The FINANCIAL - Ad-hoc announcement: Partial release of the provision with respect to EU antitrust proceedings

Ad-hoc announcement: Partial release of the provision with respect to EU antitrust proceedings

Ad-hoc announcement: Partial release of the provision with respect to EU antitrust proceedings

The FINANCIAL -- Based on the progress of the proceedings, BMW AG expects, compared with the statement of objections of 5 April 2019, that the EU Commission will significantly reduce its allegations against BMW AG in terms of content and duration.

According to BMW Group, based on the progress of the proceedings, BMW AG expects, compared with the statement of objections of 5 April 2019, that the EU Commission will significantly reduce its allegations against BMW AG in terms of content and duration.

The subject matter of the proceedings is whether German automobile manufacturers cooperated in technical working groups to restrict competition in the development and rollout of emission-reduction technologies. The legal conformity of diesel vehicles is not subject of the proceedings. The BMW Group is not and has not been accused of unlawful manipulation of emission control systems.

On 5 April 2019, BMW AG had recognised a provision of around €1.4 billion. Based on the new information, BMW AG continues to consider it more likely than not that the EU Commission will issue a fine to BMW AG. However, the significant limitation in the scope of the allegations has led to a revaluation of the provision. This revaluation will result in a positive effect on earnings of around €1 billion in the second quarter of 2021.

This effect on earnings is not included in the current guidance for 2021 and will lead to an increase in the EBIT margin for the Automotive segment of around one percentage point. The current corridor forecast in this respect will be increased accordingly. The BMW Group continues to expect a significant increase in Group earnings before taxes in the current financial year.

If the allegations are significantly reduced as expected, BMW AG would refrain from taking legal action against the issuance of any fine.

Author: The FINANCIAL