The Board of BMW AG has adjusted its forecast for the 2024 fiscal year. This is partly due to additional obstacles in the automotive segment caused by supply stoppages and technical actions related to the integrated braking system (IBS) provided by the supplier. This is stated in the company's message.
Shutdowns of deliveries of vehicles that are not yet in customers' possession will have a negative impact on global sales in the second half of the year. Technical actions related to IBS will affect more than 1.5 million vehicles and will result in additional warranty costs in the large three-digit amount in millions in the third quarter.
In parallel with this effect, continued subdued demand in China is affecting sales volumes. Despite government stimulus measures, consumer sentiment remains weak.
With this in mind, BMW Group has adjusted its forecast for fiscal year 2024 as follows: a slight decrease in deliveries compared to the previous year (previously: a slight increase).
The EBIT margin for 2024 is in the range from 6% to 7% (previously: from 8% to 10%). Return on invested capital (RoCE) from 11% to 13% (previously: from 15% to 20%). The free cash flow in the automotive segment is estimated at more than 4 billion euros for the 2024 fiscal year.
The profit will affect the third quarter much more than the fourth quarter.
In the motorcycle segment, the current competitive situation in major markets, including China and the United States, has a great impact on sales volume and price. Deliveries to customers are now expected to be at the level of the previous year (previously: a slight increase). Accordingly, it is expected that the EBIT margin in 2024 will be in the range from 6% to 7% (previously: from 8% to 10%), and the return on invested capital (RoCE) will be from 14% to 16% (previously: from 21% to 26%).
Thus, the group's profit before tax will decrease significantly (previously: a slight decrease).
BMW Group, represented by four brands BMW, MINI, Rolls-Royce and BMW Motorrad, is the world's leading manufacturer of premium cars and motorcycles, and provides premium financial and mobile services. The BMW Group's production network includes 31 production and assembly plants in 15 countries. The company has a global sales network in more than 140 countries.
