BMW 2015 Annual Report Download - page 28

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18 COMBINED MANAGEMENT REPORT
18 General Information on the BMW Group
23 Report on Economic Position
23 General and Sector-specific
Environment
27 Overall Assessment by Management
27 Financial and Non-financial
Performance Indicators
29 Review of Operations
29 Automotive Segment
35 Motorcycles Segment
36 Financial Services Segment
38 Research and Development
41 Purchasing
42 Sales and Marketing
44 Workforce
45 Sustainability
49 Results of Operations, Financial
Position and Net Assets
59 Comments on Financial Statements
of BMW AG
62 Events after the End of the
Reporting Period
63 Report on Outlook, Risks and
Opportunities
81 Internal Control System and Risk
Management System Relevant for the
Financial Reporting Process
83
Disclosures Relevant for Takeovers
and Explanatory Comments
87 BMW Stock and Capital Markets
EBIT margin and return on capital employed
The EBIT margin in the Automotive segment (profit be-
fore financial result divided by revenues) came in at 9.2 %
(2014: 9.6 %; – 0.4 percentage points). As predicted, the
EBIT margin from automobile business was within the
target range of between 8 and 10 % and thus in line with
forecasts.
The return on capital employed (RoCE) amounted to
72.2 % (2014: 61.7 %; + 10.5 percentage points). The
higher-than-expected increase in RoCE reflects the
pleasing upward trend in earnings on the one hand
and
the rigorous management of capital employed on
the other. A number of other factors also influenced
RoCE, including transactions with other segments, the
higher volume of business with service and Connected
Drive contracts as well as efficiency improvements in
investing activities. In the Annual Report 2014, a
moderate decrease in RoCE was predicted. The rate
achieved by the Automotive segment was therefore
well
above the minimum target of 26 %.
Motorcycles segment
Sales volume
In a highly favourable market environment, most notably
in Europe, BMW Motorrad achieved a significant in-
crease of 10.9 % with a sales volume of 136,963 units
(2014: 123,495 units). This performance was therefore
better than the solid increase forecast in the Annual
Report 2014. Apart from the robust market environment
and BMW Motorrad’s attractive model range, mild
weather conditions at the end of the year also gave the
strong performance additional tailwind.
Return on capital employed
The Motorcycles segment generated a return on capital
employed (RoCE) of 31.6 % in the year under report
(2014: 21.8 %; + 9.8 percentage points), a solid increase
on the previous year. In the Quarterly Report at 30 June
2015, the outlook was for a slight increase in RoCE
(outlook in the Annual Report 2014: RoCE in line with
the previous year’s level). Contributing factors for the
improved performance were higher sales volume, a
sus-
tained high-value model mix and the positive impact
of
the new brand strategy embarked upon in 2014.
Financial Services segment
Return on equity
The return on equity (RoE) generated by the Financial
Services segment improved to 20.2 % in the year under
report (2014: 19.4 %; + 0.8 percentage points), helped by
a strong operating performance and a stable risk
pro-
file. As predicted in the Annual Report 2014, RoE was
in line with the previous year’s level and therefore
re-
mained ahead of the minimum target of 18 %.
The following overall picture arises for the principal per-
formance indicators utilised by the BMW Group and its
segments:
Comparison of 2015 forecasts with actual outcomes 2015
Forecast for 2015 Forecast revision Actual outcome
in 2014 Annual Report during the year in 2015
BMW Group
Profit before tax solid increase € million 9,224 (+ 5.9 %)
Workforce at year-end solid increase 122,244 (+ 5.1%)
Automotive segment
Sales volume1 solid increase units 2,247,485 (+ 6.1 %)
Fleet emissions2 slight decrease g CO2 / km 127 (– 2.3 %)
Revenues solid increase Q1: significant increase € million 85,536 (+ 13.8 %)
EBIT margin target range between 8 and 10 % % 9.2 (– 0.4 %pts)
Return on capital employed moderate decrease % 72.2 (+ 10.5 %pts)
Motorcycles segment
Sales volume solid increase units 136,963 (+ 10.9 %)
Return on capital employed in line with last year’s level Q2: slight increase % 31.6 (+ 9.8 %pts)
Financial Services segment
Return on equity in line with last year’s level % 20.2 (+ 0.8 %pts)
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2015: 282,000 units).
2 EU-28.