BMW - M3

Profit before tax up by 12.0% before exceptional gain
Pre-tax profit up by 57.7% to euro 1.296 billionEarnings and sales volume outlook for full year confirmed Munich. The BMW Group has started 2006 with record quarterly earnings. The number of cars sold in the first three months also represented a new high. As forecast, the BMW Group is thus heading for the best year in its corporate history: "We are well on our way to achieving our target of a group profit before tax of 4 billion euros", stated Helmut Panke, the Chairman of the Board of Management of BMW AG, on Wednesday in Munich. "We also expect earnings to increase in 2006 at an operating level excluding the exceptional gain from the exchangeable bond on Rolls-Royce plc shares". In volume terms, the BMW Group as previously reported aims to achieve a new sales volume record.
In addition to the sharp increase in sales volume, the first quarter was also affected by external factors and a one-off gain of euro 375 million on the settlement of the exchangeable bond on Rolls-Royce plc shares. Group revenues rose to euro 11,618 million (first quarter 2005: euro 10,357 million), an increase of 12.2%. Adverse currency effects and high raw material prices in the first three months continued to have a negative impact on earnings; these adverse factors were compensated, however, to a large degree by on-going efficiency improvements.
Profit before tax increased by 57.7% to euro 1,296 million (first quarter 2005: euro 822 million). Excluding the gain on the partial settlement of the exchangeable bond on Rolls-Royce plc shares, the pre-tax profit rose by 12.0% to euro 921 million, and was thus also well ahead of the previous year's result at an operating level.
The profit after tax rose by 80.6% to euro 948 million (first quarter 2005: euro 525 million). The gain on the settlement of the exchangeable bond on Rolls-Royce plc shares (reported in the Reconciliations segment) had a more pronounced impact at this level since there was no tax impact. Earnings per share of common and preferred stock increased to euro 1.44 (first quarter 2005: euro 0.78).
As a result of the jump in earnings, the pre-tax return on sales increased from 7.9% to 11.2%. Excluding the one-off gain, the return on sales remained stable at 7.9%. Cash flow continued to grow dynamically, rising by 25.5% to euro 1,631 million (first quarter 2005: euro 1,300 million). Operating cash flow was up by 9.4% to euro 1,221 million (first quarter 2005: euro 1,116 million).
Currency effects and high raw material prices will continue to have an impact on business development in the current year, however to a lesser degree than in the previous year. This negative effect is partly attributable to the fact that less favourable currency hedge rates are in place than in the previous year; the effect will be felt mainly in the first half of 2006. The BMW Group will counter this development by means of continuous efficiency and productivity improvements. The targeted sales volume record and improvements in the product mix will also make a positive contribution to earnings. "In terms of operating results, the current year, excluding the one-off gain, will therefore be the best year in the company's history to date", underlined Dr. Panke.
"We will continue our profitable growth course in the coming years and generate above-average returns compared to the industry as a whole", continued Dr. Panke.
Number of jobs virtually unchanged
The BMW Group had a worldwide workforce of 106,179 employees at the end of the first quarter 2006, 0.1% more than one year earlier (106,033 employees). Compared to 31 December 2005 (105,798 employees), the workforce increased by 0.4%.