Financial Data and Key Metrics Changes - The BMW Group reported a 21.6% increase in revenues for Q2 2022 and a 19.1% increase for the first half of the year, totaling approximately €65.9 billion [7] - Group earnings before tax (EBT) for Q2 reached just over €3.9 billion, while EBT for the first half climbed 65.9% to almost €16.2 billion, with an EBT margin of 11.3% for Q2 and 24.5% for the first half [8][9] - Research and development expenses rose by 14.3% year-on-year to just over €3.1 billion, with a target R&D ratio for the full year expected to be between 5% and 5.5% [10] Business Line Data and Key Metrics Changes - The Automotive segment saw revenues increase by 18.8% year-on-year to just over €56.7 billion in the first half, with a Q2 increase of 20.1% [13] - The Financial Services segment concluded just over 815,000 new contracts, down 20.8% from the previous year, but segment earnings before tax increased by 2.3% to almost €2 billion [23][25] - The Motorcycles segment maintained sales at nearly 108,000 units, with operating earnings totaling €235 million and an EBIT margin of 14.1% [26] Market Data and Key Metrics Changes - Vehicle sales decreased by 13.4% from the previous year's record high, totaling 1.16 million vehicles sold in the first half of 2022 [5] - The company expects solid growth in deliveries for the second half of 2022 compared to the same period in 2021, despite a forecasted slight decrease in total deliveries for the full year [6][28] Company Strategy and Development Direction - The BMW Group aims to double its sales of all-electric vehicles in 2022 compared to the previous year, with a focus on electromobility as a key growth factor [5][39] - The introduction of the Neue Klasse in 2025 is expected to significantly enhance market penetration of electric vehicles, with plans for a compact sedan and a sporty SUV [40][41] - The company is investing in transforming its production network for e-mobility, including a new carbon-free plant in Hungary [45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges such as semiconductor supply bottlenecks, the war in Ukraine, and supply chain disruptions impacting vehicle sales [4][28] - The company remains optimistic about achieving a successful financial year 2022, with expectations for EBIT margins in the Automotive segment to remain between 7% and 9% [29][48] - Management highlighted the importance of maintaining strong pricing power and managing inventories effectively in response to market conditions [97] Other Important Information - Capital expenditure in the first half of 2022 totaled over €2.9 billion, primarily due to investments in e-mobility and the BBA joint venture [12] - The company is targeting a free cash flow of at least €10 billion in the Automotive segment for the full year [22] Q&A Session Summary Question: Electric vehicle development and hydrogen infrastructure - Management confirmed that battery electric vehicle (BEV) sales are expected to increase significantly, potentially matching or exceeding plug-in hybrid sales in the second half of the year [60] - Regarding hydrogen, management emphasized the need for hydrogen offerings to maintain market share, especially in regions lacking sufficient charging infrastructure [64] Question: Auto margin guidance and iX technology - Management explained that while BBA consolidation effects will decrease in H2, higher costs from logistics and raw materials will offset this, maintaining EBIT margin guidance [75] - The iX's efficiency is attributed to lightweight materials and advanced battery technology, providing a competitive edge [77] Question: Cash flow guidance and market outlook - Management indicated that cash flow shortfalls are due to increased investments in electric vehicle production, with a strong demand for models like the i4 and iX [88] - The company expects a mix of weaker demand and supply bottlenecks to impact market outlook, but remains confident in achieving its guidance [86] Question: Semiconductor supply and inventory management - Management noted that semiconductor supply issues are expected to improve gradually, with a focus on optimizing inventory levels to meet demand without overcapacity [96][97] Question: CapEx and EV investments - Management clarified that increased CapEx reflects strong demand for electric vehicles and is aligned with the strategy to grow BEV sales significantly by 2030 [127]
BMW(BMWYY) - 2022 Q2 - Earnings Call Transcript