BMW: it is expected that the second quarter epidemic will bring continued negative impact on performance

On the 6th local time, BMW Group adjusted its 2020 fiscal year performance outlook at the first quarter financial report conference today, saying that the impact on the company’s performance in the second quarter would be very negative. The company previously expected the total delivery of new cars to return to normal within a few weeks, but now it does not seem to be the case.

The group explained that the reason for this adjustment is that they have noticed that in multiple markets, the relevant measures to control the disease will last longer, therefore, the resulting negative impact exceeds the company’s analytical outlook in middle March. The group believes that the company’s pre-tax profit this year is expected to be significantly lower than the 2019 fiscal year.

Nicolas Peter, the company’s director in charge of finance, said, “We are now implementing a strategy of targeted investment in proportion, either suspending some projects or re-examining them. Therefore, we hope to reduce capital expenditure from about 57 euros last year to less than 4 billion euros.” The financial report shows that the company’s spending on research and development in the first quarter was basically the same as that in the same period last year, but in real estate, factories, the total capital expenditure on equipment and other intangible assets decreased by about 30% compared with the same period last year.

At the same time, Peter said that the company’s cash flow is currently stable, approaching 19 billion euros at the end of the first quarter, “ensuring that the company has the best credit rating among European car companies. Long-term high-quality credit will help the company continue to benefit from the international capital market.”

at the same time, BMW is making a systematic analysis of the economic situation, making coping strategies for different scenarios that may arise, and preparing to take additional measures to ensure its financial performance is benign, play your inner strengths through difficult times.

“Obviously, the situation is still grim, and market forecasts depend on changes in the epidemic. We are gradually restoring production capacity according to the needs of each market. Even so, we still pay close attention to the latest situation and give maximum flexibility to feedback the market.” Oliver Zipse, chairman of BMW’s board of directors, said in Munich today, “We strictly control inventory levels because liquidity is crucial under such circumstances.”

at the same time, chippce said that they are mobilizing all professional forces to fight against the new Crown virus, not only helping government agencies purchase personal protective equipment, providing vehicles for rescue organizations, but also starting to produce masks. “We have contributed to the protection of public health. At the same time, we have to do our duty to restart the economy and boost public life in many countries. The two are highly related and must be taken into account at the same time.”

the economic fluctuation caused by the epidemic situation makes it extremely difficult to provide a reliable prediction, which means that the company’s outlook itself is also facing many uncertainties. In order to reflect this uncertainty, BMW Group adjusted the EBIT profit margin of the automobile sector to a range of 0% to 3%. In the financial services sector, the return on equity is expected to fall year-on-year. At the same time, BMW expects motorcycle delivery in fiscal 2020 to be much lower than that in fiscal 2019, with an EBIT profit margin of about 3% to 5%.

The realization of these goals still needs to be in line with the “downsizing” measures. It is said that the number of employees this year will be slightly reduced compared with last year.

At the same time, BMW Group said that the current updated business analysis outlook did not take into account a worse scenario, that is, the second wave of the epidemic, and the government continued to introduce relevant ban measures. Because the emergence of this scenario will greatly affect the market, the economic recession in more major markets may even be longer and deeper. (Sina Finance Hao Qian from Geneva, Switzerland)