BMW 2012 Annual Report Download - page 77

77 COMBINED GROUP AND COMPANY MANAGEMENT REPORT
The BMW Group continues to enjoy a solid financial
base. Strong cash flows and straightforward access to
capital markets also provide us with additional room to
manoeuvre, which we are using to hone our leading
competitive edge and pursue our declared strategy of
ensuring that the BMW Group remains the world’s
leading provider of premium products and premium
services.
Group profit before tax in 2013 should be on a
similar scale to that reported for 2012.
Automotive segment in 2013
We forecast that the Automotive segment will continue
to perform well in 2013 on the back of strong sales vol-
ume growth. We intend to forge ahead with continued
investment in innovation, future technologies and the
consistent internationalisation of our production net-
work. Assuming economic conditions remain stable, we
forecast single-digit sales volume growth for the Group
and hence a new record for the current year.
We are again striving to achieve an EBIT margin within
the target corridor of between 8 % and 10 % and a RoCE
above 26 %. Depending on political and economic de-
velopments, however, results may be above or below the
targeted levels. The financial position of our Automotive
segment is also set to remain very strong in 2013.
Motorcycles segment in 2013
Thanks to its attractive and extremely youthful model
range, we forecast further growth in sales volume for
the BMW brand in 2013, with impetus also being gen-
erated
by the full availability of the Scooter and the new
R 1200 GS. Increased sales volumes in 2013 should re-
sult in higher revenues and earnings, compared to the
situation in 2012 where earnings were negatively im-
pacted by one-off higher expenses incurred in realigning
the Group’s motorcycle business.
Financial Services segment in 2013
We expect the Financial Services segment to continue
growing and deliver another strong performance in
2013. Despite the positive impact of various measures
taken to ease the debt crisis in Europe, the situation in
southern Europe remains tense and uncertain. We are
actively reducing our exposure to risks in these countries
by rigorously applying appropriate risk management
procedures. Based on the segment’s performance at the
beginning of the year, we forecast a further increase in
the contract portfolio and a RoE of at least 18 %.
Residual value risks are expected to develop differently
from region to region, remaining stable in growth
markets and a source of concern in southern Europe.
We also expect a small decline in market prices in the
USA, Great Britain and Germany. An improvement in
the credit risk situation will have a positive effect on
business performance.
Outlook for 2014
Assuming economic conditions remain stable, the
BMW Group will continue to grow in 2014. The finan-
cial position should also be very solid. New models will
provide a further boost to sales volumes, producing
a correspondingly favourable impact on revenues and
earnings. We expect the Automotive segment will again
achieve an EBIT margin within the desired target
corri-
dor of between 8 % and 10 % and a RoCE above 26 %.
The Financial Services segment should continue to
grow apace and continue increasing the size of its con-
tract portfolio. The RoE target for the segment will re-
main unchanged at 18 %. However, actual returns will
partially depend on political and economic develop-
ments worldwide.