Is BMW on its way to regaining its status as the ultimate profit machine? Last year’s financial results, released in conjunction with the BMW Group Annual Conference, may indicate so.
According to automaker’s report, the company had its most successful year ever in 2021, with net profit coming in at 12,463,000,000 euros, an increase of 223.1% over the 3,857,000,000 euros recorded for 2020. The percentage gains are obviously skewed as a result of the pandemic in 2020, but 2021 was still the most profitable period in the automaker’s 106-year history. Other highlights of BMW’s success in 2021 include earnings before tax reaching an all-time high of 16,060,000,000 euros, which is 207.5% more than the 5,222,000,000 euros earned in 2020. Free cash flow in the automotive segment also reached a new high of 6,354,000,000 euros, or 87.2% more than the 3,395,000,000 of 2020. BMW’s EBIT margin of 10.3% for 2021 was its highest since 2017.
“The past year provides clear evidence that successful transformation bears fruit. The strong earnings we achieved in financial year 2021 are the result of our consistent strategy – with the right products at the right time,” said Oliver Zipse, chairman of the Board of Management of BMW AG. “This success is also thanks to our associates, and I would especially like to thank them for their hard work and their passion. Together, we are demonstrating that bold transformation and economic success go hand in hand at BMW.”
The BMW Group posted record sales in 2021, with deliveries increasing 8.4% to 2,521,525 units. That total includes sales of BMW, BMW Motorrad, Mini, and Rolls-Royce vehicles, but the BMW brand was responsible for there largest portion of those with sales of 2,213,795 units, a year-over-year increase of 9.1%. Of the more than 2,500,000 BMW Group vehicles sold in 2021, 13% or 328,314 were vehicles with electrified drivetrains. On the other side of the spectrum, BMW M model sales were also higher than ever in 2021, but came in well short of BMW Group Electrified deliveries. During 2021, BMW sold 163,542 M vehicles, a 13.4% gain over the 144,218 sold in 2020.
Strong sales aren’t the only catalyst driving BMW’s recent success, however. According to Oliver Zipse, BMW’s successful transformation into an electric vehicle industry leader was made possible by the performance of its employees. Rather interestingly however, BMW recorded its most profitable year ever with fewer employees than the year before. BMW’s workforce shrunk 1.5% during 2021, with the total number of employees declining from 120,726 to 118,909. BMW’s performance in 2021 was also attributed to a higher percentage of high-revenue vehicles being offered in the product lineup, which benefitted the sales of new vehicles and the resale of lease returns.
During 2021, the BMW Group modernized its employee pension program for those working in Germany, while the European Union concluded its antitrust proceedings in the second quarter. The latter of these developments allowed BMW to realize its highest-ever earnings before tax, detailed above. BMW is still facing significant headwinds going forward, however, including increasing prices for raw materials and the continuing semiconductor microchip shortage, the latter of which the automaker is attempting to overcome by way of agreements with key supply partners. This means BMW’s performance in 2021 could have been even better if the company had not had to deal with ongoing supply constraints. The company is also continuing to invest heavily in research and development, most specifically in the areas of electric vehicle drivetrains, digital products, and automated driving technology.
The full results of BMW’s 2021 financial report can be viewed in their entirety here.—Alex Tock
[Photos courtesy BMW AG.]