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BMW Warns On FY20 Profit, Volume Amid Covid-19; To Spend EUR 30 Bln On Techs

German luxury carmaker BMW AG (BMW.L,BAMXF.PK,BAMXY.PK) on Wednesday said it expects fiscal 2020 Group profit before tax significantly lower than in 2019, due to the global spread of coronavirus or Covid-19.

The company expects the spread of coronavirus and the required containment measures would have a negative impact on delivery volumes in all major markets.

The company said it is adjusting production volumes at an early stage in its response to the foreseeable development in demand on the global automobile markets. The company will also make full use of the broad range of instruments available to it to maximise flexibility.

BMW further said it plans over 30 billion euros on future-oriented technologies up to 2025.

Regarding its outlook for the financial year 2020, BMW said it is difficult to provide an accurate forecast due to the current uncertainty regarding the coronavirus.

Automotive segment deliveries to customers worldwide in 2020 are now expected to be significantly below the previous year's level. This would have a negative impact on Automotive segment earnings, particularly in the first half of 2020.

A negative effect on the EBIT margin of the Automotive segment for the full year is expected to be in the region of 4 percentage point. The EBIT margin of the Automotive segment would lie within a range of between 2 and 4 percent.

Manfred Schoch, General Works Council Chairman, said the Council has agreed three important tools to navigate the staff safely through the corona crisis. These include flexible BMW working time accounts, the option of working from home, and the latest company regulation on short-time work.

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