By Giulia Petroni 
 

BMW AG said Wednesday that its automotive segment's free cash flow for the fourth quarter and full year of 2020 beat expectations, according to preliminary results.

The German luxury car maker said free cash flow in the segment was around 2.8 billion euros ($3.40 billion) in the fourth quarter, compared with EUR1.5 billion in the previous year period. Free cash flow was around EUR3.4 billion in the full year.

The beat was driven by a positive operating result in the segment, a lower-than-expected consumption of warranty provisions due to lockdown measures, higher down payments received from BMW's dealerships and a focused management of inventories.

BMW said the segment's positive operating result is attributable to better-than-expected results in the pre-owned car market, which led to a return on equity in the segment only slightly below the previous year.

The automotive segment's earnings before interest and taxes margin for 2020 is at the upper end of the 0% to 3% range, the company said, while the group's earnings before taxes are in line with the outlook and market expectations.

 

Write to Giulia Petroni at giulia.petroni@wsj.com

 

(END) Dow Jones Newswires

January 27, 2021 12:53 ET (17:53 GMT)

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