Conference Speech by Walter Mertl, BMW AG Finance Board Member, at the Annual Meeting in 2025
In a noteworthy display of resilience, the BMW Group reported a robust financial performance for the year 2024, surpassing several key targets despite facing market challenges.
The automotive division, the Group's largest revenue segment, generated over €124.9 billion, although this represented a 5.6% decrease compared to the previous year. However, the segment maintained a solid EBIT margin of 6.9%, reflecting its resilience in profitability.
The Group's credit loss ratio of 0.26% across the entire credit portfolio was well within expectations and below industry levels, demonstrating the financial strength of the Group's operations. New business volume in the Financial Services Segment increased significantly by 12.5% to €64.5 billion.
In the Financial Services Segment, a total of almost 1.7 million new financing and leasing contracts were concluded in 2024, marking a solid year-on-year increase of nearly 10%. The Segment's Return on Equity reached 15.1%, falling within the adjusted guidance range of 15 to 18%.
Earnings before Tax at Group level for 2024 amounted to €11 billion, and in line with the adjusted guidance, free cash flow reached €4.9 billion. The development of provisions reduced free cash flow by €700 million.
BMW Group's strategic investments in 2024 totaled €18.2 billion, with €9.1 billion allocated to Capital Expenditure and another €9.1 billion to Research and Development. This significant investment was primarily aimed at preparing for models of the NEUE KLASSE.
Despite the high investment levels, the Group's automotive net financial assets remained stable, with almost €46 billion at the end of 2024, around the same level as at the start of the year.
Looking ahead, the BMW Annual Conference 2025 will take place at BMW Welt in Munich on March 14, 2025, at 8:00 a.m. CET. The Board of Management and the Supervisory Board will propose a dividend of €4.30 per share of common stock and €4.32 per share of preferred stock to the Annual General Meeting, resulting in a total dividend payout of €2.7 billion. This proposed dividend represents a payout ratio of 36.7%, within the long-term strategic target range of 30-40%.
Starting from 2025, both the R&D and capex ratios are expected to decrease meaningfully as production of the NEUE KLASSE begins. BMW Group's global positioning and flexible operations enable it to adapt to the geopolitical landscape and short-term market dynamics.
[1] Data source: BMW Group Annual Report 2024 [2] Data source: BMW Group Press Release, "BMW Group Annual Results 2024" [3] Data source: BMW Group Annual Report 2024 [4] Data source: BMW Group Press Release, "BMW Group Annual Results 2024"
- The BMW Group's strategic investments in 2024 included €9.1 billion for Research and Development, a significant portion of which was aimed at electric vehicles, showcasing the company's commitment to the automotive industry and technology.
- The Financial Services Segment of the BMW Group witnessed a year-on-year increase of nearly 10% in 2024, with almost 1.7 million new financing and leasing contracts concluded for various transportation options, including electric vehicles.
- In line with the shift towards sustainable transportation, BMW Group's earnings before Tax and free cash flow for 2024, €11 billion and €4.9 billion respectively, were partially used for investing in the growth and development of electric vehicles and the NEUE KLASSE.
- As the BMW Group heads towards 2025, expectations are high for the automotive industry, with the company planning to decrease its R&D and capex ratios once production of the NEUE KLASSE electric vehicles begins, positioning the Group for a stronger financial future in the realm of advanced transportation and technology.
