BMW 2009 Annual Report Download - page 53

51 Group Management Report
Revenues generated with financial services activities edged
up by 0.4 %. Revenues attributable to “Other Entities”
amounted to euro 1 million. The corresponding figure in
2008 amounted to euro 146 million and related primarily
to the Cirquent Group.
Revenues generated in the Africa, Asia and Oceania regions
grew in total by 16.0 % . This includes the impact of a 46.2 %
leap in sales revenue in China.
While revenues in Germany rose by 6.5 %, they fell through-
out
the rest of Europe by 17.9 % and in the Americas re-
gion by 6.5 % . Group cost of sales totalled euro 45,356 mil-
lion (2008: euro 47,148 million) and fell therefore by
3.8 %.
Although
fixed costs were lowered, it was not possible to
compensate fully for the decrease in revenues. Negative
currency and model life-cycle factors had the opposite
effect on cost of sales. The gross profit in absolute terms
decreased by 12.0 % to euro 5,325 million and the gross
profit margin was 10.5 % (2008: 11.4 %). The gross profit
margin recorded by the Automobiles segment was 9.4 %
(2008: 10.8 % ) and that of the Motorcycles segment was
13.5 % (2008: 16.7 % ). With effect from the beginning
of the
finan cial year 2009, research and development
costs are reported as cost of sales. Research and develop-
ment costs were reduced by 8.4 % to euro 2,587 million.
This
corresponded to 5.1 % (2008: 5.3 %) of revenues.
Research
and development costs include amortisation of
capitalised development costs amounting to euro 1,226 mil-
lion
(2008: euro 1,185 million). Total research and develop-
ment costs
amounted to euro 2,448 million (2008: euro
2,864 million). This figure comprises research costs,
de-
velopment costs not recognised as assets and capitalised
development costs. The research and development ex-
penditure ratio for 2009 was 4.8 % (2008: 5.4 % ).
Sales and administrative costs fell by 6.1 % compared to
the previous year. They represented 9.9 % of revenues,
and were therefore 0.2 percentage points lower on a year-
to-year comparison.
Depreciation and amortisation on property, plant and
equipment and intangible assets recorded in cost of sales
and in sales and administrative costs amounted in total
to euro
3,600 million (2008: euro 3,670 million).
The positive net amount from other operating income and
expenses decreased by euro 237 million due to the higher
level of income from the reversal of provisions recorded in
the previous year.
Due to the adverse factors referred to above, the profit be-
fore financial result decreased by euro 632 million to euro
289 million.
The financial result improved by euro 694 million, turning
from net financial expenses of euro 570 million in 2008
to
net financial income of euro 124 million in 2009. Euro
597 million of the improvement relates to the item “Other
financial result”. The main reasons for this development
were higher positive fair values of stand-alone interest-rate
derivatives (up in line with changed interest-rate structure
curves) and
higher positive fair values of com modities
derivatives. Income from investments was up by
euro 4 mil-
lion. At the same time, the net interest result improved by
euro 87 million, mainly as a result of lower write-downs on
marketable securities. The result from investments ac-
counted for using the equity method improved by
euro
10 million to euro 36 million. This includes the Group’s
share of the result of BMW Brilliance Auto motive Ltd.,
Shenyang, and that of the Cirquent Group.
Including the impact of the changes in financial result de-
scribed above, the Group pre-tax profit went up by 17.7 %
to euro 413 million. The pre-tax return on sales was 0.8 %
(2008: 0.7 %).
The Group net profit was euro 120 million or 36.4 % down
on the previous year. The sharp increase in the effective
tax rate was partly due to the lower level of tax-exempt
in-
come. In addition, tax expenses incurred for prior years in
conjunction with a tax field audit at the level of BMW AG,
mostly relating to intragroup transfer pricing arrangements,
had an impact. Corresponding reimbursement claims at
the level of foreign subsidiaries did not fully offset the tax
expense incurred due to differences in tax rates in the
tax
jurisdictions involved.
The Automobiles segment recorded a 10.4 % decrease in
sales volume and a 10.3 % decrease in revenues. Due to
the adverse factors described above, the segment result fell
by euro 906 million, turning into a loss of euro 588 million.
Revenues of the Motorcycles segment fell by 13.1 % while
the number of units sold was down by 14.1 % . Difficult
business conditions caused the segment profit to drop by
78.4 % to euro 11 million.
Financial Services segment revenues edged up by 0.5 %
to euro 15,798 million. The segment result improved
by euro 657 million to become a profit of euro 365 mil-