The BMW Group met its financial targets during 2021 as it profits increased 223% to a record $14.2 billion, while revenue increased 12.4% also reaching a new all-time high of $126.8 billion.
The company’s Automotive segment accounted for most revenue —$105 billion. The division’s revenue, which includes BMW, Mini, Rolls-Royce and BMW Brilliance, was up 18.1% for 2021, the company reported. Its EBIT was up 356.5%, to $10.9 billion.
Automotive deliveries increased by 8.4% and electrified vehicles increased by 70.4%, accounting for 13% of the Group’s deliveries the company reported. With a higher percentage of high-revenue vehicles, the BMW Group benefited from positive product-mix effects and, like archrival Mercedes-Benz, improved pricing — both for the sale of new vehicles and the resale of end-of-lease vehicles.
Overall corporate results
Group earnings before tax also saw a strong increase, reaching an all-time high increasing by 207% to $18.4 billion, including $1.14 billion from the partial reversal of the provision for the EU Commission’s antitrust proceedings, after these were concluded in the second quarter.
“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.”
In a challenging environment, the BMW ended 2021 strong and fulfilled its targets as forecast as the company was able to increase both earnings and net profit compared to the previous year, having already raised its guidance in May and September.
Capital spending increases with electrification
The company stepped up electrification of its product range, while considerably enhancing its profitability.
BMW also continues to restructure its operations by reducing the number of employees year over year during 2021 and modernizing the company’s pension plan or employees in Germany.
The changes in personnel and pensions resulted in a lower cost of sales in the high-three-digit million-euro range. The gains were partially offset by higher expenses for performance-based remuneration in the cost of sales.
Like other automakers, BMW also reported further headwinds resulted from higher raw material prices.
BMW also increased research and development spending. Total costs for research and development in accordance with IFRS increased significantly year-on-year to $7.2 billion from $6.5 billion. In 2021, investments were channeled into new vehicle architectures and toolkits in connection with the electro-offensive. Additional expenses came from the development of digital products and automated driving.
Capital expenditures for property, plant and equipment and other intangible assets increased by 27.8% to $5.7 billion to finance the major expansion of the electrified product line-up and upcoming series launches led to corresponding spending at the plants involved in the change.