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BOTTOM LINE BASHED AT BMW

Despite sales volume and turnover recovering well as the year progressed, BMW Motorrad’s 2020 profitability was savaged by the pandemic. BDN financial editor Roger Willis reports.

Annual revenue fell by a modest 3.5% to £1.956bn. But operating profit suffered a 46.9% slump to  £88m, with operating margin sinking to 4.5% from 8.2% in 2019. Pre-tax earnings were 46.5% down at £86m and net profit dived by 43.5% to £63m.

Worldwide retail sales volume declined by only 3.4%, from a record tally in the previous 12 months, to 169,272 motorcycles and scooters. The company said favourable market developments in the final quarter had lifted deliveries to customers above its full-year forecast amended at the end of September.

The spread of Covid-19 had an uneven impact on individual markets. BMW’s German domestic sales managed to buck the general trend, rising by 4.7% to 27,516. Volume in France also edged slightly higher, by 1.4% to 17,539.

But countries which were hit particularly hard by the pandemic dropped sharply. Italy was 10.7% down to 13,918. Spain lost 12.5% on 11,030. The UK retreated by 17.7% to 7664. Further afield, US sales decreased by 9.3% to 12,135.

However, there were more trend-dodgers. China, an early escapee from coronavirus, grew by a muscular 33.7% to 11,788. And surprisingly, given its severe infection rates and death toll, Brazil posted a solid increase of 6.4% to 10,707.

Against this background, BMW Motorrad production in Germany, Latin America and China declined by 10.2% to 168,104 machines. But despite a disease-blighted year, the brand launched four new bikes and several model revisions during 2020.

In February the F900R roadster and F90XR adventure were added to its mid-range offerings. Another adventure tool, the S1000XR, joined them in March. Then the mega-boxer R18 cruiser rolled out to dealers in September. Revised versions of the R1250GS and RnineT families appeared in October and there were various GS special editions to mark the 40th anniversary of this series.

Difficult as it is forecast the future in current circumstances, BMW expects international motorcycle markets in the 250cc-plus class to grow slightly overall in 2021. The company is predicting demand will recovery in Spain and Italy, but France, Germany and the USA will experience minor contractions. Brazil and China should continue to improve. As for its own performance, an overall retail sales recovery is anticipated, with operating margin back up into an 8-10% range.

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