Confused Bavarian bean-counters seem to have got their lederhosen in a twist when announcing latest nine-monthly and third quarter figures for BMW Group’s motorcycle division. Indeed, they also broke the habit of a lifetime by actually mentioning a new product in the context of monetary gain. BDN financial editor Roger Willis reports.
For the nine months of 2023 to date, Motorrad results were somewhat less than satisfactory. Total revenue for the period was adequate, 3.5% up to £2.235bn. Retail sales volume also rose by 3.5%, with 164,908 motorcycles and maxiscooters delivered to customers worldwide. But operating profit was 4.3% down to £267.8m and operating margin slipped from 13% to 12%. Pre-tax earnings fell by 4.6% to £270.4m. However, net profit was seriously sullied, suffering a surprise 16.3% decline to £192.1m.
Illumination of July-September data told a torrid tale. Although retail headcount had still been reasonable, posting a fairly marginal 0.5% rise to 52,037 units, quarterly revenue plunged by 20.9% to £564.9m. That turned an operating profit of £75.6m in Q3 2022, with an operating margin of 10.6%, into a Q3 2023 operating loss of £3.5m and negative operating margin of 0.6%. Net profit was non-existent, of course, set against a bottom line of £60.8m in Q3 2022.
The official excuse at BMW Group’s results presentation claimed it was: “mainly due to a change in the model launch calendar from the previous year.” Surely this doesn’t stand up to scrutiny if Motorrad was selling approximately the same model mix at the same prices as it had been in Q2 2023? Perhaps that wasn’t the case. The whole thing smacks of clearing out redundant inventory on discounts.
A clue comes from the following prognostication: “Market launch of the new R1300GS in the fourth quarter will be the most important product highlight of the year,” the presentation subsequently opined. “As the world’s most successful premium motorcycle, the redesigned Boxer GS with its many innovations should be one of the segment’s main profitable sales drivers.”
€-£ currency translation at forex rates applicable on 3 November