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    BMW   DE0005190003

BMW AG

(BMW)
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BMW confirms its 2021 targets despite worsening chip shortages

05/07/2021 | 05:41am EDT
FILE PHOTO: Bangkok International Motor Show

LONDON (Reuters) - BMW remains on course to meet its profit targets for 2021 despite rising raw material costs, though the global chip shortage will worsen and may hit production in the second quarter, the German carmaker said on Friday.

Most of the auto industry has been hit by a global semiconductor chip shortage, forcing many assembly plants to shut, driving down inventories and pushing up prices for both new and used vehicles.

"We cannot assume that we will emerge from the second quarter unscathed," Chief Executive Officer Oliver Zipse said.

Zipse said, however, that he did not expect the shortage to have a major impact on production and the company would respond by prioritising production of cars with higher profit margins.

BMW said sales of its electrified vehicles more than doubled in the first quarter, when it also benefited from higher prices and strong demand in China, where sales almost doubled in the first quarter from last year.

The carmaker said it expected to have 2 million fully-electric cars on the road by 2025.

BMW has so far largely steered clear of the semiconductor chip shortage battering rivals such as Europe's biggest carmaker Volkswagen.

Volkswagen boss Herbert Diess said on Thursday that it was in "crisis mode" over the chip shortage and it would hit profits in the second quarter, while Ford said last week that the lack of chips could halve its second-quarter vehicle production.

BMW is known for its strong relations with suppliers and has been working with them to avoid disruptions. Aside from temporary shutdowns of MINI production in the United Kingdom and at a plant in Germany, the carmaker has not been affected.

GREEN CARS

Chief Financial Officer Nicolas Peter also said during a conference call that BMW expected raw material prices to rise, especially for rhodium and palladium and steel.

BMW had already reported a 370% jump in pre-tax profit as it bounced back more strongly than expected from a pandemic-ravaged first quarter last year.

Rebounding demand from consumers in China in the second half of last year helped BMW and its German rivals Volkswagen and Daimler post solid profits for 2020 despite the coronavirus pandemic.

BMW reported solid first-quarter growth in other regions too, including a 17.4% jump in sales in North America, driven by strong demand from U.S. drivers.

The German carmaker said its first-quarter results also received a boost from the sale of previously leased vehicles, in particular in the U.S. market.

BMW said it expected the pre-tax margin for its core autos business to come in at the upper end of its previous forecast of between 6% and 8%.

As part of its drive to use more environmentally sustainable raw materials, BMW said it would source half of the aluminium used at its foundry in Bavaria from Emirates Global Aluminium, which makes the metal using solar power.

"Our ambition is clear: The greenest electric car will be a BMW," CEO Zipse told a conference call.

(Reporting by Nick Carey; Editing by Keith Weir and David Clarke)

By Nick Carey


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
BMW AG 2.40% 93.13 Delayed Quote.25.92%
DAIMLER AG 2.96% 79.36 Delayed Quote.33.38%
PALLADIUM 3.59% 2581 Delayed Quote.0.49%
S&P GSCI ALUMINUM INDEX 0.71% 152.4669 Delayed Quote.20.56%
VOLKSWAGEN AG 3.78% 226.65 Delayed Quote.43.29%
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Financials
Sales 2021 109 B 130 B 130 B
Net income 2021 7 870 M 9 376 M 9 376 M
Net cash 2021 18 709 M 22 290 M 22 290 M
P/E ratio 2021 7,53x
Yield 2021 4,10%
Capitalization 60 517 M 72 096 M 72 099 M
EV / Sales 2021 0,38x
EV / Sales 2022 0,35x
Nbr of Employees 120 726
Free-Float 57,3%
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Technical analysis trends BMW AG
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 101,12 €
Last Close Price 90,95 €
Spread / Highest target 48,4%
Spread / Average Target 11,2%
Spread / Lowest Target -12,0%
EPS Revisions
Managers and Directors
NameTitle
Oliver Zipse Chairman-Management Board
Nicolas Peter Chief Financial Officer
Norbert Reithofer Chairman-Supervisory Board
Susanne Klatten Independent Member-Supervisory Board
Manfred Schoch Deputy Chairman-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
BMW AG25.92%70 084
TOYOTA MOTOR CORPORATION23.58%249 345
VOLKSWAGEN AG43.29%153 095
DAIMLER AG33.38%97 763
GENERAL MOTORS COMPANY41.11%85 241
FORD MOTOR COMPANY65.19%57 959