Excessive costs, regular provide chain defend BMW from trade woes

  • Q3 web revenue 2.58 bln euros vs forecast 2.38 bln
  • Excessive costs offset rising prices and chip troubles
  • CFO: “We’re wanting ahead”

BERLIN, Nov 3 (Reuters) – BMW (BMWG.DE) beat analysts’ forecasts on Wednesday with a 42.4% improve in third quarter web income to 2.58 billion euros ($2.99 billion) as greater costs and robust electrical automobile (EV) gross sales offset decrease deliveries because of scarce chips.

In an earnings name, finance chief Nicolas Peter mentioned the corporate was assured of topping its goal for a ten% margin on pre-tax earnings this 12 months, although the fourth quarter might be barely dampened by greater tax funds and funding prices.

Trying forward, the corporate expects sturdy EV gross sales to hold into 2022, Peter mentioned.

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Whereas rising uncooked materials costs impacted earnings this 12 months, the corporate’s sturdy relationship with suppliers has cushioned the blow, CEO Oliver Zipse mentioned.

“We’ve got at all times had good oversight over our provide chain. That’s paying off now – proper all the way down to the uncooked supplies,” Zipse mentioned.


Automakers from Volkswagen (VOWG_p.DE) to Stellantis (STLA.MI) to Renault (RENA.PA) noticed dampened third quarter gross sales because of scarce chip provide, with consultancy BCG reporting in September it anticipated a complete of 10 million to 11 million fewer automobiles to be produced worldwide this 12 months due to the scarcity.

BMW emblem is seen throughout Munich Auto Present, IAA Mobility 2021 in Munich, Germany, September 8, 2021. REUTERS/Wolfgang Rattay

However luxurious producers like BMW and rival Daimler (DAIGn.DE), which had been capable of elevate costs to offset losses, fared higher than others, with each firms reporting an EBIT margin of seven.8% within the third quarter, outstripping Volkswagen’s 4.9%.

BMW’s deliveries fell 12.2% within the third quarter however revenues had been nonetheless up by 4.5%. EVs specifically noticed a major enhance, with gross sales within the 9 months to September nearly double final 12 months’s ranges at slightly below 232,000 autos.

“A greater product combine and good worth setting of latest autos alongside a steady pricing development of used autos strengthened the monetary efficiency of the enterprise,” an organization assertion mentioned.

Nonetheless, Peter mentioned the shortage of chips was “not at all a blessing” as a result of tens of hundreds of automobiles the corporate may have offered however couldn’t produce.

The finance chief mentioned earlier this 12 months the corporate anticipated to ship as much as 90,000 fewer automobiles in 2021 due to a scarcity of chips.

BMW maintained its full-year EBIT margin forecast of 9.5% to 10.5% for its automotive division, including this objective can be achieved via barely decreasing the variety of staff.

“We’re on observe for our full-year forecast and are wanting ahead,” Peter mentioned. “We anticipate that semiconductor provide will likely be in a difficulty for us past 2021.”

($1 = 0.8636 euros)

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Reporting by Victoria Waldersee
Modifying by Shounak Dasgupta and Mark Potter

Our Requirements: The Thomson Reuters Belief Ideas.

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