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BMW’s Q4CY11 group net profit, at EUR804mn (down 61% YoY and 26%
QoQ), was lower than the Street estimate, mainly due to higher launch
related expenses and greater risk provisions. Group revenue, at EUR18.3bn
(up 10% YoY and 11% QoQ), was however ahead of Street expectation.
BMW expects to make up for the slowdown in China by growth in other
emerging markets (BRIKT). It expects strong sales in CY12 on the back of
new launches, namely the 3 Series. Incentives are already on the higher side
and are likely to rise further as the slowdown spills over to North Europe
from South Europe. The company expects sustainable EBIT margins in the
automobile segment at 8‐10% going forward.
CY11: A record year
Despite global macro challenges, the company’s group revenues rose 14% to EUR68.8bn
on higher sales volume and better product mix. Overall car sales were up ~14% in CY11.
China sales grew ~38% and contributed ~14% to the global auto sales. Currency
movements were also in favour of the company and offset any increase in raw material
costs. Group EBIT and PAT increased a healthy 57% and 52%, respectively.
CY12: A mixed bag
The company expects CY12 to be a record year in terms of sales and PBT with focus on
increasing efficiency. Major new models to be launched during the year are BMW 3 Series
Sedan, BMW 6 Series Gran Coupe, MINI Roadster etc. EBIT margins in the automobile
division are likely to be on the higher side at 8‐10% (11.8% in CY11).
However, major risks emanate from slowdown spreading to the UK and Germany, drop in
residual value and decline in China sales. The company targets to keep capex and R&D
expenditure at higher levels.
Read across for Tata Motors
Tata Motor has met tremendous response for its newly launched Evoque in China. Hence,
the company will be hit hard, if the slowdown impacts China premium car market
(currently limited to mass segment). Similar risk comes from rising incentive level in South
Europe where JLR has a low presence. If incentives levels rise in UK too, they could pose
significant margin risks.
Company Description
Founded in 1917, Bayerische Motoren Werke AG (BMW) is a German automobile,
motorcycle and engine manufacturing company and owns global premium brands like BMW,
MINI and Rolls‐Royce. In addition to its strong position in the motorcycles market with the
BMW and Husqvarna brands, the BMW Group also offers a successful range of financial
services.
The company has major prodcution facilities in countries like Germany, UK, Austria, US and
South Africa. Besides, BMW also has local assembly operation in Thailand, Russia, Egypt,
Indonesia, Malaysia, and India, for 3, 5, 7 series and X3 models.
In CY11, the company sold ~1.67mn cars and ~114 thousand motorcycles globally across all
its brands.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
BMW’s Q4CY11 group net profit, at EUR804mn (down 61% YoY and 26%
QoQ), was lower than the Street estimate, mainly due to higher launch
related expenses and greater risk provisions. Group revenue, at EUR18.3bn
(up 10% YoY and 11% QoQ), was however ahead of Street expectation.
BMW expects to make up for the slowdown in China by growth in other
emerging markets (BRIKT). It expects strong sales in CY12 on the back of
new launches, namely the 3 Series. Incentives are already on the higher side
and are likely to rise further as the slowdown spills over to North Europe
from South Europe. The company expects sustainable EBIT margins in the
automobile segment at 8‐10% going forward.
CY11: A record year
Despite global macro challenges, the company’s group revenues rose 14% to EUR68.8bn
on higher sales volume and better product mix. Overall car sales were up ~14% in CY11.
China sales grew ~38% and contributed ~14% to the global auto sales. Currency
movements were also in favour of the company and offset any increase in raw material
costs. Group EBIT and PAT increased a healthy 57% and 52%, respectively.
CY12: A mixed bag
The company expects CY12 to be a record year in terms of sales and PBT with focus on
increasing efficiency. Major new models to be launched during the year are BMW 3 Series
Sedan, BMW 6 Series Gran Coupe, MINI Roadster etc. EBIT margins in the automobile
division are likely to be on the higher side at 8‐10% (11.8% in CY11).
However, major risks emanate from slowdown spreading to the UK and Germany, drop in
residual value and decline in China sales. The company targets to keep capex and R&D
expenditure at higher levels.
Read across for Tata Motors
Tata Motor has met tremendous response for its newly launched Evoque in China. Hence,
the company will be hit hard, if the slowdown impacts China premium car market
(currently limited to mass segment). Similar risk comes from rising incentive level in South
Europe where JLR has a low presence. If incentives levels rise in UK too, they could pose
significant margin risks.
Company Description
Founded in 1917, Bayerische Motoren Werke AG (BMW) is a German automobile,
motorcycle and engine manufacturing company and owns global premium brands like BMW,
MINI and Rolls‐Royce. In addition to its strong position in the motorcycles market with the
BMW and Husqvarna brands, the BMW Group also offers a successful range of financial
services.
The company has major prodcution facilities in countries like Germany, UK, Austria, US and
South Africa. Besides, BMW also has local assembly operation in Thailand, Russia, Egypt,
Indonesia, Malaysia, and India, for 3, 5, 7 series and X3 models.
In CY11, the company sold ~1.67mn cars and ~114 thousand motorcycles globally across all
its brands.
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