BMW’s H1 results were very solid, with sales volumes reaching a record level for a first half and revenues and EBIT beating expectations. Automotive margins and cash generation were exceptionally strong as the company proved capable of handling the current industry headwinds. In spite of this, management is concerned by the risks from the semiconductor crisis and rising raw material costs as they extend into H2, opting to stick to its conservative automotive EBIT FY targets.
Companies: Bayerische Motoren Werke AG
Closing the Q1 earnings German trio, BMW also reported upbeat results coming above market expectations. The same drivers were at play here, including strong pricing, a favourable product mix and buoyant Chinese volumes. BMW also stood out as the European OEM that best managed the semiconductor shortage so far. However, Q2 is proving that it is not immune to the industry-wide lack of chips, likely leading the company to maintain its initial FY guidance.
BMW’s full-year release saw the group beating market expectations on the back of a very strong H2. Having pre-released most of the FY20 figures though, the key takeaway is a more upbeat guidance for the current year compared to the very cautious outlook sustained through 2020. The margin objectives will quickly position BMW back on the path to attain its 2025 targets, while stepping up its electrification strategy to answer the industry’s mounting EV push.
BMW was able to pare back its losses following a solid sales performance in Q4, with volumes rising by 3.2% yoy to 686k vehicles. The full-year deliveries amounted to 2.32m units, an 8.4% decline in a global market that contracted by c.15% in 2020, and came in slightly above our estimates of 2.28m units. We expect China to continue being the driving force behind the still shaky recovery in 2021.
As seen across all European OEMs that had already released their Q3 results, the third quarter also proved quite positive for BMW. Despite already high expectations, the group managed to surprise on a solid automotive EBIT margin and a strong net result boosted by the remarkable performance in China. However, the uncertainty brought by a second wave of the pandemic is expected to weigh on the Q4 results, leading BMW to stick to its original FY scenario.
BMW’s revenues were, as expected, hit hard by the difficult market conditions during Q2. What was less expected though, was the dive on the automotive division’s operating profitability (-10.4% margin). Fortunately for BMW, the swell performance of the JV with Brilliance Automotive helped the group narrow its losses in Q2. Now that the worst is over, the focus is on how BMW will manage the recovery to attain its positive EBIT and FCF targets for FY20.
BMW was the last of the European automakers to release its Q1 figures. And unlike all of them, it saw its top-line actually increase by 3.5%, buoyed by the Financial Services segment. Below the surface, though, BMW more closely resembles its German peers, as the automotive division was knocked by the COVID-19 pandemic. The cut to the 2020 guidance and the expectation of an even tougher Q2 will put pressure on the group’s otherwise strong balance sheet.
The Q1 figures give us a first glimpse of the effect of the Coronavirus outbreak on BMW’s volumes, with China posting the most significant decreases. As the gradual recovery of the Chinese market takes place, the concern in Q2 will be centred on Europe and the US. Lockdown measures and production halts are bound to stifle volumes even further.
BMW had released clear indications for 2019 on 12 March (see our Chat comment on that day). With today’s release of its annual report, it has given, unlike VW yesterday, a very cautious guidance for the current year.
We had expected a full-year number of almost 2.54m units, whereas the final number was 2.52m. The December number fell by 3.6% to 224k which explains this marginal difference. Based on our previous projection, we see the number increasing by 1% in 2020 to 2.56m which translates into an increase of 1.6% based on last year’s final number. This is clearly too optimistic.
BMW has been producing the full-electric i3 since 2013. Meanwhile, it also sells full-electric and plug-in hybrids of other models. All combined, it has now sold 0.5m electric vehicles which represent about 3.7% of all vehicles delivered from 2013 to 2019 (13.6m).
Up to now, China has been about the only market where BMW has achieved positive delivery growth, whereas Europe and about all other markets were weak. It achieved some positive growth in the USA, but the delivery fall has accelerated in Europe in November.
China has been the prime driving force behind BMW’s delivery growth in 2019 and the USA has contributed a small share as well. On the other hand, Europe as well as RoW held the growth rate back, i.e. delivery numbers to clients in these regions fell.
BMW had a dismal H1 19 when car deliveries and revenue were hardly up and when earnings collapsed. All these numbers were back in positive territory in Q3 and they all exceeded our projections. While net earnings of €1.55bn were only slightly higher than our expected €1.53bn, EBIT of €2.29bn was considerably higher than our €2.07bn.
Through to August of this year, BMW’s car delivery numbers saw growth in China but hardly any growth in other regions. This has changed in the last month, the result of a combination of more moderate growth in China and rising numbers in RoW.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Bayerische Motoren Werke AG.
We currently have 1 research reports from 1
Shoe Zone’s accelerated digital strategy and defined store rationalisation programme, alongside decisive action on cost control and cash preservation, means the Group is emerging from the pandemic as a leaner, stronger and more resilient business. Robust cash generation means we expect the Group to be debt free and able to reinstate its dividend in the current year.
Companies: Shoe Zone PLC
Companies: Accrol Group Holdings plc
Victoria has issued a positive half-year trading update that confirms underlying profit before tax for FY2022E will be ahead of consensus market expectations. Against a background of strong consumer demand for its flooring products, the first half has seen record operating earnings. Management expect this demand picture to continue into next year and beyond with the added support from the high level of housing transactions which is a good lead indicator of future refurbishment activity. Septembe
Companies: Victoria PLC
discoverIE has confirmed continued strong trading momentum and we have upgraded our FY 2022E EPS forecast by +2%. H1 sales were up +23% on last year at CER, driven by +15% organic growth over last year (+8% compared with two years ago) and a strong contribution from acquisitions. Orders remained well ahead of sales with organic growth of +64% against last year and +34% against two years ago. The Group is managing widespread supply chain challenges effectively and we have made no changes to our g
Companies: discoverIE Group PLC
Accrol has issued a trading update confirming that cost pressures both from input and distribution costs has intensified over recent weeks echoing trends we have seen in other industries. Revenue pressures have also built as fulfilment becomes more challenging. These headwinds are reflected in our downgrade to EPS forecasts of 37.4% and 18.3% in FY22E and FY23E respectively. Over the long term we continue to believe Accrol is a strategically important asset with a key position in a resilient mar
Today's news & views, plus announcements from NWG, WPP, SMDS, BDEV, CSP, EMG, HICL, QTX, RLE, MTEC, BOOM, CAPD & THG.
Companies: Barratt Developments PLC (BDEV:LON)HICL Infrastructure Company (HICL:LON)
Today's news & views, plus announcements from BATS, GRI, HAS, NEX, RAT, QQ., BRK, PURP, POLR & CAY.
Companies: British American Tobacco p.l.c.
Q2 results were roughly in line with expectations. With little surprise, the FY21 margin outlook was cut given the price uncertainties of the raw materials. This is the first bad signal for the sector.
Companies: Unilever PLC
discoverIE’s trading update confirmed that performance in H122 was ahead of board expectations, with organic revenue growth of 15% y-o-y and 8% versus the pre-COVID H120. Despite supply chain challenges, the company maintained gross margins. Q222 order intake continued in the same strong vein as H221 and Q122, resulting in a record order book entering H222 and driving a small upgrade to our FY22 and FY23 forecasts.
Whether we know it or not, advanced materials are a core component in the everyday life of the everyday person. They are the key material in items we often disregard, such as printer inks and lotions, to objects which defy the laws of gravity like the Airbus A380 and London’s Shard. Furthermore, these materials are not only essential to many objects and structures, but, due to their superior qualities, are the key to the advancement of many industries. One such example is the use of carbon fibre
Companies: AGM AUTG BIOM BOY CAR CKT EMH EXO GRPEF HAYD IKA ITX CRPR MGAM NANO OXIG SYN SCE SYM VCT ZEN HDD
Sosandar, the celebrity-endorsed women’s fashion brand, benefits from a simple and scalable capital-light online model, a fast-growing affluent customer base and a robust pipeline of new styles introduced each month. The company is achieving impressive growth across all key performance metrics and has a solid balance sheet to support its rapid expansion in the UK and, we believe, internationally over the medium term.
Companies: Sosandar Plc
Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world's largest market for brands and retailers, intends to IPO on the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021. Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch
Companies: SYM ABDX NBI BPM TND BRCK PRES ENET CDGP
Although renewable energy has been gaining increasing traction over the past decade as the costs of renewable energy generation and perhaps more importantly, energy storage have fallen, 2020 was a seminal year for transitional energy investors driven by governments seeking to “build back better” after COVID-19. The US has committed US$2.25trn largely focused on the energy transition while the EU has committed US$0.54trn with companies around the world including China committing to net zero targe
Companies: LAM FSJ TGP PRES JMAT CRPR NEXS VLX
The H1 results (in line with expectations) were led by New Category growth (up by +50%) and the partial recovery from the pandemic impact. We see the outlook as good, with annual sales revised upwards and even though margins may be challenged by increased New Category investments. This is definitely good for the long term, but could be (unfairly) misinterpreted by the market at the moment.