Bulletin: BMW Will Need Strong Operational Execution To Offset Steep Q2 Losses

FRANKFURT (S&P Global Ratings) Aug. 6, 2020--S&P Global Ratings said today that German carmaker BMW AG's (A/Negative/A-1) operating losses in second-quarter 2020 are at the higher end of our expected range, and BMW will require strong operational execution to stabilize profitability and cash flows for the full year. Furthermore, to avoid a downgrade, BMW will have to demonstrate further improvements in profitability and cash flow in 2021, including an adjusted EBITDA margin of more than 12% and positive free operating cash flow (FOCF) of more than €2 billion, as flagged in our outlook statement dated March 27, 2020. In second-quarter 2020, the EBIT margin in BMW's automotive business plummeted to negative 10.4%, compared with positive 6.5% in the previous year.

...August 6, 2020 FRANKFURT (S&P Global Ratings) Aug. 6, 2020--S&P Global Ratings said today that German carmaker BMW AG's (A/Negative/A-1) operating losses in second-quarter 2020 are at the higher end of our expected range, and BMW will require strong operational execution to stabilize profitability and cash flows for the full year. Furthermore, to avoid a downgrade, BMW will have to demonstrate further improvements in profitability and cash flow in 2021, including an adjusted EBITDA margin of more than 12% and positive free operating cash flow (FOCF) of more than 2 billion, as flagged in our outlook statement dated March 27, 2020. In second-quarter 2020, the EBIT margin in BMW's automotive business plummeted to negative 10.4%, compared with positive 6.5% in the previous year. This was because positive mix effects and initiatives to reduce costs could not offset the impact of a 37% drop in unit sales (excluding its Chinese joint venture [JV] BMW Brilliance Automotive). Although we understand...

Bulletin