finance Division.
The margin EBIT of the Automotive sector at 10,3%
Ο Automotive sector benefited from better pricing and an improved product mix in 2021, as demand remained high. Due to the global shortage of semiconductors, the availability of new vehicles in the market declined, and more lucrative models were preferred. The high resale value of vehicles that completed the leasing program - mainly in the US and the UK - also contributed to higher segment revenues. Increased turnover from new parts and accessories sales also had a positive impact on revenue.
As a result, The income of the department were significantly higher, at EUR 95.47 billion (previous year: EUR 80.85 billion/ +18.1%).
The earnings before interest & taxes (EBIT) amounted to EUR 9.87 billion (previous year: EUR 2,16 billion / +356,5%). In 10,3%, (2020: 2.7%; +7.6 percentage points), the margin EBIT of the department were at the upper levels of the forecast range.
The the economic result of the sector, at 1,93 billion was significantly higher than in the previous year (2020: EUR 560 million / +345.5%). This benefited mainly from the higher contribution from the Chinese joint venture, BMW Brilliance Automotive Ltd. and positive valuation effects from equity investments and equity holdings.
The total profit before tax for the financial year 2021, amounting to 11,80 billion were significantly higher than those of the previous year (2020: EUR 2.72 billion / +333.7%).
Η liquidity of the Automotive Sector reached new all-time record highs 6,35 billion (previous year: EUR 3.39 billion / +87.2%) at the end of the year.
According to the forecast, the return on capital employed (RoCE) for the automotive sector also increased significantly in 2021 to 59,9% (previous year: 12.7% / +47.2 percentage points). This significant increase resulted primarily from the much higher EBIT compared to the previous year.
The sector Financial Services contributes with remarkable profits
The sector Financial Services also benefited from strong demand for new and used luxury vehicles. Ο number of new retail contracts with customers arrived at 1.956.514 throughout the year (previous year: 1,845,271 / +6%). The total portfolio of 5,577,011 retail contracts managed at the end of 2021 was in line with that of the previous year (previous year: 5,591,799 contracts / -0.3%).
The Revenue of the domain Financial Services increased significantly in the 32,86 billion (previous year: EUR 30.04 billion / +9.4%) in 2021. The profit before tax amounted to 3,75 billion (previous year: EUR 1.72 billion / +117.6%) and were therefore significantly higher than in the previous year. This increase in revenues and profits was mainly due to higher income generated by the resale of vehicles that completed the leasing programme due to the positive price development on the used vehicle markets. The need for value adjustments to cover credit risks remained low - which had a further positive impact on earnings.
At 22,6%, the return on equity - RoE ( return at equity ) in the Financial Services sector was found at the upper limits of the prediction range of 20-23% (previous year: 11.2% / +11.4 percentage points). This increase is mainly driven by the improvement in the risk situation during the financial year.
Η BMW Motorcycle recorded strong growth in revenue and profit before tax
BMW Motorrad delivered 194.261 Vehicles (previous year: 169,272 / +14.8%) to its customers in 2021. The division reported revenue 2,74 billion (previous year: EUR 2,28 billion / +20,3%) and EBIT EUR 227 million (previous year: EUR 103 million / +120.4%). margin EBIT rose to 8,3% (previous year: 4.5% / +3.8 percentage points) and is therefore within the forecast range of 8-10%.
The main factors were the positive effects of the product mix and sales growth. The significant increase in return on capital employed ( RoCE ) at 35,9% (previous year: 15.0% / +20.9 percentage points) mainly reflects the improvement in EBIT.
"Our business results in 2021 demonstrate that we have been able to combine our ongoing transformation and the major investment involved with strong operational success in a very volatile environment. We are well positioned and optimistic about the future. The rating agencies confirm this by revising our forecast to a 'solid' last year," said Nicolas Peter, Member of the Board of Management of BMW AG, responsible for the Financial Division.
Successful fourth quarter, despite adverse conditions
The BMW Group completed the 2021 with a successful fourth quarter, despite the continuing shortage of semiconductors and rising energy and raw material prices. During this period, deliveries of the three luxury car brands, BMW, MINI and Rolls-Royce, fell to 589,290 units (previous year: 687,012 / -14,2%), due to the difficulty in the supply of semiconductors. At the same time, an exceptionally high number of orders confirmed the strong appeal of the current model range. The electric vehicles had a share of more than 16% of sales volume, with 96.739 deliveries to customers. The income of Group amounted to 28,40 billion (previous year: EUR 29,48 billion / -3,6%).
The his earnings Group before tax for this period have increased significantly to 2,90 billion (previous year: EUR 2.26 billion / +28.6%).
Despite higher fixed costs, as is usual in the last quarter of the year, the margin EBT of Group rose to 10,2%. The net profit of Group for the fourth quarter amounted to 2,25 billion (previous year: EUR 1,68 billion / +34,3%).
At Automotive sector, the EBIT of EUR 1.92 billion (previous year: EUR 2.01 billion / -4.21 TtP3T) decreased slightly from the previous year, mainly due to lower sales volumes. At 2,35 billion, capital expenditure were also significantly higher compared to the same period in 2020 (previous year: EUR 1.54 billion). EBIT of the Automotive sector for the last quarter of the year were 7,7% (previous year 7,7%).
The Department Financial Services once again significantly increased its pre-tax profit in the fourth quarter to EUR 829 million (previous year: EUR 686 million/ +20.8%), as it continued to benefit from high prices in the used car markets, mainly in the US and the UK.
Human resources slightly reduced compared to the previous year
The BMW Group employed human resources 118.909 employees at the end of 2021 (previous year: 120,726 / -1.5%). This year, the company plans to hire new staff to meet the needs of further digitalisation and electrification of its product range.
Authorisation to repurchase shares at the Annual General Meeting
Thanks to its successful business development, the BMW Group has a healthy balance sheet and a very stable financing structure. It is also able to generate sustainably high free cash flow. One reason for this is the recent full consolidation of the Chinese joint venture BMW Brilliance Automotive Ltd. in the BMW Group Financial Statements. In order to maintain the possibility of optimising the company's capital structure, the Board of Management and the Supervisory Board will propose to the Annual General Meeting that the Board of Management be authorised to buy back and withdraw treasury shares. In accordance with the legal framework, the Management Board will be authorised for a period of five years to purchase shares in the company worth up to 10% of the total share capital and to withdraw or use them.
The Annual Report of the BMW Group for 2021 covers all on Requirements SASB
Sustainability is a central theme of the BMW Group's corporate strategy. In this year's BMW Group Report, which will be published on 16 March, the BMW Group has fully integrated the requirements of the Sustainable Accounting Standards Board (SASB) into its reports for the first time.
"We understand that our economic success in the future will depend, more than today, on further reducing the negative impact of our operations on the environment and making a positive contribution to the development of society," said Nicolas Peter. "The BMW Group Annual Report 2021 provides a holistic, comprehensive overview of the Group by integrating comprehensive non-financial Key Performance Indicators (KPIs) into our regular reports. Setting out our sustainability efforts in a way that is transparent and easy to understand puts our company on the right track. Our goal is to lead our industry in this area."
