BMW cuts its annual automotive margin outlook as restructuring expands
BMW has lowered its reported annual automotive operating margin outlook to between minus 0.5 per cent and plus 0.5 per cent as it expands restructuring measures. The expected margin impact of those measures has risen to about 2.5 percentage points. Its margin forecast before the measures and its annual automotive free cash flow target remain unchanged. Quarterly automotive operating profit was 901 million euros.
Economics & Markets··Evening
Restructuring raises the expected margin burden
German carmaker BMW has lowered its annual automotive operating margin outlook as it expands portfolio and structural measures.[1], [2]
The company now expects its reported margin between minus 0.5 per cent and plus 0.5 per cent. It estimates a margin burden of about 2.5 percentage points from the measures, against an earlier forecast of 1.25 points. The company expects the margin before these measures to remain above 2 per cent. Finance chief Walter Mertl presented the change in the quarterly statement on 4 November.[1]
Quarterly operating profit reaches 901 million euros
Automotive operating profit was 901 million euros in the third quarter, giving a reported margin of 3.4 per cent. A supplier settlement connected to a brake-system warranty case supported the result, while elevated tariffs reduced the margin by about 1.25 percentage points. Vehicle deliveries fell 6.3 per cent to approximately 551,000. Deliveries declined 24.8 per cent in China but increased 2.6 per cent in Europe and 2.5 per cent in the United States.[1]
Automotive free cash flow was negative 566 million euros in the quarter and positive 724 million euros over nine months. Management retained its annual target above 2.5 billion euros, expecting support in the final quarter from working-capital reductions and tariff refunds. Research and development expenditure fell 6.8 per cent to 1.8 billion euros, and the company expects annual research and capital spending below the prior-year level.[1]
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