Το πρώτο τρίμηνο του έτους μόνο θετικά θα έχει να το θυμάται η BMW μιας και με 428.259 πωλήσεις (+12,3%), είδε τα είδε τα συνολικά της έσοδα να ανέρχονται σε 18,23 δις ευρώ (+3,9% σε σχέση με την ίδια περίοδο του 2013), έχοντας καθαρά κέρδη 1,46 δις ευρώ (+11,2%).
Η BMW είδε τις πωλήσεις της τον Μάρτιο να ανέρχονται σε 186.126 αυτοκίνητα (+16,9%), ενώ τους τρεις πρώτους μήνες του έτους 428.259 BMW έχουν παραδοθεί στους ιδιοκτήτες τους (+12,3%). Η MINI από τη μεριά από την αρχή του έτους έχει πουλήσει 57.868 αυτοκίνητα (-12,5%), ενώ τον Μάρτιο οι πωλήσεις της ανήλθαν σε 26.382 (-16,9%). Σε ότι αφορά την Rolls-Royce, τους τρεις πρώτους μήνες του 2014 πούλησε 897 πολυτελής λιμουζίνες (+39,7%), ενώ μόνο τον Μάρτιο, είδε να πουλά 400 αυτοκίνητα (+28,6%).
Για το 2014 η BMW έχει θέσει ως στόχο να πουλήσει περισσότερα από 2 εκατ. αυτοκίνητα, να σημειώνει νέο ρεκόρ κερδών, με το περιθώριο κέρδους να αυξάνεται στη περιοχή του 8 με 10%. Περισσότερες λεπτομέρειες μπορείς να βρεις στο δελτίο τύπου που ακολουθεί.
Strong start to new financial year for BMW Group
Contained media data:
Group revenues rise to € 18.24 billion in first quarter Profit before financial result rises to € 2.09 billion Group profit before tax climbs to € 2.17 billion Group net profit increases to € 1.46 billion BMW Group reaffirms targets for full year 2014
Munich. First-quarter sales volume, revenues and earnings were all up on the previous year, underpinning the BMW Group’s position as the world’s leading premium car company.
Group revenues rose by 3.9% to € 18,235 million in the opening quarter of the year (2013: € 17,546 million) on the back of good sales volume figures. Despite high levels of expenditure on new technologies, higher personnel costs and tough competition, Group profit before financial result (EBIT) increased by 2.6% to € 2,090 million (2013: € 2,038 million). Group profit before tax (EBT) climbed by 8.1% to € 2,166 million (2013: € 2,003 million), giving a pre-tax return on sales of 11.9%. Group net profit rose by 11.4% to € 1,462 million (2013: € 1,312 million).
The total number of BMW, MINI and Rolls-Royce brand cars delivered to customers worldwide went up by 8.7% to a new first-quarter record of 487,024 units (2013: 448,200).
“The BMW Group has made a strong start to the current financial year with new record first-quarter figures for sales volume and profit before tax. The 9.5% EBIT margin recorded by the Automotive segment keeps us firmly within the upper range of eight to ten percent that we wish to attain,” stated Norbert Reithofer, Chairman of the Board of Management of BMW AG, on Tuesday in Munich.
Automotive segment: Profit before tax rises to € 1.64 billion
Strong demand for BMW Group vehicles had a positive impact on the Automotive segment’s revenues and earnings in the first three-month period. First-quarter revenues rose by 4.1% to € 16,559 million (2013: € 15,907 million). Owing to substantial expenditure on new technologies, tougher competition and increased personnel costs as mentioned above, EBIT came in at exactly the same level as the previous year (€ 1,580 million) and resulted in an EBIT margin of 9.5%. Segment profit before tax improved by 8.4% to € 1,643 million (2013: € 1,516 million), corresponding to a return on sales of 9.9%.
The BMW brand maintained its position as the world’s leading premium company during the period under report and, for the first time in its history, sold more than 400,000 vehicles in the first quarter of a financial year. Worldwide sales rose by 12.3% to 428,259 units (2013: 381,404 units). The BMW 3, 5 and 6 Series as well as the X5 each headed the market in their respective segments.
The various models of the BMW X family were significant growth drivers in the first three months of the year. Sales of the BMW X1 rose by 14.8% to 43,262 units (2013: 37,680 units), while the BMW X3 achieved an increase of 10.9% to 40,125 units (2013: 36,189 units). The new BMW X5 continues to sell very well, with first-quarter sales volume up by 13.8% to 31,025 units (2013: 27,274 units).
The BMW 3 Series also experienced another successful quarter with sales rising to 116,671 units (2013: 109,309 units; +6.7%). Equally successful was the performance of the BMW 5 Series, which recorded a sales volume of 91,600 units (2013: 85,731 units; +6.8%). Sharp growth was also registered for the BMW 6 Series, with sales up by 33.2% to 8,223 units (2013: 6,174 units). The BMW flagship, the 7 Series, achieved a 2.3% increase to 12,670 units (2013: 12,390 units). Demand for the BMW i3 continues to be high. 2,022 units of this innovative electric vehicle were sold worldwide in the first quarter and sales figures are set to continue rising over the coming months as more vehicles become available (a large number of the vehicles produced to date has been delivered to various markets for demonstration and showroom purposes). The sales figure for March alone was in the region of 1,000 units. Production ramp-up for the i3 has continued in line with schedule in recent weeks and some 100 vehicles are currently being manufactured each day. The i3’s initial launch in Europe was followed up in April by its introduction in the USA, which promises to be the vehicle’s largest market.
In line with expectations, first-quarter sales of MINI vehicles decreased to 57,868 units (2013: 66,154 units; -12.5%), owing to the change of the brand’s core model – the new MINI Hatch – which began delivery in March. The MINI Countryman recorded 6.6% sales volume growth to 25,108 units (2013: 23,559 units), while the MINI Paceman jumped to 4,075 units (2013: 729 units). Interest in the new MINI Hatch is extremely high and expected to have a positive impact on the MINI brand’s sales figures from summer onwards.
Rolls-Royceremains the world’s leading manufacturer in the ultra-luxury segment. After four record years in succession, the trend continued in the first quarter 2014, with a total of 897 Rolls-Royce cars delivered to customers worldwide (2013: 642 units; +39.7%). Demand continues to be high for the various models of the Phantom and Ghost families. Similarly, order book figures for the new Rolls-Royce Wraith are also at a very healthy level.
The BMW Group achieved first-quarter growth in numerous markets, with sales volume gains recorded in all major regions.
Despite some challenging conditions still to be faced in a number of markets, first-quarter sales in Europe rose by 3.4% to 214,210 units (2013: 207,243 units).
In Asia, the number of cars sold climbed by 21.8% to 158,582 units (2013: 130,219 units). Mainland China saw a 25.4% increase in deliveries to 108,143 units (2013: 86,224).
First-quarter sales in the Americas region rose by 3.5% to 99,840 units (2013: 96,488 units), including 81,248 units sold in the USA (2013: 79,117 units; +2.7%).
Higher sales volume, revenues and earnings for Motorcycles segment
The Motorcycles segment benefited greatly from the mild winter in Europe, which effectively brought forward the start of the motorcycling season. First-quarter revenues rose by 8.3% to € 472 million (2013: € 436 million). EBIT jumped by 25.5% to € 64 million (2013: € 51 million) and profit before tax by 26.0% to € 63 million (2013: € 50 million). At both levels, these figures represented the best quarterly earnings performance in the history of the Motorcycles segment.
A new sales volume record was also set for the three-month period from January to March, with 28,719 units sold (2013: 24,732 units; +16.1%). The new R nineT, S 1000 R, R 1200 RT and K 1600 GTL Exclusive models presented the previous autumn were all launched in time for the start of the season in March. The C evolution electric scooter will make its appearance in dealership showrooms from May onwards.
Financial Services remains on course
The Financial Services segment continued to perform well throughout the first quarter 2014. Revenues edged up by 1.2% to € 4,890 million (2013: € 4,830 million). Profit before tax rose by 2.4% to € 460 million (2013: € 449 million).
The number of new financing and lease contracts signed in the period from January to March rose worldwide by 2.3% to 348,072 contracts (2013: 340,328 contracts). The portfolio of lease and financing contracts in place with dealers and retail customers at 31 March 2014 rose by 6.8% to a total of 4,170,318 contracts (2013: 3,905,891 contracts).
The number of employees as of 31 March 2014 was 4.6% higher than a year ago. Overall, the BMW Group had a worldwide workforce of 111,378 employees (31 March 2013: 106,470 employees). The increase was attributable to the growing need for engineers and skilled workers in order to keep pace with continued strong demand on the one hand and to forge ahead with innovations and the development of new technologies on the other.
BMW Group reaffirms targets for current year
Based on its strong performance in the first quarter, the BMW Group reaffirms its outlook for 2014. Within a challenging market environment, sales volume (2013: 1,963,798 units) and Group profit before tax (2013: € 7,913 million) are both expected to rise to new record levels.
“We are on course to achieve significant sales volume growth in the current year, leading to a new all-time high of over two million vehicles”, Reithofer confirmed.
The planned growth in sales volume is also likely to be reflected in Group profit before tax: “We are aiming for a new record Group profit before tax figure, which will be significantly higher than in the previous year”, Reithofer explained. The pace at which earnings increase will be influenced, however, by high levels of expenditure for new technologies, fierce competition and rising personnel expenses.
The Automotive segmentforecasts a significant rise in revenues in 2014 on the back of the expected strong demand for BMW, MINI and Rolls-Royce brand vehicles. The scale of the increase could, however, be held down somewhat by currency factors. An EBIT margin within a corridor of between 8 and 10% (2013: 9.4%) remains the target for the Automotive segment. At the same time, the BMW Group will continue to invest substantial amounts in new technologies in order to extend its lead in the field of innovation and in the premium segment.
Tailwind is also likely to be provided by the 16 new models including model revisions which the BMW Group plans to launch in the current year, including the 4 Series Gran Coupé and the BMW i8 plug-in hybrid sports car in June as well as the BMW X4 in July 2014. The 2 Series Active Tourer will go on sale in the fourth quarter.
The Motorcycles segment is also expected to continue to perform well over the year as a whole. Despite tough conditions on international motorcycle markets, sales are forecast to be slightly up on the previous year (2013: 115,215 units).
The Financial Services segment should also remain on growth course in 2014. As a consequence of related investments, the return on equity is likely to drop slightly (2013: 20.2%), but is still set to surpass the BMW Group’s minimum required level of 18%.
The Group’s forecasts for the current year are based on the assumption that political and economic conditions remain stable in 2014.
|1st quarter 2014||1st quarter 2013*||Change in %|
|Operating cash flow Automotive segment||€ million||2,132||1,971||8.2|
|Financial Services||€ million||4,890||4,830||1.2|
|Other Entities||€ million||2||1||–|
|Profit before financial result (EBIT)||€ million||2,090||2,038||2.6|
|Financial Services||€ million||465||450||3.3|
|Other Entities||€ million||10||17||-41.2|
|Profit before tax||€ million||2,166||2,003||8.1|
|Financial Services||€ million||460||449||2.4|
|Other Entities||€ million||57||67||-14.9|
|Income taxes||€ million||-704||-691||-1.9|
|Net profit||€ million||1,462||1,312||11.4|
|Earnings per share2||€||2.22/2.22||1.99/1.99||11.6|
* Prior year’s figures partially adjusted due to application of IFRS 10, IFRS 11 and IFRS 12.
1 Figures exclude dormant employment contracts, employees in the work and non-work phases of pre-retirement part-time working arrangements and low-wage earners
2 Earnings per share of common stock/preferred stock
Statement Dr. Norbert Reithofer, Chairman of the Board of Management of BMW AG, Conference Call Interim Report to 31 March 2014
Ladies and Gentlemen!
In 2014, we are focusing even more strongly on innovative technologies and customer satisfaction.
Through innovation, we continue to develop our brands and drive progress forward in our industry. That is how we secure our own future in an ever changing environment. And that is how we create added value for our customers and shareholders.
Let me give you three examples: 1. The BMW i3: The demand for our innovative electric vehicle is high. In March alone, we sold 1,000 BMW i3 cars worldwide. Just a few days ago, the BMW i3 was launched in the US. American customers are particularly open to new types of drive-trains. We expect the majority of BMW i3 cars to be sold in the US. We especially focus on California as a relevant market for electric cars, as it is considered by experts to be a trendsetter for the whole USA. In Japan, the i3 has been available for customers since early April, and China is due to follow later in the year. At our site in Leipzig, production is being ramped up according to schedule – with 100 vehicles produced per day. More than 5,000 BMW i3 cars have been built so far in total. Many of these cars were delivered to our global markets as demonstration and exhibition vehicles. Now, more and more cars are being built to meet customer demand. 2. The BMW i8: As promised, we are going to launch the second member of the BMW i family in June. It combines a total of three world firsts in one:
- The BMW i8 is the world’s first plug-in hybrid sports car with the BMW i Life-Drive architecture.
- It is the first sports car with a three-cylinder drivetrain.
- And it is the first series car featuring the new laser light technology.
Just like the i3, the US could become the key market for the BMW i8 as well. It is currently being tested by international media at our press event in Los Angeles. With BMW i, lightweight technology plays a central role. Carbon fiber is a material with a significant future in our industry, which we will also use in other series models.
3. The BMW 2 Series Active Tourer: This is the first BMW model with front-wheel drive, and is a trailblazer to acquire new customers to the BMW brand. It offers the best technological solution for this very practical and functional car. The Active Tourer will be available as of the fourth quarter.
All these initiatives are part of our long-term strategy: „Number ONE“. It continues to be our roadmap towards the future. We have held the lead in the premium segment for almost a decade now. Our strategy covers a time frame up to the year 2020. Naturally, we are already thinking beyond this.
It goes without saying, we monitor closely all the relevant trends in our environment and beyond, as well as assessing the external challenges that have an effect on our business. Some of the questions we ask ourselves are:
- What do customers expect of a leading mobility company today and beyond tomorrow?
- How do we remain at the forefront of technological trends and create attractive services?
- How do we want to develop our brands further in a timely manner so that we can win new customer groups without compromising on our brand identity?
- How can we master the complexity arising from the many requirements and the growth targets we have set for ourselves?
- And last but not least: What kind of company do we want to be in the future?
As always, our goal is long-term profitable growth. Following four straight record years, we are aiming at continuing our successful business development this year.
Our 2014 targets are as follows:
- New record sales on Group level of over two million cars.
- A new record in Group profit before tax, significantly above the last year’s level.
- An EBIT margin in the Automobile Segment in the range of 8 to 10 percent.
We have started the new business year with a strong first quarter.
- Between January and March, we sold around 487,000 cars worldwide. This is more than ever before in a first quarter.
- We posted new first quarter record sales for BMW and Rolls-Royce as well as BMW Motorrad. The MINI sales figures were affected by the model update of the Hatch.Our BMW brand exceeded for the first time in a first quarter the mark of 400,000 cars delivered. 30 years ago, this was the sales figure for an entire year. This highlights the innovative strength of our company and the appeal of our brands. The BMW 3, 5 and 6 Series as well as the BMW X5 are currently the market leaders in their respective segments.
- Our Group profit before tax stands at over 2.1 billion Euros. Again, this is a new record for a first quarter.
- The Group net profit amounts to over 1.4 billion Euros.
- The EBIT margin in the Automobile Segment continues to be in the upper half of the targeted profitability range of between 8 and 10 percent.
This all shows that: Following the first quarter, we are on track towards meeting our targets for 2014.
Two factors should have a positive effect on our business development this year: First, demand in the key automotive regions of North America and Asia is increasing. In Europe, we were also able to record a slight growth in sales in the first quarter. Second, we are offering our customers a young and attractive model portfolio.
Of course, it is important that the economic uptrend in Europe stabilizes further. However, we are well aware that a number of risks still exist: High public debt, unequal development of worldwide economic markets, and political tensions and conflicts.
Our business environment can be affected by these and so remains volatile. As a successful global company, we continue to aim for a balanced distribution of sales in the three large regions: Europe, Asia and America.
In this way, we avoid one-sided dependencies. As a basis for further global growth we are strategically expanding our capacity, in keeping with the principle Production follows the market.
The Americas are and will remain a key region for our global growth:
- With the expansion of our site in Spartanburg, we will increase our production capacity in the US to 450,000 units annually by the end of 2016. This is 50 percent more than today. Our respective investment in the period 2014 to 2016 stands at one billion dollars.
- In the fall of this year, our new BMW plant in Brazil will begin production. Its annual output is planned to reach up to 30,000 units in the mid-term.
Our customers all around the world have diverse and individual needs.
In 2014, we will offer them even more variety, not only to meet their diverse tastes but also to fulfill their individual aspirations.
- Our BMW X range continues to be a huge success. More than 3.3 million X vehicles sold since 1999 attest to the popularity of this model family. Today, more than one in four vehicles of the BMW brand is an X model. The model update of the BMW X1 has been available since March 2014. It is to be followed by the model update of the BMW X3 in May. In July, a new member is going to join the X family – the BMW X4. Plus, with our BMW Concept X5 eDrive, we have shown how we will be able to increase the efficiency of our X range even further with a plug-in hybrid.
And for the future, we have announced another completely new model – the BMW X7.
- The new BMW 4 Series is also very popular with customers. The new BMW 4 Series Convertible came out in March. In June, following the Coupe and Convertible, the third model in the new 4 series will be launched: the Gran Coupe. And for those customers who enjoy an even sportier drive, the M version will be available in September.
- Two further new M models are the BMW M3 Sedan and the BMW M4 Coupe, both available as of June.
- The new BMW 2 Series Coupe arrived at the dealerships in March and has had a successful start.
- At the same time, the new generation of the MINI Hatch was launched. From the second half of the year on, the new MINI will also be manufactured by our partner, VDL NedCar in the Netherlands.
- The Rolls-Royce Ghost Series II is going to be delivered to customers as of fall.
We will continue to invest in new models, in innovative technologies and in our facilities around the globe. Our innovative drive, our financial strength and our business success provide us with the necessary flexibility and latitude to grow. That is how we will continue to remain Number ONE. Thank you very much!
Statement Dr. Friedrich Eichiner, Member of the Board of Management of BMW AG, Finance, Conference Call Interim Report to 31 March 2014
Ladies and Gentlemen,
After a strong first quarter, the BMW Group is on track. Over the full year, we expect to see an upward trend in the European markets and significant growth in our major overseas markets, the US and China.
The first three months have met our expectations. We are seeing the first signs of recovery in Europe, and sales are several thousand units higher than this time last year. This could be a good indication of a sustainable recovery in the European car markets.
In the United States, the BMW brand posted sales growth of 11.5% in the first quarter. MINI volumes were lower due to the model changeover. After the market launch of new models, this will shift in the second half of the year.
Asia and China, in particular, reported a strong increase in sales: Deliveries in the Chinese market exceeded expectations, climbing 25% year-on-year. This was largely due to higher sales of locally-produced models.
The positive business development so far confirms our guidance for 2014. In the first three months, BMW Group revenues were 3.9% higher year-on-year.
Group pre-tax earnings reached € 2.17 billion – an increase of 8.1% over the same period last year.
At Group level, the pre-tax EBIT margin stood at 11.5%. Profitability was therefore on a par with the first quarter of 2013.
The BMW Group is maintaining its growth course. In the first quarter, we invested a total of € 1.24 billion in new products and equipment to strengthen our competitiveness. This represents an increase of 1.6% over the previous year.
The capex ratio (HGB – German Commercial Code) for the first three months of the year stood at 6.8%. We aim at a 2014 ratio lower than last year, moving closer to our target of below 7%.
The BMW Group spent a total of € 993 million on research and development (HGB – German Commercial Code) in the first quarter – a 4.2% increase over the same period of last year.
The development of new low-emission and lightweight technologies and other measures to enhance fuel economy remains our main focus. This R&D spending is designed to strengthen our future market position.
Our R&D ratio (HGB – German Commercial Code) of 5.4% is unchanged from the first quarter of last year. In 2013, the ratio was 6.3%. For the full year 2014, the ratio should move closer in line with our target range of 5-5.5% of revenue.
Group liquidity remained solid in the first three months. At the end of the quarter, liquid assets and securities totalled € 10.75 billion, which assures the company the financial flexibility it needs.
The Automotive segment benefitted from higher sales.
With more than 487,000 vehicles delivered, sales in the Automotive segment grew by 8.7%.
Revenues climbed to € 16.56 billion. This represents an increase of 4.1% over the same period last year. Revenues rose more slowly than sales in the first quarter due to currency translation effects: Adjusted for these effects, revenues increased by 7.3%.
Also, revenues do not take full account of sales of vehicles produced locally in China.
Our product mix improved in the first three months of the year. Due to the model change, MINI accounted for a lower percentage of sales – although this will even out over the course of the year.
EBIT in the segment for the first quarter totalled € 1.58 billion, which is in line with the previous year’s figure.
The Automotive segment achieved an EBIT margin of 9.5%. We see this as confirmation of our guidance and also expect EBIT margin in the Automotive segment for the full year to stay within our target range of 8-10%.
Segment earnings benefitted from higher deliveries and improvements in the model mix. However, additional expenditure for future projects and costs for the market launch of new models offset this.
Segment earnings were affected by marketing and sales costs for the launch of the new 4 Series Convertible and Gran Coupé models, the new 2 Series Coupé, the new MINI Hatch and the X5. The total charge lies in the high two-digit million euro range.
The response of media and dealers to our new products has been extremely positive. We therefore expect good growth opportunities, as planned. It remains to be seen whether this will also have a positive effect on pricing.
In spite of lasting challenges, there are initial signs of pricing improvement in the European markets. However, we did not benefit from this in the first quarter.
Higher investment resulted in a larger impact from depreciation. Segment growth also raised personnel costs.
In the first quarter, changes in currency and raw material prices had no significant impact on segment earnings. For the full year, we are well hedged for the major currencies and raw materials and anticipate similar headwinds as those of last year. However, due to price changes profit might be affected in the course of the year.
In the year to the end of March, we produced almost 33,000 more units than we delivered – in preparation for traditionally strong sales in the second quarter and sales growth in overseas markets. For example, new 4 Series models and the BMW i3 are now also available in the US and Japan.
Overall, the second half of the year will benefit from stronger product momentum, as additional new models are launched.
First-quarter growth led to a corresponding increase in working capital of € 918 million. The segment generated a strong operating cash flow, with a free cash flow of € 932 million. This figure is € 308 million higher year-on-year.
As previously announced, we expect free cash flow to be higher than in 2013 and closer to € 3 billion.
At the end of the first quarter, net financial assets in the Automotive Segment totalled almost € 13 billion.
As stated in our Annual Report, we brought our accounting into line with IFRS standards 10, 11 and 12 in the first quarter. This means that our joint ventures with the SGL Group are now reported as joint operations. Consequently, their earnings contributions are no longer reported in the at-equity result, but proportionately consolidated. This results in minor changes at Group level and in the Automotive segment and Eliminations.
The Financial Services segment also expanded its operating business in parallel with sales. In the first three months, we concluded more than 348,000 leasing and financing contracts with customers: 2.3% more than in the first quarter of last year. BMW Group Financial Services managed a portfolio of 4.17 million contracts as per 31 March. This represents an increase of 6.8% over the previous year.
At 40.5%, the segment penetration rate – the percentage of new vehicles leased or financed by Financial Services – was lower than for the first quarter of 2013.
In this segment, a profitable new business and a good balance between leasing and financing is our priority.
The segment reported pre-tax earnings of € 460 million in the first quarter of 2014 – an increase of 2.4%.
The risk situation developed in line with expectations. Pricing on the international used-car markets, including Europe, remained largely unchanged. In the US, prices trended downward slightly.
Over the full year we expect this price trend for used cars in North America to continue as the market mildly cools. In Europe, pricing should remain stable throughout the year.
The credit risk situation for Financial Services remained stable in the first quarter. In general, we make risk provisions for our Financial Services segment in line with our analyses and forecasts.
Overall, we remain confident about 2014, as Financial Services continues to benefit from strong sales growth and model ramp-ups.
The Motorcycles segment reported another new sales-high for the first quarter. A total of more than 28,700 BMW motorcycles were delivered to customers – an increase of 16.1%. The mild winter across Europe brought an earlier start to the motorcycle season, with particularly dynamic sales growth in France, Italy and Germany.
Revenues for the year to the end of March climbed 8.3% to € 472 million. EBIT for the first quarter reached € 64 million – an increase of 25.5% over the same period last year.
The new models R nineT, S 1000 R, R 1200 RT, R 1200 GS Adventure and K 1600 GTL Exclusive have all been available since March. The C evolution electro-scooter will be launched in May.
The BMW Group is committed to its ambitious growth targets for the full year. Our planning assumes that the company will continue its positive business development.
This will depend on a stable recovery in the European markets and continued strong growth in markets outside of Europe. As already mentioned, we are maintaining our guidance – which calls for a significant increase in pre-tax earnings at Group level. After the first three months of the year, positive business development in the segments indicates that we are on track.
In the Automotive segment, dynamic product momentum should generate a significant increase in deliveries and revenues. However, as announced, revenues might be affected by translation effects. We expect to see continuing signs of recovery in the European car markets, as well as price stabilisation.
We expect continued effects from expenses for product ramp-ups, up-front investments and preparations for further growth.
In the Automotive segment, EBIT margin should remain within our target range of 8-10%.
Assuming conditions remain stable, we expect our Financial Services segment to achieve a return on equity of at least 18%. This will be slightly lower than last year, however, as we make necessary investments. From today’s perspective, it appears we have made adequate provisions for the risks typically associated with this segment.
BMW Motorrad is likely to continue its positive business development, with new models producing a slight increase in sales over the full year. However, the rate of growth achieved in the first quarter will not be sustained throughout the rest of the year.
Our forecast for the year assumes that political and macroeconomic conditions remain stable. Risk factors, such as increased volatility in the markets, could affect our guidance, however.
Our focus in 2014 will be on consolidating the BMW Group’s position as the world’s leading premium car company, targeting profitable growth for the full year. In the interests of all its shareholders and associates, the BMW Group is enhancing its future competitiveness today – and striving to maintain its leading role in the premium segment.