BMW 2004 Annual Report Download - page 10
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9
Capital expenditure remains at a high level
The BMW Group invested euro 3,226 million in
property, plant and equipment and intangible assets
in 2004. In addition, development expenditure of
euro1,121 million has been recognised as assets in
accordance with IAS 38, so that total capital expen-
diture for 2004 amounted to euro 4,347 million,
equivalent to an increase of 2.4% compared to the
previous year.
The main emphasis of capital expenditure in
2004 was the construction of the new BMW plant in
Leipzig and expansion of the sales network. In addi-
tion, extensive measures were taken and up-front
expenditure incurred to expand capacities for new
models going into production at existing plants.
At 39.8%, the proportion of development costs
recognised as assets is still relatively low for the in-
dustry (2003: 38.9%).
Including capitalised development costs, the
capital expenditure ratio (i.e. the ratio of capital
expenditure to group revenues) was 9.8% in 2004,
and was thus below the record ratio reported for the
previous year (10.2%).
Cash flow for the year, at euro 5,167 million, in-
creased sharply (15.1%) and, as in previous years,
exceeded capital expenditure.
BMW Group capital expenditure and cash flow
in euro million
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
00
Capital expenditure
01
2,781
3,779 3,516
4,202
02
4,042
4,374
03
4,245
4,490
04
4,347
5,167
Cash flow
Higher revenues despite currency impact
Group revenues in 2004, at euro 44,335 million, were
6.8% ahead of the previous year and hence a new
high for the BMW Group. The weakness of the US
dollar against the euro continued to have an adverse
impact on reported revenues; in the USA in particu-
lar, revenues in euro terms were well below the pre-
vious year despite the fact that a new sales volume
record was set. Worldwide, however, this effect was
more than compensated by the sharp increase in
the number of cars sold. Adjusted for changes in ex-
change rates, revenues of the BMW Group would
have risen by 9.2% compared to the previous year.
Revenues of the Automobiles segment in-
creased by 11.0% to euro 42,544 million and thus
even faster than the growth in sales volume. By con-
trast, revenues of the Motorcycles segment fell by
2.5% to euro 1,029 million as a result of the cur-
rency impact and lower volumes brought about by
prevailing market conditions and model life-cycles.
Revenues of the Financial Services segment for
2004 amounted to euro 8,226 million, an increase
of 8.5% compared to the previous year.