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BMW Group Confirms Outlook for 2005

Business on course despite difficult market conditions
Earnings per share of euro 0.98 for second quarter 2005

Munich. The BMW Group’s performance held up well during the second quarter 2005 despite difficult market conditions, with dynamic sales volume growth allowing it to extend its lead in the premium segments of the international car markets. With 354,324 cars sold, the BMW Group recorded a sales volume increase of 10.4% (second quarter 2004: 321,010 units). The sales volume for the first half of the year therefore totalled 646,531 units, an increase of 9.4% (first half-year 2004: 590,983 units). Sales volume growth was bolstered in particular by newly introduced models such as the BMW 1 Series and the MINI Convertible.

As already forecast for the full year, reported revenues and earnings for the second quarter 2005 have also been affected by external factors such as the currency impact, higher raw material prices and more intense market competition, so that the record figures reported in the previous year could not all be matched. Revenues in the second quarter 2005 increased by 2.1% to euro 12,159 million (second quarter 2004: euro 11,910 million). On a half-year basis, revenues fell marginally (-0.9%) to euro 22,516 million (first half-year 2004: euro 22,715 million). Profit before tax for the second quarter 2005, at euro 916 million, was down by 15.5% (second quarter 2004: euro 1,084 million). Profit before tax for the first half of 2005 therefore amounted to euro 1,728 million (first half-year 2004: euro 1,935 million / -10.7%). One-off tax-related issues had a positive impact on group net profit. The net profit for the second quarter was euro 663 million (second quarter 2004: euro 671 million / -1.2%); for the first half of the year it fell by 1.0% to euro 1,182 million (first half-year 2004: euro 1,194 million).

Number of jobs virtually unchanged
The BMW Group had a worldwide workforce of 105,888 employees as of June 30, 2005, 0.5% more than one year earlier (June 30, 2004: 105,388 employees) and 0.1% less than at the end of 2004 (December 31, 2004: 105,972 employees).

Expansion of model range still in line with schedule
With the launch of the revised BMW 7 Series and that of the BMW M6 during the second quarter 2005, the BMW Group has taken further major steps to implement its product and market initiative. The market introduction of the new BMW 3 Series Touring and of new engine versions for the BMW 1, 3, 5, 6 and 7 Series is expected to give further momentum to sales volumes, so that the number of cars sold during the full year is still forecast to increase by a high single digit percentage.

Automobiles segment: sales volume growth remains robust
Revenues of the Automobiles segment for the second quarter 2005 increased by 3.4% to euro 11,911 million (second quarter 2004: euro 11,515 million), and thus at a slower rate than the increase in sales volume. This was attributable mainly to the impact of exchange rate changes and product mix shifts. The picture is similar on a half-year basis, with revenues increasing by 2.9% to euro 21,865 million (first half-year 2004: euro 21,259 million). The Automobiles segment’s profit before taxes was below the level reported for the equivalent quarter and half-year periods last year. Segment profit for the second quarter fell by 16.8% to euro 808 million (second quarter 2004: euro 971 million); for the first half of 2005 it fell by 11.9% to euro 1,510 million (first half-year 2004: euro 1,713 million).

298,745 BMW brand cars were sold during the second quarter 2005, 9.3% more than in the previous year (second quarter 2004: 273,429 units). The equivalent figure for the first half of 2005 was 538,132 BMW cars, 8.6% higher than in the previous year (first half-year 2004: 495,496 units).

In the fifth year after launch, the MINI continues to enjoy strong growth rates. The sales volume in the second quarter 2005 totalled 55,420 units, 16.9% more than in the previous year (second quarter 2004: 47,402 units). 108,114 MINI brand vehicles were sold during the first half of 2005, an increase of 13.6% compared to the same period last year (first half-year 2004: 95,168).

159 Rolls-Royce Phantoms were handed over to customers during the second quarter 2005, 20 fewer (-11.2%) than in the previous year (second quarter 2004: 179 units). Between January and June 2005, 285 Rolls-Royce Phantoms were sold, 10.7%, or 34 vehicles, fewer than in the previous year (first half-year 2004: 319).

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