72.2
19.4
20.0
21.2
RoE in % (change in %pts)
FINANCIAL SERVICES SEGMENT
1.4
33.0
7,893
7,803
8,707
9,224
10,000
9,665
20.2
in € million
Profit before tax
2016
2015
2014
2013
2012
50
76.1
76.8
80.4
100
92.2 94.2
in € billion
→ 08
→ 07
21.2
Further financial performance figures
11,464
11,836
9,423
9,964
9,167
Operating cash flow Automotive segment
3.2
4,806
4,659
4,170
3,741
3,541
Depreciation and amortisation
1.0
−1.1
5,890
6,100
6,711
5,240
Capital expenditure
Change in %
2016
2015
2014
2013
2012
in € million
→ 04
5,823
-3.1
Revenues
2015
7.7/7.7
10.45/10.47
2.6
8.0
-2,755
6,910
-2,828
6,396
9.70/9.72
-2,890
5,817
8.83/8.85
-2,564
5,329
8.08/8.10
7.75/7.77
Earnings per share in €
-2,692
5,111
Net profit
Income taxes
-16.3
5
-19.4
-664
-163
-527
211
154
164
3
-937
Eliminations
Other Entities
9.7
2,166
1,975
1,723
170
-772
2016
60
in Figures
2014
2013
2012
5,000
7,978
8,275
9,118
10,000
9,593 9,386
in € million
Profit before financial result
(2012: 141,165 units, 2013: 198,542 units, 2014: 275,891 units, 2015: 282,000 units,
2016: 316,200 units).
* Including the joint venture BMW Brilliance Automotive Ltd., Shenyang
→ BMW Group
2016
2014
2013
2012
1,250
1,845.2
1,963.8
2,118.0
2,247.5
2,367.6
2,500
in 1,000 units
→ 05
Sales volume of automobiles*
2015
1,619
Revenues
76,848
2016
2015
2014
2013
2012
5,000
9,665
9,224
8,707
7,893
7,803
Profit before tax
-15.3
1
-663
-65
-437
-949
Eliminations
-17
169
71
44
58
Other Entities
10.2
2,184
1,981
-575
1,756
REPORT OF THE
SUPERVISORY BOARD
BOARD OF MANAGEMENT
61.7
The Board of Management reported to us comprehensively on the performance, risk situation
and business strategies of the Financial Services segment. It also provided information on the
current status of regulatory proceedings involving a locally based financial services company.
Towards the end of the year under report, we studied the annual budget for the financial year
2017 presented to us by the Board of Management. We carefully reviewed the opportunities and
risks attached to the budget and discussed them thoroughly with the Board of Management.
On the second day of the meeting, we focused on the long-term corporate plan for the years
2017-2022. The Board of Management also took the opportunity to point out various risk
scenarios, such as a possible further tightening of emissions regulations. The long-term plan
was approved after exhaustive analysis and consultation. We urged the Board of Management to
maintain close control over fixed costs and profitability in order to secure the necessary levels
of future investment.
We also took the opportunity to personally test-drive a variety of series vehicles on a test track,
including the current BMW plug-in hybrid vehicles and other individual models currently
being developed. In addition, selected vehicle models were presented and explained to us. In
this context, the new brand strategy, a key element of Strategy NUMBER ONE > NEXT, was
considered at length.
Together with the Board of Management, we also debated at length on the topic of digitalisation
in sales and production and the related requirements. After thorough deliberation, the members
of the Supervisory Board approved the Strategy NUMBER ONE > NEXT.
Corporate strategy and long-term corporate planning were considered in a meeting held over
two days. In the first part of the meeting we discussed the Strategy NUMBER ONE > NEXT in
great detail, including the implementation measures developed by the Board of Management.
The Board of Management elaborated on topics that included the measures adopted for defined
key areas of technology, such as Efficient Dynamics NEXT.
One Supervisory Board meeting was held in Goodwood, England, the headquarters and location
of the Rolls-Royce Motor Cars manufacturing plant. In the course of this meeting we dealt
with several topics, including a Board of Management report on product quality and customer
satisfaction. The Board of Management described various existing and planned emissions
requirements on key markets and presented measures designed to ensure compliance with
those requirements, including the further electrification of the BMW Group's fleet of vehicles.
Furthermore, the Board of Management explained the strategy and risk management measures
in place for Group financing. While visiting the Rolls-Royce manufacturing plant, we gathered
information on topics such as the implementation of individual customer requirements as a way
of optimising customer orientation.
The Board of Management kept us up-to-date at all times on the further development of the
Group's corporate strategy. Based on a thorough analysis of the changing environment in
which the BMW Group operates, the Board of Management set out the strategic targets of
Strategy NUMBER ONE > NEXT, which is designed to reconcile the need to ensure operational
excellence, invest in forward-looking areas and maintain profitability at a stable level. After the
various presentations, we discussed individual points of strategy with the Board of Management,
including digitalisation, electric mobility and lightweight construction.
We reviewed business developments on various key markets in some depth, particularly those
in China and the USA. The referendum held in the United Kingdom on the country leaving the
European Union prompted us to obtain an assessment from the Board of Management regarding
possible future consequences for the BMW Group.
Supervisory Board
→ Report of the
10
9
STATEMENT OF THE
CHAIRMAN OF THE
In its regular business status reports, the Board of Management kept us well informed regarding
the progress of important current projects and transactions, which we then deliberated upon in
greater detail. For example, the Board of Management briefed us on the BMW Group's collabo-
ration with Mobileye and Intel aimed at developing technologies for highly and fully automated
driving. It also provided information on the planned joint venture with other automobile
manufacturers to establish a charging infrastructure for electric vehicles that is compatible with
every brand. Other items reported on included the complete acquisition of the parking space
service provider ParkMobile and the enlargement of the group of shareholders for the HERE
mapping service. The Board of Management also informed us on the impact of an earthquake
in Japan on security of supply for certain components.
At the beginning of the year, the Board of Management presented us with a summary of new
and revised vehicle models scheduled for market launch in 2016.
We carefully monitored the overall performance of the BMW Group, both at scheduled meetings
and at other times as the situation required. The Board of Management informed us of all key sales
and workforce figures on a regular basis. The Chairman of the Board of Management informed
me personally and in a prompt manner regarding all important transactions and key projects.
Similarly, Dr Karl-Ludwig Kley, the Chairman of the Audit Committee, and Dr Friedrich Eichiner,
member of the Board of Management responsible for Finance, consulted on matters directly,
both at scheduled meetings and as the need arose.
One of the main areas of emphasis with regard to reporting and our consultations in 2016 was
the enhanced development of the BMW Group's corporate strategy. We also deliberated at length
on succession planning for the Board of Management. Corporate planning was a further key
area of focus. We discussed the current performance and financial position of the BMW Group
at each of our five Supervisory Board meetings.
Main emphases of the Supervisory Board's monitoring and advisory activities
Throughout the financial year 2016, we performed the duties incumbent on the Supervisory
Board in accordance with the law and the Articles of Association. We continuously monitored
the Board of Management's governance of the business and provided advice on important
projects and plans.
In 2016, BMW AG celebrated its 100th anniversary. Quite fittingly, the BMW Group finished its
centenary year with record earnings. With its Strategy NUMBER ONE > NEXT, the BMW Group
is moving forward with a sense of purpose into the challenging era of digitalisation and
electrification and fully intends to continue playing an active role in shaping technological
change within the automobile industry.
Dear Shareholders,
Norbert Reithofer
Chairman of the Supervisory Board
Supervisory Board
→ Report of the
8
the Chairman of
the Board of
Management
Statement of
Report of the
Supervisory Board
The Board of Management reported to us regularly and comprehensively on the BMW Group's
financial condition, providing information on sales volume developments, market competition
issues relevant for the Automotive and Motorcycles segments, and changes in the size of the
workforce. It also kept us informed of economic developments in the world's key regions and
the prospects for business in each of them. The Board of Management provided us with regular
updates on new business with retail customers and business volumes in the Financial Services
segment, including explanations of variances against the forecast.
Automotive
1,643
Financial Services
5
Eliminations
Other Entities
8.2
25,681
23,739
20,599
19,874
19,550
4.0
2,069
1,990
1,679
6
1,504
Financial Services
Motorcycles
1.0
86,424
85,536
75,173
70,630
70,208
2.2
94,163
92,175
80,401
76,059
1,490
1,558
7
6
2.7
187
182
112
79
9
Motorcycles
-1.8
7,695
7,836
7,244
6,649
7,599
7
Automotive
9,386
9,593
9,118
7,978
8,275
Profit before financial result (EBIT)
-4.8
-20,017
-19,097
-17,057
-15,955
-14,405
-14.3
-2.2
1,561
→ 06
3.4
2015
2016
Change in %
Sales volume
BMW2
MINI
Rolls-Royce
Total²
1,540,085
301,526
3,575
1,845,186
1,655,138
305,030
3,630
1,963,798
1,811,719
302,183
4,063
2,117,965
1,905,234
338,466
3,785
2,247,485
2014
2,003,359
360,233
6.4
4,011
Financial Services
2,367,603
5.3
Production volume
BMW 5
MINI
Rolls-Royce
1,547,057
311,490
3,279
Total5
1,861,826
5.2
1,699,835
303,177
3,354
2,006,366
2013
AUTOMOTIVE SEGMENT
116,324
122,244
124,729
2.0
AUTOMOTIVE SEGMENT
Sales volume2
1,845,186
1,963,798
2,117,965
2,247,485
2,367,603
Fleet emissions in g CO2/km³
143
2012
133
127
124
5.3
-2.4
MOTORCYCLES SEGMENT
Sales volume4
106,358
115,215
123,495
136,963
145,032
5.9
Further non-financial performance figures
→ 02
130
1,838,268
322,803
4,495
2,165,566
1,933,647
342,008
3,848
2,279,503
2,002,997
2014
2015
2016
Change in %
7,803
7,893
8,707
9,224
9,665
4.8
AUTOMOTIVE SEGMENT
Revenues in € million
70,208
2013
70,630
85,536
86,424
1.0
EBIT margin in % (change in %pts)
10.8
9.4
9.6
9.2
8.9
-0.3
ROCE in % (change in %pts)
73.7
63.0
75,173
2012
Profit before tax in € million
BMW GROUP
3.6
352,580
3.1
4,179
8.6
2,359,756
3.5
MOTORCYCLES SEGMENT
Production volume6
BMW
FINANCIAL SERVICES SEGMENT
New contracts with retail customers
113,811
110,127
133,615
151,004
145,555
-3.6
1,341,296
1,471,385
1,509,113
1,655,961
1,811,157
9.4
1 Figures exclude suspended contracts of employment, employees in the non-work phases of pre-retirement part-time arrangements and low income earners.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2012: 141,165 units, 2013: 198,542 units, 2014: 275,891 units, 2015: 282,000 units, 2016: 316,200 units).
3 EU-28.
* Excluding Husqvarna, sales volume up to 2013: 59,776 units.
5 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2012: 150,052 units, 2013: 214,920 units, 2014: 287,466 units, 2015: 287,755 units, 2016: 305,726 units).
6 Excluding Husqvarna, production up to 2013: 59,426 units.
Key financial performance indicators
→ 03
110,351
105,876
6.0
Change in %
CONTENTS
→Page
→Page
1
4 BMW Group in Figures
8 Report of the Supervisory Board
→Page 16 Statement of the Chairman of the
Board of Management
4
CORPORATE
GOVERNANCE
→ Page 190 Statement on Corporate Governance (§289a HGB)
(Part of the Combined Management Report)
2
Motor Cars Limited
COMBINED
→Page 22 General Information on the BMW Group
→Page 22 Organisational Structure and Business Model
→Page 24 Locations
→Page 29 Management System
→Page 34 Report on Economic Position
→Page 34 General and Sector-specific Environment
→ Page 38 Overall Assessment by Management
→Page 39 Financial and Non-financial Performance Indicators
→Page 42 Review of Operations
→Page 63 Results of Operations, Financial Position and Net Assets
→Page 76 Comments on Financial Statements of BMW AG
→Page 82 Report on Outlook, Risks and Opportunities
→Page 82 Outlook
→Page 88 Risks and Opportunities
→ Page 101 Internal Control System and Risk Management
System Relevant for the Financial Reporting Process
→Page 103 Disclosures Relevant for Takeovers
MANAGEMENT REPORT
→Page 107 BMW Stock and Capital Markets in 2016
Rolls-Royce
W
185
179
107
76
6
Motorcycles
5.2
7,916
7,523
6,886
Workforce at year-end¹
7,170
Automotive
MINI
4.8
21.8
16.4
1.8
ROCE in % (change in %pts)
MOTORCYCLES SEGMENT
2.1
74.3
ANNUAL REPORT
2016
A New Era Begins
BMW
GROUP
Mo 25 592
THE NEXT
100 YEARS
M
31.6
→ Page 190
6,561
Information on the Company's Governing Constitution
Declaration of the Board of Management and of the
Supervisory Board pursuant to § 161 AktG
→ Page 139
→Page 140
Notes to the Statement of Comprehensive Income
Notes to the Balance Sheet
→Page 161
Other Disclosures
→ Page 175
Segment Information
→ Page 180 List of Investments at 31 December 2016
→Page 4 BMW Group in Figures
→Page 8 Report of the Supervisory Board
→ Page 16 Statement of the Chairman of the Board of Management
1
1
BMW Group
in Figures
Report of the
Supervisory Board
Statement of
the Chairman of
the Board of
Management
→ BMW Group
in Figures
BMW GROUP IN FIGURES
Key non-financial performance indicators
BMW GROUP
2012
2013
2014
2015
2016
→ Page 191
Notes to the Income Statement
→ Page 133
→ 01
Accounting Principles and Policies
→Page 192
Members of the Board of Management
→ Page 120
→Page 193
Members of the Supervisory Board
Composition and Work Procedures of the Board of
Management of BMW AG and its Committees
→Page 198 Composition and Work Procedures of the
Supervisory Board of BMW AG and its Committees
→ Page 204 Disclosures pursuant to the Act on Equal
Gender Participation
→ Page 205 Information on Corporate Governance Practices Applied
beyond Mandatory Requirements
→ Page 207
→Page 212
Compliance in the BMW Group
Compensation Report
→Page 223
Responsibility Statement by the
Company's Legal Representatives
→ Page 224 Auditor's Report
→Page 196
OTHER INFORMATION
→ Page 118 Group Statement of Changes in Equity
5
→ Page 114 Balance Sheets for Group and Segments
→ Page 116 Cash Flow Statements for Group and Segments
→ Page 112 Income Statements for Group and Segments
→ Page 112 Statement of Comprehensive Income for Group
3
→ Page 120 Notes to the Group Financial Statements
→ Page 232 Index of Graphs
→Page 233 Financial Calendar
→Page 234 Contacts
→Page 230 Index
→Page 226 BMW Group Ten-year Comparison
→Page 228 Glossary
GROUP FINANCIAL
STATEMENTS
Interest rate changes
Stable
Significant
Stable
Medium
Residual value
Stable
Significant
Stable
Medium
Stable
Risks and opportunities relating to the provision of financial services
Stable
Significant
Medium
Pension obligations
Stable
Low
Liquidity
Low
Stable
Stable
Significant
Credit risk
Stable
Given the political events that have occurred during
the financial year under report, future global economic
developments are currently subject to a high degree
of uncertainty, in particular with respect to potential
barriers that could affect global trade. The outcome
of the elections in the USA in November 2016, the
planned exit of the UK from the EU and possible
election wins for anti-globalisation parties in the EU
in the coming years could result in higher tariff and
non-tariff barriers to trade.
Stable
Should the global economy develop significantly
better than reflected in the outlook, macroeco-
nomic opportunities could arise with a potentially
favourable impact on the revenues and earnings of
the BMW Group. Stronger Chinese growth, econo-
my-boosting structural reforms within the eurozone,
growth stimulus through infrastructure investment
in the USA or more robust consumer spending by
US households despite rising financing costs, could
result in significantly stronger sales volume growth,
reduced competitive pressures and improved pricing.
Macroeconomic opportunities that could generate a
sustainable impact on earnings are currently classified
by the BMW Group as insignificant.
Strategic and sector risks and opportunities
Changes in legislation and regulatory requirements
Abrupt introduction of tightened new laws and regu-
lations represents a significant risk for the automobile
industry, particularly in relation to emissions, safety
and consumer protection, as well as taxes on vehicle
purchases and use. Country- and sector-specific trade
barriers can also change at short notice. Unfavourable
developments in any of these areas can necessitate
significantly higher levels of investment and ongoing
expenses or influence customer behaviour. Risks from
changes in legislation and regulatory requirements
could have a low impact on earnings over the two-year
assessment period. The risk level attached to these
risks is classified as medium.
Low
The BMW Group counters macroeconomic risks pri-
marily by internationalising its sales and production
structures, in order to minimise the extent to which
earnings depend on risks in individual countries and
regions. Flexible sales and production processes across
the BMW Group increase the ability to react quickly
to regional economic developments.
Furthermore, increasing political unrest, military
conflicts, terrorist activities, natural disasters or
pandemics could have a lasting negative impact on
the global economy and international capital markets.
The transition of the Chinese economy from an invest-
ment-driven to a consumer-driven market is likely to
entail slower growth rates and greater instability on
financial markets. If the Chinese economy were to
grow at a significantly slower pace than expected, the
consequence could be not only a decline in automo-
bile sales, but also, potentially, lower demand for raw
materials, which would have a negative impact above
all on emerging economies such as Brazil or Russia.
Any renewed drop in raw material prices could result
in lower demand from these countries. The threat of
turmoil on the Chinese property, stock and banking
markets and an overly rapid hike in interest rates by
the US Federal Reserve pose considerable risks for
global financial market stability.
The Brexit plan could have a long-term adverse
impact on the BMW Group, particularly as a result of
increased trade barriers in relation to the European
single market. In the short and medium term, too,
uncertainty regarding the outcome of the negotiations
with the EU could lead to reduced customer spending
and trigger further unfavourable currency effects.
Unresolved structural problems in the eurozone, a
potential increase in anti-globalisation political sen-
timent and a possible renewed economic downturn
could potentially hold down growth prospects for the
BMW Group. European integration with a unified
economic and currency area remains an important
pillar of economic stability in Europe.
The possible introduction of trade barriers by the new
US administration could have an adverse impact on the
BMW Group's operations in the form of less favourable
conditions for importing vehicles. Moreover, counter-
measures by the USA's trading partners could slow
down global economic growth and consequently have
an adverse impact on the export of vehicles produced
in the USA. The BMW Group's production strategy
involves local production both in the USA and in other
important trading regions. The strategy of regional
production reduces the existing risk of trade barriers.
Nevertheless, any increase in trade barriers would
have an adverse impact on the BMW Group.
→ Risks and
Opportunities
Report on Outlook,
Risks and
Opportunities
Management
Report
Combined
92
42
-
Macroeconomic risks and opportunities
Economic conditions influence business performance
and hence the results of operations, financial posi-
tion and net assets of the BMW Group. Unforeseen
disruptions in global economic ties can have highly
unpredictable effects. Macroeconomic risks can lead
to reduced purchasing power in the countries and
regions involved and lead to reduced demand for the
products and services offered by the BMW Group.
If macroeconomic risks were to materialise, they
could - due to sales volume fluctuations have a
high earnings impact over the two-year assessment
period. Overall, the risk level attached to macroeco-
nomic risks is classified as high. Macroeconomic risks
are evaluated on the basis of historical data and by
means of a cash-flow-at-risk approach, supplemented
by scenario analyses.
Stable
Medium
* Prior-year classifications have been amended in line with the revision of the risk catalogue described in the section "Risk Management System" and the measurement of risk amount described in the section
"Risk measurement".
Legal risks
Stable
Low
Operational risks
Significant
Raw materials
High
Significant
Market developments
Stable
Insignificant
Stable
Medium
Changes in legislation and regulatory requirements
Strategic and sector risks and opportunities
Stable
Insignificant
Risks and opportunities
The following table provides an overview of all risks
and opportunities and illustrates their significance
for the BMW Group.
Overall, neither at the balance sheet date nor at the
date on which the Group Financial Statements were
prepared were any risks identified that could pose a
threat to the going-concern status of the BMW Group.
Risks and opportunities which could, from today's
perspective, have a significant impact on the results
of operations, financial position and net assets of the
BMW Group are described in the following sections.
91
Risk level
Change compared
to prior year*
Opportunities
Change compared
to prior year
RISKS AND OPPORTUNITIES
Macroeconomic risks and opportunities
High
Stable
The BMW Group sees a clear move towards increasing-
ly stringent vehicle emissions regulations, particularly
for conventional drive systems, not only in the devel-
oped markets of Europe and North America, but also
in emerging markets such as China. The introduction
of new measurement procedures to represent stand-
ard driving cycles, combined with significantly lower
emissions thresholds, represents a major challenge for
the automotive sector. The BMW Group counters this
risk with its Efficient Dynamics concept and continues
to play a pioneering role within the premium segment
in reducing both fuel consumption and emissions.
Electric drive systems are being built into a growing
number of models, namely in BMW i vehicles since
2013 and following the introduction of the X5 in
2015 - in models using plug-in-hybrid technologies,
thus contributing to the BMW Group's effort to comply
with statutory carbon emissions requirements.
Stable
Insignificant
Stable
Risks and opportunities relating to operations
Stable
Medium
Stable
Insignificant
Increased
High
Stable
Insignificant
Stable
Low
Stable
Stable
Insignificant
Medium
Stable
Insignificant
Stable
High
Foreign currencies
Financial risks and opportunities
Information, data protection and IT
Sales and marketing
Purchasing
Production and technology
Stable
Further risks can result from the tightening of existing
import and export regulations. These lead primarily to
additional expenses, but can also restrict the import
and export of vehicles or parts. Increased taxes on
high-value consumer goods have also been proposed
in a number of regions. Taxes of this kind in major
markets of the BMW Group, such as China, could have
a negative impact on regional demand and margins
on BMW Group vehicles in the automobile segments
concerned.
Management
Report
The BMW Group's earnings could also be positively
affected in the short to medium term by changes in
trading policies. A possible reduction in tariff barriers,
import restrictions or direct excise duties could lower
the cost of materials for the BMW Group, also enabling
products and services to be offered to customers at
lower prices. Further opportunities from changes in
legislation and regulatory requirements compared
to the outlook for the earnings performance of the
BMW Group are classified as insignificant.
Credit and counterparty risks and opportunities
Credit and counterparty default risk arises with-
in the Financial Services segment if a contractual
partner (i.e. a customer or dealer) either becomes
unable or only partially able to fulfil its contractual
obligations, such that lower income is generated or
losses incurred. If credit and counterparty risks were
to materialise, they could have a medium earnings
impact over the two-year assessment period. The risk
level is classified as medium. The BMW Group classi-
fies potential opportunities in this area as significant.
As part of its credit and counterparty risk manage-
ment system, the Financial Services segment uses
a variety of rating systems in order to assess the
creditworthiness of its contractual partners. Credit
risks are managed at the time of the initial credit
decision on the basis of a calculation of the pres-
ent value of standard risk costs and subsequently,
during the term of the credit, by using a range of
risk provisioning techniques to cover risks resulting
from changes in customer creditworthiness. In this
context, individual customers are classified by cate-
gory each month on the basis of their current con-
tractual status, and appropriate levels of allowance
recognised in accordance with that classification. If
economies develop more favourably than assumed
in the outlook, credit losses may be reduced, leading
to a positive earnings impact.
The segment's total risk exposure was covered at all
times during the 2016 financial year by the available
risk-covering assets, thus ensuring the Financial
Services segment's risk-bearing capacity.
The categories of risk relating to the provision of
financial services comprise credit and counterparty
risk, residual value risk, interest rate risk, operational
risks and liquidity risk. Evaluation of liquidity risk
for the Financial Services segment is included in
the liquidity risk category for the Group as a whole.
the Financial Services segment
Risks and opportunities relating to
note 30
Further information on risks in conjunction with
pension provisions is provided in → note 30 to the see
Group Financial Statements.
Future pension payments are discounted by reference
to market yields on high-quality corporate bonds.
These yields are subject to market fluctuation and
therefore influence the level of pension obligations.
Changes in other parameters, such as rises in infla-
tion and longer life expectancy, also impact pension
obligations and payments. Most of the BMW Group's
pension obligations are managed in external pension
funds or trust arrangements and the related assets are
kept separate from those of the Group. The amount
of funds required to finance pension payments out
of operations in the future is therefore substantially
reduced, since most of the Group's pension obli-
gations are settled out of pension fund assets. The
pension assets of the BMW Group comprise inter-
est-bearing securities, equities, real estate and other
investment classes. Assets held by pension funds and
trust arrangements are monitored continuously and
managed on a risk-and-yield basis. Diversification
of investments also helps to mitigate risk. In order
to reduce fluctuations in pension funding shortfalls,
investments are structured to match the timing of
pension payments and the expected pattern of pen-
sion obligations. Remeasurements on the liability and
fund asset sides are recognised, net of deferred taxes,
in "Other comprehensive income" and hence directly
in equity (within revenue reserves).
Pension obligations are influenced in particular by
fluctuations of market yields on corporate bonds, as
well as by other economic and demographic parame-
ters. Opportunities and risks arise depending on the
nature and scale of changes in these parameters. If
risks relating to pension obligations materialised, they
could have a high earnings impact over the two-year
assessment period. The risk level relating to pension
obligations is classified as medium. Within a favoura-
ble capital market environment, the return generated
by pension assets may exceed expectations and reduce
the deficit of the relevant pension plans. This could
have a significantly favourable impact on the net asset
position of the BMW Group.
pension obligations
Risks and opportunities relating to
Opportunities
→ Risks and
Opportunities
Report on Outlook,
Risks and
Management
Report
Combined
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note 37
A description of the methods applied for risk measure-
ment and hedging in conjunction with currency and
→ see commodity risks is provided in → note 37 to the Group
Financial Statements. If the relevant recognition crite-
ria are fulfilled, derivatives used by the BMW Group
as hedges are accounted for as hedging relationships.
Further information on risks in conjunction with
→see financial instruments is provided in → note 37 to the
Group Financial Statements.
Residual value risks and opportunities
Based on the experience of the financial crisis, a
minimum liquidity concept has been developed and
is rigorously adhered to. Use of the “matched funding
principle" to finance the Financial Services segment's
operations eliminates liquidity risks to a large extent.
Solvency is assured at all times throughout the
BMW Group by maintaining a liquidity reserve and
by the broad diversification of refinancing sources.
Regular measurement and monitoring ensure that
cash inflows and outflows from transactions in
varying maturity cycles and currencies offset each
other. The relevant procedures are incorporated in the
BMW Group's target liquidity concept. The liquidity
position is monitored continuously and managed
by means of a cash flow requirement and sourcing
forecast system in place throughout the Group. A
diversified refinancing strategy reduces dependency
on any specific type of instrument. Moreover, the
BMW Group's solid financial and earnings position
results in the high creditworthiness ratings issued by
internationally recognised rating agencies.
Risks and opportunities arise in conjunction with
lease contracts if the market value of a leased vehicle
at the end of the contractual term of a lease differs
from the residual value estimated at the inception
of the lease and factored into the lease payments. A
residual value risk exists if the expected market value
of the vehicle at the end of the contractual term is
lower than its estimated residual value at the date the
contract is entered into. If residual value risks were to
materialise, they could have a high earnings impact
over the two-year assessment period. A high and
medium earnings impact would then arise for the
affected Financial Services and Automotive segments,
respectively. The risk level is classified as medium for
the Group as a whole. Opportunities can arise out of
a positive deviation between the actual market and
the original residual value forecast. The BMW Group
classifies potential residual value opportunities as
significant.
Interest rate risks and opportunities
Setting the regulatory framework for innovative mobil-
ity solutions and providing state-funded incentives
are important prerequisites for developing mobility
services and introducing product innovations, such
as autonomous driving. If the necessary public meas-
ures are implemented globally at a faster
pace than
expected, opportunities will arise for the BMW Group
to expand new business segments more quickly.
Alternative mobility services, such as DriveNow,
ChargeNow and ParkNow, could benefit from sup-
portive regulatory measures, for example through
systematic application in German cities of car-sharing
legislation that comes into force in September 2017.
Access restrictions for inefficient vehicles with lower
environmental standards could provide a competitive
advantage and hence an opportunity for BMW Group
vehicles equipped with Efficient Dynamics technol-
ogies and for BMW i and iPerformance vehicles with
alternative drive systems. The market acceptance and
sales volumes of product innovations that are either
planned for the future or have recently been launched
could turn out to be greater than predicted in the
outlook. Good examples of such opportunities are
implementation of the 360° ELECTRIC portfolio in the
field of electric mobility, achieving growth in the field
of mobility services, and collaborating with Toyota on
developing a hydrogen fuel cell system.
Combined
Management
Report
Report on Outlook,
Risks and
Opportunities
→ Risks and
Opportunities
→ Internal Control
System and Risk
Management System
Relevant for the
Financial Reporting
Process
Like all internationally operating entities, the
BMW Group is confronted with legal disputes relat-
ing in particular to warranty claims, product liability,
infringements of protected rights and proceedings
initiated by government agencies. Any of these mat-
ters could, amongst others, have an adverse impact
on the Group's reputation. Such proceedings are
typical for the sector and can arise as a consequence
of realigning product or purchasing strategies to suit
changed market conditions. Particularly in the US
market, class action lawsuits and product liability
risks can have substantial financial consequences
and cause damage to the Group's public image. The
application of more rigorous consumer regulations
or the stricter interpretation of existing regulations
could result in a greater number of recalls. The high
quality of the Group's products, which is ensured
by regular quality audits and ongoing improvement
measures, helps reduce this risk.
The BMW Group recognises appropriate levels
of provision for lawsuits. A part of these risks is
insured where this makes business sense. Some
risks, however, either cannot be estimated or only
to a limited extent. In other cases, the incurrence
of expenses or losses may be considered unlikely.
Such items are reported as contingent liabilities.
It cannot be ruled out, however, that losses from
damages could arise that are either not covered or
not fully covered by insurance policies or provisions,
or as contingent liabilities. In accordance with IAS 37
(Provisions, Contingent Liabilities and Contingent
Assets), the required information is not provided if
the BMW Group concludes that disclosure of the
information could seriously prejudice the outcome of
the relevant legal proceedings. Further information
on contingent liabilities is provided in → note 36 to
the Group Financial Statements.
→ see
note 36
Overall assessment of the risk and
opportunities situation
The overall risk assessment is based on a consolidated
view of all significant individual risks and opportu-
nities. The exposure to risks in the individual risk
categories is essentially stable. In view of the growing
importance of data and IT systems for its business, the
BMW Group sees an increased need for protection in
the area of information, data protection and IT systems.
In view of these changes, the overall risk level for the
BMW Group has increased slightly compared to the
previous year. Overall, there has been no significant
change in the opportunities situation compared to
the previous year.
In addition to the risk categories described above,
unforeseen events could have a negative impact on
business operations and hence on the BMW Group's
results of operations, financial position and net assets,
and on its reputation. A comprehensive risk manage-
ment system is in place to ensure that the BMW Group
successfully manages these risks.
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99
The growing international scope of the BMW Group's
operations and of business interdependencies in
general, combined with the variety and complexity
of legal provisions, including increasingly import and
export regulations, give rise to an increased risk that
laws may be violated simply through lack of aware-
ness. The BMW Group has established a Compliance
Organisation aimed at ensuring that its represen-
tative bodies, managers and staff act lawfully at all
times. Further information on the BMW Group's
Compliance Organisation can be found in the section
"Corporate Governance".
Compliance with the law is a basic prerequisite for the
success of the BMW Group. Current legislation pro-
vides the binding framework for the BMW Group's
various business activities around the world. As a
result of its worldwide operations, the BMW Group
is exposed to a wide range of legal risks. If legal risks
were to materialise, they could have a high earnings
impact over the two-year assessment period. The risk
level attached to significant identified legal risks is
classified as medium. However, it cannot be ruled
out that new legal risks, as yet unforeseen, could
materialise that could have a high earnings impact
for the BMW Group.
Legal risks
Operational risks are defined in the Financial Ser-
vices segment as the risk of losses arising as a conse-
quence of the inappropriateness or failure of internal
procedures (process risks), people (personnel-related
risks), systems (infrastructure and IT risks) and exter-
nal events (external risks). These four categories of
risk also include related legal and reputation risks.
The comprehensive recording and measurement of
risk scenarios, loss events and countermeasures in
the operational risk management system provides
the basis for a systematic analysis and management
of potential or materialised operational risks. Annual
self-assessments are also carried out. If operational
risks were to materialise, they would be likely to have
a low earnings impact over the two-year assessment
period. The risk level is classified as low.
segment
Operational risks in the Financial Services
If the relevant recognition criteria are fulfilled, deriv-
atives used by the BMW Group are accounted for as
hedging instruments. Further information on risks in
conjunction with financial instruments is provided in
→ note 37 to the Group Financial Statements.
Interest rate risks in the Financial Services line of
business are managed by raising refinancing funds
with matching maturities and by employing inter-
est-rate derivatives.
Interest rate risks in the Financial Services segment
relate to potential losses caused by changes in market
interest rates. They can arise when fixed interest
rate periods for assets and liabilities recognised in
the balance sheet do not match. If risks relating to
interest rate risk were to materialise, they could
have a medium earnings impact over the two-year
assessment period. The risk level is classified as
low. The BMW Group classifies potential interest
rate opportunities as material.
Each vehicle's estimated residual value is calculated
on the basis of historical external and internal data
and used to estimate the expected market value of
the vehicle at the end of the contractual period. As
part of the process of managing residual value risks,
a calculation is performed at the inception of each
contract to determine the net present value of risk
costs. Market developments are observed through-
out the contractual period and the risk assessment
updated.
rising refinancing costs. They may also manifest them-
selves in restricted access to funds as a consequence of
the general market situation or the failure of individual
banks. If liquidity risks were to materialise, they would
be likely to have a low earnings impact over the two-
year assessment period. The risk of incurring liquidity
risk, including the risk of the BMW Group's rating
being downgraded and any ensuing deterioration in
financing conditions, is classified as low.
→ see
note 37
Liquidity risks
Close cooperation between carmakers and automotive
suppliers in the development and production of vehi-
cles and the provision of services generates economic
benefits, but also raises levels of dependency. Potential
reasons for the failure of individual suppliers could
include non-compliance with sustainability or quality
standards, lack of financial strength on the part of a
supplier, the occurrence of natural hazards, IT-related
risks, fires or insufficient supply of raw materials.
As part of the supplier pre-selection process, the
BMW Group is careful to ensure compliance with the
sustainability standards stipulated for the supplier
Risks and opportunities relating to purchasing
Purchasing risks relate primarily to supply risks
caused by the failure of a supplier to deliver as well
as risks associated with the quality of bought-in parts.
Production problems incurred by suppliers could have
adverse consequences for the BMW Group, ranging
from increased expenditure through to production
interruptions and a corresponding reduction in sales
volume. The increasingly complex nature of the
supplier network, especially at the level of lower tier
suppliers, whose operations can only be indirectly
influenced by the BMW Group, is a further potential
cause of downtimes at supplier locations. Purchas-
ing risks, if materialised, could have a high earnings
impact over the two-year assessment period. The
risk level attached to purchasing risks is classified
as medium.
The BMW Group sees opportunities relating to produc-
tion and technology primarily in the competitive edge
accruing from mastering new and complex technolo-
gies. Opportunities could arise as a result of product-
or process-related technological innovations, as well
as from organisational changes designed to improve
efficiency and increase competitiveness. In the field of
lightweight construction, for example, carbon is being
utilised in high volumes for the first time in the auto-
mobile industry for the production of the BMW i3. In
2015, the BMW Group then introduced carbon for the
BMW 7 Series. This has generated competitive bene-
fits in the form of lower fuel consumption and better
driving dynamics through reduced vehicle weight.
Given the long lead times involved in developing new
products and processes, additional opportunities are
expected to have insignificant impact on earnings
during the forecast period.
note 31
BMW Group also recognises appropriate accounting
provisions for statutory and non-statutory warranty
obligations. Such provisions reduce the risk to earn-
ings, as they are already included in the outlook.
Further information on risks in conjunction with
provisions for statutory and non-statutory warranty
→ see obligations is provided in → note 31 to the Group
Financial Statements.
In order to attain the outstanding level of quality
expected of the BMW Group's products and corre-
spondingly high external ratings (e.g. for product
safety) and reduce statutory and non-statutory
warranty obligations, it may be necessary to incur a
higher level of expenditure than originally forecast.
In addition, availability of products may be limited,
particularly at the start of production of new vehicles.
These risks are mitigated through regular audits and
the continual improvement of the quality management
system, which ensures a high standard of quality. The
Production stoppages and downtimes, in particular
due to fire, but also to machinery and tooling-related
breakdowns, IT disruptions, power failures, transpor-
tation and logistical disruptions, pose risks, against
which the BMW Group has put suitable measures
in place. Production structures and processes are
designed from the outset with a view to minimising
any potential damage and the probability of occur-
rence. The broad array of measures taken include
technical fire protection solutions, land development
measures including contingencies against flooding
when facilities are expanded or new buildings added,
the interchangeability of production facilities, pre-
ventative maintenance, the ability to manage spare
parts across sites, and predictive planning of trans-
portation alternatives. The risk level is also reduced by
deploying flexible working hour models and working
time accounts, but also as appropriate through split
arrangements or by building engine types at addition-
al sites. This makes it possible to recover quickly any
backlog arising from production interruptions. More-
over, risks arising from interruptions and production
downtime due to fire are also appropriately insured
with insurance companies of good credit standing.
Risks relating to production and technology often
manifest themselves in the form of potential sources
of production interruptions or additional expenses
necessary to comply with quality standards under
changed environmental conditions. If risks from the
production and technology category were to materi-
alise, they could have a high earnings impact over the
two-year assessment period. The risk level attached
to production and technology is classified as high.
Risks and opportunities relating to operations
Risks and opportunities relating to
production and technology
7 Series models, for instance, include the optional
Driving Assistant Plus which, as a future-oriented
product innovation, offers the comfort of partially
autonomous driving. The BMW Group does not expect
these opportunities to have a material earnings impact
over the two-year assessment period compared to the
assumptions made in the outlook.
Opportunities
→ Risks and
Report on Outlook,
Risks and
Combined
Management
Report
94
94
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New opportunities are continuously being sought to
create even greater added value for customers than
currently expected, and thereby realise significant
opportunities with respect to sales volumes and pric-
ing. Further development of the product and mobility
portfolio and expansion in growth regions are seen
as the most important growth opportunities for the
BMW Group in the medium to long term. Continued
growth depends above all on the ability to develop
innovative products and bring them to market. The
range of services on offer was further expanded in
2016, including the establishment of new mobility ser-
vices by ReachNow in North America and the expan-
sion of the DriveNow offering introduced in additional
European cities. Furthermore, vehicle-related services
were brought onto the market. The new BMW 5 and
Local restrictions affecting product usage in specific
sectors may limit BMW Group sales volumes in indi-
vidual markets. In some urban areas, for instance,
local measures have been or are being introduced
which impose entry restrictions, road use charges
or, in some situations, highly restrictive registration
rules. These restrictions may affect local demand for
the BMW Group vehicles affected and hence have
negative repercussions on sales volume and margins.
The BMW Group's endeavours to counter this risk
include offering locally emission-free vehicles (such
as the BMW i3), which benefit from state subsidies
and exemption rules.
Fierce competition, particularly in Western Europe,
the USA and China, is a potential reason for lower
demand and for fluctuations in the regional distri-
bution and composition of demand for vehicles and
mobility services. Greater competition could potential-
ly put pressure on selling prices and margins. Changes
in customer behaviour can also be brought about by
changes in public opinion, values, environmental
issues and fuel or energy prices. Selling price and
margin risks are measured using a scenario approach,
based on a bottom-up survey of the key sales markets
and an analysis of historical data. The BMW Group's
flexible selling and production processes enable risks
to be reduced and opportunities in market and prod-
uct segments to be taken.
In addition to the potential impact of macroeconomic
factors and sector-specific political framework condi-
tions, it is also extremely difficult to predict the impact
of increasingly fierce competition among established
manufacturers and the emergence of new competitors.
Unforeseen consumer preferences and changes in how
brands are perceived can give rise to opportunities
and risks. If market risks were to materialise, they
could have a high earnings impact over the two-year
assessment period. The risk level is classified as high.
The major part of the Financial Services segment's
credit financing and lease business is refinanced on
capital markets. Liquidity risks may be reflected in
Market development
95
95
Opportunities
The BMW Group pays particular attention to the qual-
ity of the parts built into its vehicles. In order to attain
a very high level of quality, it may become necessary
to invest in new technological concepts or discontinue
planned innovations, with the consequence that the
cost of materials could exceed levels accounted for in
the outlook. By monitoring and developing global sup-
plier markets, the BMW Group continuously strives
to increase its competitiveness by working together
with the world's best product and service providers.
Changes in commodity prices are monitored on the
basis of a well-defined management process. The
principal objective is to increase planning reliability
for the BMW Group. Price fluctuations for precious
metals (platinum, palladium, rhodium) and non-fer-
rous metals (aluminium, copper, lead), and, to some
extent, on steel and steel ingredients (iron ore, coke-
coal) and energy (gas, electricity) are hedged using
financial derivatives and supply contracts with fixed
pricing arrangements.
network, including the requirement to comply with
internationally recognised human rights and appli-
cable labour and social standards. The principal tool
for ensuring compliance with the BMW Group Sus-
tainability Standard is a three-stage risk management
system for sustainability. In addition, the technical
and financial capabilities of suppliers - especially
those supplying for modular-based production - are
monitored. Supplier sites are assessed for exposure
to natural hazards, such as floods or earthquakes, in
order to identify supply risks at an early stage and
implement appropriate safeguards. Fire risks at series
suppliers are evaluated by means of questionnaires
and selective site inspections. In order to minimise
supply risks, the BMW Group works hard to reduce
the input of raw materials or to use alternative raw
materials as a substitute.
note 37
Risks and opportunities relating to raw materials
As a large-scale manufacturing company, the
BMW Group is exposed to purchase price risks, par-
ticularly in relation to raw materials used in vehicle
production. Basis for the analysis of raw material
price risk are planned purchases of raw materials and
components containing those raw materials. If risks
relating to raw material prices were to materialise, they
would likely have a low earnings impact over the two-
year assessment period. A low risk level is attached
to these risks. Significant opportunities could arise
if raw material prices developed favourably for the
BMW Group.
Operational currency management is based on the
results of currency risk analyses. The BMW Group
manages currency risk at both the strategic (medium
and long term) and operational level (short and medi-
um term). Medium- and long-term measures include
increasing production volumes and purchase volumes
in foreign currency regions (natural hedging). Cur-
rency risks are managed in the short to medium term
and for operational purposes by means of hedging on
financial markets. Hedging transactions are entered
into only with financial partners of good credit stand-
ing. Opportunities are also secured through the use
of options during specific market phases.
As an internationally operating enterprise, the
BMW Group conducts business in a variety of
currencies, thus giving rise to currency risks and
opportunities. A substantial portion of Group revenue
generation, purchasing and funding occur outside
the eurozone (particularly in China and the USA).
Cash-flow-at-risk models and scenario analyses are
used to measure currency risks and opportunities. If
currency risks were to materialise, they could have a
high earnings impact over the two-year assessment
period. The risk level attached to currency risks is
medium. Significant opportunities can arise if curren-
cy developments are favourable for the BMW Group.
Currency risks and opportunities
The use of information technology in new products
and services, production or communication with
customers opens up new opportunities. Under the
slogan Industry 4.0, new approaches to production are
being tested which could generate significant improve-
ments in process and energy efficiency. The range
of services and apps on offer to customers via BMW
ConnectedDrive is constantly being expanded and
updated. The purchase together with other companies
of the firm HERE lays the foundation for the next
generation of mobility and location-based services.
For the automobile sector, it serves as the basis for
new customer-oriented functions, such as innovative
assistance systems through to fully automated driving.
The BMW Group expects these opportunities to have
an insignificant earnings impact over the two-year
assessment period compared to the assumptions made
in the outlook.
requirements and in-house rules. The BMW Group
protects its intellectual property as well as customer
and employee data in cooperations and business
partnerships by stipulating clear instructions with
regard to data protection and the use of information
technology. Information pertaining to key areas of
expertise as well as sensitive personal data are subject
to particularly strict security measures. Technical data
protection incorporates industry-wide standards and
best practices. Responsibility for data and information
protection lies for each Group entity with the Board
of Management or relevant management team.
Great importance is attached to protecting the
confidentiality, integrity and availability of business
information and employee and customer data, for
instance against unauthorised access and misuse. Data
security based on the International Standard ISO/IEC
27001 is an integral component of all business pro-
cesses. As part of risk management procedures, data
protection, information and IT risks are systematically
documented, allocated appropriate measures by the
departments responsible and regularly monitored in
terms of threat level and risk mitigation. Regular anal-
yses and controls and rigorous security management
ensure an appropriate level of security. Despite regular
testing and preventative security measures, it is impos-
sible to eliminate risks completely in this area. All
employees are required to treat carefully information
such as confidential business, customer and employee
data, to use securely information systems and handle
risks with transparency. Group-wide requirements
are documented in a comprehensive set of principles,
guidelines and instructions, such as, for example, the
Binding Corporate Rules for handling of employee
data. Regular communication and information activ-
ities create a high degree of security and risk aware-
ness among employees involved. Employees receive
training to ensure compliance with the applicable
In addition to IT attacks and direct physical inter-
vention, lack of knowledge or misconduct on the
part of employees may also represent a danger to the
confidentiality, integrity and availability of data and
systems. Direct consequences of information, data
protection and IT risks include expenses required
for rapid data, information and systems recovery.
Negative impacts on operational performance due
to the non-availability of products and services or
disruptions in spare-part or vehicle production could
also be possible. A further indirect result could be
reputational damage.
The advance of digitalisation across all areas of the
business raises the need for increasingly stringent
requirements for the confidentiality, integrity and
availability of electronically processed data and in
information technology (IT) in general. The increased
threat of cybercrime has changed the risk exposure
of the BMW Group. In addition to intellectual prop-
erty theft, BMW Group must protect itself against
attacks on data integrity and availability. At the same
time, regulations covering the handling of personal
data are also becoming more stringent, for example
with the adoption of the EU General Data Protection
Regulation by the European Parliament in April 2016.
If information, data protection and IT risks were to
materialise, they could have a high earnings impact
over the two-year assessment period. Risk levels
attached to these risks are classified as high.
Financial risks and risks relating to
the use of financial instruments
New opportunities for the BMW Group's brands are
opening up in particular as a result of developments
in the field of digital communication and connectivity.
Additional opportunities could also arise if new sales
channels contribute to greater brand reach to addi-
tional customer groups than currently envisaged in
the forecast. Digital communication and connectivity
enables consumers to be reached on a more targeted
and individualised basis, thus strengthening long-term
relationships and brand loyalty. The outcome is often
a more intense product and brand experience for cus-
tomers, which could lead to higher sales volume and
have a positive impact on revenues and earnings. The
BMW Group invests in advanced marketing concepts
in order to intensify customer relationships. In 2016,
for example, customers in the United Kingdom were
able to access an online sales platform, enabling them
to select, finance and buy their vehicle online. The
BMW Group's brands are also present on numerous
platforms, such as Facebook, YouTube and Twitter.
The BMW Group estimates the earnings impact as
insignificant over the two-year assessment period as
compared to the assumptions made in the outlook.
Risks and opportunities relating to
sales and marketing
Information, data protection and IT
The BMW Group employs a global sales network,
primarily comprising independent dealers, branches,
subsidiaries and importers to sell its products and
services. Any threat to the continued activities of
parts of the sales network would entail risks for the
BMW Group. If sales and marketing risks were to
materialise, they are likely to have low earnings impact
over the two-year assessment period. The risk level
is classified as low.
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96
Within the Purchasing and Supplier Network
opportunities emerge above all in the area of global
sourcing through increased efficiency and the use
of innovations developed by suppliers, which can
lead to a broader range of products. Introduction
of new and innovative production technologies and
location-specific cost factors, in particular through
local supplier structures in close proximity to new
and existing BMW Group production plants, can lead
to lower cost of materials for the BMW Group. The
integration of previously unidentified innovations
from the supplier market into the product range is
a further source of opportunities. The BMW Group
offers innovative suppliers numerous possibilities for
creating specific contractual arrangements which are
attractive for those developing innovative solutions.
At regular intervals, the BMW Group honours its
most inventive suppliers with the Supplier Innova-
tion Award. The BMW Group does not expect these
opportunities to have a significant earnings impact
over the two-year assessment period as compared to
the assumptions made in the outlook.
Combined
From today's perspective, management does not see
any threat to the BMW Group's going-concern status.
As in the previous year, identified risks are considered
to be manageable, but could - like the opportuni-
ties - have an impact on the BMW Group's forecasts if
they were to materialise. The BMW Group's financial
position is stable and cash needs are currently covered
by available liquidity and credit lines.
Report on Outlook,
Risks and
Opportunities
→ Risks and
Opportunities
73.76
77.41
75.68
65.10
63.93
85.22
92.25
95.51
122.60
72.93
89.77
53.16
85.42
PREFERRED STOCK
72.70
55,114
74.15
97.63
48.76
62.09
67.84
77.41
Number of shares in 1,000
Low
Year-end closing price
Stock exchange price in €1
53,994
54,260
54,500
54,809
High
88.75
Source: Reuters.
High
92.19
50
2012
2013
2014
2015
2016
2017
The Prime Automobile Index lost about one third of
its value towards the middle of the year, with subdued
demand for automobile stocks. The index recovered
during the second half of the year, finishing the report-
ing period at 1,506 points, 5.6% below its closing level
on 30 December 2015.
BMW common stock followed the downward trend for
the sector index during the first half of the year, at one
stage falling 33% below its previous year's closing level.
It performed significantly better during the second
half of the year, closing at €88.75 (-9.1%) thanks to
strong gains. BMW preferred stock fell by 6.1% in
value compared to its closing price at the end of the
previous year and stood at €72.70 at the end of the
stock market year 2016. With a market capitalisation
of approximately €57 billion, the BMW Group was
among the ten most valuable German enterprises
listed on the stock market.
Employee Share Programme
BMW AG has enabled its employees to participate in
its success for more than 40 years. Since 1989, this
participation has taken the form of an Employee Share
Programme. A total of 305,029 shares of preferred
stock were issued to employees as part of this pro-
gramme in 2016.
In this context, and with the approval of the Super-
visory Board, the Board of Management increased
BMW AG's share capital by €305,000 from €656,804,600
to €657,109,600 by issuing 305,000 new non-voting
shares of preferred stock. This increase was executed
on the basis of Authorised Capital 2014 in Article 4
(5) of the Articles of Incorporation. The new shares
of preferred stock carry the same rights as existing
shares of preferred stock. The newly issued shares of
preferred stock for employees are entitled to receive
dividends with effect from the financial year 2017. In
addition, 29 shares of preferred stock were bought
back via the stock market.
Dividend increase proposed
Low
Reflecting the strong earnings performance, the
Board of Management and the Supervisory Board
will propose to the Annual General Meeting to use
BMW AG's unappropriated profit of €2,300 million ¬
BMW stock
→ 58
2016
2015
2014
2013
2012
COMMON STOCK
Number of shares in 1,000
601,995
601,995
601,995
601,995
Stock exchange price in €1
Year-end closing price
(2015: €2,102 million) to pay a dividend of €3.50 for
each share of common stock (2015: €3.20) and a divi-
dend of €3.52 for each share of preferred stock (2015:
€3.22), a pay-out ratio of 33.3% for 2016 (2015: 32.9%).
74.60
→ BMW Stock and
Capital Markets in
2016
49.23
15.19
13.98
Equity
72.08
65.11
57.03
54.25
46.66
1 Xetra closing prices.
2 Proposed by management.
³ Annual average weighted amount.
4 Stock weighted according to dividend entitlements.
109
110
Combined
Management
Report
50
Ratings remain at top level
The BMW Group continued to inform analysts, inves-
tors, and rating agencies throughout 2016 with regular
quarterly and year-end financial reports. The compre-
hensive information programme provided for relevant
capital market participants also included numerous
one-on-one and group meetings, dedicated socially
responsible investment (SRI) roadshows for investors
using sustainability criteria in their investment deci-
sions, and debt roadshows for fixed-income investors
and credit analysts. Communication focused on the
new Strategy NUMBER ONE > NEXT, the profitability
of future business models, digitalisation and other
technological trends in the automobile industry, and
the relevance of alternative drive systems. In addition
to participating in various conferences and roadshows,
a series of product presentations and a technology
workshop were held for analysts and investors.
Intensive communication with capital markets
continued
The ratings underline the BMW Group's robust
financial condition and excellent creditworthiness.
Thanks to these attributes, it not only has good access
to international capital markets, but also benefits from
attractive refinancing conditions.
On 25 January 2017, Moody's raised its long-term
rating for BMW AG from A2 (positive outlook) to
A1 (stable outlook). The P-1 short-term rating was
reaffirmed. The main reasons for the improved ratings
were the forthcoming launches of attractive products,
the good position of the BMW Group with regard
to the challenges faced by the automobile industry,
a consistently strong operating performance and a
robust financing and capital structure.
stable
stable
14.35
A+
A-1
A1
Non-current financial liabilities
Current financial liabilities
Outlook
Standard &
Poor's
Moody's
Company rating
The BMW Group continues to have the best ratings
in the European automobile sector. Since Decem-
ber 2013, BMW AG has had a long-term rating of A+
(stable outlook) and a short-term rating of A-1 from
the rating agency Standard & Poor's, currently the
highest rating given by Standard & Poor's to a Euro-
pean car manufacturer.
P-1
64.65
18.02
Operating cash flow Automotive segment
56.53
58.96
59.08
48.69
35.70
KEY DATA PER SHARE IN €
Dividend
Common stock
3.502
3.20
2.90
2.60
2.50
Preferred stock
3.522
3.22
2.92
7.79
8.10
8.85
9.72
10.47
Earnings per share of preferred stock4
17.45
7.77
8.83
9.70
10.45
Earnings per share of common stock³
2.52
2.62
8.08
100
601,995
150
10% of voting rights
Direct or indirect investments in capital exceeding
and Explanatory
Comments
for Takeovers
→ Disclosures Relevant
Combined
Management
Report
Based on the information available to the Company, 1
104
When the Company issues non-voting shares of
preferred stock to employees in conjunction with its
Employee Share Programme, these shares are subject
as a general rule to a company-imposed blocking peri-
od of four years, measured from the beginning of the
calendar year in which the shares are issued.
As well as shares of common stock, the Company has
also issued non-voting shares of preferred stock. Fur-
ther information relating to this can be found above
in the section "Composition of subscribed capital”.
Restrictions on voting rights or the transfer
of shares
note 39
→ see
103
Contractual holding period arrangements also apply to
shares of common stock acquired by Board of Manage-
ment members and certain senior department heads
in conjunction with the share-based remuneration
programmes (Compensation Report of the Corporate
Governance section; → note 39 to the Group Financial
Statements).
the following direct or indirect holdings exceeding
10% of the voting rights at the end of the reporting
period were held at the stated reporting date:¹
in %
Stefan Quandt, Germany
16.4
16.43
17.4
17.42
0.2
Indirect share of
voting rights
Direct share of
voting rights
3 Controlled entities, of which 3% or more are attributed: Johanna Quandt GmbH & Co. KG für Automobilwerte.
4 Controlled entities, of which 3% or more are attributed: Susanne Klatten Beteiligungs GmbH.
2 Controlled entities, of which 3% or more are attributed: AQTON SE.
1 Based on voluntary notifications provided by the listed shareholders as at 31 December 2016.
Susanne Klatten Beteiligungs GmbH, Bad Homburg v.d. Höhe, Germany
Susanne Klatten, Germany
Johanna Quandt GmbH & Co. KG für Automobilwerte, Bad Homburg v.d. Höhe, Germany
Johanna Quandt GmbH, Bad Homburg v.d. Höhe, Germany
AQTON SE, Bad Homburg v.d. Höhe, Germany
(c) uniform payment of any other dividends on
shares on common and preferred stock, provid-
ed the shareholders do not resolve otherwise
at the Annual General Meeting
€1 par value on non-voting preferred shares
(b) payment of an additional dividend of €0.02 per
accruement
IT authorisations
Extensive controls are carried out by managers and
staff in all financial reporting processes at an individ-
ual entity and Group level, thus ensuring that legal
requirements and internal guidelines are complied
with and that all business transactions are properly
executed. Controls are also carried out with the aid
of IT applications, thus reducing the incidence of
process risks. Moreover, the performance of controls
on accounts deemed to be exposed to risk are subject
to additional monitoring.
Controls
All financial reporting processes (including Group
financial reporting processes) are structured in
organisational terms in accordance with the principle
of segregation of duties, thus making an important
contribution to the early identification of errors and
the prevention of potential wrongdoing. Regular com-
parison of internal forecasts and external financial
reports, for example, improves the quality of financial
Organisational measures
One component of the internal control system is that
of “Information and Communication”. It ensures that
all the information needed to achieve the objectives
set for the internal control system is made available
to those responsible in an appropriate and timely
manner. Information relevant for the various finan-
cial reporting processes
at BMW AG, other consol-
idated Group entities and for the BMW Group as a
whole - is set out primarily in organisational manuals,
internal and external financial reporting guidelines,
accounting manuals and training documentation. This
information, which can be accessed at all levels via the
BMW Group's intranet system, provide the framework
for ensuring that the relevant rules are applied consist-
ently throughout the Group. The quality and relevance
of these instructions are ensured by regular review as
well as by continuous communication between the
relevant departments.
-
Information and communication
The internal control system in place throughout the
BMW Group is aimed at ensuring the effectiveness
of operations. It makes an important contribution
towards ensuring compliance with the laws that apply
to the BMW Group as well as providing assurance on
the propriety and reliability of internal and external
financial reporting. The internal control system is
therefore a significant factor in the management of
process risks. The principal features of the internal
control system and the risk management system, as far
as they relate to individual entity and Group financial
reporting processes, are described below.
reporting. Moreover, the internal audit department,
in its capacity as a process-independent function,
tests and assesses the effectiveness of the internal
control system and proposes improvements where
appropriate.
and § 315 (2)
no. 5 HGB.
BMW common stock
pursuant to
Disclosures
INTERNAL CONTROL
SYSTEM* AND RISK
MANAGEMENT SYSTEM
RELEVANT FOR THE
FINANCIAL REPORTING
PROCESS
All IT applications used in financial reporting pro-
cesses throughout the BMW Group are subject to
access restrictions, allowing only authorised persons
to gain access to systems and data in a controlled envi-
ronment. Access authorisations are allocated on the
basis of the nature of the duties to be performed. In
addition, IT processes are designed and authorisations
allocated using the dual control principle, as a result of
which, for instance, requests cannot be submitted and
approved by the same person. Technical monitoring
procedures and internal audits are also in place to
ensure appropriate authorisation security throughout
all IT systems.
0.2
101
Combined
Management
Report
(a) subsequent payment of any arrears on dividends
on non-voting preferred shares in the order of
The Company's shares of preferred stock are shares
within the meaning of § 139 et seq. AktG, which
carry a cumulative preferential right in terms of the
allocation of profit and for which voting rights are
excluded. These shares only confer voting rights in
exceptional cases stipulated by law, in particular when
the preference amount has not been paid or has not
been fully paid in one year and the arrears are not paid
in the subsequent year alongside the full preference
amount due for that year. With the exception of voting
rights, holders of shares of preferred stock are entitled
to the same rights as holders of shares of common
stock. Article 24 of the Articles of Incorporation con-
fers preferential treatment to the non-voting shares of
preferred stock with regard to the appropriation of the
Company's unappropriated profit. Accordingly, the
unappropriated profit is required to be appropriated
in the following order:
§ 289 (4) HGB
and § 315 (4)
HGB.
*Disclosures
pursuant to
The rights and duties of shareholders derive from the
German Stock Corporation Act (AktG) in conjunction
with the Company's Articles of Incorporation, the
full text of which is available at www.bmwgroup.com. The
right of shareholders to have their shares evidenced
is excluded in accordance with the Articles of Incor-
poration. The voting power attached to each share
corresponds to its par value. Each €1 of par value
of share capital represented in a vote entitles the
holder to one vote (Article 18 no. 1 of the Articles of
Incorporation).
The subscribed capital (share capital) of BMW AG
amounted to €657,109,600 at 31 December 2016
(2015: €656,804,600) and, in accordance with Article 4
no. 1 of the Articles of Incorporation, is sub-divided
into 601,995,196 shares of common stock (91.61%)
(2015: 601,995,196; 91.66%) and 55,114,404 shares of
non-voting preferred stock (8.39%) (2015: 54,809,404;
8.34%), each with a par value of €1. The Company's
shares are issued to bearer.
Composition of subscribed capital
DISCLOSURES RELEVANT
FOR TAKEOVERS* AND
EXPLANATORY COMMENTS
Responsibilities for ensuring the effectiveness of
the internal control system in relation to individual
entity and Group financial reporting processes are
clearly defined and allocated to the relevant managers
and are subject to internal audits (e.g. management
self-audits, internal audit department findings). Data
analysis tools are also employed to identify risks relat-
ing to business transactions. Continuous revision and
further development ensures the effectiveness of the
internal control system. Group entities are required
to confirm regularly as part of their reporting duties
that the internal control system is functioning prop-
erly. Effective measures are implemented whenever
weaknesses are identified and reported.
Evaluating the effectiveness of the internal
control system
All employees are appropriately trained to carry out
their duties and kept informed of any changes in
regulations or processes that affect them. Managers
and staff also have access to detailed best-practice
descriptions relating to risks and controls in the var-
ious processes, thus increasing risk awareness at all
levels. As a consequence, the internal control system
can be evaluated regularly and further improved
as necessary. Employees can, at any time and inde-
pendently, deepen their understanding of control
methods and design using an information platform
that is accessible throughout the entire Group.
Internal control training for employees
and Explanatory
Comments
→ Disclosures Relevant
for Takeovers
→ Internal Control
System and Risk
Management System
Relevant for the
Financial Reporting
Process
102
12.64
§ 289 (5) HGB
The voting power percentages disclosed above may
have changed subsequent to the stated date if these
changes were not required to be reported to the
Company. Due to the fact that the Company's shares
are issued to bearer, the Company is generally only
aware of changes in shareholdings if such changes are
subject to mandatory notification rules.
BMW
preferred common
stock
stock
120
171.5
194.6
198.9
240
BMW
219.1
in %
→ 56
Development of BMW stock compared to stock
market indices since 30 December 2011
→ www.bmwgroup.com/ir
AND CAPITAL MARKETS
IN 2016
BMW STOCK
Capital markets and BMW stock were both impacted by
major political and economic uncertainties during the
past year. Thanks to its consistent focus on the future
and solid financials, the BMW Group continues to enjoy
the best ratings in the European automobile sector and
a high standing on international capital markets.
Prime
DAX
Auto-
mobile
12.6
Prime Automobile
BMW preferred stock
DAX
200
100
150
200
→ 57
Development of BMW stock compared to stock market indices
Capital Markets in
2016
→ BMW Stock and
Combined
Management
Report
108
107
At the beginning of the year, speculation about the
cooling of the Chinese economy had a negative impact
on stock market indices worldwide. At 8,753 points,
the German stock exchange (DAX) reached its low for
the year on 11 February, 18.5% down on its closing
level on 31 December 2015. The ECB's decision to con-
tinue its expansionary monetary policies and, starting
8 June, to buy euro-denominated investment-grade
corporate bonds, had a positive impact on investor
sentiment. However, following the Brexit vote on
23 June and the uncertainties it triggered, indices
around the world slumped again. During the summer
months, stock markets proceeded to recover after the
difficult first half year. The active role of the Bank
of England was well received by investors. Reducing
the reference interest rate to a record low of 0.25%
and the bank's decision to purchase GBP 60 billion
worth of UK government bonds were interpreted as
positive signals. Good labour market figures coming
from the USA and the UK generated further gains
over the summer. During the last three months of
the year, the focus was on the US elections and the
ECB's decision to extend its bond-buying programme
until December 2017. Stock markets generally tended
positively during this phase, with the consequence
that the DAX - despite a turbulent start to the year -
recorded a 6.9% gain for the twelve-month period,
closing at 11,481 points on 30 December 2016. The
EURO STOXX 50 recorded a gain of 0.7% in 2016,
closing at 3,291 points on 30 December.
Political uncertainties weigh on stock markets
The stock market year 2016 was dominated by con-
cerns relating to political developments. During the
first half of the year, the approaching Brexit vote had
a negative impact on international financial markets.
Additionally, the US election on 8 November unsettled
markets towards the year-end. Uncertainties regard-
ing the economic situation in China also dampened
investor sentiment. The active role of central banks
over the course of the year tended to counteract these
influences, so that many stock exchanges closed - at
the end of a volatile year – higher than their previous
year's level.
The BMW Group has not concluded any compensation
agreements with members of the Board of Manage-
ment or with employees for situations involving a
takeover offer.
Compensation agreements with members of the
Board of Management or with employees in the
event of a takeover bid
Index: December 2011 = 100
In accordance with the agreement between
BMW AG, Daimler AG and AUDI AG pertaining
to the acquisition of entities of the HERE Group
and the related foundation of There Holding
B.V., each contractual party is required to offer
its shares in There Holding B.V. for sale to the
other shareholders in the event of a change in
control. If neither of the other two parties
acquires these shares, these other parties are
entitled to resolve that There Holding B. V. be
dissolved.
BMW AG is party to the following major agreements,
which contain provisions that would apply in the event
of a change in control or the acquisition of control as
a result of a takeover bid:
Significant agreements entered into by the
Company subject to control change clauses in the
event of a takeover bid
In accordance with Article 4 no. 5 of the Articles of
Incorporation, the Board of Management is author-
ised – with the approval of the Supervisory Board – to
increase BMW AG's share capital during the period
until 14 May 2019 by up to €4,145,383 for the pur-
poses of an Employee Share Scheme by issuing new
non-voting shares of preferred stock, which carry the
same rights as existing non-voting preferred stock,
in return for cash contributions (Authorised Capital
2014). Subscription rights of existing shareholders to
the new shares are excluded. No conditional capital
is in place at the reporting date.
to offer and transfer shares to persons employed by
the Company or one of its affiliated companies up to
a proportionate amount of €5 million of share capital.
The subscription rights of existing shareholders to the
new shares of preferred stock used for the purpose
stated above are excluded. The authorisations may
also be exercised in parts on more than one occasion.
In accordance with the resolution passed at the
Annual General Meeting on 15 May 2014, the Board of
Management is also authorised – up to 14 May 2019 -
to acquire shares of non-voting preferred stock of the
Company via the stock exchange, up to a maximum
of 1% of the share capital existing at the date of the
resolution. The consideration paid by the Company
per share of non-voting preferred stock (excluding
transaction costs) may not be more than 10% above
or below the market price determined by the opening
auction on the date of trading of the stock in the
Xetra trading system (or a successor system having a
comparable function). Moreover, the Board of Man-
agement is authorised to use the acquired Company's
own shares of non-voting preferred stock for all legally
admissible purposes, specifically including the right
-
The Board of Management is authorised to buy back
shares and sell repurchased shares in situations spec-
ified in § 71 AktG, e.g. to avert serious and imminent
damage to the Company and/or to offer shares to
persons employed or previously employed by BMW AG
or one of its affiliated companies.
Authorisations given to the Board of Management
in particular with respect to the issuing or buying
back of shares
Amendments to the Articles of Incorporation must
comply with § 179 et seq. AktG. All amendments must
be decided upon by the shareholders at the Annual
Statutory regulations and Articles of Incorporation
provisions with regard to the appointment and
removal of members of the Board of Management
and changes to the Articles of Incorporation
The appointment or removal of members of the Board
of Management is based on the rules contained in § 84
et seq. AktG in conjunction with § 31 of the German
Co-Determination Act (MitbestG).
Like all other shareholders, employees exercise their
control rights pertaining to shares they have acquired
in conjunction with the Employee Share Programme
and/or the share-based remuneration programme
directly on the basis of relevant legal provisions and
the Company's Articles of Incorporation.
System of control over voting rights when
employees participate in capital and do not
exercise their control rights directly
There are no shares with special rights which confer
control rights.
The development cooperation agreement
between BMW AG, Intel Corporation and Mobil-
eye Vision Technologies Ltd., relating to the
development of technologies deployed in highly
and fully automated vehicles, may be terminat-
ed by any of the contractual parties if a competi-
tor of one of the parties acquires and
subsequently holds at least 30% of the voting
shares of one of the contractual parties.
Shares with special rights which confer control
rights
-
An agreement concluded with an international
consortium of banks relating to a syndicated
credit line (which was not being utilised at the
balance sheet date) entitles the lending banks to
give extraordinary notice to terminate the credit
line (such that all outstanding amounts, includ-
ing interest, would fall due immediately) if one
or more parties jointly acquire direct or indirect
control of BMW AG. The term "control" is
defined as the acquisition of more than 50% of
the share capital of BMW AG, or the right to
receive more than 50% of the dividend or the
right to direct the affairs of the Company, or
appoint the majority of the members of the
Supervisory Board.
General Meeting (§ 119 (1) no. 5, § 179 (1) AktG). The
Supervisory Board is authorised to approve amend-
ments to the Articles of Incorporation which only
affect its wording (Article 14 no. 3 of the Articles of
Incorporation). Resolutions are passed at the Annual
General Meeting by simple majority of shares unless
otherwise explicitly required by binding provisions of
law or, when a majority of share capital is required,
by simple majority of shares represented in the vote
(Article 20 no. 1 of the Articles of Incorporation).
BMW AG acts as guarantor for all obligations aris-
ing from the joint venture agreement relating to
BMW Brilliance Automotive Ltd. in China. The
agreement grants an extraordinary right of termi-
nation to either joint venture partner in the event
that, either directly or indirectly, more than 25%
of the shares of the other party are acquired by a
third party, or if the other party is merged with
another legal entity. The termination of the joint
venture agreement may result in either the sale of
the shares to the other joint venture partner or in
the liquidation of the joint venture entity.
-
-
→ BMW Stock and
Capital Markets in
2016
and Explanatory
Comments
→ Disclosures Relevant
for Takeovers
Combined
Management
Report
106
BMW AG is party to an agreement with SGL Car-
bon SE, Wiesbaden, relating to the joint operations
SGL Automotive Carbon Fibers LLC, Delaware,
USA and SGL Automotive Carbon Fibers GmbH &
Co. KG, Munich. The agreement includes call and
put rights in case - either directly or indirectly -
50% or more of the voting rights relating to the rel-
evant other shareholder of the joint operations are
acquired by a third party, or if 25% of such voting
rights have been acquired by a third party if that
third party is a competitor of the party that has not
been affected by the acquisition of the voting
rights. In the event of such acquisitions of voting
rights by a third party, the non-affected sharehold-
er has the right to purchase the shares of the joint
operations from the affected shareholder or to
require the affected party to acquire the other
shareholder's shares.
A cooperation agreement concluded with Peu-
geot SA relating to the joint development and
production of a new family of small (1- to
1.6-litre) petrol engines entitles each of the
cooperation partners to give extraordinary noti-
fication of termination in the event of a compet-
itor acquiring control over the other contractual
party and if any concerns of the other contrac-
tual party concerning the impact of the change
of control on the cooperation arrangements are
not allayed during the subsequent discussion
process.
The framework cooperation agreement entered
into by BMW AG and Sixt SE amongst others,
relating to the foundation and operation of the
car-sharing joint venture DriveNow, may be ter-
minated by Sixt SE if a car hire company
acquires more than 50% of the shares of com-
mon stock of BMW AG. In the event of such a
termination, Sixt SE may, at its own discretion,
stipulate the sale of BMW's interest in the joint
venture to Sixt SE or the purchase of Sixt's
interest in the joint venture by BMW AG or one
its subsidiaries.
Several supply and development contracts
between BMW AG and various industrial cus-
tomers, all relating to the sale of components for
drivetrain systems, grant an extraordinary right
of termination to the relevant industrial custom-
er in specified cases of a change in control at
BMW AG (e.g. BMW AG merges with a third
party or is taken over by a third party; an auto-
mobile manufacturer acquires more than 50% of
the voting rights or share capital of BMW AG).
-
105
Financing agreements in place with the European
Investment Bank (EIB) entitle the EIB to request
early repayment of the loan in the event of an
imminent or actual change in control at the level
of BMW AG (partially in the capacity of guarantor
and partially in the capacity of borrower), if the
EIB has reason to assume - after the change in
control has taken place or 30 days after it has
made a request to discuss the situation - that the
change in control could have a significantly
adverse impact, or if the borrower refuses to hold
any such discussions. A change in control of
BMW AG arises if one or more individuals take
over or lose control of BMW AG, with control
being defined in the above-mentioned financing
agreements as (i) holding or having control over
more than 50% of the voting rights, (ii) the right
to stipulate the majority of the members of the
Board of Management or Supervisory Board, (iii)
the right to receive more than 50% of dividends
payable or (iv) any other comparable controlling
influence over BMW AG.
assets.
Framework agreements are in place with finan-
cial institutions and banks (ISDA Master Agree-
ments) with respect to trading activities with
derivative financial instruments. Each of these
agreements includes an extraordinary right of
termination, which triggers the immediate settle-
ment of all current transactions in the event that
the creditworthiness of the party involved is
materially weaker following a direct or indirect
acquisition of beneficially owned equity capital
that confers the power to elect a majority of the
Supervisory Board of a contractual party or any
other ownership interest that enables the acquir-
er to exercise control over a contractual party, or
which constitutes a merger or a transfer of net
-820
-847
-14
-27
-768
-771
9,386
9
9,593
7,695
7,836
187
182
Result from equity accounted investments
Profit/loss before financial result
Other operating expenses
Other operating income
689
15,137
430
448
Selling and administrative expenses
8
-9,158
-8,633
27
22
-7,219
-256
-239
9
670
914
616
-7,604
441
-3
441
-454
193
-396
279
-369
221
-313
15,451
-2
-3
9,665
9,224
7,916
7,523
185
131
11
Income taxes
Profit/loss before tax
518
Interest and similar income
10
196
185
260
327
518
Interest and similar expenses
-489
-618
-673
-762
-2
Other financial result
Financial result
10
18,132
INCOME STATEMENTS FOR GROUP AND SEGMENTS
Gross profit
Segment Information
→ Page 180
List of Investments at 31 December 2016
3
3
Group Financial
Statements
Income Statements
Statement of
Comprehensive
Income
Balance Sheets
Cash Flow
Statements
Notes
112
Group
Financial
Statements
→ BMW Group
Income Statements
→Page 175
Other Disclosures
→ Page 161
Notes to the Balance Sheet
GROUP FINANCIAL
STATEMENTS
→ Page 112 Income Statements for Group and Segments
→ Page 112 Statement of Comprehensive Income for Group
→ Page 114 Balance Sheets for Group and Segments
→Page 116 Cash Flow Statements for Group and Segments
→Page 118 Group Statement of Changes in Equity
Notes to the Group Financial Statements
Accounting Principles and Policies
for Group and
Segments
179
Notes to the Income Statement
Notes to the Statement of Comprehensive Income
→ Page 120
→ Page 120
→Page 133
→ Page 139
→ Page 140
1,777
18,721
→ Statement of Com-
for Group
6
94,163
92,175
86,424
85,536
2,069
1,990
Cost of sales
7
-75,442
-74,043
-70,973
-70,399
-1,639
-1,542
Revenues
2015
2016
2015
BMW GROUP
STATEMENT OF COMPREHENSIVE INCOME FOR GROUP
Income Statements for Group and Segments
→ 59
in € million
Automotive
(unaudited supplementary
prehensive Income
Group
Note
2016
2015
2016
Motorcycles
(unaudited supplementary
information)
information)
12
5,147
-2,828
10
18
21
39
25
11
842
-1,800
1,687
-424
3,952
5,752
1,359
1,783
4,794
3,952
3,046
Change in other operating assets and liabilities
Change in trade payables
Change in trade receivables
Change in inventories
Changes in working capital
Gain/loss on disposal of tangible and intangible assets and marketable securities
Result from equity accounted investments
10,028
Other non-cash income and expense items
Change in receivables from sales financing
Change in provisions
Change in leased products
Depreciation and amortisation of other tangible, intangible and investment assets
Reconciliation between net profit and cash inflow/outflow from operating activities
Current tax
Other interest and similar income/expenses
Net profit
1,359
Change in deferred taxes
11,601
-6,130
-5,225
Current provisions and liabilities
Trade payables
Other liabilities
Current tax
Financial liabilities
Other provisions
Non-current provisions and liabilities
Other liabilities
-118
Financial liabilities
Other provisions
Pension provisions
13,071 -67,136 -65,525
30,121 -67,766 -66,224
13,362
27,545
-699
-630
Deferred tax
Income taxes paid
-264
429
3,343
4,425
195
-719
-720
-7,671
-7,215
870
-521
8,787
8,295
108
67
-773
-1,160
-520
Interest received
Cash inflow/outflow from operating activities
Investment in intangible assets and property, plant and equipment
29
reserves
reserves
capital
Note
Revenue
657
Capital
31 December 2015
Premium arising on capital increase relating to preferred stock
Other changes
Subscribed share capital increase out of Authorised Capital
Other comprehensive income for the period after tax
Comprehensive income 31 December 2015
Net profit
Dividends paid
Subscribed
1 January 2015
2,027
-2,102
29
Revenue
reserves
Capital
reserves
Subscribed
capital
Note
44,445
41,027
2,047
29
-14
20
5,534
-1,329
6,863
657
16,610
24
in € million
Premium arising on capital increase relating to preferred stock
Other changes
Cash inflow/outflow from financing activities
Repayment of non-current other financial liabilities
Change in current other financial liabilities
Change in commercial paper
Proceeds from new non-current other financial liabilities
Proceeds from the issue of bonds
Repayment of bonds
Interest paid
Intragroup financing and equity transactions
Effect of exchange rate on cash and cash equivalents
Payment of dividend for the previous year
Issue/buy-back of treasury shares
Proceeds from the sale of marketable securities and investment funds
Cash inflow/outflow from investing activities
Investments in marketable securities and investment funds
Proceeds from the disposal of investments
Expenditure for investments
Proceeds from the disposal of intangible assets and property, plant and equipment
Payments into equity
31 December 2016
Effect of changes in composition of Group on cash and cash equivalents
Cash and cash equivalents as at 1 January
Cash and cash equivalents as at 31 December
Subscribed share capital increase out of Authorised Capital
Other comprehensive income for the period after tax
Comprehensive income 31 December 2016
Net profit
Dividends paid
1 January 2016
in € million
Change in cash and cash equivalents
GROUP STATEMENT OF CHANGES IN EQUITY
Changes in Equity
→ BMW Group
Group Statement of
Statements
Group
Financial
118
117
BMW GROUP
14,107
24
630
41,503
65,912
72,363
30,228
1
158
178
7
5
28,178
-47,194
30,425
35,749
86,396
97,306
-599
-2,596
-27,129
-32,689
-54,475
22,268
1,504
1,329
40,422
-65,133
-66,675
-699
-630
1,121
1,104
45,379
811
1,354
44,782
40
3,046
4,540
5,417
894
37
44
1,359
35,633
27,120
3,093
-6,183
-7,345
2015
2016
2015
information)
3
(unaudited supplementary
41,148
45,134
29
30
424
405
Eliminations
2,469
2
5,966
-2,635
205
263
222
389
-583
6,585
1,985
236
221
41,865
48,032
-10,687
-11,223
1,780
656
47,046
-67,305 -65,832
46,169
54,316
601
23,613
29,413
36,328
38,506
16,030
31
28
48
6,158
6,755
13
313
17,718
353
31,471
835
33,495
-4,499
43,439
702
23,038
27,368
408
49
-4,748
-583
-31,629
-36,960
223
8
3
518
599
Minority interest
Equity
-599
-25,835
-30,933
255
48,416
1,130
55
Other assets
Deferred tax
Financial assets
Receivables from sales financing
Other investments
Investments accounted for using the equity method
Non-current assets
Leased products
Intangible assets
ASSETS
78,841 -121,780 -113,026
82,795
122,029
137,728
Property, plant and equipment
1,516
Inventories
Receivables from sales financing
77
-15,869
-17,054
15,225
16,744
9,948
Trade receivables
11,049
Accumulated other equity
Capital reserves
Revenue reserves
EQUITY AND LIABILITIES
Subscribed capital
Total assets
Cash and cash equivalents
Current assets
Financial assets
Current tax
Other assets
Equity attributable to shareholders of BMW AG
2,005
35,621
-1,904
Cash inflow/outflow from financing activities
Effect of exchange rate on cash and cash equivalents
17
73
Effect of changes in composition of Group on cash and cash equivalents
38
5,004
Change in cash and cash equivalents
-1,566
Cash and cash equivalents as at 1 January
6,122
7,688
Cash and cash equivalents as at 31 December
7,880
1,758
6,122
4,393
-1,632
-2,121
23
-1,917
-118
-264
13,974
13,007
-498
-10,374
8,952
9,715
-8,443
-8,802
4,135
2,648
-8,908
20
1 Interest relating to financial services business is classified as revenues/cost of sales.
(unaudited supplementary
THE GROUP
FINANCIAL
STATEMENTS
BMW GROUP
NOTES TO
Policies
Accounting
Principles and
Financial Statements
Notes to the Group
ACCOUNTING PRINCIPLES
AND POLICIES
BMW Group
↑
120
119
31 December 2015
Subscribed share capital increase out of Authorised Capital
Premium arising on capital increase relating to preferred stock
Other changes
Comprehensive income 31 December 2015
Group
Financial
Statements
Automotive
01
The consolidated financial statements of Bayerische
Motoren Werke Aktiengesellschaft (BMW AG Group
Financial Statements or Group Financial Statements)
at 31 December 2016 have been drawn up in accord-
ance with International Financial Reporting Standards
(IFRS), as endorsed by the European Union (EU), and
the supplementary requirements of § 315a (1) of the
German Commercial Code (HGB). The Group Finan-
cial Statements will be submitted to the operator of
the electronic version of the German Federal Gazette
and can be obtained via the Company Register website.
Bayerische Motoren Werke Aktiengesellschaft, which
has its seat at Petuelring 130, Munich, is registered
in the Commercial Register of the District Court of
Munich under the number HRB 42243.
information)
2016
Financial Services
(unaudited supplementary
information)
2015
Basis of preparation
2016
5,441
The Board of Management authorised the Group
Financial Statements for issue on 14 February 2017.
note 44
In order to provide a better insight into the net
assets, financial position and performance of the
BMW Group, and going beyond the requirements of
IFRS 8 (Operating Segments), the Group Financial
Statements also include balance sheets and income
statements for the Automotive, Motorcycles, Financial
Services and Other Entities segments. The Group
Cash Flow Statement is supplemented by statements
of cash flows for the Automotive and Financial Ser-
vices segments. This supplementary information is
unaudited. Inter-segment transactions relate primarily
to internal sales of products, the provision of funds
for Group companies and the related interest. These
items are eliminated in the relevant "Eliminations"
columns. A description of the nature of the BMW
Group's business and operating activities of segments
→ see is provided in → note 44 ("Explanatory notes to seg-
ment information").
The BMW Group and segment income statements are
presented using the cost of sales method.
The Group currency is the euro. All amounts are dis-
closed in millions of euros (€ million) unless stated
otherwise.
2015
Other comprehensive income for the period after tax
Change in commercial paper
Repayment of non-current other financial liabilities
Change in other operating assets and liabilities
Income taxes paid
-104
-293
-749
298
Change in trade payables
-93
738
-25
1,229
550
-2,417
-3,323
-566
Interest received
Change in trade receivables
Changes in working capital
-8,368
-6,637
Change in deferred taxes
85
77
Other non-cash income and expense items
Change in inventories
-15
Gain/loss on disposal of tangible and intangible assets and marketable securities
-4
-144
Result from equity accounted investments
-441
-518
47
Change in current other financial liabilities
142
-2,755
Proceeds from the sale of marketable securities and investment funds
3,740
5,659
Cash inflow/outflow from investing activities
-5,863
-7,603
-6,880
Issue/buy-back of treasury shares
Payment of dividend for the previous year
Intragroup financing and equity transactions
Interest paid
Proceeds from the issue of bonds
Repayment of bonds
Proceeds from new non-current other financial liabilities
Payments into equity
132
-3,592
215
Cash inflow/outflow from operating activities
3,173
960
Investment in intangible assets and property, plant and equipment
-5,823
-5,889
Investments in marketable securities and investment funds
Proceeds from the disposal of intangible assets and property, plant and equipment
38
Expenditure for investments
-338
-746
Proceeds from the disposal of investments
140
10
2016
Net profit
1 January 2015
Derivative
financial
Currency
translation
differences
Equity
Accumulated other equity
41,027
2,027
attributable to
657
Change in leased products
296
883
Change in provisions
4,686
4,998
-2,526
Depreciation and amortisation of other tangible, intangible and investment assets
shareholders
Securities
47
6,863
-2,102
-2,102
42,764
234
Minority
42,530
24
132
Total
interest
of BMWAG
instruments
-1,337
6,910
239
Other interest and similar income/expenses
Group
Financial
116
115
Total equity and liabilities
78,841 -121,780 -113,026
82,795
Statements
122,029
29
-71
22
7,381
1,012
6,369
137,728
131
→ BMW Group
Statements for Group
2,751
2,670
Current tax
Reconciliation between net profit and cash inflow/outflow from operating activities
6,396
6,910
Cash Flow
Net profit
2016
Group
in € million
CASH FLOW STATEMENTS FOR GROUP AND SEGMENTS
BMW GROUP
and Segments
2015
Dividends paid
-303
1,415
1
893
7,289
27
7,262
-857
-117
1
855
-857
-117
855
6,396
27
6,369
893
-1,904
22
-71
31 December 2016
Subscribed share capital increase out of Authorised Capital
Premium arising on capital increase relating to preferred stock
Other changes
Other comprehensive income for the period after tax
Comprehensive income 31 December 2016
Net profit
Dividends paid
1 January 2016
22
42,764
42,530
-1,337
24
132
-81
-10
234
28
-1,904
217
52
-171
20
-40
-26
-14
20
78
6,721
6,674
1,415
28
-303
-189
-189
47
37,437
47,108
47,363
37,220
-480
141
-723
Total
interest
255
of BMW AG
Equity
attributable to
shareholders
Derivative
financial
instruments
Securities
translation
differences
Currency
Accumulated other equity
Minority
Change in receivables from sales financing
2015
(unaudited supplementary
121
138
-561
-460
37
21
1
1,740
1,426
121
137
-561
-460
Revenues
Cost of sales
Gross profit
Selling and administrative expenses
Other operating income
Statements
Group
Financial
114
113
Basic earnings per share of common stock in €
Basic earnings per share of preferred stock in €
Dilutive effects
Diluted earnings per share of common stock in €
Diluted earnings per share of preferred stock in €
Attributable to shareholders of BMW AG
1,447
Attributable to minority interest
Income taxes
Profit/loss before tax
Financial result
Result from equity accounted investments
Interest and similar income
Interest and similar expenses
Other financial result
Profit/loss before financial result
Other operating expenses
Net profit/loss
1,777
204
211
-3
-5
1,234
1,216
-1,080
-1,006
-57
-7
-1,323
-1,325
1,177
1,250
4
11
-24
→ BMW Group
-55
-6
-73
-49
-528
-389
-664
-772
-18
211
1,975
2,166
-89
-109
42
187
170
Balance Sheets for
Group and Segments
at 31 December
23
Receivables from sales financing
5,147
5,195
428
560
48,032
Other investments
2,546
2,233
2,546
22
Investments accounted for using the equity method
34,965
2,233
37,789
41,865
24
1,595
26
Non-current assets
Other assets
4,114
4,310
Financial assets
1,945
12
Deferred tax
586
1,287
2,208
2,705
2,327
-575
21
313
information)
Motorcycles
(unaudited supplementary
2016
2015
2016
Note
2015
Group
(unaudited supplementary
Automotive
ASSETS
in € million
BALANCE SHEETS FOR GROUP AND
SEGMENTS AT 31 DECEMBER 2016
BMW GROUP
information)
Leased products
2016
Intangible assets
365
17,416
17,566
17,759
17,960
20
2015
Property, plant and equipment
46
6,899
7,705
7,372
8,157
19
48
-663
169
-17
Remeasurement of the net defined benefit liability for pension plans
6,396
6,910
Net profit
2015
2016
30
Note
Statement of Comprehensive Income for Group
→ 60
9.72
10.47
13
Diluted earnings per share of preferred stock in €
9.70
in € million
10.45
-1,858
Deferred taxes
-721
Deferred taxes
71
43
Other comprehensive income from equity accounted investments
-1,301
1,413
-170
Financial instruments used for hedging purposes
Available-for-sale securities
1,012
-401
529
-1,329
Items not expected to be reclassified to the income statement in the future
40
2,008
516
13
Dilutive effects
27
47
Attributable to minority interest
124
132
5,147
10
5,441
6,910
Net profit/loss
-55
-53
-2,376
-2,475
6,396
Diluted earnings per share of common stock in €
5
29
9.72
10.47
13
Basic earnings per share of preferred stock in €
9.70
10.45
Attributable to shareholders of BMW AG
13
124
132
5,142
5,431
6,369
6,863
Basic earnings per share of common stock in €
1,568
Currency translation foreign operations
765
-1,164
-1,294
-613
-712
7
6
-30
3,153
18,484
19,305
-20,586
-22,135
-19,097
-20,017
3,546
7
-30
19
1,981
2,184
78
141
-46
-103
26
-54
-59
-118
238
110
46
35
-103
-230
6
25,681
29
Total comprehensive income attributable to shareholders of BMW AG
47
Total comprehensive income attributable to minority interests
7,289
6,721
6,674
Total comprehensive income
-189
17
Other comprehensive income for the period after tax
-119
1,140
Items expected to be reclassified to the income statement in the future
893
23,739
27
7,262
(unaudited supplementary
2015
2016
2015
information)
(unaudited supplementary
Eliminations
Financial Services
2016
information)
(unaudited supplementary
Other Entities
2016
information)
1,447
2015
4,043
3,935
28
-43
1
2
367
-758
46
-541
50
-172
-518
-441
-5
-1
-138
-337
-3
-12
629
132
11,836
11,464
142
-133
164
-2,595
-15
-1,997
-283
2,295
-246
60
60
-163
-1,706
1
5
316
11
121
302
283
-125
-117
4,876
2,893
810
770
1,441
1,074
32
Current tax
2,787
11
4,577
31
11
579
275
-369
-187
-6,637
29
-8,368
-3,532
3
172
139
128
970
-4,026
85
-9,844
-5,699
48
56
20,111
20,477
9,208
10,198
Current provisions and liabilities
34
263
303
6,856
7,483
7,773
8,512
Other liabilities
35
67,989
35,398
Other Entities
2016
information)
Financial Services
(unaudited supplementary
978
1,077
65,591
83,352
172,174
188,535
Total equity and liabilities
396
449
35,386
88,715
-10,351
3,211
42,160
5,406
3,436
-387
-396
-6,498
-3,196
304
144
-823
-122
6
-10
-5,791
38
9
140
1,481
253
-7,524
42,326
33
Trade payables
5,913
6,191
-2,840
-5,432
Financial liabilities
-1,917
-2,121
23
20
-140
-102
-1,833
information)
90
5,187
4,794
6,122
7,880
Cash and cash equivalents
2
19,907
3,952
21,561
5,087
26
Other assets
1,240
1,000
2,381
4,693
1,938
Current assets
61,831
29
Subscribed capital
EQUITY AND LIABILITIES
978
1,077
83,352
66,864
88,715
188,535
Total assets
592
638
43,022
46,063
172,174
657
25
4,859
492
10,611
11,344
11,071
11,841
27
453
Inventories
439
40,330
42,652
110,343
121,671
25
386
Current tax
Trade receivables
2,825
4,862
6,635
7,065
24
Financial assets
28,178
28
30,228
Receivables from sales financing
139
144
2,453
2,502
2,751
23
4,398
657
29
Other liabilities
2,621
1,942
49,523
55,405
33
34
Financial liabilities
740
2,116
2,795
12
Deferred tax
136
429
103
5,357
6,530
5,009
5,879
31
Other provisions
582
628
4,559
14,506
63,819
73,183
Non-current provisions and liabilities
401
442
5,545
16,693
Capital reserves
4,141
4,621
42,530
47,108
29
Equity attributable to shareholders of BMW AG
-1,181
-41
Minority interest
29
41,027
44,445
29
Revenue reserves
2,027
2,047
Accumulated other equity
4,570
Equity
255
47,363
5,039
31
Other provisions
45
83
1,770
Pension provisions
2,911
4,587
30
33,460
36,624
42,764
234
3,000
-3,299
Group
Financial
Statements
The financial statements of consolidated companies
which are drawn up in a foreign currency are trans-
lated using the modified closing rate method. Under
this method, assets and liabilities are translated at the
closing exchange rate, whilst income and
expenses are
translated at the average exchange rate. Differences
arising on foreign currency translation are presented
in "Accumulated other equity".
Development costs for vehicle and engine projects are
capitalised at manufacturing cost, to the extent that
attributable costs (including development-related
overhead costs) can be measured reliably and both
technical feasibility and successful marketing are
assured. It must also be probable that the development
expenditure will generate future economic benefits.
Capitalised development costs are amortised system-
atically over the estimated product life (usually four to
eleven years) following the start of production.
reliably. Such assets are measured at acquisition
and/or manufacturing cost, as a general rule without
borrowing costs, and, to the extent that they have a
finite useful life, amortised on a straight-line basis
over their estimated useful lives. With the exception
of capitalised development costs, intangible assets
are amortised as a general rule over their estimated
useful lives of between three and 20 years.
Purchased and internally-generated intangible assets
are recognised as assets where it is probable that the
use of the asset will generate future economic benefits
and where the costs of the asset can be determined
Earnings per share are calculated as follows: Basic
earnings per share are calculated for common and
preferred stock by dividing the net profit after minor-
ity interests, as attributable to each category of stock,
by the average number of outstanding shares. The net
profit is accordingly allocated to the different catego-
ries of stock. The portion of the Group net profit for
the year which is not being distributed is allocated
to each category of stock based on the number of
outstanding shares. Profits available for distribution
are determined directly on the basis of the dividend
resolutions passed for common and preferred stock.
Diluted earnings per share are calculated and sepa-
rately disclosed in accordance with IAS 33.
Public sector grants are not recognised until there is
reasonable assurance that the conditions attaching
to them have been complied with and the grants
will be received. The resulting income is recognised
in cost of sales over the periods necessary to match
them with the related costs which they are intended
to compensate.
Revenues relating to operating lease arrangements
are recognised on a straight-line basis over the lease
term. Interest income arising on finance leases and
Profits arising on the sale of vehicles, for which a
Group company retains a repurchase commitment
(buyback contracts), are not immediately recognised.
The difference between the sales and buyback price is
accounted for as deferred income and recognised in
instalments as revenue over the contract term.
If the sale of products includes a determinable amount
for services ("multiple-component contracts"), the
related revenues are deferred and recognised as
income over the service period. Amounts are normally
recognised as income by reference to the pattern of
related expenditure.
Revenues from the sale of products are recognised
when the risks and rewards of ownership of the goods
are transferred to the dealership or customer, provided
that the amount of revenue can be measured reliably,
it is probable that the economic benefits associated
with the transaction will flow to the entity and costs
incurred or to be incurred in respect of the sale can
be measured reliably. Revenues are stated net of set-
tlement discount, bonuses and rebates.
Accounting policies; assumptions, judgements
and estimations
04
1,255.38
134.28
120.25
1,283.86
130.74
1,278.92
123.34
1,274.34
6.97
7.35
7.07
7.34
0.73
0.82
0.74
0.85
1.11
Goodwill arises on first-time consolidation of an
acquired business when the cost of acquisition
exceeds the Group's share of the fair value of the
individually identifiable assets acquired and liabilities
and contingent liabilities assumed.
1.11
If there is any indication of impairment of intangible
assets, or if an annual impairment test is required to
be carried out (i.e. intangible assets with an indef-
inite useful life, intangible assets during the devel-
opment phase and goodwill), an impairment test is
performed. Each individual asset is tested separately
unless the cash flows generated by the asset cannot
be distinguished to a large degree from the cash flows
generated by other assets or other groups of assets.
In this case, impairment is tested at the level of a
cash-generating unit.
If the reason for a previously recognised impairment
loss no longer exists, the impairment loss is reversed
up to the level of the recoverable amount, capped at
the level of rolled-forward amortised cost. Impairment
losses on goodwill are not reversed.
All items of property, plant and equipment are measured
at acquisition or manufacturing cost less accumulated
depreciation and accumulated impairment losses. The
cost of internally constructed plant and equipment
comprises all costs which are directly attributable
to the manufacturing process as well as an appro-
priate proportion of production-related overheads.
This includes production-related depreciation and
amortisation as well as an appropriate proportion
of administrative and social costs. As a general rule,
borrowing costs are not included in acquisition or
manufacturing cost unless they are directly attrib-
utable to the asset. The carrying amount of items of
depreciable property, plant and equipment is written
down recording scheduled usage-based depreciation -
as a general rule on a straight-line basis - over the
useful lives of the assets. Depreciation is recorded as
an expense in the income statement.
The risk-adjusted interest rates, calculated using a
CAPM model, also take into account specific peer-
group information relating to beta-factors, capital
structure data and borrowing costs. In conjunction
with the impairment tests for cash-generating units,
sensitivity analyses are performed for the main
assumptions in order to rule out that conceivable
changes to the assumptions used to determine the
recoverable amount would result in the requirement
to recognise an impairment loss.
13.4
13.4
12.0
12.0
12.0
12.0
2015
2016
Financial Services
Motorcycles
Automotive
in %
factors:
Cash flows of the Automotive and Motorcycles
cash-generating units are discounted using a risk-ad-
justed pre-tax cost of capital (WACC). In the case of
the Financial Services cash-generating unit, a sec-
tor-compatible pre-tax cost of equity capital is used.
Calculations were based on the following discount
Policies
Notes to the Group
Financial Statements
Accounting
Principles and
BMW Group
Group
Financial
Statements
↑
124
123
The value in use is determined on the basis of a present
value computation. Cash flows used for the purposes
of this calculation are derived from long-term forecasts
approved by management. The long-term forecasts
themselves are based on detailed forecasts drawn up
at an operational level and, based on a planning period
of six years, correspond roughly to a typical product's
life cycle. For the purposes of calculating cash flows
beyond the planning period, the asset's assumed
residual value does not take growth into account.
Forecasting assumptions are continually brought up
to date and regularly compared with external sources
of information. The assumptions used take account
in particular of expectations of the profitability of the
product portfolio, future market share developments,
macroeconomic developments (such as currency,
interest rate and raw materials prices) as well as the
legal environment and past experience.
As part of the process of assessing recoverability, it is
generally necessary to apply estimations and assump-
tions - in particular regarding future cash inflows and
outflows and the length of the forecast period – which
could differ from actual amounts. Actual amounts
may differ from the assumptions and estimations
used if business conditions develop differently to the
BMW Group's expectations.
For the purposes of the impairment test, the carrying
amount of an asset (or a cash-generating unit) is com-
pared with the recoverable amount. The first step of
the impairment test is to determine the value in use.
If the value in use is lower than the carrying amount,
the next step is to determine the fair value less costs to
sell and compare the amount so determined with the
asset's carrying amount. If the fair value is lower than
the carrying amount, an impairment loss is recognised,
reducing the carrying amount to the higher of the
asset's value in use or fair value less costs to sell.
The following uniform useful lives are applied through-
out the BMW Group:
1.09
2015
28
178
157
21
Total
Foreign
Germany
31 December 2016
31 December 2015
Included for the
first time in 2016
No longer included
in 2016
Included at
Included at
The following changes took place in the Group report-
ing entity in the financial year 2016:
As a general rule, associated companies and joint
ventures are accounted for using the equity method,
with measurement on initial recognition based on
acquisition cost.
In the case of a joint venture, the parties which have
joint control only have rights to the net assets of the
arrangement.
The BMW Group is also collaborating with Toyota
Motor Corporation, Toyota City, to develop a sports
car. This collaboration is accounted for as a joint
operation.
In the case of a joint operation, the parties that have
joint control of the arrangement have rights to the
assets and obligations for the liabilities, relating to the
arrangement. Assets, liabilities, revenues and expens-
es of a joint operation are recognised proportionately
in the Group Financial Statements on the basis of the
BMW Group entity's rights and obligations (propor-
tionate consolidation). Together with SGL Carbon SE,
Wiesbaden, companies of the BMW Group are party to
three joint operations that manufacture carbon fibres
and carbon fibre cores used in vehicle production.
Joint operations and joint ventures are forms of joint
arrangements. Such an arrangement exists when a
BMW Group entity jointly carries out activities on the
basis of a contractual agreement with a third party.
An entity is classified as an associated company if
BMW AG either directly or indirectly - has the
ability to exert significant influence over the entity's
operating and financial policies. As a general rule,
there is a rebuttable assumption that the Group has
significant influence if it holds between 20% and 50%
of the associated company's voting power.
-
An entity is deemed to be controlled if BMW AG -
either directly or indirectly - has power over it, is
exposed or has rights to variable returns from its
involvement with the entity and has the ability to
influence those returns through its power over the
entity.
When assessing whether an investment gives rise to
a controlled entity, an associated company, a joint
operation or a joint venture, the BMW Group consid-
ers all relevant contractual arrangements and other
circumstances, and not just the structure and legal
form of the entity. The ultimate classification may
require the use of judgement. A new assessment is
made whenever there is an indication of a change
in the previous assessment regarding (joint) control.
All consolidated subsidiaries have the same year-end as
BMW AG with the exception of BMW India Private Ltd.
and BMW India Financial Services Private Ltd., whose
year-ends are 31 March in accordance with local legal
requirements.
The BMW Group Financial Statements include
BMW AG, all material subsidiaries including one spe-
cial purpose securities fund and 40 structured entities,
over which BMW AG - either directly or indirectly.
exercises control. The structured entities are used
exclusively in conjunction with the BMW Group's
asset-backed financing arrangements.
consolidation principles
Group reporting entity and
02
28
1.06
7
21
2016
31.12.2015
31.12.2016
Average rate
Closing rate
Korean Won
Japanese Yen
Chinese Renminbi
British Pound
US Dollar
↑
The exchange rates of currencies which have a material
impact on the Group Financial Statements were as
follows:
rate prevailing at the date of first-time recognition.
At the end of the reporting period, foreign currency
receivables and payables are measured using the clos-
ing exchange rate. The resulting unrealised gains and
losses, as well as the subsequent realised gains and
losses arising on settlement, are recognised in the
income statement in accordance with the underlying
substance of the relevant transactions.
Foreign currency receivables and payables in the sin-
gle entity accounts of BMW AG and subsidiaries are
measured on initial recognition using the exchange
Foreign currency translation
03
Policies
Notes to the Group
Financial Statements
Accounting
Principles and
BMW Group
Statements
Group
Financial
122
121
199
178
7
For machinery used in multiple-shift operations,
depreciation rates are increased to account for the
additional utilisation. If there is any indication of
impairment of property, plant and equipment, an
impairment test is performed as described above for
intangible assets.
on retail customer/dealership financing is recognised
using the effective interest method.
Leased items of property, plant and equipment that are allo-
cated to the BMW Group on the grounds of economic
ownership (finance leases) are measured on initial rec-
ognition at their fair value or at the net present value
of the minimum lease payments, if lower. The assets
are depreciated using the straight-line method over
their estimated useful lives or over the lease period, if
shorter. The obligations for future lease instalments
are recognised as other financial liabilities, measured
at their net present value.
18.12.2014
(Initiative to Improve Disclosure Requirements - Amendments to IAS 1)
Presentation of Financial Statements
IAS 1
Standard/Interpretation
EU
Date
of mandatory
application
Date of
mandatory
application
IASB
IASB
Date of
issue by
(a) Standards and Revised Standards significant for
the BMW Group and applied for the first time in
the financial year
2016:
Financial reporting rules
05
Policies
Accounting
Principles and
Notes to the Group
Financial Statements
BMW Group
Statements
Group
Financial
130
↑
129
note 39
→ see in note 39.
The share-based remuneration programmes for
Board of Management members and senior heads of
department entitles BMW AG to elect whether to settle
its commitments in cash or with shares of BMW AG
common stock. Following the decision to settle in cash,
the share-based remuneration programmes for Board
of Management members and senior heads of depart-
ment are accounted for as cash-settled, share-based
remuneration programmes. Further information on
share-based remuneration programmes is provided
1.1.2016
ed to be settled in shares are measured at their fair
value at grant date. The related expense is recognised
in the income statement (as personnel expense)
over the vesting period, with a contra (credit) entry
recorded against capital reserves. Share-based remu-
neration programmes expected to be settled in cash
are revalued to their fair value at each balance sheet
date between the grant date and the settlement date
and on the settlement date itself. The expense for such
programmes is recognised in the income statement
(as personnel expense) over the vesting period of the
programmes and presented in the balance sheet as
a provision.
1.1.2016
(b) Financial reporting pronouncements issued by
the IASB that are significant for the BMW Group,
but have not yet been applied:
The impact of adoption of IFRS 9 on the Group Finan-
cial Statements is currently being investigated. Based
on analyses to date, the accounting treatment for
specific financial assets that do not comply with the
stipulated cash flow criteria may have to be changed,
by reclassifying them from the "measured at amortised
cost" category to the "measured at fair value” cate-
gory. Based on the current assessment, the change
would only affect a limited volume of assets, with the
consequence that the impact on measurement is not
expected to be material.
IFRS 9 (Financial Instruments) contains new require-
ments for the classification and measurement of
financial assets that are based on the reporting
entity's business model and its contractual cash flow
characteristics ("Solely Payments of Principal and
Interest" (SPPI) criterion). IFRS 9 also gives rise to
a new model for determining impairment based on
expected credit losses. Furthermore, the requirements
for hedge accounting were revised with the aim of
bringing the accounting treatment more into line with
the reporting entity's risk management activities.
No
1.1.2019
13.1.2016
12.4.2016
11.9.2015
1.1.2018
1.1.2018
1.1.2018
28.5.2014
1.1.2018
24.7.2014
EU
Date
of mandatory
application
Date of
mandatory
application
IASB
Date of
issue by
IASB
Leases
IFRS 16
Revenue from Contracts with Customers
IFRS 15
The use of judgement is required when the BMW Group
enters into lease arrangements, in particular when
assessing the transfer of economic ownership of a
leased item.
IFRS 9
Standard/Interpretation
In this context, the BMW Group has examined the
contents of the Notes to the Group Financial State-
ments and the Combined Management Report and
applied the principle of materiality in the Group
Financial Statements for the year ended 31 Decem-
ber 2016, mainly by revising the presentation and
eliminating redundancies.
7
The Amendments to IAS 1 (Presentation of Financial
Statements) relate primarily to clarifications concern-
ing the presentation of, and disclosures in, financial
statements. The amendments emphasise the principle
that it is only necessary to disclosure information if it
is material for users of the financial statements, even
in cases where specific disclosures in an IFRS are
explicitly defined as minimum requirements.
Share-based remuneration programmes which are expect-
Financial Instruments
Related party disclosures comprise information on
related individuals or entities which control
the BMW Group or which are controlled by the
BMW Group, unless such parties are already included
in the Group Financial Statements of BMW AG as con-
solidated companies. Control is defined as ownership
of more than one half of the voting power of BMW AG
or the power to direct, by statute or agreement, the
financial and operating policies of the management of
the Group. In addition, the disclosure requirements
also cover transactions with associated companies,
joint ventures and individuals that have the ability
to exercise significant influence over the financial
and operating policies of the BMW Group. This also
includes close relatives and intermediary entities.
Significant influence over the financial and operating
policies of the BMW Group is presumed when a party
holds 20% or more of the voting power of BMW AG.
In addition, the requirements contained in IAS 24
relating to key management personnel and close
members of their families or intermediary entities
are also applied. In the case of the BMW Group, this
applies to members of the Board of Management and
the Supervisory Board. Non-consolidated subsidiaries,
joint ventures and associated companies also qualify
as related parties. Details relating to these entities
are provided in the list of investments in → note 45.
The recognition of impairment losses on receivables
relating to the industrial side of the business is also,
as far as possible, based on the same procedures
applied to financial services business. The impair-
ment losses are recorded in separate accounts and
are derecognised at the same time the corresponding
written-down receivables are derecognised.
Receivables from sales financing are measured at amor-
tised cost using the effective interest rate method.
Impairment allowances are recognised both on a
specific-item and a group basis. For these purposes,
the main factors taken into consideration are past
experience, current market data (such as the level
of arrears), rating classes and scoring information.
Specific allowances are recognised if there is objective
evidence of impairment. In the retail customer credit
financing and leasing lines of business, the existence
of overdue balances or the incidence of similar events
in the past are examples of such objective evidence.
In the event of overdue receivables, allowances are
always recognised individually based on the length
of period of the arrears. In the case of dealership
financing receivables, the allocation of the dealership
to a corresponding rating category is also deemed to
represent objective evidence of impairment. If there is
no objective evidence of impairment, allowances are
recognised using a portfolio approach based on similar
groups of assets. Company-specific loss probabilities
and loss ratios, derived from historical data, are used
to measure allowances on similar groups of assets.
Policies
Notes to the Group
Financial Statements
Accounting
Principles and
BMW Group
↑
126
125
An assessment is made on a regular basis whether
there is any objective evidence that a financial asset
or group of assets may be impaired. For the purposes
of assessing possible impairment, the BMW Group
takes account of all available information, such as
market conditions and prices as well as the length
of time and the scale of the decline in value. In the
case of equity capital instruments that are listed on a
stock market, it is assumed that an item is impaired if
its fair value falls significantly (more than 20%) or on
a prolonged basis (more than 5% over nine months)
below acquisition cost.
Non-derivative financial assets that are not classified
as "loans and receivables" or "held-to-maturity invest-
ments" or as items measured "at fair value through
profit and loss" are classified as "available-for-sale”.
Financial assets that are classified as loans and receiva-
bles are measured at amortised cost using the effective
interest method. All financial assets for which pub-
lished price quotations in an active market are not
available and whose fair value cannot be determined
reliably are measured at cost.
Subsequent to initial recognition, financial assets
which are available-for-sale or held-for-trading or for
which the fair value option is applied, are measured at
their fair value. The fair values shown are computed
using market information available at the balance
sheet date, on the basis of prices quoted by the
contract partners or using appropriate measurement
methods, e.g. discounted cash flow models.
The fair value option is applied by the BMW Group
for non-current marketable securities with embedded
derivatives. The related gains and losses are presented
in the income statement line item "Other financial
result". Related interest income and expenses are
presented in the net interest result.
The Group's financial assets are allocated to either
cash funds or to the categories "loans and receivables",
"available-for-sale", "held for trading” or “fair value
option".
On initial recognition, financial assets are measured
at their fair value. Transaction costs are included in
the fair value unless the financial assets are allocated
to the category "financial assets measured at fair value
through profit or loss".
Investments in non-consolidated subsidiaries, non-con-
solidated joint operations and interests in associated
companies, joint ventures and participations not
accounted for using the equity method, are reported
as other investments, measured at their fair value. If
this value is not available or cannot be determined
reliably, they are measured at cost.
Investments accounted for using the equity method are
(except when the investment is impaired) measured
at the Group's share of equity, taking account of fair
value adjustments on acquisition.
2 to 25
3 to 21
8 to 50
Other equipment, factory and office equipment
Plant and machinery
Factory and office buildings, residential buildings, fixed
installations in buildings and outside facilities
in years
Where Group products are recognised by BMW Group
entities as leased products under operating leases,
they are measured at manufacturing cost, plus any
initial direct costs. All other leased products are
measured at acquisition cost. All leased products are
depreciated over the period of the lease using the
straight-line method down to their expected residual
value. Changes in residual value expectations are rec-
ognised - in situations where the recoverable amount
of the lease exceeds the asset's carrying amount - by
adjusting scheduled depreciation prospectively over
the remaining term of the lease. If the recoverable
amount is lower than the asset's carrying amount,
an impairment loss is recognised for the shortfall.
A test is carried out at each balance sheet date to deter-
mine whether an impairment loss recognised in prior
years no longer exists or has decreased. In these cases,
the carrying amount of the asset is increased to the
recoverable amount, at a maximum up to the amount
of the asset's amortised cost. Assumptions need to
be made regarding future residual values, given that
they represent a significant portion of future cash
inflows. In this context, internally available historical
data, current market data and forecasts of external
institutions are taken into account. The assumptions
applied are regularly validated by comparison with
external data.
→ see
note 45
Derivative financial instruments are used within the
BMW Group for hedging purposes in order to reduce
currency, interest rate, fair value and market price
risks arising from operating activities and the relat-
ed financing requirements. All derivative financial
instruments are measured at their fair value. The fair
values of derivative financial instruments are deter-
mined using measurement models, as a consequence
of which there is a risk that the amounts calculated
could differ from realisable market prices on disposal.
Observable financial market price spreads are taken
into account in the measurement of derivative finan-
cial instruments. The supply of data to the model used
to calculate fair values also takes account of tenor and
currency basis spreads.
In addition, the Group's own default risk and that of
counterparties is taken into account on the basis of
credit default swap values for market contracts with
matching terms. The BMW Group applies the option
of measuring the credit risk for a group of financial
assets and financial liabilities on the basis of its net
exposure. Portfolio-based value adjustments to the
individual financial assets and financial liabilities are
allocated using the relative fair value approach (net
method).
A financial instrument is a contract that gives rise to a
financial asset of one entity and a financial liability or
equity instrument of another entity. Financial assets
are accounted for on the basis of the settlement date.
Deferred taxes are recognised on all temporary dif-
ferences between the tax and accounting bases of
assets and liabilities and on consolidation procedures.
Deferred tax assets also include claims to future tax
reductions which arise from the expected usage of
existing tax losses available for carryforward to the
extent that future usage is probable. The calculation of
deferred tax assets requires assumptions to be made
with regard to the level of future taxable income and
the timing of recovery of deferred tax assets. These
assumptions take account of forecast operating results
and the impact on earnings of the reversal of taxable
temporary differences. Since future business devel-
opments cannot be predicted with certainty and to
some extent cannot be influenced by the BMW Group,
the measurement of deferred tax assets is subject to
uncertainty.
-
In those cases where hedge accounting is applied,
changes in fair value are recognised in the income
statement or in other comprehensive income as a
component of accumulated other equity, depending
on whether the hedging relationship is classified as
a fair value hedge or a cash flow hedge. In the case
of a fair value hedge, the results of the fair value
measurement of the derivative financial instruments
and the related hedged items are recognised in the
income statement. Fair value hedges are mainly used
to hedge the market prices of bonds, other financial
liabilities and receivables from sales financing. In the
case of a cash flow hedge, the effective portion of
the fair value gain or loss on the derivative financial
instrument is recognised directly in accumulated other
equity. The ineffective portion of the fair value gain or
loss is recognised in the income statement. Amounts
recorded in accumulated other equity are recognised
subsequently in the income statement when the
hedged item (usually external revenue) is recognised
in the income statement. If, contrary to the normal
case within the BMW Group, hedge accounting cannot
be applied, the gains or losses arising on the fair value
measurement of derivative financial instruments are
recognised immediately in the income statement.
Financial liabilities are measured on first-time recogni-
tion at their fair value. Transaction costs are also taken
into account, except for financial liabilities allocated to
the category "financial liabilities measured at fair value
through profit or loss". Subsequent to initial recogni-
tion, liabilities are – with the exception of derivative
financial instruments measured at amortised cost
using the effective interest method.
If the recognition and measurement criteria relevant
for provisions are not fulfilled and the outflow of
resources to settle the matter is not probable, the
potential obligation is disclosed as a contingent liability.
The recognition and measurements of provisions for
litigation and liability risks necessitates making assump-
tions regarding the probability of occurrence, the
amount involved and the duration of the legal dispute.
These assumptions, especially the assumption about
the outcome of legal proceedings, are subject to a high
degree of uncertainty.
The measurement of provisions for statutory and
non-statutory warranty obligations (statutory, contractual
and voluntary) involves estimations. In addition to
statutorily prescribed manufacturer warranties, the
BMW Group also offers various categories of guar-
antee depending on the product and sales market
concerned. These provisions are recognised when
the risks and rewards of ownership of the goods are
transferred to the dealership or retail customer or
when a new category of warranty is introduced. In
order to determine the level of the provision, various
factors are taken into consideration, including estima-
tions based on past experience with the nature and
amount of claims. The future level of potential repair
costs and price increases per product and market are
also taken into account. Provisions for warranties are
adjusted regularly to take account of new circumstanc-
es and the impact of any changes recognised in the
income statement. Specific and expected warranty
items, such as vehicle recall actions, are also included.
Similar estimates are also made in conjunction with
the measurement of expected reimbursement claims,
which, if recognised, are presented as separate assets.
Other provisions are recognised when the BMW Group
has a present obligation (legal or constructive) arising
from past events, the settlement of which is proba-
ble and when a reliable estimate can be made of the
amount of the obligation. Provisions with a remaining
period of more than one year are measured at their
net present value.
in the income statement.
Past service cost arises where a BMW Group compa-
ny introduces a defined benefit plan or changes the
benefits payable under an existing plan. This cost
is recognised immediately in the income statement.
Similarly, gains and losses arising on the settlement
of a defined benefit plan are recognised immediately
Net interest expense on the net obligation and/or
net interest income on the net fund assets of defined
benefit plans are presented separately within the
financial result. All other costs relating to allocations
to pension provisions are allocated to costs by function
in the income statement.
The calculation of the amount of the provision requires
assumptions to be made with regard to discount
factors, salary trends, employee fluctuation and the
life expectancy of employees. Discount factors are
determined by reference to market yields at the end
of the reporting period on high quality fixed-interest
corporate bonds. The salary level trend refers to the
expected rate of salary increase which is estimated
annually depending on inflation and the career devel-
opment of employees within the Group.
Policies
BMW Group
Notes to the Group
Financial Statements
Accounting
Principles and
Remeasurements of the net liability arise from
changes in the present value of the defined benefit
obligation, the fair value of the plan assets or the asset
ceiling. Reasons for remeasurements include changes
in financial and demographic assumptions as well as
changes in the detailed composition of beneficiaries.
Remeasurements are recognised immediately in
"Other comprehensive income" and hence directly
in equity (within revenue reserves).
↑
Inventories of raw materials, supplies and goods for
resale are stated at the lower of average acquisition
cost and net realisable value.
Current income taxes are computed throughout the
BMW Group in accordance with tax legislation appli-
cable in each relevant country. In situations where
judgement was necessary to determine the amount
of a tax exposure to be recognised in the financial
statements, there is always a possibility that local tax
authorities may reach a different conclusion.
128
127
In the case of externally funded plans, the pension
obligation is offset against plan assets measured at
their fair value. If the plan assets exceed the pension
obligation, the surplus is tested for recoverability. In
the event that the BMW Group has a right of reim-
bursement or a right to reduce future contributions,
it reports an asset (within "Other financial assets"),
measured on the basis of the present value of the
future economic benefits attached to the plan assets.
If the plan is externally funded, a liability is recog-
nised under pension provisions where the obligation
exceeds fund assets.
Group
Financial
Statements
Provisions for pensions and similar obligations are meas-
ured using the projected unit credit method. Under
this method, not only obligations relating to known
vested benefits at the reporting date are recognised,
but also the effect of future expected increases in
pensions and salaries. The calculation is based on
an independent actuarial valuation which takes into
account all relevant biometric factors.
Assets held for sale and disposal groups held for sale are
presented separately in the balance sheet in accord-
ance with IFRS 5, if the carrying amount of the rel-
evant assets will be recovered principally through a
sale transaction rather than through continuing use.
This situation only arises if the assets can be sold
immediately in their present condition, the sale is
expected to be completed within one year from the
date of classification and the sale is highly probable.
At the date of classification, property, plant and equip-
ment, intangible assets and disposal groups which are
being held for sale are measured at the lower of their
carrying amount and their fair value less costs to sell
and scheduled depreciation/amortisation ceases. This
does not apply, however, to items within the disposal
group which are not covered by the measurement
rules contained in IFRS 5. Simultaneously, liabilities
directly related to the sale are presented separately on
the equity and liabilities side of the balance sheet as
"Liabilities in conjunction with assets held for sale".
Cash and cash equivalents, comprising mainly cash on
hand and cash at bank with an original term of up to
three months, are measured at fair value.
Work in progress and finished goods are stated at
the lower of manufacturing cost and net realisable
value. Manufacturing cost comprises all costs which
are directly attributable to the manufacturing process
as well as an appropriate proportion of production-re-
lated overheads. This includes production-related
depreciation and amortisation and an appropriate
proportion of administrative and social costs. Bor-
rowing costs are not included in the acquisition or
manufacturing cost of inventories.
of €73 million (2015: positive amount of €90 million)
and within "Financial instruments used for hedging
purposes" with a positive amount of €87 million (2015:
negative amount of €15 million).
Other comprehensive income arising at the level
of equity accounted investments is reported in the
Statement of Changes in Equity within "Currency
translation foreign operations" with a negative amount
893
778
-189
139
140
2 Including assets under construction of €1,187 million.
Statements
BMW Group
1 Including mergers.
111
-192
64
917
Group
Financial
3
-29
→ Notes to the
459
-1,301
3
-842
Other comprehensive income from equity accounted investments
43
14
71
4
75
Currency translation foreign operations
-230
-230
765
765
Other comprehensive income
867
50,097
28
14,452
18,011
1,738
36,969
Leased products
1,462
3,680
766
47,113
Property, plant and equipment
1,597
4
1,268
1,328
-1,691
42,266
Investments accounted for using
the equity method
1,088
656
15
233
64
68
Other investments
Non-current marketable securities
28
641
68
3
226
Investments in non-consolidated subsidiaries
2,233
148
1,293
Participations
-680
tax
Financial instruments used for hedging purposes
in € million
3,253
3,455
Interest income on loan financing
8,181
9,258
leased to customers
Sales of products previously
8,965
9,507
Income from lease instalments
68,643
68,681
Sales of products and related goods
133
2016
2015
Other income
3,262
An analysis of revenues by segment and region is
shown in the segment information in → note 44.
4
2,064
2,092
development costs
New expenditure for capitalised
-1,166
Research and development expenditure was as
follows:
-1,222
4,271
4,294
Research and development expenses
92,175
94,163
Revenues
3,133
Amortisation
2,008
Cost of sales is reduced by public-sector subsidies
in the form of reduced taxes on assets and reduced
consumption-based taxes amounting to €69 million
(2015: €71 million).
2015
The BMW Group intends to apply the new Standard
entirely retrospectively at the adoption date.
A different accounting treatment may be required if
buyback arrangements are in place with customers,
resulting in a shift in the timing of revenue recognition.
The resulting impact is not expected to be significant.
In the case of multi-component contracts with variable
consideration components, changes in the allocation
of transaction prices will result in higher amounts
being recognised for vehicle sales and a lower level
of amounts deferred for service contracts. However,
the shift in the timing of revenue recognition is not
expected to have a significant impact at the date of
first-time adoption or in subsequent periods.
529
-1,329
1,413
-401
1,012
Available-for-sale securities
40
-12
28
-170
53
-117
131
132
↑
↑
2016
in € million
Revenues by activity comprise the following:
Revenues
06
NOTES TO THE INCOME
STATEMENT
Early adoption of all of the new IFRS requirements is
permitted. Currently, the BMW Group does not intend
to adopt any of the new requirements early.
Warranty expenses include the accrued expense for
vehicle recall actions, the cost of which is expected to
exceed amounts previously recognised. Accordingly,
a further amount of €678 million was allocated to
the warranty provision for various issues, including
airbags supplied by the Takata group of companies,
the ISOFIX attachment system used for child car seats,
and costs relating to the provision of the network
service for telematics (2G).
Given that the BMW Group is still in a very early phase
of considering the implications of introducing IFRS 16,
the impact of the Standard on the Group Financial
Statements from a lessee and lessor perspective cannot
be wholly foreseen at present. Similarly, the transi-
tion method to be used on first-time adoption of the
Standard has not yet been stipulated.
The new Standard IFRS 16 (Leases) stipulates a
completely new approach to accounting for leases
by lessees. Whereas under IAS 17, the accounting
treatment of a lease was determined on the basis of
the transfer of risks and rewards incidental to own-
ership of the asset, in the future, all leases will be
required to be accounted for as a general rule by the
lessee in a similar way to finance leases. Recognition
exemptions are available for short-term leases and for
leasing assets with a low value.
Income Statement
Notes to the
Policies
Notes to the Group
Financial Statements
Accounting
Principles and
BMW Group
Group
Financial
Statements
The accounting requirements for lessors, particularly
in relation to the requirement to classify leases, will
remain largely unchanged.
2,020
231
2,601
2,672
222
32
234
22
2,606
Other facilities, factory and office equipment
35,924
1,589
691
1,510
-185
35,497
Plant and machinery
10,940
Advance payments made and construction in progress
34
1,600
1,587
45,588
15,401
18,339
316
42,334
Leased products
51,789
1,848
3,631
-155
50,161
Property, plant and equipment
2,253
3
-954
23
→ see
300
-15
Other intangible assets
Goodwill
Development costs
31.12.2016
Disposals
Reclassi-
fications
Additions
Translation
differences
1.1.20161
in € million
Acquisition and manufacturing cost
Analysis of changes in Group tangible, intangible and investment assets 2016
18
NOTES TO THE BALANCE SHEET
Balance Sheet
Intangible assets
10,522
2,092
369
10,458
buildings on third party land
Land, titles to land, buildings, including
13,348
1,188
1,495
58
Investments accounted for using
369
1,130
2,192
-2
12,346
100
2
1,455
11,484
Advance payments made and construction in progress
the equity method
513
buildings on third party land
Land, titles to land, buildings, including
12,345
1,454
152
1,035
369
10,522
883
2,064
2,210
15
11,155
146
15
1,445
9,806
369
164
295
215
34
218
47
2,517
Other facilities, factory and office equipment
35,469
1,168
1,362
1,954
551
32,770
Plant and machinery
10,430
75
240
9,341
Intangible assets
Other intangible assets
28
Non-current marketable securities
710
2
56
656
Participations
500
56
321
2
233
Investments in non-consolidated subsidiaries
2,546
200
28
Other investments
917
2
Goodwill
Development costs
31.12.2015
Disposals
Reclassi-
fications
Additions
Translation
differences
2,233
1.1.20151
in € million
Analysis of changes in Group tangible, intangible and investment assets 2015
2 Including assets under construction of €1,760 million.
1 Including first-time consolidation.
1,238
58
377
Acquisition and manufacturing cost
Remeasurement of the net defined benefit liability for pension plans
Total research and development
expenditure
5,169
6,289.2
573.7
€ million
€ million
6,369.4
6,862.9
€ million
2015
2016
Dividend per share of common stock
Dividend per share of preferred stock
*Proposal by management.
Basic earnings per share of common stock
Basic earnings per share of preferred stock
Average number of preferred stock shares in circulation
Average number of common stock shares in circulation
Profit attributable to preferred stock
Profit attributable to common stock
Net profit for the year after minority interest
Earnings per share
13
The tax returns of BMW Group entities are checked
regularly by German and foreign tax authorities. Tak-
ing account of a variety of factors - including existing
interpretations, commentaries and legal decisions
taken relating to the various tax jurisdictions and the
BMW Group's past experience - adequate provision
has, to the extent identifiable and probable, been
made for potential future tax obligations.
7
Deferred taxes are not recognised on retained prof-
its of €38.7 billion (2015: €33.7 billion) of foreign
subsidiaries, as it is intended to invest these profits
to maintain and expand the business volume of the
relevant companies. A computation was not made of
the potential impact of income taxes on the grounds
of disproportionate expense.
Deferred taxes recognised directly in equity in the
financial year 2016 decreased by an additional €29 mil-
lion (2015: increased by €43 million) on currency
translation.
171
468
253
49
448
-561
-520
724
5,839.6
529.8
number
number
601,995,196 601,995,196
54,809,375
Comprehensive
Statement of
→ Notes to the
Income Statement
Notes to the
Financial Statements
Notes to the Group
BMW Group
Statements
Group
Financial
个个
138
ings per share correspond to basic earnings per share.
diluted earn-
-72
financial years. As in the previous year,
3.22
3.52*
€
3.20
3.50*
€
9.72
10.47
€
9.70
-1,858
10.45
€
54,499,460
Earnings per share of preferred stock are computed
on the basis of the number of preferred stock shares
entitled to receive a dividend in each of the relevant
Income
163
85
13,700
715
797
3,281
3,481
478
298
2,654
2,760
178
184
4,187
4,966
548
536
2,109
2,861
1,363
1,448
11
17
5
3
6,260
6,987
367
467
376
305
12,435
13,683
12,104
-485
-87
171
2015
2016
Deferred taxes at 31 December (assets (-)/ liabilities (+))
thereof relating to fair value gains and losses on financial instruments and marketable securities recognised directly in equity
thereof relating to the remeasurements of net liabilities for defined benefit pension plans
Exchange rate impact and other changes
Change in deferred taxes recognised directly in equity
Deferred tax expense (+)/income (-) recognised through income statement
Deferred taxes at 1 January (assets (−)/liabilities (+))
in € million
Changes in deferred tax assets and liabilities during
the reporting period can be summarised as follows:
7
Deferred taxes recognised directly in equity amounted
to €1,812 million (2015: €2,004 million).
137
77
Netting relates to the offset of deferred tax assets and
liabilities within individual entities or tax groups to
the extent that they relate to the same tax authorities.
Capital losses available for carryforward in the United
Kingdom which do not relate to ongoing operations
decreased to €1,926 million (2015: €2,234 million) due
to currency factors. As in previous years, deferred tax
assets recognised on these tax losses - amounting to
€327 million at the end of the reporting period (2015:
€402 million) – were fully written down since they can
only be utilised against future capital gains.
€468 million). This includes an amount of €464 million
(2015: €345 million), for which a valuation allowance
of €158 million (2015: €100 million) was recognised
on the related deferred tax asset. For entities with
tax losses available for carryforward, a net surplus
of deferred tax assets over deferred tax liabilities is
reported at 31 December 2016 amounting to €90 mil-
lion (2015: €104 million). Deferred tax assets are
recognised on the basis of management's assessment
of whether it is probable that the relevant entities
will generate sufficient future taxable profits, against
which deductible temporary differences can be offset.
-
Tax loss carryforwards – for the most part usable with-
out restriction amounted to €637 million (2015:
-
171
2,116
2,795
468
-9,988
-10,888
-9,988
1,945
2,327
-10,888
-502
-
20
14
The income statement includes personnel expenses
as follows:
thereof reclassifications to the income statement
thereof gains/losses arising in the period under report
Financial instruments used for hedging purposes
thereof reclassifications to the income statement
-26
79
-170
40
thereof gains/losses arising in the period under report
Available-for-sale securities
1,012
-1,329
Items not expected to be reclassified to the income statement in the future
-401
529
1,413
-1,858
Remeasurement of the net defined benefit liability for pension plans
Deferred taxes
2015
2016
in € million
Other comprehensive income for the period after tax
comprises the following:
Disclosures relating to the statement of total
comprehensive income
17
INCOME
NOTES TO THE STATEMENT
OF COMPREHENSIVE
A large part of these amounts relate to public sector
grants for the promotion of regional structures and
to subsidies received for plant expansions.
Government grants and government assistance
Income from asset-related and performance-related
grants, amounting to €31 million (2015: €33 million)
and €126 million (2015: €132 million) respectively,
were recognised in the income statement in 2016.
16
-39
-144
2,008
-1,301
After
Deferred
taxes
tax
tax
Before
After
Deferred
taxes
Before
tax
2015
2016
in € million
Deferred taxes on components of other comprehen-
sive income are as follows:
893
-189
The number of employees at the end of the reporting
period is disclosed in the Combined Management
Report.
Other comprehensive income for the period after tax
1,140
Items expected to be reclassified to the income statement in the future
765
-230
Currency translation foreign operations
516
-721
71
43
Other comprehensive income from equity accounted investments
Deferred taxes
1,318
550
-2,619
1,458
-119
Personnel expenses
119,688
The fee expense shown for KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin, relates only to services
provided on behalf of BMW AG and its German
subsidiaries.
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Other services
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Tax advisory services
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Audit of financial statements
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Other attestation services
2015
2016
year was:
The average number of employees during the
Personnel expenses include €61 million (2015: €48 mil-
lion) of costs incurred to adjust the workforce size.
The total pension expense for defined contribution
plans of the BMW Group amounted to €90 million
(2015: €71 million). Employer contributions paid to
state pension insurance schemes totalled €607 million
(2015: €571 million).
10,870
11,535
in € million
733
802
Social insurance expenses
Personnel expenses
1,250
1,152
Pension and welfare expenses
8,887
9,581
Wages and salaries
The fee expense pursuant to § 314 (1) no. 9 HGB
recognised in the financial year 2016 for the Group
auditor and its network of audit firms amounted to
€23 million (2015: €23 million) and consists of the
following:
Fee expense for the Group auditor
15
2015
2016
in € million
Fee expense
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Employees
115,842
2
7
8
23
23
1
1
3
21
2
4
4
5
4
123,755
4
15
2015
2016
Average number of employees
proportionately-consolidated entities
thereof at
7,783
7,913
Apprentices and students gaining work
experience
214
204
proportionately-consolidated entities
thereof at
111,905
15
26
1,977
2,234
310
Sundry other financial result
914
670
Other operating income
-430
310
financial instruments
219
196
Sundry operating income
Income (+) and expenses (-) from
173
46
Gains on the disposal of assets
-24
-179
Result on investments
27
51
losses and write-downs
Income from the reversal of impairment
-25
-192
subsidiaries and participations
Impairment losses on investments in
172
115
Income from the reversal of provisions
-430
Exchange losses
-249
-311
12
thereof from subsidiaries:
185
196
Other interest and similar income
2015
2016
in € million
Net interest result
10
Income from the reversal of impairment losses and
expenses for the recognition of impairment losses
relate primarily to impairment allowances on receiv-
ables.
94
-177
Other operating income and expenses
13
-820
Other operating expenses
-241
-267
Sundry operating expenses
-76
-28
write-downs
Expense for impairment losses and
-192
-303
Expense for additions to provisions
-454
131
Other financial result
-847
19
thereof from subsidiaries:
262
583
Telematics and roadside assistance
1,325
1,435
Service contracts
1,891
2,165
Warranty expenditure
4,271
4,294
Research and development expenses
1,495
1,638
to financial services business
thereof: Interest expense relating
19,449
20,723
business
Cost of sales relating to financial services
43,685
43,175
Manufacturing costs
2015
2016
in € million
Cost of sales comprises:
Cost of sales
07
note 44
446
Other cost of sales
3,067
2,976
Exchange gains
1
13
Income from investments in subsidiaries
and participations
2015
2016
2015
2016
in € million
Other financial result
11
in € million
Other operating income and expenses comprise the
following items:
Other operating income and expenses
323
09
→ Notes to the
Financial Statements
Notes to the Group
BMW Group
Statements
Group
Financial
134
Administrative expenses amounted to €3,128 million
(2015: €2,875 million) and relate mainly to personnel
and IT costs.
Selling expenses amounted to €6,030 million (2015:
€5,758 million) and comprise mainly marketing,
advertising and sales personnel costs.
Selling and administrative expenses
08
74,043
75,442
Cost of sales
Income Statement
Interest and similar income
196
185
30.7%
28.5%
2,828
2,755
Actual tax expense
-91
3
Other variances
164
-174
42
78
Tax increases (+)/tax reductions (-) as a result of non-deductible expenses and tax-exempt income
Tax expense (+)/benefits (-) for prior years
-119
-119
Variances due to different tax rates
2,832
2,967
30.7%
30.7%
9,224
9,665
Expected tax expense
Tax rate applicable in Germany
Profit before tax
2015
2016
in € million
The difference between the expected tax expense
based on the underlying tax rate for Germany and
actual tax expense is explained in the following
reconciliation:
Effective tax rate
135
136
Group
Financial
Statements
10
13
2015
2016
2015
2016
Deferred tax liabilities
Deferred tax assets
Net
Deferred taxes
Netting
Valuation allowances on tax loss carryforwards and capital losses
Eliminations
Liabilities
Deferred taxes for non-German entities are calculated
on the basis of the relevant country-specific tax rates,
ranging in the financial year 2016 between 12.5% and
45.0% (2015: between 12.5% and 46.9%). Changes
in tax rates resulted in a deferred tax expense of
€70 million (2015: €36 million).
Provisions
Sundry other assets
Other investments
Leased products
Property, plant and equipment
Intangible assets
in € million
The allocation of deferred tax assets and liabilities to
balance sheet line items at 31 December is shown in
the following table:
The line "Other variances" comprises various recon-
ciling items, including the Group's share of taxes on
the earnings of companies accounted for using the
equity method.
7
Tax income relating to prior years resulted primarily
from adjustments to income tax receivables and pro-
visions for prior years.
Tax increases as a result of non-deductible expens-
es and tax reductions due to tax-exempt income
increased compared to one year earlier. As in the
previous year, tax increases as a result of non-tax-de-
ductible expenses were attributable primarily to the
impact of non-recoverable withholding taxes and
transfer price issues.
Income Statement
→ Notes to the
BMW Group
Notes to the Group
Financial Statements
Tax loss carryforwards and capital losses
7
The change in the valuation allowance on deferred tax
assets relating to tax losses available for carryforward
and temporary differences resulted in a tax expense
of €38 million (2015*: €82 million).
The tax expense was reduced by €49 million (2015*: *Previous year's
figures adjusted.
€41 million) as a result of utilising tax loss carryfor-
wards, for which deferred assets had not previously
been recognised and in conjunction with previously
unrecognised tax credits and temporary differences.
2,670
Deferred tax expense
Current tax expense
Deferred taxes are computed using enacted or planned
tax rates which are expected to apply in the relevant
national jurisdictions when the amounts are recov-
ered. After taking account of an average municipal
trade tax multiplier rate (Hebesatz) of 425.0% (2015:
425.0%), the underlying income tax rate for Germany
was as follows:
2015
2016
in € million
Taxes on income comprise the following:
Income taxes
12
-433
-293
Net interest result
-618
85
-489
-5
-4
thereof to subsidiaries:
-423
-327
Other interest and similar expenses
-123
-78
benefit liability for pension plans
Net interest expense on the net defined
-72
-84
on other long-term provisions
Expense relating to interest impact
Interest and similar expenses
5,164
2,751
thereof relating to temporary
Current tax expense includes tax income of €174 mil-
lion (2015: tax expenses of €164 million) relating to
prior periods.
30.7
30.7
German income tax rate
14.9
14.9
Municipal trade tax rate
15.8
15.8
surcharge
Corporation tax rate including solidarity
2,828
2,755
Income taxes
77
5.5
Solidarity surcharge
25
5
carryforwards and tax credits
15.0
15.0
Corporation tax rate
thereof relating to tax loss
52
80
differences
2015
2016
in %
5.5
115
Notes to the Group
A major difference to the previous Standard is the
increased scope of discretion for estimates and the
introduction of thresholds, thus influencing the
amount and timing of revenue recognition.
The new Standard is based on a five-step model, which
sets out the rules for revenue from contracts with
customers. Revenues are required to be recognised
either over time or at a specific point in time.
The objective of the new Standard IFRS 15 (Revenue
from Contracts with Customers) is to assimilate all the
various existing requirements and Interpretations
relating to revenue recognition into a single Standard.
The new Standard also stipulates uniform revenue
recognition principles for all sectors and all categories.
IFRS 9 contains a requirement that it should be
applied retrospectively for classification and meas-
urement, whereas the new rules for hedge accounting
are generally required to be applied prospectively. The
BMW Group intends to apply the exception granted
by the Standard not to restate comparatives for earlier
periods for classification and measurement (including
impairment).
As far as the accounting for hedging relationships is
concerned, analyses to date indicate that it will be pos-
sible to account for the majority of commodity hedg-
ing contracts using hedge accounting rules. Moreover,
changes in the time value of options are required to be
recognised as "cost of hedging" in accumulated other
equity during the hedging period. This approach to
accounting for hedging relationships could significant-
ly reduce the volatility in the amounts reported for
financial result and Group earnings. The presentation
of the cost of hedging in the income statement has not
yet been definitively clarified. It is therefore possible
that shifts could arise between the line items "Profit
before financial result” and “Financial result".
-
Implementation of the new impairment model requires
substantial modifications to existing processes and
systems, especially for the Financial Services segment.
These modifications have been stipulated centrally
and implemented to a large extent at subsidiary level.
The overall impact cannot be quantified reliably as
yet, however, given that the procedures for providing
data by the subsidiaries still requires validation and
some of the major implementation aspects of the
new standard – in particular the transfer criterion for
impairment levels - are not expected to be definitively
established until a later stage in the financial year 2017.
Based on preliminary findings, significant changes to
impairment amounts are not expected.
Accounting for buyback arrangements and rights
of return for vehicles sold, but which the Financial
Services segment will subsequently lease to customers,
will result in the earlier recognition of eliminations.
The adoption of IFRS 15 will result in a one-time
reduction in equity, which will be recognised retro-
spectively as of the date of the beginning of the first
accounting period presented on the basis of the new
requirements. The actual impact of adopting the new
Standard will depend on the level of inventories of
vehicles held by dealerships, the expected number of
leases to be concluded and the amount of inter-seg-
ment profits requiring to be eliminated at the date
of first-time adoption. Based on analyses to date and
the assumptions applied, it is estimated that equity
at 31 December 2016 will be reduced by €650 mil-
lion. The impact in the period following first-time
adoption and in subsequent periods is not expected
to be significant.
Financial Statements
3,922
Derivative instruments
5,261
5,287
investment funds
4,700
31.12.2015
31.12.2016
3,030
4,553
Debt securities
Marketable securities and
Credit card receivables
129
272
Loans to third parties
due later than three months
133
Other
145
147
Financial assets
9,770
8,843
thereof non-current
thereof current
287
344
3,657
due within three months
11,278
5,429
11,572
The contracted maturities of debt securities are as
follows:
due later than five years
32
127
16,658
17,128
in € million
31.12.2016
31.12.2015
Unrealised interest income
104
1,869
24
Financial assets
Financial assets comprise:
in € million
Fixed income securities
due within three months
780
699
due later than three months
3,669
2,705
Other debt securities
1,796
2,208
Allowances for impairment and credit risk
6,635
1,527
Receivables from companies in which
specific
an investment is held
1,217
893
item basis
group basis
Total
Other taxes
1,135
1,036
1,914
Expected reimbursement claims
711
8
Receivables from subsidiaries
422
716
8
Collateral receivables
387
412
-8
Sundry other assets
828
779
Prepayments
recognised on a
Allowance for impairment
The amount by which the value of investment funds
exceeds obligations for part-time working arrange-
ments (€17 million; 2015: €12 million) is reported
under other financial assets. Investment funds are
held to secure obligations relating to pre-retirement
part-time work arrangements. These funds are man-
aged by BMW Trust e. V., Munich, as part of Con-
tractual Trust Arrangements (CTA) and are therefore
netted against the corresponding settlement arrears
for pre-retirement part-time work arrangements.
due between one and five years
Receivables relating to credit card business comprise
the following:
in € million
Gross carrying amount
Allowance for impairment
Net carrying amount
31.12.2016
31.12.2015
296
280
-9
-8
287
272
25
Income tax assets
Income tax assets totalling €1,938 million (2015:
€2,381 million) include claims amounting to €351 mil-
lion (2015: €519 million), which are expected to be
settled after more than twelve months. Some of the
claims may be settled earlier than this depending on
the timing of proceedings.
Allowances for impairment losses on receivables
relating to credit card business developed as follows
during the year under report:
26
Other assets
Other assets comprise:
in € million
in € million
31.12.2016
31.12.2015
2016
7,065
5,348
5,261
lease payments
impairment allowances recognised
on a specific-item basis
14,440
13,742
Impairment allowances recognised
Balance at 1 January
1,000
515
1,515
on a specific-item basis
-934
-963
Total
Allocated (+)/reversed (-)
30
295
thereof for finance lease receivables
-141
-174
Utilised
-319
-22
-341
Gross carrying amount of items with
Exchange rate impact
and other changes
17
265
group basis
item basis
specific
248
-25
223
Utilised
-304
-41
-345
Non-guaranteed residual values that fall to the ben-
efit of the lessor amounted to €118 million (2015:
€165 million).
Impairment allowances
* Balance at 1 January adjusted due to deconsolidation of entities.
Exchange rate impact
and other changes
27
-2
25
Balance at 31 December
934
467
1,401
in € million
31.12.2016
31.12.2015
Gross carry amount of items with
in € million
2015
Allowance for impairment
recognised on a
7
due within one year
24
Balance at 31 December
31.12.2015
Financial Statements
→ Notes to the
Balance Sheet
Gross investment in finance leases
due within one year
5,921
5,974
due between one and five years
12,574
12,816
Fixed income securities
Stocks
due later than five years
31.12.2016
32
134
18,924
Other debt securities
4,449
4,356
734
561
104
344
Marketable securities and
investment funds
5,287
966
Present value of future minimum
18,527
in € million
31.12.2015
31.12.2016
963
530
on a group basis
1,493
52,951
44,473
Impairment allowances recognised
on a group basis
-467
-530
Carrying amount without impairment
allowances
12,270
13,321
Net carrying amount
78,260
70,043
The estimated fair value of collateral received for receiv-
ables on which impairment losses were recognised
totalled €30,542 million (2015: €26,992 million). This
collateral related primarily to vehicles. The carrying
amount of assets held as collateral and taken back as
a result of payment default amounted to €153 million
(2015: €40 million).
145
146
Group
Financial
Statements
BMW Group
Finance leases are analysed as follows:
Marketable securities and investment funds relate to
available-for-sale financial assets and comprise:
in € million
Notes to the Group
impairment allowances recognised
1
9
6,682
10
91-120 days overdue
17
15
More than 120 days overdue
64
22
Balance at 31 December
307
195
Receivables that are overdue by between one and
30 days do not normally result in bad debt losses
since the overdue nature of the receivables is primar-
ily attributable to the timing of receipts around the
month-end. In the case of trade receivables, collateral
is generally held in the form of vehicle documents
and bank guarantees so that the risk of bad debt loss
is extremely low.
29
29
Equity
Number of shares issued
Preferred stock
2016
Common stock
2015
2016
Shares issued/in circulation at 1 January
54,809,404
Shares issued in conjunction with Employee Share Programme
305,029
Less: shares repurchased and re-issued
29
Number of shares issued
54,499,544
309,944
84
61-90 days overdue
23
Exchange rate impact and
other changes
-1
-2
Balance at 31 December
84
12
96
28
Some trade receivables were overdue for which an
impairment allowance was not recognised. Overdue
balances are analysed into the following time windows:
Gross carrying amount
2,882
20
2,847
-57
-96
Net carrying amount
2,825
2,751
in € million
31.12.2016
31.12.2015
1-30 days overdue
174
128
31-60 days overdue
Allowance for impairment
Shares issued/in circulation at 31 December
55,114,404
54,809,404
was as follows:
in € million
31.12.2016
31.12.2015
Equity attributable to shareholders
of BMW AG
47,108
42,530
Proportion of total capital
32.5%
31.7%
Non-current financial liabilities
The capital structure at the end of the reporting period
55,405
Current financial liabilities
42,326
42,160
Total financial liabilities
97,731
91,683
Proportion of total capital
Total capital
67.5%
68.3%
144,839
134,213
The equity ratio attributable to shareholders of
BMW AG increased during the financial year by
0.8 percentage points, primarily reflecting the
increase in revenue reserves.
49,523
In order to manage its capital structure, the
BMW Group uses various instruments, including the
amount of dividends paid to shareholders and share
buybacks. Moreover, the BMW Group pro-actively
manages debt capital, determining levels of debt
capital transactions with a target debt structure in
mind. An important aspect of the selection of finan-
cial instruments is the objective to achieve matching
maturities for the Group's financing requirements. In
order to reduce non-systematic risk, the BMW Group
uses a variety of financial instruments available on
the world's capital markets to achieve diversification.
The BMW Group is not subject to any external
minimum equity capital requirements. Within the
Financial Services segment, however, there are a
number of individual entities which are subject to
equity capital requirements set by relevant regulatory
banking agencies.
The BMW Group manages the capital structure and
makes adjustments to it in the light of changes in
economic conditions and the risk profile of the under-
lying assets.
2015
601,995,196
601,995,196
601,995,196 601,995,196
All of the Company stock is issued to bearer and each
share has a par value of €1.00. Preferred stock, to
which no voting rights are attached, bears an addi-
tional dividend of €0.02 per share.
In 2016, a total of 305,029 shares of preferred stock
was sold to employees at a reduced price of €44.14 per
share in conjunction with the Company's Employee
Share Programme. These shares are entitled to receive
dividends with effect from the financial year 2017.
29 shares of preferred stock were bought back in
2016 via the stock exchange in conjunction with the
Company's Employee Share Programme.
Issued share capital increased by €0.3 million as a
result of the issue to employees of 305,000 shares of
non-voting preferred stock. The number of author-
ised shares and the Authorised Capital of BMW AG
amounted to 4.2 million shares and €4.2 million
respectively at the end of the reporting period. The
Company is authorised to issue 5 million shares of
non-voting preferred stock amounting to nominal
€5.0 million prior to 14 May 2019.
Capital reserves
Capital reserves include premiums arising from the
issue of shares and totalled €2,047 million (2015:
€2,027 million). The change related to the share cap-
ital increase arising in conjunction with the issue of
shares of preferred stock to employees amounting to
€20.1 million.
Revenue reserves
Revenue reserves comprise the post-acquisition and
non-distributed earnings of consolidated companies.
In addition, remeasurements of the net defined ben-
efit liability for pension plans are also presented in
revenue reserves.
A proposal will be made that the unappropriated profit
of BMW AG for the financial year 2016 amounting to
€2,300 million be utilised as follows:
Distribution of a dividend of €3.52 per share of
preferred stock (€193 million).
Distribution of a dividend of €3.50 per share of
common stock (€2,107 million).
The proposed distribution was not recognised as a
liability in the Group Financial Statements.
Accumulated other equity
Accumulated other equity comprises all amounts rec-
ognised directly in equity resulting from the transla-
tion of the financial statements of foreign subsidiaries,
the effects of recognising changes in the fair value
of derivative financial instruments and marketable
securities directly in equity and the related deferred
taxes recognised directly in equity.
149
150
Group
Financial
Statements
BMW Group
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
Capital management disclosures
The BMW Group's objectives when managing capital
are to safeguard the Group's ability to continue as
a going concern in the long-term and to provide an
adequate return to shareholders.
-28
-1
-27
43
7
-8
Exchange rate impact and
other changes
1
1
Balance at 31 December
8
8
Prepayments relate mainly to prepaid interest and
commission paid to dealerships. Prepayments of
€1,018 million (2015: €795 million) have a maturity
of less than one year.
Collateral receivables comprise mainly customary
collateral (banking deposits) arising on the sale of
receivables.
147
8
148
Statements
BMW Group
Notes to the Group
27
Inventories
Inventories comprise the following:
Financial Statements
in € million
→ Notes to the
Balance Sheet
31.12.2016
31.12.2015
Group
Financial
-8
Utilised
7
6,261
9
thereof non-current
1,595
1,568
thereof current
5,087
4,693
Balance at 1 January
8
Allocated (+)/reversed (-)
8
Utilised
-8
Exchange rate impact and
other changes
Balance at 31 December
in € million
2015
Allowance for impairment
recognised on a
specific
item basis
group basis
Total
Balance at 1 January
8
Allocated (+)/reversed (-)
The impairment allowance on trade receivables devel-
oped during the year under report as follows:
Other assets
2016
recognised on a
Balance at 31 December
46
11
57
At 31 December 2016, inventories measured at their
net realisable value amounted to €871 million (2015:
€1,054 million). Write-downs to net realisable value
amounting to €101 million (2015: €486 million) were
recognised in 2016. The write-down recorded in the
previous year resulted primarily from accidents and
natural disasters.
The expense recorded in conjunction with inven-
tories during the financial year 2016 amounted to
€55,129 million (2015: €55,536 million).
28
Trade receivables
Trade receivables comprise the following:
in € million
31.12.2016
31.12.2015
2
in € million
Allowance for impairment
recognised on a
specific
item basis
group basis
Total
Balance at 1 January
76
7
83
Allocated (+)/reversed (-)
Utilised
36
7
2015
2
and other changes
Exchange rate impact
Finished goods and goods for resale
9,684
8,969
in € million
specific
item basis
group basis
Total
Work in progress, unbilled contracts
1,157
1,098
Raw materials and supplies
Inventories
1,000
1,004
Balance at 1 January
84
12
96
11,841
11,071
Allocated (+)/reversed (-)
-21
-21
Utilised
-19
-1
-20
Allowance for impairment
Allocated (+)/reversed (-)
1,498
78,260
390
2,795
1,150
25,876
9,593
8,930
1,902
43
204
208
1,941
660
23,841
613
Plant and machinery
Other facilities, factory and office equipment
6
6
1,5912
29,930
510
3,318
1,420
32,338
17,759
2,014 Advance payments made and construction in progress
17,182
Property, plant and equipment
Land, titles to land, buildings, including
buildings on third party land
5,625
5,915
4,515
5,453
5
5
364
364
763
11
175
152
797
657
682
4,656
11
1,341
1,035
4,973
7,372
6,499
Development costs
Goodwill
Other intangible assets
Intangible assets
4,181
77
319
62
6,804
6,351
238
3,277
141
142
Group
Financial
Statements
BMW Group
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
19
Intangible assets
Intangible assets mainly comprise capitalised develop-
ment costs on vehicle and engine projects as well as
subsidies for tool costs, licences, purchased develop-
ment projects, software and purchased customer lists.
Other intangible assets include a brand-name right
amounting to €42 million (2015: €48 million) which
is allocated to the Automotive segment and is not
subject to scheduled amortisation since its useful life
is deemed to be indefinite. The year-on-year change
is due entirely to currency factors. This line item also
includes goodwill of €33 million (2015: €33 million)
allocated to the Automotive cash-generating unit
(CGU) and goodwill of €331 million (2015: €331 mil-
lion) allocated to the Financial Services CGU.
Intangible assets amounting to €42 million (2015:
€48 million) are subject to restrictions on title.
As in the previous year, there was no requirement to
recognise impairment losses or reversals of impair-
ment losses on intangible assets in 2016.
Other investments
As in the previous year, no borrowing costs were
recognised as a cost component of intangible assets
in 2016.
Property, plant and equipment
No impairment losses were recognised in 2016 (2015:
€3 million).
As in the previous year, no borrowing costs were
recognised as a cost component of property, plant
and equipment in 2016.
Property, plant and equipment include a total of
€107 million (2015: €110 million) relating to land and
buildings, for which economic ownership is attribut-
able to the BMW Group (finance leases). Leases to
which BMW AG is party, with a carrying amount of
€90 million (2015: €102 million), run for periods up
to 2030 at the latest and contain price adjustment
clauses in the form of index-linked rentals as well as
extension and purchase options.
Minimum lease payments are as follows:
in € million
31.12.2016
31.12.2015
Total of future minimum lease payments
due within one year
23
22
due between one and five years
20
Non-current marketable securities
408
428
7,301
34,965
30,165
Leased products
2,233
1,088
Investments accounted for using
the equity method
62
2
12
398
232
76
157
164
Investments in non-consolidated subsidiaries
13
411
245
244
Participations
2
26
460
2
27
489
3,536
70,043
4,171
1,166
5,191
8,157
7,372
Development costs
Goodwill
Other intangible assets
Intangible assets
4,516
-28
320
4
26
4,786
1,188
6,154
25,891
-100
2,865
2
1,566
27,092
8,832
9,593
Land, titles to land, buildings, including
buildings on third party land
Plant and machinery
1,942
9
5,915
657
572
923
Depreciation and amortisation
Carrying amount
Translation
1.1.20161
differences
Current year
Reclassi-
fications
Disposals
31.12.2016
31.12.2016 31.12.2015
1,222
4,171
5
797
3
181
4,973
3
1,403
1,130
4,263
7,221
6,351
5
364
364
58
218
883
4
1,951
76
3
484
226
245
Participations
2
2
26
26
489
192
411
3
560
428
Non-current marketable securities
Other investments
Depreciation and amortisation
Carrying amount
1.1.20151
Translation
differences
Current year
Reclassi-
fications
Disposals 31.12.2015 31.12.2015 31.12.2014
3,888
678
Investments in non-consolidated subsidiaries
157
308
721
660
Other facilities, factory and office equipment
2
2
2,2532
32,351
-119
3,403
1,806
33,829
17,960
1,591 Advance payments made and construction in progress
17,759
Property, plant and equipment
7,308
19
3,306
2,834
7,799
37,789
34,965
2,546
2,233
Leased products
Investments accounted for using
the equity method
76
116
192
214
69
73
127
598
Non-current provisions and liabilities
670
589
1,044
1,093
Current financial liabilities
87
641
73
48
Current provisions and liabilities
525
4,835
518
384
18
12
RECONCILIATION OF AGGREGATED FINANCIAL
INFORMATION
Assets
10,183
9,256
3,394
3,480
33
32
4,814
201
151
32
2015
DISCLOSURES RELATING TO THE BALANCE SHEET
Non-current assets
5,779
5,415
2,802
3,115
Cash and cash equivalents
2,106
1,663
209
96
20
Current assets
4,405
3,841
592
365
33
Equity
Non-current financial liabilities
4,678
3,853
1,832
2,003
235
23
Provisions and liabilities
due later than five years
5,505
1,562
Receivables from sales financing comprise the fol-
lowing:
in € million
Credit financing for retail customers
31.12.2016
31.12.2015
Allowances on receivables from sales financing -
which only arise within the Financial Services seg-
ment developed as follows:
2016
Allowance for impairment
recognised on a
specific
item basis
Receivables from sales financing
group basis
and dealerships
Finance lease receivables
Receivables from
sales financing
61,602
52,915
in € million
16,658
17,128
Balance at 1 January*
963
535
Total
23
1 Corresponds to the consolidated equity capital provided by the shareholders of DriveNow GmbH & Co. KG and its subsidiaries.
2 The BMW Group holds 67.2% (2015: 73.8%) of the net assets at 31 December 2016. Due to the allocation of voting power within the decision-making bodies of the two entities,
operations remain subject to joint control.
14
1,477
18
12
Net assets
4,678
3,853
1,832
2,003
15
20
Group's interest in net assets
2,339
1,927
611
668
102
20
142
Eliminations
-414
-376
Carrying amount
1,925
1,551
611
668
10
5,403
2015
2016
2015
31.12.2016
31.12.2015
within one year
8,692
8,079
between one and five years
9,154
8,445
later than five years
4
Minimum lease payments
17,850
in € million
16,527
Contingent rents of €46 million (2015: €54 million),
based principally on the distance driven, were rec-
ognised in income. The agreements have, in part,
extension and purchase options.
Impairment losses amounting to €384 million (2015:
€119 million) were recognised on leased products in
2016 as a consequence of changes in residual value
expectations. No income was recognised in 2016 from
the reversal of impairment losses (2015: €24 million).
22
Investments accounted for using the equity
method
Investments accounted for using the equity method
comprise the joint venture BMW Brilliance Auto-
motive Ltd. (BMW Brilliance), the joint ventures
DriveNow GmbH & Co. KG and DriveNow Ver-
waltungs GmbH (DriveNow) and the interest in the
associated company THERE Holding B.V. (THERE).
BMW Brilliance (in which the BMW Group has a 50.0%
shareholding) produces mainly BMW brand models
for the Chinese market and also has engine manufac-
turing facilities, which supply the joint venture's two
plants with petrol engines.
DriveNow (in which the BMW Group has a 50.0%
shareholding) offers car-sharing services in major
German cities and abroad.
In August 2015, BMW AG, Daimler AG, Stuttgart,
and AUDI AG, Ingolstadt, agreed with Nokia Cor-
poration, Helsinki, to acquire that entity's maps and
location-based services business (HERE Group). The
HERE Group's digital maps are fundamental for the
next generation of mobility and location-based ser-
vices, providing the basis for new assistance systems
and, ultimately, fully autonomous driving.
THERE Holding B.V. and its wholly owned subsidi-
ary, HERE International B.V. (until 28 January 2016:
THERE Acquisition B.V.) were founded in connection
with the acquisition. HERE International B. V. acquired
all of the shares of the HERE Group. Via BMW Inter-
national Holding B.V., the BMW Group has a 33.3%
shareholding in THERE Holding B.V. THERE acquired
the HERE Group with effect from 4 December 2015.
The total purchase price of €2.6 billion was financed by
using capital contributions (€2.0 billion) and via bank
loans taken up by HERE International B.V. (€0.6 bil-
lion). The BMW Group's share of the purchase price
was approximately €0.67 billion.
THERE is included in the BMW AG Group Financial
Statements as an associated company using the equity
method and allocated for segment reporting purposes
to the Automotive segment. In view of the proximity
of the reporting date and on the grounds of imma-
teriality, no fair value adjustments were recorded in
conjunction with the at-equity carrying amount at
31 December 2015, at which stage the investment
was accounted for at cost. During 2016, the Group's
share of earnings was accounted for with one month's
delay, which was caught up at 31 December 2016. The
purchase price allocation was completed during the
first quarter of 2016.
In December 2016, THERE Holding B.V. signed
contracts for the sale of a total of 25% of the shares
of HERE International B.V. The contract relating to
the sale of 15% of the shares to Intel Holdings B.V.,
Schiphol-Rijk, was completed in January 2017. 10%
of the shares were sold to a consortium comprising
NavInfo Co. Ltd., Beijing, Tencent Holdings Ltd.,
Shenzhen, and GIC Private Ltd., Singapore. After
receipt of the approval of the relevant regulatory
agencies, the transaction is expected to be completed
during the first half of 2017.
143
3
Minimum lease payments of non-cancellable oper-
ating leases amounting to €17,850 million (2015:
€16,527 million) fall due as follows:
Leased products
21
99
223
190
Interest portion of the future minimum
lease payments
due within one year
11
10
due between one and five years
36
32
due later than five years
50
27
97
69
Present value of future minimum lease
payments
due within one year
12
12
due between one and five years
37
37
due later than five years
77
72
126
121
2016
Financial information relating to equity accounted
investments is aggregated in the following tables:
144
BMW Group
-149
-15
-6
30
40
1
2
15
22
363
369
3
1,399
30
-4
1,061
1,081
-171
-15
-6
134
144
BMW Brilliance
THERE
DriveNow
2016
150
Group
Financial
Statements
1,328
47
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
in € million
DISCLOSURES RELATING TO THE INCOME STATEMENT
Revenues
Scheduled depreciation
Profit/loss before financial result
Interest income
Interest expenses
Income taxes
Other comprehensive income
Total comprehensive income
52
Dividends received by the Group
BMW Brilliance
58
1,240
13,220
380
12,991
486
in € million
2016
2015
2016
2015
2016
DriveNow
THERE
2015
-1
Gains (-) or losses (+) arising from changes in the discount factor
Gains (-) or losses (+) arising from changes in demographic assumptions
-1,836
-1,836
3.3
9,030
3,194
496
12,720
Liabilities from customer deposits (banking)
9,719
3,657
133
13,509
Commercial paper
5,415
5,415
Derivative instruments
Other
2,198
2,245
107
4,550
628
325
586
1,539
Financial liabilities
42,160
41,289
8,234
91,683
Liabilities to banks
Customer deposit liabilities arise in the BMW Group's
banks, notably in Germany and the USA, which offer
a range of investment products.
13,631
5,046
1,656
1,496
179
3,331
Other
Financial liabilities
497
130
622
1,249
42,326
44,144
11,261
97,731
in € million
31.12.2015
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
Total
Bonds
10,124
23,283
6,912
40,319
Asset backed financing transactions
8,585
157
158
Group
Financial
1.8
fixed
CNH 300 million
3.0
4.2
fixed
EUR 15,214 million
7.2
2.0
fixed
GBP 2,700 million
5.2
2.5
fixed
HKD 1,093 million
4.1
1.9
fixed
JPY 49,100 million
3.7
0.4
fixed
NOK 1,650 million
3.9
2.1
BMW Finance N. V.
fixed
6.0
CHF 300 million
fixed
4.0
Statements
BMW Group
Bonds comprise:
Notes to the Group
Financial Statements
Issuer
→ Notes to the
Balance Sheet
Interest
Issue volume
in relevant currency
(ISO-Code)
Weighted average
maturity period
(in years)
Weighted average
nominal interest rate
(in %)
Derivative instruments
variable
2.2
0.1
variable
GBP 67 million
1.0
0.7
variable
SEK 1,950 million
3.0
0.0
fixed
AUD 690 million
5.4
EUR 6,101 million
3,852
3,852
Commercial paper
→ Notes to the
31
Other provisions
Other provisions changed during the year as follows:
Balance Sheet
in € million
Translation
1.1.2016
differences
Additions
Reversal of
discounting
Utilised
Reversed
thereof due
31.12.2016 within one year
Obligations for personnel and social
expenses
1,939
5
1,705
1
-1,436
-23
2,191
1,661
Obligations for ongoing operational
expenses
5,811
Financial Statements
Notes to the Group
BMW Group
Statements
decrease of 0.25%
-713
-3.1
-610
-3.1
increase of 1 year
853
3.7
632
3.2
decrease of 1 year
-854
-3.7
48
-633
increase of 0.25%
165
0.7
134
0.7
decrease of 0.25%
-158
-0.7
-128
-0.6
155
156
Group
Financial
-3.2
SEK 1,750 million
3,219
-2,313
BMW Group at the relevant balance sheet dates
relating to financing activities. Financial liabilities
comprise the following:
31.12.2016
Maturity within
in € million
one year
Maturity between
one and five years
Maturity later
than five years
Total
Bonds
9,242
25,496
9,683
44,421
Asset backed financing transactions
6,765
9,709
16,474
Liabilities to banks
10,251
3,997
644
14,892
Liabilities from customer deposits (banking)
10,063
3,316
133
13,512
Financial liabilities include all liabilities of the
Financial liabilities
33
Current income tax liabilities of €1,074 million
(2015: €1,441 million) comprise €269 million (2015:
€288 million) for taxes payable and €805 million (2015:
€1,153 million) for tax provisions.
-289
6,527
2,824
Other obligations
1,880
21
938
6
-362
-283
2,200
1,394
Other provisions
51
9,630
5,862
58
-4,111
-595
10,918
5,879
Provisions for obligations for personnel and social
expenses comprise mainly performance-related
remuneration components, early retirement part-time
working arrangements and employee long-service
awards.
Provisions for obligations for on-going operational
expenses comprise primarily warranty obligations.
Depending on when claims are made, it is possible
that the BMW Group may be called upon to fulfil
obligations over the whole period of the warranty
or guarantee. Expected reimbursement claims at
31 December 2016 amounted to €779 million at the
end of the reporting period (2015: €711 million). Also
included are other provisions for expected payments
for bonuses, rebates and other price deductions.
Provisions for other obligations cover numerous spe-
cific risks and obligations of uncertain timing and
amount, in particular for litigation and liability risks.
Income from the reversal of other provisions amount-
ing to €480 million (2015: €550 million) is recorded
in cost of sales and in selling and administrative
expenses.
32
Income tax liabilities
Current income tax liabilities totalling €1,074 million
(2015: €1,441 million) include €33 million (2015: 485
€million), which is expected to be settled after more
than twelve months. Some of the liabilities may be
settled earlier than this depending on the timing of
proceedings.
74
5.0
1.9
variable
Maturity later
than five years
Total
2,399
3,640
215
6,254
681
121
802
492
374
5
871
1,080
1,080
107
107
86
86
71
17
1
89
4,292
176
10
4,478
Maturity between
one and five years
one year
Maturity within
31.12.2015
99
99
Social security
Other
Other liabilities
71
21
92
4,659
147
10
4,816
10,198
9,208
4,923
15,555
in € million
Deferred income
Advance payments from customers
Deposits received
Other taxes
Payables to other companies in which an investment is held
Payables to subsidiaries
Social security
Other
Other liabilities
Sundry other liabilities include mainly bonuses for
services already performed as well as sales promotions,
commission payable and credit balances on customers'
accounts.
434
Payables to subsidiaries
4,328
13,767
7,773
31.12.2016
31.12.2015
thereof due
thereof due
Total
within one year
Total
within one year
4,412
1,474
3,910
1,397
2,241
1,037
1,922
915
382
30
299
32
221
58
123
55
7,256
2,599
8,512
Trade payables
Maturity later than five years
7,701
72
159
160
Group
Financial
Statements
BMW Group
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
→ Other Disclosures
Deferred income comprises the following items:
in € million
Deferred income relating to service contracts
231
Deferred income from lease financing
Other deferred income
Deferred income
Deferred income relating to service contracts arises
in conjunction with service and repair work as well
as telematics services and roadside assistance to be
provided under commitments given at the time of
the sale of a vehicle (multi-component arrangements).
Deferred income from lease financing relates primarily
to upfront lease payments.
Grants comprise primarily public sector funds to
promote regional structures and which have been
invested in the production plants in Brazil, Mexico,
Leipzig and Berlin. The grants are partly subject to
holding periods for the assets concerned of up to five
years and/or minimum employment figures. Grant
income is recognised over the useful lives of the assets
to which they relate.
35
Trade payables
Trade payables have the following maturities:
in Mio. €
31.12.2016
31.12.2015
Maturity within one year
8,512
Maturity between one and five years
Grants
-1,836
615
Payables to other companies in which an investment is held
JPY 30,000 million
3.0
0.2
fixed
NZD 100 million
3.0
4.4
BMW US Capital, LLC
fixed
USD 8,210 million
6.2
2.3
variable
CAD 500 million
2.7
0.9
BMW Canada Inc.
fixed
CAD 1,600 million
4.6
2.1
variable
AUD 700 million
3.0
2.4
fixed
CNY 2,000 million
fixed
1.6
3.0
HKD 834 million
EUR 1,500 million
3.2
0.0
variable
GBP 250 million
1.8
0.7
variable
NZD 30 million
3.0
2.9
variable
USD 1,295 million
3.0
3.0
fixed
AUD 130 million
3.8
2.8
fixed
EUR 3,500 million
6.6
0.9
fixed
GBP 300 million
5.0
2.0
fixed
1.4
615
3.3
INR 3,500 million
91
7.33
34
Other liabilities
Other liabilities comprise the following items:
in € million
31.12.2016
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
Total
Deferred income
Advance payments from customers
Deposits received
Other taxes
2,599
4,238
419
7,256
847
130
977
501
387
893
807
807
INR 14,000 million
BMW India Financial Services Private Ltd.
0.67
20
5.0
10.3
Other
fixed
KRW 260,000 million
3.9
2.8
The following details apply to the commercial
paper:
Issuer
Issue volume
in relevant currency
(ISO-Code)
Weighted average
maturity period
(in days)
fixed
Weighted average
nominal interest rate
EUR 380 million
76
-0.32
BMW Finance N. V.
BMW Malta Finance Ltd.
GBP 300 million
74
0.37
EUR 350 million
13
-0.30
BMW US Capital, LLC
USD 2,722 million
(in %)
6,254
655
747
Plan assets
Total
19,926
-16,930
2,996
557
557
557
-479
78
-171
-171
-8
-8
Limitation of
the net defined
benefit asset to
the asset ceiling
Net defined
benefit liability
3
2,999
557
78
-171
-8
Gains (-) or losses (+) on plan assets, excluding amounts included
in interest income
4,587
thereof pension provision
4,587
thereof assets
Defined
benefit
obligation
in € million
REMEASUREMENTS
Past service cost
3,000
thereof assets
-1
-1
151
152
Group
Financial
Statements
BMW Group
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
Numerous defined benefit plans are in place through-
out the BMW Group.
Under the motto "THE NEXT 100 YEARS", almost
all of the workforce received a special bonus in
conjunction with the BMW Group's centenary
anniversary. Depending on opportunities available
in each country, the bonus was contributed to the
relevant pension plan or paid to the recipient in a
one-off amount.
The most significant of the BMW Group's pension
plans are described below.
Germany
Both employer- and employee-funded benefit plans
are in place in Germany. Benefits paid in conjunction
with these plans comprise old-age retirement pen-
sions as well as invalidity and surviving dependents'
benefits. The Deferred Remuneration Retirement
Plan is an employee-financed defined contribution
plan with a minimum rate of return. The fact that the
plan involves a minimum rate of return means that
it is classified as a defined benefit plan. Employees
have the option to waive payment of certain remu-
neration components in return for a future benefit.
When the benefit falls due, it is paid on the basis
of the higher of the value of the depot account or a
guaranteed minimum amount. Defined benefit obli-
gations also remain in Germany, for which benefits
are determined either by multiplying a fixed amount
by the number of years of service or on the basis of
an employee's final salary.
The defined benefit plans have been closed to new
entrants. With effect from 1 January 2014, new
employees receive a defined contribution entitle-
ment with a minimum rate of return. Under the
motto "THE NEXT 100 YEARS", this entitlement was
enhanced by a special centenary bonus to employees,
made in the form of a starting contribution to a new
BMW supplementary benefit plan.
The assets of the German pension plans are admin-
istered by BMW Trust e. V., Munich, (German reg-
istered association) in accordance with a CTA. The
representative bodies of this entity are the Board
of Directors and the Members' General Meeting.
BMW Trust e. V., Munich, currently has seven mem-
bers and three Board of Directors members elected
by the Members' General Meeting. The Board of
Directors is responsible for investments, drawing
up
and deciding on investment guidelines as well as
monitoring compliance with those guidelines. The
members of the association can be employees, senior
executives and members of the Board of Directors.
An ordinary Members' General Meeting takes place
once every calendar year, and deals with a range
of matters, including receiving and approving the
association's annual report, ratifying the activities
of the Board of Directors and adopting changes to
the association's statutes.
United Kingdom
In the United Kingdom, the BMW Group has defined
benefit plans, which are primarily employer-funded
combined with employee-funded components based
on the conversion of employee remuneration. These
plans are subject to statutory minimum recovery
requirements. Benefits paid in conjunction with
these plans comprise old-age retirement pensions as
well as invalidity and surviving dependents' benefits.
The defined benefit plans have been closed to new
entrants, who, since 1 January 2014, are covered by
a defined contribution plan.
The pension plans are administered by BMW Pen-
sion Trustees Limited, Hams Hall, and BMW (UK)
Trustees Limited, Hams Hall, both trustee companies
which act independently of the BMW Group. BMW
(UK) Trustees Limited, Hams Hall, is represented
by 11 trustees and BMW Pension Trustees Limited,
Hams Hall, by five trustees. A minimum of one
third of the trustees must be elected by plan partic-
ipants. The trustees represent the interests of plan
participants and decide on investment strategies.
Recovery contributions to the funds are determined
in agreement with the BMW Group.
The change in the net defined benefit liability for pension
plans can be derived as follows:
in € million
1 January 2016
EXPENSE/INCOME
Current service cost
Interest expense (+)/income (−)
Gains (-) or losses (+) arising from settlements
1 January 2015
EXPENSE/INCOME
Current service cost
-1,181
-224
-224
-224
Gains (-) or losses (+) arising from experience adjustments
Changes in the limitation of the net defined benefit asset to the
asset ceiling
-429
-429
-429
1
Transfers to fund
-872
-872
-872
Employee contributions
Pensions and other benefits paid
79
-540
-79
-
-
554
14
14
Translation differences and other changes
683
-529
154
154
-1,181
-1,181
Gains (-) or losses (+) arising from changes in the discount factor
Gains (-) or losses (+) arising from changes in demographic assumptions
325
Interest expense (+)/income (-)
Past service cost
Gains (-) or losses (+) arising from settlements
REMEASUREMENTS
Gains (-) or losses (+) on plan assets, excluding amounts included
in interest income
Defined
benefit
obligation
Plan assets
Total
the net defined
benefit asset to
the asset ceiling
Limitation of
Net defined
benefit liability
20,462
-15,861
4,587
4,601
494
591
-468
123
-9
-9
2
4,603
494
123
-9
325
325
494
466
521
1,174
Pension provisions
In the case of defined benefit plans, the BMW Group
is required to pay the benefits it has granted to pres-
ent and past employees. Defined benefit plans may
be funded or unfunded, the latter sometimes covered
by accounting provisions. Pension commitments in
Germany are mostly covered by assets contributed
to BMW Trust e. V., Munich, in conjunction with a
contractual trust arrangement (CTA). The main other
countries with funded plans were the UK, the USA,
Switzerland, the Netherlands, Belgium and Japan. ¬
In the meantime, most of the defined benefit plans
have been closed to new entrants.
The assumptions stated below, all of which depend
on the economic situation in the relevant country,
are used to measure the defined benefit obligation
of each pension plan. The following weighted aver-
age values have been used for Germany, the United
Kingdom and other countries:
in %
Discount rate
Pension level trend
Weighted duration of all pension obligations in years
The following mortality tables are applied in countries,
in which the BMW Group has significant defined
benefit plans:
Germany
United Kingdom
Germany
United Kingdom
Other
31.12.2016
31.12.2015
31.12.2016
31.12.2015
31.12.2016
31.12.2015
1.80
2.51
2.51
3.58
3.70
3.83
1.78
30
4,584
-18,315
22,899
4,093
4,093
4,093
-40
-40
-40
Gains (-) or losses (+) arising from experience adjustments
Changes in the limitation of the net defined benefit asset to the
asset ceiling
-118
-118
-118
Transfers to fund
-827
-827
1.60
-827
85
-85
Pensions and other benefits paid
-643
676
33
33
Translation differences and other changes
-1,339
1,166
-173
-173
31 December 2016
Employee contributions
31 December 2015
2.55
21.3
7,855
8,714
8,153
958
922
22,899
18,315
19,926
16,930
Effect of limiting net defined benefit
asset to asset ceiling
3
3
3
3
Carrying amounts at 31 December
2,469
1,360
1,597
1,174
521
465
4,587
2,999
thereof pension provision
2,469
1,360
1,597
8,643
Fair value of plan assets
1,384
1,476
20.5
20.9
19.2
17.6
0.02
18.4
Mortality Table 2005 G issued by Prof. K. Heubeck (with invalidity rates reduced by 50%)
SP2 tables with weightings
In Germany, the so-called “pension entitlement trend"
(Festbetragstrend) also represents a significant actu-
arial assumption for the purposes of determining
benefits payable at retirement and was left unchanged
at 2.0%.
7
Based on the measurement principles contained in
IAS 19, the following balance sheet carrying amounts
apply to the Group's pension plans:
in € million
Germany
United Kingdom
2.43
31.12.2016
31.12.2016
Other
Total
31.12.2015
31.12.2016
31.12.2015
31.12.2016
31.12.2015
Present value of defined benefit
obligations
11,112
9,215
10,311
9,327
31.12.2015
19,926
-16,930
2,996
65
183
51
97
432
562
Total without quoted market price
1,478
1,214
1,924
1,902
224
239
3,626
3,355
31 December
8,643
7,855
8,714
8,153
958
922
18,315
16,930
Employer contributions to plan assets are expected to
amount to €1,190 million in the coming year.
The BMW Group is exposed to risks arising from
defined benefit plans on the one hand and defined
contribution plans with a minimum return guarantee
on the other. The discount rates used to calculate
pension obligations are subject to market fluctuation
and therefore influence the level of the obligations.
Furthermore, changes in other actuarial parameters,
such as expected rates of inflation, also have an impact
on pension obligations. In order to reduce currency
exposures, a substantial portion of plan assets is either
invested in the same currency as the underlying plan
or hedged by means of currency derivatives. As part
of the internal reporting procedures and for internal
management purposes, financial risks relating to the
pension plans are reported on using a deficit-value-
at-risk approach. The investment strategy is also
subjected to regular review together with external
consultants, with the aim of ensuring that investments
are structured to coincide with the timing of pen-
sion payments and the expected pattern of pension
obligations. Each of these measures helps to reduce
fluctuations in pension funding shortfalls.
282
316
Other
1,115
2
229
207
Real estate
183
172
697
783
123
105
1,003
1,060
Cash and cash equivalents
The defined benefit obligation relates to current
employees, former employees with vested benefits
and pensioners as follows:
17
9
24
1
27
41
Absolute return funds
419
376
745
705
46
34
1,210
17
2
in € million
Pensioners
100.0
100.0
The sensitivity analysis provided below shows the
extent to which changes in individual factors at the
end of the reporting period influence the defined
benefit obligation.
It is only possible, however, to aggregate sensitivities
to a limited extent. Since the change in obligations 7
does not follow a linear pattern, estimates made on
the basis of the specified sensitivities are only possible
with this restriction. The calculation of sensitivities
using ranges other than those specified could result
in a non-proportional change in the defined benefit
obligation.
Discount rate
Pension level trend
Average life expectancy
Pension entitlement trend
In the UK, the sensitivity analysis for the pension
level trend also takes account of restrictions due to
caps and floors.
Change in defined benefit obligation
31.12.2016
in € million
31.12.2015
in %
in € million
in %
increase of 0.75%
-2,939
-12.8
-2,577
-12.9
decrease of 0.75%
increase of 0.25%
4,031
17.6
3,253
16.3
100.0
100.0
100.0
100.0
Former employees with vested benefits
Defined benefit obligation
Germany
United Kingdom
Other
31.12.2016 31.12.2015
31.12.2016
31.12.2015
31.12.2016
31.12.2015
67.3
66.3
26.7
Current employees
23.4
75.0
27.8
28.6
43.1
48.6
17.5
16.7
4.9
5.1
30.2
28.0
3.4
8.3
79.1
3.3
205
thereof non-investment grade
1,726
1,807
611
1,340
235
224
2,572
3,371
Debt instruments
5,439
4,834
6,071
4,623
458
420
11,968
9,877
thereof investment grade
3,752
3,525
5,564
4,437
422
383
9,738
8,345
thereof non-investment grade
Equity instruments
2015
2016
2015
3
2,999
thereof pension provision
thereof assets
3,000
-1
153
154
Group
Financial
Statements
BMW Group
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
1,687
Past service cost results from a change in the defined
benefit pension plan in Germany. In future, 12 month-
ly pension payments will be paid to all plan benefi-
ciaries, with a guaranteed 1% increase in pension
entitlements for benefits awarded since 1999.
Depending on the cash flow profile and risk structure
of the pension obligations involved, pension plan
assets are invested in various investment classes.
Plan assets in Germany, the UK and other countries
comprised the following:
in € million
COMPONENTS OF PLAN ASSETS
Germany
United Kingdom
Other
Total
2016
2015
2016
2015
2016
7
227
1,309
186
14,689
13,575
Debt instruments
543
367
408
207
3
3
954
577
thereof investment grade
195
189
2
2
1
1
198
192
thereof mixed funds
(funds without a rating)
348
178
179
527
178
683
734
6,251
6,790
36
37
2,230
1,532
Real estate
25
20
25
20
Money market funds
26
255
11
507
19
274
Absolute return funds
82
33
-
82
33
Other
5
5
Total with quoted market price
7,165
6,641
37
2,399
36
OTHER DISCLOSURES
Receivables from companies in which an investment is held
2,217
164
163
Total
Other
Payables to other companies in which an investment is held
Payables to subsidiaries
Other liabilities
Trade payables
Other
Other derivative instruments
Fair value hedges
Cash flow hedges
Derivative instruments
Asset backed financing transactions
Commercial paper
Group
Financial
Statements
BMW Group
Notes to the Group
Financial Statements
→ Other Disclosures
The following table shows the fair values and carrying
amounts of financial assets and liabilities that are
measured at cost or amortised cost and whose carrying
amounts differ from their fair value. Based on the
fact that maturities of some balance sheet items are
generally short, it is assumed in this case that their
fair value corresponds to the carrying amount.
Fair value
Carrying amount
Fair value
31.12.2015
31.12.2016
Interest rate for five years
Interest rate for ten years
Interest rate for one year
Liabilities from customer deposits (banking)
Interest rate for six months
Fair value measurement of financial instruments
The following interest rate structures were used to
discount financial instruments at 31 December 2016:
Asset-backed financing transactions
Liabilities from customer deposits (banking)
Liabilities to banks
Bonds
Receivables from sales financing
in € million
in %
Carrying amount
Liabilities to banks
Financial liabilities
4,550
3,331
100,174
109,161
5,075
5,535
107
615
86
99
7,773
1,539
1,249
8,512
1,452
767
ASSETS
Other investments
Receivables from sales financing
Financial assets
LIABILITIES
Total
Other
Collateral receivables
Receivables from subsidiaries
Other assets
Trade receivables
Bonds
Cash and cash equivalents
Credit card receivables
Loans to third parties
Marketable securities and investment funds
Other derivative instruments
Fair value hedges
Cash flow hedges
Derivative instruments
Other
81,621
78,260
72,309
1. measured at their fair values in an active market
for identical financial instruments (Level 1),
are
Financial instruments measured at fair value are allo-
cated to different measurement levels in accordance
with IFRS 13. This includes financial instruments that
43.05
76.45
1,507.00
561.70
USD/t
79.65
USD/t
230.00
USD/t 1,695.13
USD/oz
680.96
Palladium
Iron ore
Coke/coal
Aluminium
31.12.2015
31.12.2016
Raw material
Commodity derivatives were measured on the basis
of the following quoted market prices:
Interest rates taken from interest rate curves were
adjusted, where necessary, to take account of the
credit quality and risk of the underlying financial
instrument.
4.85
0.23
1.25
2. measured at their fair values in an active market
for comparable financial instruments or using
measurement models whose main input factors
are based on observable market data (Level 2), or
3. using input factors not based on observable mar-
ket data (Level 3).
The following table shows the amounts allocated to
each measurement level at the end of the reporting
period:
in € million
213
5,387
Raw materials price risks
Currency risks
Interest rate risks
Derivative instruments (liabilities)
Raw materials price risks
2.37
Currency risks
Derivative instruments (assets)
Other investments - available-for-sale/fair value option
Marketable securities, investment funds and collateral assets - available-for-sale
Level 2
Level 1
Level hierarchy in accordance with IFRS 13
31.12.2016
Interest rate risks
0.67
4.44
0.08
13,611
16,474
16,556
13,509
13,543
13,512
13,545
13,631
12,720
14,892
14,942
40,319
40,701
44,421
45,140
70,043
12,783
563
ISO Code
USD
0.87
1.98
0.08
3.77
0.02
0.55
1.18
EUR
-0.20
-0.20
0.60
1.21
-0.23
CNY
JPY
GBP
2.94
in € million
870
1,694
Credit card receivables
Loans to third parties
Marketable securities and investment funds
Other derivative instruments
Fair value hedges
Cash flow hedges
Derivative instruments
Financial assets
Receivables from sales financing
Other investments
ASSETS
in € million
The carrying amounts of financial instruments are
assigned to IAS 39 categories and cash funds as fol-
lows:*
Financial instruments
37
Other
Cash and cash equivalents
Trade receivables
Other assets
5,161
5,287
100
70,043
78,260
402
534
→ Other Disclosures
31.12.2016
31.12.2016
Loans and receivables
Cash funds
31.12.2015
31.12.2016
31.12.2015
Available for sale
31.12.2015
129
Notes to the Group
Financial Statements
Statements
371
447
due within one year
The BMW Group determines its best estimate of
contingent liabilities on the basis of the information
available at the date of preparation of the Group
Financial Statements. This assessment may change
over time and is adjusted regularly on the basis of new
information and circumstances. Some of the risks are
insured. In accordance with IAS 37, the BMW Group
does not disclose information relating to legal disputes
and risks relating to taxes and customs duties, if such
disclosures could be expected to prejudice seriously
the position of the BMW Group or if disclosure is not
practicable. From today's perspective, the BMW Group
does not expect these proceedings to have a significant
adverse impact on the results of operations, financial
position or net assets of the Group.
In June 2016, Germany's Federal Cartel Agency con-
ducted searches at various carmakers and suppliers,
including the BMW AG, as part of an investigation
into the purchase of steel in the automotive industry.
The investigations have not yet been completed. More
detailed information is currently not available.
Other contingent liabilities comprise mainly legal
disputes as well as risks relating to taxes and customs
duties.
31.12.2015
31.12.2016
in € million
306
541
Contingent liabilities
213
474
Other
due between one and five years
due later than five years
1,102
1,003
895
Group
Financial
162
161
757
1,363
Purchase commitments for
intangible assets
3,141
BMW Group
Purchase commitments for
property plant and equipment
31.12.2016
in € million
The following obligations also existed for the
BMW Group at the end of the reporting period:
Other financial obligations
2,190
2,444
816
31.12.2015
133
287
272
26
26
26
26
31.12.2016
31.12.2015
Other liabilities
31.12.2016
Fair value option
*The carrying amounts of cash flow and fair value hedges are allocated to the category "Held for trading" for the sake of clarity.
Total
Other
Payables to other companies in which an investment is held
Payables to subsidiaries
Other liabilities
Held for trading
31.12.2015
31.12.2016
31.12.2015
13,631
16,474
5,415
3,852
13,509
13,512
12,720
Trade payables
14,892
44,421
3,030
3,922
1,006
1,215
830
1,194
1,758
949
40,319
Other
Other derivative instruments
Fair value hedges
100
314
287
Collateral receivables
893
1,217
Receivables from companies in which an investment is held
98
716
Receivables from subsidiaries
2,751
2,825
6,122
7,880
147
145
422
2,535
Other
1,050
Cash flow hedges
Derivative instruments
Asset backed financing transactions
Commercial paper
Liabilities from customer deposits (banking)
Liabilities to banks
Bonds
1,124
Financial liabilities
5,661
5,921
76,105
84,409
6,436
8,167
Total
LIABILITIES
Marketable securities, investment funds and collateral assets - available-for-sale
Other investments - available-for-sale/fair value option
Derivative instruments (assets)
Interest rate risks
Currency risks
Total
Maturity later
than five years
one and five years
one year
in € million
Maturity between
Maturity within
31.12.2015
111,438
11,568
851
601
178
46,957
52,913
72
Bonds
10,774
24,241
7,230
Trade payables
13,928
133
3,990
9,805
Liabilities from customer deposits (banking)
13,354
3,853
405
9,464
Liabilities to banks
14,044
8,849
5,195
Asset backed financing transactions
42,245
3,485
7,701
3,853
Other financial liabilities
9,938
7,161
Asset backed financing transactions
46,809
10,089
26,766
9,954
Bonds
Total
Maturity later
than five years
Maturity between
one and five years
one year
Maturity within
31.12.2016
in € million
17,099
Liabilities to banks
11,238
4,234
Commercial paper
4,565
187
2,395
1,983
Derivative instruments
8,512
Total
8,512
13,719
133
3,446
10,140
Liabilities from customer deposits (banking)
16,030
558
Trade payables
72
7,773
Derivative instruments
The following table shows the potential negative
impact for the BMW Group - measured on the basis
of the cash-flow-at-risk approach - attributable to
unfavourable changes in exchange rates. The impact
for the principal currencies, in each case for the fol-
lowing financial year, is as follows:
The potential negative impact on earnings is computed
for each currency for the following financial year on
the basis of current market prices and exposures to a
confidence level of 95% and a holding period of up to
one year. Correlations between the various currencies
are taken into account when the risks are aggregated,
thus reducing the overall risk.
In the next stage, these exposures are compared to all
hedges that are in place. The net cash flow surplus
represents an uncovered risk position. The cash-
flow-at-risk approach involves allocating the impact
of potential exchange rate fluctuations to operating
cash flows on the basis of probability distributions.
Volatilities and correlations serve as input factors to
assess the relevant probability distributions.
Euro/Japanese Yen
Euro/Korean Won
Euro/British Pound
1,162
1,510
1,985
1,926
5,396
4,785
4,770
3,319
9,973
in € million
Euro/Chinese Renminbi
Euro/US Dollar
Euro/British Pound
the currencies referred to above.
Currency risk for the BMW Group is concentrated on
68
70
99
30
86
10,467
134
278
163
249
31.12.2015
31.12.2016
Euro/Japanese Yen
Euro/Korean Won
48
Euro/Chinese Renminbi
31.12.2015
31.12.2016
The cash flows shown comprise principal repayments
and the related interest. The amounts disclosed for
derivatives comprise only cash flows relating to
derivatives that have a negative fair value at the bal-
ance sheet date. At 31 December 2016, irrevocable
credit commitments to dealerships which had not
been called upon at the end of the reporting period
amounted to €9,194 million (2015: 7,552 million).
104,067
8,512
44,375
1,203
570
372
Solvency is assured at all times by managing and mon-
itoring the liquidity situation on the basis of a rolling
cash flow forecast. The resulting funding requirements
are secured by a variety of instruments placed on the
world's financial markets. The objective is to minimise
risk by matching maturities for the Group's financing
requirements within the framework of the target debt
structure. The BMW Group has good access to capital
markets as a result of its solid financial position and
a diversified refinancing strategy. Depending on
financing requirements and market conditions, the
261
51,180
5,416
Other financial liabilities
Total
Commercial paper
6,104
174
3,366
2,564
5,416
The following table shows the maturity structure of
expected contractual cash flows (undiscounted) for
financial liabilities:
BMW Group issues commercial paper on the money
markets, corporate bonds and asset-backed financial
securities in various currencies. Customer deposits
at the Group's in-house banks are also used as a
supplementary source of financing.
Also reducing liquidity risk, additional secured and
unsecured lines of credit are in place with internation-
al banks, including a syndicated credit line totalling
€6 billion (2015: €6 billion). Intra-group cash flow
fluctuations are evened out by the use of daily cash
pooling arrangements.
Euro/US Dollar
in € million
The starting point for analysing currency risk with
this model is the identification of forecast foreign
currency transactions or "exposures". At the end of
the reporting period, the principal exposures for the
relevant coming year were as follows:
A description of the management of this risk is pro-
vided in the Combined Management Report. The
BMW Group measures currency risk using a cash-
flow-at-risk model.
At 31 December 2016, derivative financial instruments,
mostly in the form of forward currency contracts, were
in place.
As an enterprise with worldwide operations, business
is conducted in a variety of currencies, from which
currency risks arise. Since a significant portion of
Group revenues is generated outside the euro currency
region and the procurement of production materials
and funding is also organised on a worldwide basis,
the currency risk is an extremely important factor for
Group earnings.
Currency risks
These refinancing activities are underpinned by the
longstanding long- and short-term ratings issued by
Moody's and Standard & Poor's.
Further information is provided in the "Report on
Outlook, Risks and Opportunities" section of the
Combined Management Report.
Protection against such risks is provided in the first
instance through natural hedging which arises when
the values of non-derivative financial instruments
have matching maturities and amounts (netting).
Derivative financial instruments are used to reduce
the risk remaining after netting. Financial instruments
are only used to hedge underlying positions or forecast
transactions.
The principal market risks to which the BMW Group
is exposed are currency risk, interest rate risk and raw
materials price risk.
Market risks
BMW Group
Notes to the Group
Financial Statements
→ Other Disclosures
Group
Financial
Statements
170
169
The
scope of permitted transactions, responsibilities,
financial reporting procedures and control mecha-
nisms used for financial instruments are set out in
detailed internal guidelines. This includes, above
all, a clear separation of duties between trading and
processing. Currency, interest rate and raw materi-
als price risks of the BMW Group are managed at a
corporate level.
Liquidity risk
Further disclosures relating to credit risk – in particu-
lar with regard to the amounts of impairment losses
recognised - are provided in the explanatory notes
to the relevant categories of receivables in → notes 23,
24 and 28.
A concentration of credit risk with particular borrow-
ers or groups of borrowers has not been identified in
conjunction with financial instruments.
-1,285
-1,169
-1,169
4,550
3,030
3,331
3,922
Reported on equity
and liabilities side
Reported on
assets side
31.12.2015
Reported on Reported on equity
assets side and liabilities side
31.12.2016
Held for trading
in € million
arising for each of the categories of financial instru-
ment defined by IAS 39:
-1,285
2,753
2,162
1,745
1
13
Net income from participations and investments
129
-155
Gains and losses on sale and fair value measurement of marketable securities held for sale
(including investments in subsidiaries and participations measured at cost)
Available-for-sale
The following table shows the net gains and losses
-2
Fair value option
-717
1,265
Gains/losses from the use of derivative instruments
2015
2016
3,265
Gains/losses on investments measured at fair value through profit and loss
Gains and losses on financial instruments
Gross amount of derivatives which can be offset in case of insolvency
Net amount after offsetting
Balance sheet amounts as reported
244
5,259
Level 1
Level hierarchy in accordance with IFRS 13
31.12.2015
450
1,479
Level 2
1,402
1,842
1,933
Raw materials price risks
Currency risks
Interest rate risks
Derivative instruments (liabilities)
Raw materials price risks
147
Accumulated other equity
1,939
5
in € million
master netting agreements or similar contracts are in
place, actual offsetting would be possible in principle,
for instance in the case of insolvency. Offsetting would
have the following impact on the carrying amounts
of derivatives:
In the BMW Group, financial assets and liabilities
relating to derivative financial instruments would
normally be required to be offset. No offsetting takes
place for accounting purposes, however, since the nec-
essary criteria are not met. Since legally enforceable
Offsetting of financial instruments
BMW Group
Notes to the Group
Financial Statements
→ Other Disclosures
Group
Financial
Statements
166
1,086
165
As in the previous year, there were no reclassifications
within the level hierarchy during the financial year
2016.
Other investments (available-for-sale) amounting to
€347 million (2015: €184 million) are measured at
amortised cost since quoted market prices are not
available or cannot be determined reliably. These are
therefore not included in the level hierarchy shown
above. In addition, other investments amounting to
€213 million (2015: €244 million) are measured at fair
value since quoted market prices are available. These
items are included in Level 1.
Level 3
Level 3
1,062
2,136
1,352
In situations where a fair value was required to be
measured for a financial instrument only for disclosure
purposes, this was achieved using the discounted cash
flow method and taking account of the BMW Group's
own default risk. For this reason, the fair values cal-
culated can be allocated to Level 2.
Performance guarantees
Balance at 1 January
141
-269
-158
Gains/losses on hedging instruments
designated as part of a fair value hedge
relationship
31.12.2016 31.12.2015
in € million
At 31 December 2016, the BMW Group held deriva-
tive financial instruments (mainly forward currency
contracts) in order to hedge currency risks attached
to future or existing transactions/items. These deriv-
ative instruments are intended to hedge forecast sales
An amount of €2 million (2015: €8 million) attributable
to forecasting errors (and the resulting over-hedging
of currency exposures) was recognised as a loss in
"Financial Result" in the year under report. Losses
attributable to the ineffective portion of cash flow
hedges amounting to €11 million were recognised in
“Financial Result" (2015: gains of €9 million). As in
the previous year, no gains or losses were recognised
in "Financial Result" in 2016 in connection with
forecasting errors relating to cash flow hedges for
commodities. Gains attributable to the ineffective
portion of cash flow hedges amounting to €17 million
were recognised in "Financial Result" (2015: losses of
€13 million).
Fair value gains and losses recognised on derivatives
and recorded initially in accumulated other equity
are reclassified to cost of sales when the derivatives
mature.
167
The following table shows gains and losses on hedging
instruments and hedged items which are deemed to
be part of a fair value hedge relationship:
Fair value hedges
At 31 December 2016, the BMW Group held deriva-
tive financial instruments (mostly commodity swaps)
with terms of up to 58 months (2015: 58 months) to
hedge raw materials price risks. The income statement
impact of the hedged cash flows will be recognised
as a general rule in the same periods in which the
derivative instruments mature. It is expected that
€94 million of net losses, recognised in equity at the
end of the reporting period, will be reclassified to the
income statement in the new financial year (2015: net
losses of €127 million).
The BMW Group did not hold any derivative financial
instruments at 31 December 2016, which had been
designated at cash flow hedges to hedge against
interest-rate risks.
denominated in a foreign currency over the coming
44 months (2015: 55 months). The income statement
impact of the hedged cash flows will be recognised as
a general rule in the same periods in which external
revenues are recognised. It is expected that €113 mil-
lion of net losses, recognised in equity at the end of
the reporting period, will be reclassified to the income
statement in the new financial year (2015: net losses
of €623 million).
1,318
-1,337
Gains/losses from hedged items
Ineffectiveness of fair value hedges
134
276
-24
The credit risk relating to derivative financial instru-
ments is minimised by the fact that the Group only
enters into such contracts with parties of first-class
credit standing. The general credit risk on derivative
financial instruments utilised by the BMW Group is
therefore not considered to be significant.
→ see
note 4
→ see
notes 23,24
and 28
Creditworthiness testing is an important aspect of
the BMW Group's credit risk management. Every
borrower's creditworthiness is tested for all credit
financing and lease contracts entered into by the
BMW Group. In the case of retail customer financing,
creditworthiness is assessed using validated scoring
systems integrated into the purchasing process. In
the area of dealership financing, creditworthiness is
assessed by means of ongoing credit monitoring and
an internal rating system that takes account not only
of the tangible situation of the borrower, but also of
qualitative factors such as past reliability in business
relations.
Impairment losses are recorded as soon as credit risks
are identified on individual financial assets, using a
methodology specifically designed by the BMW Group.
More detailed information regarding this methodol-
ogy is provided in the section on accounting policies
(→ note 4).
Within the financial services business, the financed
items (e.g. vehicles, equipment and property) in
the retail customer and dealership lines of business
serve as first-ranking collateral with a recoverable
value. Security is also put up by customers in the
form of collateral asset pledges, asset assignment
and first-ranking mortgages, supplemented where
appropriate by warranties and guarantees. If an
item previously accepted as collateral is acquired, it
undergoes a multi-stage process of repossession and
disposal in accordance with the legal situation pre-
vailing in the relevant market. The assets involved are
generally vehicles which can be converted into cash
at any time via the dealership organisation.
In the case of performance relationships underlying
non-derivative financial instruments, collateral will
be required, information on the credit standing of
the counterparty obtained or historical data based
on the existing business relationship (i.e. payment
patterns to date) reviewed in order to minimise the
credit risk, all depending on the nature and amount
of the exposure that the BMW Group is proposing
to enter into.
550
78
Notwithstanding the existence of collateral accepted,
the carrying amounts of financial assets generally take
account of the maximum credit risk arising from the
possibility that the counterparties will not be able to
fulfil their contractual obligations. The maximum cred-
it risk for irrevocable credit commitments relating to
credit card business amounts to €1,461 million (2015:
€2,011 million). The equivalent figure for dealership
financing is €27,494 million (2015: €24,733 million).
→ Other Disclosures
BMW Group
Notes to the Group
Financial Statements
Statements
Group
Financial
168
The difference between the gains/losses on hedging
instruments (mostly interest rate swaps and com-
bined interest rate/currency swaps) and the results
recognised on hedged items represents the ineffective
portion of fair value hedges.
7
Credit risk
Balance at 31 December
thereof reclassified to the income
statement
-857
-345
-210
Income/expenses
Other liabilities
Other income/expenses
Impairment losses/reversals of impairment losses
Loans and receivables
-38
24
Balance at 31 December
-144
-39
thereof recognised in the income statement during the period under report
-117
28
Total change during the year
52
24
-77
32
1,415
Total changes during the year
-480
-1,337
Balance at 1 January
2015
2016
586
in € million
Cash flow hedges
The disclosure of interest income resulting from the
unwinding of interest on future expected receipts
would normally only be relevant for the BMW Group
where assets have been discounted as part of the pro-
cess of determining impairment losses. However, as
a result of the assumption that most of the income
that is subsequently recovered is received within one
year and the fact that the impact is not material, the
BMW Group does not discount assets for the purposes
of determining impairment losses.
Impairment losses of €76 million (2015: €13 million)
were recognised in the income statement in 2016 on
available-for-sale securities accounted for as partici-
pations, for which fair value changes had previously
been recognised directly in equity. As in the previous
year, no reversals of impairment losses on marketable
securities occurred.
Net interest expenses from interest rate and interest
rate/currency swaps amounted to €120 million (2015:
€22 million).
in the default risk. Such credit-risk related changes in
fair values are calculated as a general rule by deducting
market-related changes in fair value from the overall
change in fair value.
In the case of financial instruments for which the
fair value option is applied, no significant changes in
fair values arose in the financial year 2016 or on an
accumulated basis which were attributable to changes
Gains/losses from the use of derivatives relate primar-
ily to fair value gains or losses arising on stand-alone
derivatives.
The impact of cash flow hedges on accumulated other
equity is analysed as follows:
Guarantees
Regulatory agencies have ordered the BMW Group
to recall various vehicle models that are fitted with
airbags supplied by the Takata group of companies.
Provision for the costs involved has been recognised
within warranty provisions. It cannot be ruled out,
however, that further BMW Group vehicles will be
affected by future recall actions. Further disclosures
pursuant to IAS 37.86 cannot be provided at present
in view of the fact that technical tests have not yet
been completed.
93
The total of future minimum payments under non-
cancellable leases and rental contracts can be analysed
by maturity as follows:
In the financial year 2016, an amount of €432 million
(2015: €315 million) was recognised as expense in
conjunction with operating leases.
In addition to liabilities, provisions and contingent lia-
bilities, the BMW Group also has other financial com-
mitments, primarily under rental and lease contracts
for land, buildings, plant and machinery, tools, office
and other facilities. These contracts run for periods of
one to 85 years. Some of them contain extension and
purchase options as well as price adjustment clauses,
based on index-linked or graduated rentals, including
adjustments for inflation.
Other financial obligations
67
31.12.2016
31.12.2015
balance sheet date:
The following contingent liabilities existed at the
Contingent liabilities
commitments
Contingent liabilities and other financial
in € million
35.9
37.6
Fixed remuneration
775
7.7
Board of Management
7.8
Compensation to members of the
Compensation of members of the Board of
Management and Supervisory Board
2016
in € million
No events have occurred since the end of the financial
year which could have a major impact on the results
of operations, financial position and net assets of
BMW AG and the BMW Group.
Events after the end of the reporting period
43
The total compensation of the current members of the
Board of Management and the Supervisory Board of
BMW AG for the financial year 2016 in accordance
with IFRS amounted to €46.9 million (2015: €43.6 mil-
lion) and comprised the following:
Variable remuneration
2015
29.0
2.6
Share-based remuneration component
2.0
2.0
Fixed compensation and attendance fees
5.1
5.4
Supervisory Board
Compensation to members of the
1.1
termination of an employment relationship
Benefits in conjunction with the
42
2.8
Allocation to pension provisions
1.1
0.8
27.1
Further details about the remuneration of current
members of the Board of Management and the
Supervisory Board can be found in the Compensation
Report, which is part of the Combined Management
Report.
issued the prescribed Declaration of Compliance pur-
suant to § 161 of the German Stock Corporation Act.
It is reproduced in the Annual Report 2016 of the
BMW Group and is also available to shareholders on
the BMW Group website at www.bmwgroup.com/ir.
Pension obligations to current members of the Board
of Management are covered by provisions amounting
to €23.6 million (2015: €23.2 million), computed in
accordance with IAS 19 (Employee Benefits). Pen-
sion obligations to former members of the Board of
Management and their surviving dependants, also
computed in accordance with IAS 19, amounted to
€86.4 million (2015: €71.8 million).
The share-based remuneration component is measured
at its fair value at each balance sheet date between
grant and settlement date, and on the settlement date
itself. The appropriate amounts are recognised as per-
sonnel expense on a straight-line basis over the vesting
period and reported in the balance sheet as a provision.
With effect from the financial year 2012, qualifying
heads of department are also entitled to opt for a
share-based remuneration component, which, in most
respects, is comparable to the share-based remunera-
tion arrangements for Board of Management members.
holding period of four years. Once the holding period
is fulfilled, BMW AG grants one additional share of
BMW AG common stock for each three held or pays
the equivalent amount in cash (share-based remuner-
ation component). Special rules apply in the case of
death or invalidity of a Board of Management member
or early termination of the contractual relationship
before fulfilment of the holding period.
Each Board of Management member is required to
invest 20% of his/her total bonus (after tax) in shares of
BMW AG common stock, which are recorded in a sep-
arate custodian account for each member concerned
(annual tranche). Each annual tranche is subject to a
For financial years beginning after 1 January 2011,
BMW AG has added a share-based remuneration
component to the existing compensation system for
Board of Management members.
In the case of the Employee Share Programme,
non-voting shares of preferred stock in BMW AG were
granted to qualifying employees during the financial
year 2016 at favourable conditions (see → note 29 for → see
the number and price of issued shares). The holding
period for these shares is up to 31 December 2019. In
the financial year 2016, the BMW Group recorded a
personnel expense of €7 million (2015: €6 million) for
the Employee Share Programme, corresponding to the
difference between the market price and the reduced
price of the shares of preferred stock purchased by
employees. The Board of Management reserves the
right to decide anew each year with respect to an
Employee Share Programme.
note 29
note 42
Three share-based remuneration programmes are in
place within the BMW Group, namely the Employee
Share Programme (for entitled employees of the
BMW Group), a share-based remuneration programme
for members of the Board of Management and a share-
based remuneration programme for senior heads of
department of BMW AG.
Share-based remuneration
39
For disclosures relating to key management personnel,
please see → note 42 and the Compensation Report. see
BMW Trust e. V., Munich, administers assets on a
trustee basis to secure obligations relating to pensions
and pre-retirement part-time working arrangements
in Germany and is therefore a related party of the
BMW Group in accordance with IAS 24. This entity,
which is a registered association (eingetragener Vere-
in) under German law, does not have any assets of its
own. It did not have any income or expenses during
the period under report. BMW AG bears expenses on
an immaterial scale and performs services for BMW
Trust e. V., Munich.
Apart from vehicle leasing and credit financing con-
tracts concluded on an arm's length basis, companies
of the BMW Group have not entered into any contracts
with members of the Board of Management or Super-
visory Board of BMW AG. The same applies to close
members of the families of those persons.
276
The cash-settlement obligation for the share-based
remuneration component is measured at its fair
value at the balance sheet date (based on the closing
price of BMW AG common stock in Xetra trading at
31 December 2016).
The compensation systems for members of the Super-
visory Board do not include any stock options, value
appreciation rights comparable to stock options or any
other stock-based compensation components. Apart
from vehicle lease and financing contracts entered
into on customary market conditions, no advances
or loans were granted to members of the Board of
Management and the Supervisory Board of BMW AG
or its subsidiaries, nor were any contingent liabilities
entered into on their behalf.
The total carrying amount of the provision for the
share-based remuneration component of current
and former Board of Management members and
senior heads of department at 31 December 2016 was
€5,473,219 (2015: €4,989,668).
The fair value of the programmes for Board of Man-
agement members and senior heads of department
at the date of grant of the share-based remuneration
components was €1,950,853 (2015: €1,605,147), based
on a total of 21,201 shares (2015: 18,143 shares) of
BMW AG common stock or a corresponding cash-
based settlement measured at the relevant market
share price prevailing on the grant date.
The total remuneration of former members of the
Board of Management and their dependants amount-
ed to €6.5 million (2015: €8.0 million).
The members of the Supervisory Board of BMW AG
hold in total 27.99% (2015: 43.00%) of the issued
common and preferred stock shares, of which 16.25%
(2015: 31.26%) relates to Stefan Quandt, Germany, and
11.73% (2015: 26.74%) to Susanne Klatten, Germany.
The differences compared to the previous year resulted
almost entirely from the fact that the shares held by
Johanna Quandt GmbH & Co. KG für Automobilwerte,
Bad Homburg v.d. Höhe, are no longer attributed to
Stefan Quandt and Susanne Klatten following the
dissolution of the community of heirs. As at the end of
the previous financial year, shareholdings of members
of the BMW AG Board of Management account, in
total, for less than 1% of issued shares.
Shareholdings of members of the Board of
Management and Supervisory Board
41
Variable compensation
→ Other Disclosures
→ Segment Information
Notes to the Group
Financial Statements
BMW Group
Group
Financial
Statements
174
173
The Board of Management and the Supervisory Board
of Bayerische Motoren Werke Aktiengesellschaft have
Declaration with respect to the Corporate
Governance Code
40
Further details on the remuneration of the Board
of Management are provided in the Compensation
Report for the financial
year 2016.
The total expense recognised in 2016 for the share-
based remuneration component of current and former
Board of Management members and senior heads of
department was €1,443,227 (2015: €1,892,994).
3.4
SEGMENT INFORMATION
Total expense
1,595
1,559
6
7
17,491
18,447
Inter-segment revenues
22,144
24,122
1,984
2,062
68,045
67,977
External revenues
BY OPERATING SEGMENT
Total revenues
SEGMENT INFORMATION
Segment result
85,536
5,699
Capital expenditure on non-current assets
518
441
Result from equity accounted investments
1,975
2,166
182
187
7,836
7,695
23,739
25,681
1,990
BMW España Finance S. L., Madrid
86,424
2015
2016
2015
Internal management and reporting
Segment information is prepared as a general rule in
conformity with the accounting policies adopted for
preparing and presenting the Group Financial State-
ments. The only exceptions to this general principle
are the treatment of inter-segment warranties (the
earnings impact of which is allocated to the Automo-
tive and Financial Services segments on the basis used
internally to manage the business) and cross-segment
impairment losses on investments in subsidiaries.
Inter-segment receivables and payables, provisions,
income, expenses and profits are eliminated in the
column "Eliminations". Inter-segment sales take place
at arm's length prices.
Holding and Group financing companies are includ-
ed in the Other Entities segment. This segment also
includes operating companies - BMW Services Ltd.,
BMW (UK) Investments Ltd., Bavaria Lloyd Reise-
büro GmbH, and MITEC Mikroelektronik Mikro-
technik Informatik GmbH - which are not allocated
to one of the other segments.
The principal lines of business of the Financial Servic-
es segment are car leasing, fleet business, multi-brand
business, retail customer and dealership financing,
customer deposit business and insurance activities.
The Motorcycles segment develops, manufactures,
assembles and sells motorcycles as well as spare parts
and accessories.
The Automotive segment develops, manufactures,
assembles and sells cars and off-road vehicles, under
the brands BMW, MINI and Rolls-Royce as well as
spare parts, accessories and mobility services. BMW
and MINI brand products are sold in Germany
through branches of BMW AG and by independent,
authorised dealerships. Sales outside Germany are
handled primarily by subsidiary companies and
by independent import companies in a number of
markets. Rolls-Royce brand vehicles are sold in the
USA, China and Russia via subsidiary companies and
elsewhere by independent, authorised dealerships.
The activities of the BMW Group are broken down
into the operating segments Automotive, Motorcycles,
Financial Services and Other Entities.
For the purposes of presenting segment information,
the activities of the BMW Group are divided into oper-
ating segments in accordance with IFRS 8 (Operating
Segments). Operating segments are identified on the
same basis that is used internally to manage and report
on performance. The allocation also takes account of
the organisational structure of the BMW Group based
on the various products and services of the reportable
segments.
Explanatory notes to segment information
Information on reportable segments
44
585
39.9
43.3
thereof due within one year
43.6
46.9
The role of "chief operating decision maker" with
respect to resource allocation and performance
assessment of the reportable segment is embodied
in the full Board of Management. In order to assist
the decision-taking process, different measures of
segment performance as well as segment assets have
been set for the operating segments.
The performance of the Automotive and Motorcycles
segments is managed on the basis of return on capital
employed (ROCE). The relevant measure of segment
results used is therefore profit before financial result.
Capital employed is the corresponding measure of
segment assets used to determine how to allocate
resources and comprises all current and non-current
operational assets after deduction of liabilities used
operationally which are not subject to interest (e.g.
trade payables).
The performance of the Financial Services segment is
measured on the basis of return on equity (ROE), with
profit before tax therefore representing the measure
of segment result used. For this reason, the measure
of segment assets in the Financial Services segment
corresponds to net assets, defined as total assets less
total liabilities.
The performance of the Other Entities segment is
assessed on the basis of profit or loss before tax. The
corresponding measure of segment assets used to
manage the Other Entities segment is total assets less
asset-side income tax items and intragroup invest-
Financial Services
2016
2015
2016
Motorcycles
Automotive
in € million
3.1
Segment information by operating segment is as
follows:
Notes to the Group
Financial Statements
BMW Group
Statements
Group
Financial
176
175
ments.
→ Segment Information
769
458
29
In the next stage, these exposures are compared to all
hedges that are in place. The net cash flow surplus
represents an uncovered risk position. The cash-
flow-at-risk approach involves allocating the impact
of potential fluctuations in raw materials prices to
operating cash flows on the basis of probability dis-
tributions. Volatilities and correlations serve as input
factors to assess the relevant probability distributions.
3,720
3,150
31.12.2015
31.12.2016
Raw materials price exposures
in € million
The first step in the analysis of the raw materials price
risk is to determine the volume of planned purchases
of raw materials (and components containing those
raw materials). These amounts, which represent the
gross exposure, were as follows at each reporting date
for the following financial year:
The BMW Group is exposed to the risk of price fluc-
tuations for raw materials. A description of the man-
agement of these risks is provided in the Combined
Management Report.
Raw materials price risk
As stated there, the BMW Group applies a Group-wide
value-at-risk approach for internal reporting purpos-
es and to manage interest rate risks. This is based
on a state-of-the-art historical simulation, in which
the potential future fair value losses of the interest
rate portfolios are compared across the Group, with
expected amounts measured on the basis of a holding
period of 250 days and a confidence level of 99.98%.
Aggregation of these results creates a risk reduction
effect due to correlations between the various port-
folios.
Interest rate risks can be managed by the use of inter-
est rate derivatives. The interest rate contracts used
for hedging purposes comprise mainly swaps, which,
if hedge accounting is applied, are accounted for as
fair value hedges. A description of the management
of interest rate risks is provided in the Combined
Management Report.
536
571
1,006
The potential negative impact on earnings is computed
for each raw materials category for the following finan-
cial year on the basis of current market prices and
exposure to a confidence level of 95% and a holding
period of up to one year. Correlations between the
various categories of raw materials are taken into
account when the risks are aggregated, thus reducing
the overall risk.
3,124
172
cial year was as follows:
31.12.2016
Cash flow at risk
7
2016
Supplies and services
performed
in € million
Transactions of Group entities with related parties
arise, without exception, in the normal course of the
business of each of the parties concerned and are
conducted on the basis of arm's length principles.
Related party relationship
38
in € million
The following table shows the potential negative
impact for the BMW Group - measured on the basis
of the cash-flow-at-risk approach - attributable to fluc-
tuations in prices across all categories of raw materials. ¬
Notes to the Group
Financial Statements
→ Other Disclosures
BMW Group
Statements
Group
Financial
The risk at each reporting date for the following finan-
4,220
5,708
10,742
475
532
31.12.2015
31.12.2016
* Previous year's figures adjusted.
Chinese Renminbi
Japanese Yen
British Pound
US Dollar
Euro*
in € million
In the following table the potential volumes of fair
value fluctuations - measured on the basis of the val-
ue-at-risk approach - are compared with the expected
value for the interest-rate-sensitive exposures of the
BMW Group:
The fair values of the Group's interest rate portfolios
for the five main currencies were as follows at the end
of the reporting period:
Interest rate risks arise when funds with differing
fixed-rate periods or differing terms are borrowed and
invested. All items subject to, or bearing, interest are
exposed to interest rate risk. Interest rate risks can
affect either side of the balance sheet.
The BMW Group's financial management system
involves the use of standard financial instruments
such as short-term deposits, investments in variable
and fixed-income securities as well as securities funds.
The BMW Group is therefore exposed to risks resulting
from changes in interest rates.
Interest rate risks
545
449
244
186
14,340
25,772
28,063
31.12.2016 31.12.2015
*Previous year's figures adjusted.
Japanese Yen
Chinese Renminbi
31.12.2015
British Pound
Euro*
in € million
171
12
14
33
16
US Dollar
1,227
135
A significant proportion of the BMW Group's transac-
tions with related parties relates to the joint venture
BMW Brilliance Automotive Ltd. and the associated
company THERE Holding B. V.
22,818
22,554
3,617
3,546
DELTON AG
2015
2016
2015
2016
2015
at 31 December
at 31 December
Payables
Receivables
2016
64
2015
37
2,476
UnternehmerTUM GmbH
50
312
337
324
5,792
2,764
2,690
ALTANA AG
7
1
3
287
309
SOLARWATT GmbH
1,331
received
Supplies and services
2016
4,815
5,316
BMW Brilliance Automotive Ltd.
THERE Holding B.V.
2015
2016
2015
2016
2015
at 31 December
Payables
Receivables
at 31 December
2016
2015
received
Supplies and services
50
43
1,215
892
Supplies and services
performed
in € thousand
Seen from the BMW Group's perspective, the transac-
tions of BMW Group companies with the above-men-
tioned entities were as follows:
Susanne Klatten, Germany, is also the sole share-
holder and Chairwoman of the Supervisory Board
of UnternehmerTUM GmbH, Garching. During
the financial year 2016, the BMW Group bought in
services from UnternehmerTUM GmbH, Garching,
primarily in the form of consultancy and workshop
services.
contracts.
Susanne Klatten, Germany, is a shareholder and
member of the Supervisory Board of BMW AG and
also a shareholder and Deputy Chairman of the Super-
visory Board of ALTANA AG, Wesel. ALTANA AG,
Wesel, acquired vehicles from the BMW Group during
the financial year 2016, mostly in the form of lease
7
155
Stefan Quandt, Germany, is also the indirect majority
shareholder of SOLARWATT GmbH, Dresden. Coop-
eration arrangements are in place between BMW AG
and SOLARWATT GmbH, Dresden, within the field
of electric mobility. The focus of this collaboration
is on providing complete photovoltaic solutions for
rooftop systems and carports to BMWi customers.
SOLARWATT GmbH, Dresden, leased vehicles from
the BMW Group in 2016.
Business relationships of the BMW Group with other
associated companies and joint ventures as well as
with non-consolidated subsidiaries are small in scale.
3
9
7
58
107
615
Stefan Quandt, Germany, is a shareholder and Deputy
Chairman of the Supervisory Board of BMW AG. He is
also the sole shareholder and Chairman of the Super-
visory Board of DELTON AG, Bad Homburg v.d.H.,
which, via its subsidiaries, performed logistic-related
services for the BMW Group during the financial year
2016. In addition, companies of the DELTON Group
acquired vehicles from the BMW Group by way of
leasing.
114
2,069
25,105
Statements
Group
Financial
180
60,096
63,906
92,175
94,163
BMW Group
Notes to the Group
Financial Statements
Group
-7,345
Eliminations
121
261
3,210
3,251
Other regions
-6,183
2,053
→ List of Investments
LIST OF INVESTMENTS AT
31 DECEMBER 2016
MITEC Mikroelektronik Mikrotechnik Informatik GmbH, Munich 4,6
BMW M GmbH Gesellschaft für individuelle Automobile, Munich 3, 5, 6
BMW Hams Hall Motoren GmbH, Munich 4,5,6
BMW Verwaltungs GmbH, Munich 3, 6
BMW Finanz Verwaltungs GmbH, Munich
BMW Bank GmbH, Munich³
BMW INTEC Beteiligungs GmbH, Munich 3,6
at 31 December 2016
BMW Beteiligungs GmbH & Co. KG, Munich6
Companies
→ 61
BMW AG's subsidiary at 31 December 2016
significance" for the results of operations, financial
position and net assets of BMW AG pursuant to § 286
(3) sentence 1 no. 1 HGB or if financial statements
for a company are not yet available. It is also shown
in the list which subsidiaries apply the exemptions
available in § 264 (3) and § 264 b HGB with regard
to the publication of annual financial statements
and the drawing up of a management report and/or
notes to the financial statements (footnotes 5 and 6).
The Group Financial Statements of BMW AG serve
as exempting consolidated financial statements for
these companies.
The List of Investments of BMW AG pursuant to § 285
and § 313 HGB is presented below. Figures for equity
and earnings are not disclosed if they are of "minor ¬
List of investments at 31 December 2016
45
DOMESTIC¹
Alphabet International GmbH, Munich 4, 5, 6
2,628
3,507
China
28,786
29,741
13,394
13,776
Germany
2015
92
2016
Non-current assets
2016
External revenues
in € million
Information by region
179
for non-current assets relates to property, plant and
equipment, intangible assets and leased products.
Eliminations disclosed for non-current assets relate
to leased products.
2015
3,361
15,856
23
Rest of the Americas
1,197
1,439
9,582
10,466
Rest of Asia
13,099
23
13,910
30,544
Rest of Europe
21,000
23,249
18,155
16,000
USA
28,617
In the case of information by geographical region,
external sales are based on the location of the custom-
er's registered office. Revenues with major customers
were not material overall. The information disclosed
Alphabet Fuhrparkmanagement GmbH, Munich
BMW Vermögensverwaltungs GmbH, Munich
BMW Fahrzeugtechnik GmbH, Eisenach 3, 5, 6
1,366
BMW Malta Finance Ltd., Floriana
100
73
1,541
BMW Malta Ltd., Floriana
100
48
267
BMW Österreich Holding GmbH, Steyr
100
7,898
100
1,180
14,696
BMW International Holding B.V., Rijswijk11
2,502
BMW Holding B.V., The Hague
100
948
14
100
BMW (UK) Holdings Ltd., Farnborough
749
460
100
BMW (UK) Manufacturing Ltd., Farnborough
BMW Motoren GmbH, Steyr
723
100
100
282
881
BMW Financial Services (GB) Ltd., Farnborough
100
179
136
Rolls-Royce Motor Cars GmbH, Munich 4, 5, 6
Europe 13
100
3,558
100
.5
5,794
Capital invest-
ment in %
Profit/loss
in € million
in € million
100
Equity
BAVARIA-LLOYD Reisebüro GmbH, Munich
Bavaria Wirtschaftsagentur GmbH, Munich 3, 5, 6
LARGUS Grundstücks-Verwaltungsgesellschaft mbH, Munich
Bürohaus Petuelring GmbH, Munich
Parkhaus Oberwiesenfeld GmbH, Munich
BMW Vertriebszentren Verwaltungs GmbH, Munich
BMW Anlagen Verwaltungs GmbH, Munich 3,6
FOREIGN²
51
1,988
325
100
100
100
100
100
100
100
100
100
100
100
100
100
100
153
100
100
172,174
16,619
Total Group assets
9,665
441
-980
-553
211
170
92,175
94,163
9,224
-19,097
7
6
-19,097
-20,017
55
4
92,175
-20,017
94,163
-6,756
188,535
Segment result
Total revenues
SEGMENT INFORMATION
BY OPERATING SEGMENT
External revenues
Inter-segment revenues
31.12.2015
31.12.2016
31.12.2015
31.12.2016
-5,672
31.12.2015
Group
Reconciliation to Group figures
Other Entities
8,195
518
23,901
24,162
8,112
-5,119
31.12.2016
Result from equity accounted investments
2
2016
31.12.2015
31.12.2016
31.12.2015
31.12.2016
Financial Services
Motorcycles
Automotive
31.12.2016
in € million
9,606
69
75
4,559
4,702
Depreciation and amortisation on non-current assets
23,689
8,686
2
31.12.2015
9,411
2015
2015
Group
2016
Reconciliation to Group figures
2015
2016
Segment assets
Other Entities
2,546
Investments accounted for using the equity method
9,948
11,049
557
600
10,024
2,233
Capital expenditure on non-current assets
Depreciation and amortisation on non-current assets
-6,271
71,709
31.12.2015
75,363
Reconciliation of segment assets
Total for reportable segments
Non-operating assets -
Other Entities segment
in € million
8,195
8,112
-5,119
96,423
-6,271
14,383
Total for reportable segments
Elimination of inter-segment items
Total Group depreciation and
amortisation on non-current assets
Reconciliation of depreciation and
amortisation on non-current assets
23,901
24,162
on non-current assets
Total Group capital expenditure
13,314
-5,672
92,238
7,132
-113,026
-121,780
Elimination of inter-segment items
31,817
33,858
not subject to interest
and Motorcycles segments
7,432
Liabilities of Automotive
45,923
Automotive and Motorcycles segments
Non-operating assets -
112,081
126,679
Financial Services segment
Total liabilities -
41,932
-6,756
31.12.2016
29,573
The Other Entities' segment result includes interest
and similar income amounting to €1,250 million (2015:
€1,177 million) and interest and similar expenses
amounting to €1,006 million (2015: €1,080 million)
as well as impairment losses on other investments
totalling €18 million (2015: €7 million).
Financial Services segment result was negatively
impacted by impairment losses totalling €384 million
(2015: €406 million) recognised on leased products.
Income from the reversal of impairment losses on
leased products amounted to €211 million (2015:
€81 million). No impairment losses were recognised
on other financial assets in the year under report
(2015: €3 million).
Impairment losses and fair value changes on oth-
er investments amounting to €174 million (2015:
€17 million) relating to the Automotive segment and
recognised in the financial result are not included in
the segment result.
Write-downs on inventories to their net realisable
value amounting to €101 million (2015: €486 million)
were recognised by the Automotive segment in the
financial year 2016. The write-down recorded in the
previous year resulted primarily from accidents and
natural disasters.
→ Segment Information
BMW Group
Notes to the Group
Financial Statements
Statements
Group
Financial
178
177
Investments accounted for using the equity method
2,233
Segment assets
172,174
188,535
2,546
Elimination of inter-segment items
92,112
The information disclosed for capital expenditure and
depreciation and amortisation relates to non-current
property, plant and equipment, intangible assets and
leased products.
Segment figures can be reconciled to the correspond-
ing Group figures as follows:
79,936
on non-current assets
in € million
30,918
Total for reportable segments
Reconciliation of capital expenditure
9,224
9,665
-664
-772
Group profit before tax
219
10,204
10,218
Reconciliation of segment result
Total for reportable segments
Financial result of Automotive
segment and Motorcycles segment
Elimination of inter-segment items
2015
2016
-316
26900
8
100
100
100
100
134
Rolls-Royce Motor Cars Ltd., Farnborough
59
135
Alphabet Nederland B.V., Breda 11
16
136
BMW Austria Leasing GmbH, Salzburg
12
BMW Finance N.V., The Hague
123
21
100
180
BMW Austria Ges.m.b.H., Salzburg
BMW Financial Services Belgium S.A./N.V., Bornem
APD Industries plc, Farnborough
BMW Austria Bank GmbH, Salzburg
100
156
7
104
100
112
Alphabet Belgium Long Term Rental NV, Aartselaar
100
94
119
BMW Russland Trading 000, Moscow
BMW International Investment B.V., 's-Gravenhage
BMW Financial Services Scandinavia AB, Sollentuna
BMW Sverige AB, Stockholm
36
39
374
100
592
100
49
49
100
719
BMW Italia S. p.A., San Donato Milanese
BMW Finance S.N.C., Guyancourt
BMW France, Montigny-le-Bretonneux
BMW Coordination Center V.o.F., Bornem
BMW (Schweiz) AG, Dielsdorf
181
Alphabet UK Ltd., Glasgow
BMW Iberica S.A., Madrid
100
364
100
202
ALPHABET (GB) Ltd., Farnborough
100
65
213
BMW (UK) Ltd., Farnborough
100
40
21
BMW Belgium Luxembourg S.A./N.V., Bornem
100
24
302
100
35
345
277
Bavaria Reinsurance Malta Ltd., Floriana
11.8
BMW Bank OOO, Moscow
BMW Vertriebs GmbH, Salzburg
BMW Motorsport Ltd., Farnborough
BMW i Ventures B.V., 's-Gravenhage
BMW Group Benefit Trust Ltd., Farnborough
BMW Drivers Club Ltd., Farnborough
BMW Car Club Ltd., Farnborough
BMW (UK) Pensions Services Ltd., Hams Hall
BMW (P+A) Ltd., Farnborough
BMW (GB) Ltd., Farnborough
Alphabet Insurance Services Polska Sp. z o.o., Warsaw
Europe
FOREIGN7
100
100
100
100
100
100
Capital invest-
ment in %
in € million
Profit/loss
in € million
Equity
Cobalt Holdings Ltd., Basingstoke
Cobalt Telephone Technologies Ltd., Basingstoke
Content4all BV, Amsterdam
John Cooper Garages Ltd., Farnborough
Park-Mobile (UK) Limited, Basingstoke
100
Park-line Holding B.V., 's-Gravenhage
100
Park-line B.V., 's-Gravenhage
100
Park-line Aqua B.V., 's-Gravenhage
100
000 BMW Leasing, Moscow
100
John Cooper Works Ltd., Farnborough
PM Parking Ventures GmbH, Munich
100
100
100
100
100
100
100
100
100
100
100
100
100
100
ParkNow GmbH, Munich
Bavaria Betriebs-Gastronomie GmbH, Munich4
BMW Australia Finance Ltd., Mulgrave
100
100
100
100
100
100
100
100
100
74
100
100
51
100
100
100
100
287
83
108
20
196
394
-12
100
BMW Australia Ltd., Melbourne
Automag GmbH, Munich
Alphabet Fleetservices GmbH, Munich
DOMESTIC7
Companies
at 31 December 2016
→ List of Investments
BMW Group
Notes to the Group
Financial Statements
Statements
Group
Financial
→ 62
BMW AG's non-consolidated companies at 31 December 2016
BMW Car IT GmbH, Munich4
184
100
BMW Melbourne Pty. Ltd., Melbourne
100
BMW Sydney Pty. Ltd., Sydney
100
BMW New Zealand Ltd., Auckland
100
BMW Financial Services New Zealand Ltd., Auckland
100
20
194
183
Parkmobile Belgium BvBa, Antwerpen
100
Parkmobile Benelux B.V., Amsterdam
50
-2
38
Capital invest-
ment in %
Profit/loss
in € million
in € million
Equity
DriveNow Verwaltungs GmbH, Munich
DriveNow GmbH & Co. KG, Munich³
DOMESTIC
Joint ventures - equity accounted
Companies
→ 63
BMW AG's associated companies, joint ventures and joint operations at 31 December 2016
at 31 December 2016
→ List of Investments
BMW Group
Notes to the Group
Financial Statements
Statements
Group
Financial
186
185
49
100
50
FOREIGN
BMW Brilliance Automotive Ltd., Shenyang
Associated companies - equity accounted
Bavarian & Co. Ltd., Incheon
Mini Urban X Accelerator SPV, LLC, Wilmington, Delaware
Parkmobile International Holding BV, Utrecht 10
IP Mobile N.V., Brussels
Stadspasparkeren B.V., Deurne
BMW AVTOTOR Holding B.V., Amsterdam
BMW Albatha Finance PSC, Dubai
BMW Albatha Leasing LLC, Dubai
FOREIGN¹
PDB-Partnership for Dummy Technology and Biomechanics GbR, Gaimersheim
Abgaszentrum der Automobilindustrie GbR, Weissach
70
The Retail Performance Company GmbH, Munich
Encory GmbH, Unterschleißheim
DOMESTIC¹
Not equity accounted or proportionately-consolidated entities
SGL Automotive Carbon Fibers, LLC, Dover, Delaware
FOREIGN
SGL Automotive Carbon Fibers Verwaltungs GmbH, Munich³
SGL Automotive Carbon Fibers GmbH & Co. KG, Munich
DOMESTIC
Joint operations - proportionately-consolidated entities
THERE Holding B.V., Amsterdam³
FOREIGN
Digital Energy Solutions GmbH & Co. KG, Munich
100
85888287
100
BMW Leasing de Argentina S.A., Buenos Aires
BMW i Ventures, LLC, Wilmington, Delaware
BMW Experience Centre Inc., Richmond Hill, Ontario
217-07 Northern Boulevard Corporation, Wilmington, Delaware
The Americas
90
100
100
100
100
60
BMW Operations Corp., Wilmington, Delaware
BMW Technology Corporation, Wilmington, Delaware
Designworks/USA, Inc., Newbury Park, California
100
U.T.E. Alphabet España-Bujarkay, Sevilla
Parkmobile Suisse SA, Bulle
Parkmobile Software BV, Amsterdam
Parkmobile Limited, Basingstoke
Parkmobile Licenses B.V., Amsterdam
Parkmobile Hellas SA, Athens
Parkmobile Group Holding BV, Amsterdam
Parkmobile Group BV, Amsterdam
100
Parkmobile France SAS, Versailles
100
100
100
MINI Business Innovation, LLC, Wilmington, Delaware
Reach Now, LLC, Wilmington, Delaware
100
100
100
Herald International Financial Leasing Co., Ltd., Tianjin
THEPSATRI Co., Ltd., Bangkok⁹
BMW Philippines Corp., Manila
BMW Insurance Services Korea Co. Ltd., Seoul
BMW India Leasing Pvt. Ltd., Gurgaon
BMW Financial Services Singapore Pte Ltd., Singapore
BMW Financial Services Hong Kong Limited, Hong Kong
BMW Finance (United Arab Emirates) Ltd., Dubai
Asia
100
Toluca Planta de Automoviles, S.A. de C.V., Mexico City
100
BMW Automobile Distributors (Pty) Ltd., Midrand
BPF Midrand Property Holdings (Pty) Ltd., Midrand
Multisource Properties (Pty) Ltd., Midrand
Africa
100
100
100
100
100
100
100
100
100
100
151
310
100
BMW Central Pension Trustees Ltd., Farnborough
Riley Motors Ltd., Farnborough
BMW (UK) Capital plc, Farnborough
BMW (UK) Investments Ltd., Farnborough
Société Nouvelle WATT Automobiles SARL, Rueil-Malmaison
Alphabet Luxembourg S.A., Leudelange
BMW Milano S.r.I., San Donato Milanese
BMW Madrid S.L., Madrid
Oy BMW Suomi AB, Helsinki
BMW Den Haag B.V., The Hague
at 31 December 2016
→ List of Investments
BMW Group
Notes to the Group
Financial Statements
Statements
Group
Financial
182
100
100
100
100
100
100
100
Triumph Motor Company Ltd., Farnborough
BLMC Ltd., Farnborough
100
100
Financial Services Vehicle Trust, Wilmington, Delaware
100
289
1,429
BMW Manufacturing Co., LLC, Wilmington, Delaware
100
148
1,545
BMW Bank of North America, Inc., Salt Lake City, Utah
100
667
100
2,339
The Americas
100
100
100
100
100
100
100
100
100
100
BMW (US) Holding Corp., Wilmington, Delaware
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
103
Alphabet France SAS, Rueil-Malmaison
Alphabet France Fleet Management S.N.C., Rueil-Malmaison
BMW Financial Services B.V., Rijswijk
BMW Services Ltd., Farnborough
Alphabet España Fleet Management S.A.U., Madrid
BMW Norge AS, Fornebu
BMW Financial Services (Ireland) DAC, Dublin
100
1,007
100
BMW Retail Nederland B.V., Delft
100
100
BMW Nederland B.V., Rijswijk
BMW Danmark A/S, Copenhagen
BMW Distribution S.A.S., Montigny-le-Bretonneux
BMW Financial Services Polska Sp. z o.o., Warsaw 12
BMW Roma S.r.l., Rome
BMW Services Belgium N.V., Bornem
Park Lane Ltd., Farnborough
BMW Automotive (Ireland) Ltd., Dublin
BMW Renting (Portugal) Lda., Porto Salvo
100
BMW Amsterdam B.V., Amsterdam
BMW Portugal Lda., Porto Salvo
Alphabet Fuhrparkmanagement (Schweiz) AG, Dielsdorf
Alphabet Polska Fleet Management Sp. z o.o., Warsaw
Alphabet Austria Fuhrparkmanagement GmbH, Salzburg
BMW Financial Services Denmark A/S, Copenhagen
BMW Hellas Trade of Cars A.E., Kifissia
100
100
100
100
100
Alphabet Italia Fleet Management S.p.A., Rome
4,678
-49
BMW of North America, LLC, Wilmington, Delaware
BMW (Thailand) Co., Ltd., Bangkok
BMW Korea Co., Ltd., Seoul
BMW Japan Corp., Tokyo
BMW Financial Services Korea Co., Ltd., Seoul
BMW Japan Finance Corp., Chiba
BMW China Automotive Trading Ltd., Beijing
100
5
177
100
63
682
BMW Automotive Finance (China) Co., Ltd., Beijing
Asia
BMW Financial Services (South Africa) (Pty) Ltd., Midrand
BMW (South Africa) (Pty) Ltd., Pretoria
Africa
100
100
100
100
100
100
BMW India Financial Services Private Ltd., Gurgaon
BMW Manufacturing (Thailand) Co., Ltd., Rayong
BMW Malaysia Sdn Bhd, Kuala Lumpur
BMW Asia Pte. Ltd., Singapore
54
320
100
66
384
100
160
535
58
154
987
100
Oceania
BMW Holding Malaysia Sdn Bhd, Kuala Lumpur
107
BMW Lease (Malaysia) Sdn Bhd, Kuala Lumpur
BMW Tokyo Corp., Tokyo
BMW Credit (Malaysia) Sdn Bhd, Kuala Lumpur
BMW Asia Pacific Capital Pte Ltd., Singapore
BMW Asia Technology Centre Sdn Bhd, Kuala Lumpur
PT BMW Indonesia, Jakarta
BMW China Services Ltd., Beijing
BMW Leasing (Thailand) Co., Ltd., Bangkok
BMW India Private Ltd., Gurgaon
BMW Osaka Corp., Osaka
100
100
100
100
100
100
100
-31
197
100
555
315
100
59
100
332
BMW Financial Services de Mexico S.A. de C.V. SOFOM, Mexico City
BMW de Argentina S.A., Buenos Aires
BMW de Mexico, S.A. de C.V., Mexico D.F.
BMW Financeira S.A. Credito, Financiamento e Investimento, São Paulo
BMW do Brasil Ltda., São Paulo
BMW SLP, S.A. de C.V., Villa de Reyes 12
BMW Financial Services NA, LLC, Wilmington, Delaware
BMW US Capital, LLC, Wilmington, Delaware
100
353
558
BMW Manufacturing Indústria de Motos da Amazônia Ltda., Manaus 12
100
100
BMW of Manhattan, Inc., Wilmington, Delaware
100
100
100
100
100
100
100
100
100
BMW Canada Inc., Richmond Hill, Ontario
BMW Receivables Limited Partnership, Richmond Hill, Ontario
BMW Receivables 1 Inc., Richmond Hill, Ontario
100
BMW Receivables 2 Inc., Richmond Hill, Ontario
BMW FS Securities LLC, Wilmington, Delaware
BMW Facility Partners, LLC, Wilmington, Delaware
BMW Auto Leasing, LLC, Wilmington, Delaware
BMW Extended Service Corporation, Wilmington, Delaware
SB Acquisitions, LLC, Wilmington, Delaware
BMW Consolidation Services Co., LLC, Wilmington, Delaware
Rolls-Royce Motor Cars NA, LLC, Wilmington, Delaware
BMW Acquisitions Ltda., São Paulo
BMW Finanzdienstleistungen (Schweiz) AG, Dielsdorf
BMW Insurance Agency, Inc., Wilmington, Delaware
BMW Leasing do Brasil, S.A., São Paulo
BMW FS Funding Corp., Wilmington, Delaware
BMW Manufacturing LP, Woodcliff Lake, New Jersey
BMW FS Receivables Corp, Wilmington, Delaware
1,061
BMW Leasing de Mexico S.A. de C.V., Mexico City
2,003
4
→Page 224 BMW Group Auditor's Report
→ Page 223 Responsibility Statement by the Company's
Legal Representatives
→Page 212 Compensation Report
→Page 207 Compliance in the BMW Group
Disclosures pursuant to the Act on Equal Gender Participation
Information on Corporate Governance
→ Page 205
→ Page 204
→ Page 198 Composition and Work Procedures of the Supervisory Board
of BMW AG and its Committees
Composition and Work Procedures of the Board of Management
of BMW AG and its Committees
Members of the Supervisory Board
→ Page 196
→ Page 193
→ Page 192
→ Page 190 Statement on Corporate Governance (§289a HGB)
(Part of the Combined Management Report)
→ Page 190 Information on the Company's Governing Constitution
→Page 191 Declaration of the Board of Management and
of the Supervisory Board pursuant to § 161 AktG
Members of the Board of Management
4
Corporate
Governance
Company's Govern-
ing Constitution
Board of
Management
16.9
The close interaction between Board of Management
and Supervisory Board in the interests of the enterprise
as described above is also known as a "two-tier board
structure".
The designation "BMW Group" comprises Bayerische
Motoren Werke Aktiengesellschaft (BMW AG) and
its group entities. BMW AG is a stock corporation
(Aktiengesellschaft) based on the German Stock
Corporation Act (Aktiengesetz) and has its registered
office in Munich, Germany. It has three representative
bodies: the Annual General Meeting, the Superviso-
ry Board and the Board of Management. The duties
and authorities of those bodies derive from the Stock
Corporation Act and the Articles of Incorporation of
BMW AG. Shareholders, as the owners of the business,
exercise their rights at the Annual General Meeting.
The Annual General Meeting decides in particular on
the utilisation of unappropriated profit, the ratification
of the acts of the members of the Board of Management
and the Supervisory Board, the appointment of the
external auditor, changes to the Articles of Incorpo-
ration and specified capital measures, and elects the
shareholders' representatives to the Supervisory Board.
The Board of Management manages the enterprise
under its own responsibility. Within this framework,
it is monitored and advised by the Supervisory Board.
The Supervisory Board appoints the members of the
Board of Management and can, at any time, revoke
an appointment for important reasons. The Board of
Management keeps the Supervisory Board informed of
all significant matters regularly, promptly and compre-
hensively, following the principles of conscientious and
faithful accountability and in accordance with prevail-
ing law and the reporting duties allocated to it by the
Supervisory Board. The Board of Management requires
the approval of the Supervisory Board for certain major
transactions. The Supervisory Board is not, however,
authorised to undertake management measures itself.
Information on the Company's
Governing Constitution
Good corporate governance - acting in accordance
with the principles of responsible management aimed
at increasing the value of the business on a sustainable
basis - is an essential requirement for the BMW Group
embracing all areas of the business. Corporate culture
within the BMW Group is founded on transparent
reporting and communication, corporate governance
in the interest of all stakeholders, fair and open coop-
eration between the Board of Management and the
Supervisory Board as well as among employees, and
compliance with existing laws. The Board of Manage-
ment and Supervisory Board report in this statement
on important aspects of corporate governance pursuant
to §§ 289, 315 (5) HGB and section 3.10 of the German
Corporate Governance Code (GCGC).
CORPORATE
GOVERNANCE
STATEMENT ON
CORPORATE
GOVERNANCE
Constitution
→Information on the
Company's
Statement on
Corporate
Governance
190
Report
Compensation
Compliance
Supervisory Board
Governing
Oliver Zipse
Peter Schwarzenbauer
Dr. Ian Robertson (HonDSc)
rules. Equity not denominated in euro is translated into euro using the closing exchange rate at the balance sheet date, earnings are translated using the average rate.
8 The amounts shown for entities accounted for using the equity method and for proportionately consolidated entities correspond to the annual financial statements drawn up in accordance with uniform IFRS
7 These entities are neither consolidated nor accounted for using the equity method due to their overall immateriality for the Group Financial Statements.
6 Exemption from publication of financial statements applied in accordance with § 264 (3) and § 264 b HGB.
Exemption from drawing up a management report applied in accordance with § 264 (3) and § 264 b HGB.
4 Profit and Loss Transfer Agreement with a subsidiary of BMW AG.
3 Profit and Loss Transfer Agreement with BMW AG.
⁹ Including power to appoint representative bodies.
2 The amounts shown for the foreign subsidiaries correspond to the annual financial statements drawn up in accordance with uniform IFRS rules. Equity and earnings not denominated in euro are translated into
euro using the closing exchange rate at the balance sheet date.
2.6
2.7
0.9
1.7
Swindon Pressings Ltd., Farnborough
9.1
18.6
1.2
1.1
10 Significant influence.
12 First-time consolidation.
Dr. Nicolas Peter
Klaus Fröhlich
Milagros Caiña Carreiro-Andree Markus Duesmann
Harald Krüger
The Board of Management
Bayerische Motoren Werke
Aktiengesellschaft
Munich, 14 February 2017
¹¹Exemption pursuant to Article 2:403 of the Civil Code of the Netherlands applied.
at 31 December 2016
Notes to the Group
Financial Statements
BMW Group
Statements
Group
Financial
188
187
13 First-time consolidation in the financial year 2016: BMW Leasing (GB) Ltd., Farnborough.
→ List of Investments
3.3
Practices Applied beyond Mandatory Requirements
3.6
20
BMW AG's participations at 31 December 2016
→ 64
Companies
DOMESTIC
Deutsches Forschungszentrum für Künstliche Intelligenz GmbH, Kaiserslautern
GSB Sonderabfall-Entsorgung Bayern GmbH, Baar-Ebenhausen
46
Hubject GmbH, Berlin
Joblinge gemeinnützige AG Berlin, Berlin
Joblinge gemeinnützige AG Leipzig, Leipzig
Joblinge gemeinnützige AG München, Munich
RA Rohstoffallianz GmbH i.L., Berlin
Racer Benchmark Group GmbH, Landsberg am Lech
SGL Carbon SE, Wiesbaden
Equity
IVM Industrie-Verband Motorrad GmbH & Co. Dienstleistungs KG, Essen
in € million
18
30
33
43
10
49
49
44
2
25
49
50
0.3
25
20
40
40
50
50
Profit/loss
50
Capital invest-
ment in %
Rever Moto, Inc., Wilmington, Delaware
RideCell, Inc., Wilmington, Delaware
Scoop Technologies, Inc., Wilmington, Delaware
Srividya Tech, Inc., Wilmington, Delaware
striVB Labs., Inc., Camden, Delaware
Turo, Inc., Dover, Delaware
Zendrive, Inc., Dover, Delaware
Nauto, Inc., Dover, Delaware
ZIRX Technologies, Inc., Dover, Delaware
1 The amounts shown for the German subsidiaries correspond to the annual financial statements drawn up in accordance with German accounting requirements (HGB).
1.5
12.0
6.7
10.6
1.1
in € million
Moovit App Global Ltd., St. Ness Ziona
Life360, Inc., Dover, Delaware
50
ChargePoint, Inc., Wilmington, Delaware
4.6
Desktop Metal, Inc., Wilmington, Delaware
3.1
16.7
9.8
16.7
6.2
10.5
18.9
18.3
Carbon, Inc., Wilmington, Delaware
FOREIGN7
Chargemaster Plc., Luton
Gios Holding B.V., Oss
JustPark Parking Limited, London
9.1
Parkopedia Ltd., Birmingham
Examination of financial statements and the profit distribution proposal
KPMG AG Wirtschaftsprüfungsgesellschaft conducted a review of the abridged Interim Group
Financial Statements and Interim Group Management Report for the six-month period ended
30 June 2016. The results of the review were presented to the Audit Committee by representatives
of KPMG AG Wirtschaftsprüfungsgesellschaft. No issues were identified that might indicate
that the abridged Interim Group Financial Statements and Interim Group Management Report
had not been prepared, in all material respects, in accordance with the applicable provisions.
The Group and Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft
for the year ended 31 December 2016 and the Combined Management Report
- as author-
ised for issue by the Board of Management on 14 February 2017 – were audited by KPMG AG
Wirtschaftsprüfungsgesellschaft and given an unqualified audit opinion.
The composition of the Presiding Board and the committees of the Supervisory Board remained
unchanged during the financial year 2016. The Corporate Governance Report contains a summary
of the composition of the Supervisory Board and its committees.
In 2016, the Annual General Meeting re-elected Simone Menne to the Supervisory Board for
a term of five years. Ulrich Kranz resigned his mandate as executive staff representative with
effect from the end of 2016. As elected substitute member, Ralf Hattler became a member of
the Supervisory Board with effect from 1 January 2017. We thank Mr Kranz for the trusting and
constructive working relationship within the Supervisory Board.
and Supervisory Board Committees
Supervisory Board
→ Report of the
14
-
13
Composition of the Supervisory Board, the Presiding Board
KPMG AG Wirtschaftsprüfungsgesellschaft is the external auditor for BMW AG and the
BMW Group. The Auditor's Report has been signed with effect from the financial year 2016 by
Christian Sailer, as independent auditor (Wirtschaftsprüfer), and with effect from the financial
year 2014 by Andreas Feege, as independent auditor (Wirtschaftsprüfer), responsible for the
performance of the engagement.
The Group corporate culture, the spirit of innovation, and the passionate commitment of our
workforce provide a strong foundation for taking on the challenges of the future. Building on
this firm base, the BMW Group will continue to play a formative and leading role in shaping
technological change, with the clear aim of emerging on the winning side.
In a first step, the Audit Committee diligently examined and discussed these documents at a
meeting held on 24 February 2017. The Supervisory Board subsequently examined the relevant
drafts of the Board of Management at its meeting on 9 March 2017, after hearing the committee
chairman's report on the meeting of the Audit Committee. In both meetings, the Board of
Management gave a detailed explanation of the financial reports it had prepared. Representatives
of the external auditors attended both meetings, reported on significant findings and answered
any additional questions raised by the members of the Supervisory Board. They confirmed that
the risk management system established by the Board of Management is capable of identifying
developments at an early stage that might impair the Company's going-concern status. They
also confirmed that no material weaknesses in the internal control system and risk management
system were found with regard to the financial reporting process. Similarly, they confirmed that
they had not identified any issues in the course of their audit work that were inconsistent with
the contents of the Declaration of Compliance issued jointly by the two boards.
Based on thorough examination by the Audit Committee and the full Supervisory Board, we
concurred with the results of the external audit. In accordance with the conclusion reached after
the examination by the Audit Committee and the full Supervisory Board, no objections were
raised. The Group and Company Financial Statements of Bayerische Motoren Werke Aktien-
gesellschaft for the financial year 2016 prepared by the Board of Management were approved at
the Supervisory Board meeting held on 9 March 2017. The separate financial statements have
therefore been adopted.
We also examined the proposal of the Board of Management to use the unappropriated profit to
pay an increased dividend of €3.50 per share of common stock and €3.52 per share of non-voting
preferred stock. We consider the proposal appropriate and therefore concur with it.
Expression of appreciation by the Supervisory Board
The Supervisory Board wishes to thank the members of the Board of Management and the entire
staff of the BMW Group worldwide for their efforts and hard work, which contributed to the
overall success of the BMW Group in its centenary year.
Pro-actively shaping change
We would like to extend our special thanks to Dr Draeger and Dr Eichiner for their many years
of dedicated work in the interests of the BMW Group, both in highly successful years and during
the challenging period of the global financial and economic crisis. We equally wish to thank
them for their personal contribution to the BMW Group's long-term success.
Munich, 9 March 2017
On behalf of the Supervisory Board
Yours
Men
Norbert Reithofer
The Financial Statements and the Combined Management Report, the long-form audit reports
of the external auditors and the Board of Management's profit distribution proposal were made
available to all members of the Supervisory Board in a timely manner.
With effect from 1 January 2017, we appointed Dr Nicolas Peter as member of the Board of
Management. Dr Peter joined BMW AG in 1991 and most recently worked as head of the European
sales region. He took over board responsibility for Finances from Dr Friedrich Eichiner, who
retired from the Board of Management with effect from the end of 2016.
As in previous years, the Head of Group Controlling reported during the financial year 2016
on the current risk profile of the BMW Group and provided an overview of the changes made
to the risk management system in view of new internal and external requirements.
Composition and organisation of the Board of Management
During the period under report, the composition of the Board of Management changed as part
of the process of amicably agreed succession planning.
Chairman of the Supervisory Board
In both the Personnel Committee and the full Supervisory Board, we examined not only the
structure, but also the amounts of compensation paid to the various members of the Board of
Management. In this context, we reviewed trends in business performance and board compen-
sation over a period of several years. We also gave general consideration to the remuneration
paid to executive managers and employees of BMW AG within Germany over the course of time.
A compensation consultant, independent of both the Board of Management and BMW AG, was
called upon to provide expert advice and assist us in our evaluation of DAX-related compensation
studies. We concluded that the level of compensation paid to board members, including their
pension entitlements, is appropriate and in keeping with other DAX-listed companies. The
Supervisory Board therefore resolved not to propose any changes to the system of Board of
Management compensation in 2016. Further information on the amounts of compensation
paid to the members of the Board of Management is provided in the Compensation Report (see
section "Statement on Corporate Governance").
Together with the Board of Management, we undertook an in-depth review of the corporate
governance standards currently in place within the BMW Group as well as the rules set out
in the German Corporate Governance Code. The latest Declaration of Compliance, issued in
December 2016, is included in the Annual Report.
We also discussed with the Board of Management the probable impact of technological changes
on future workforce requirements. We were informed about the range of measures implemented
to incorporate Strategy NUMBER ONE > NEXT in the BMW Group's corporate culture and
brought up to date on activities aimed at attracting young talent. The Board of Management
also provided details of actual and planned additions to the workforce in defined growth areas.
The Board of Management also reported on the latest status of the BMW Group's diversity concept.
The report presented figures for the percentage of female executives in the BMW Group, in par-
ticular the proportions in the two executive management levels below the Board of Management,
the targets set, and the latest status of these two levels.
We again decided upon a target for the proportion of female members on the Board of Manage-
ment, including a time frame for target attainment. As its target for the period from 1 January 2017
to 31 December 2020, we stipulated that the Board of Management should continue to have at
least one female member. We consider it a key aim to increase the proportion of women on the
Board of Management and fully support the Board's endeavours to increase the percentage of
women employed at the highest executive management levels within the BMW Group. Moreover,
we developed a diversity concept for the composition of the Board of Management.
The composition targets for the Supervisory Board, which represent the basis for a diversity
concept, were not changed during the financial year 2016. Compliance with the composition
targets set for 31 December 2016 was determined by way of self-assessment.
No conflicts of interest arose on the part of members of either of the two boards during the
year under report. Significant transactions with Supervisory Board members and other related
parties as defined by IAS 24, including close relatives and intermediary entities, are examined
on a quarterly basis.
The Supervisory Board also assessed the efficiency of its own work with the aim of further
improving its internal procedures and the work of its committees. With this point in mind, I
also conducted individual discussions with the members of the Supervisory Board. The matter
was also considered at a meeting of the full Supervisory Board. Additional topics for report were
identified as part of the overall conclusion reached.
11
→ Report of the
Supervisory Board
Each of the five Supervisory Board meetings during the financial year 2016 was attended on
average by over 90% of its members, a fact that can be tied in to the analysis of attendance fees
for individual members disclosed in the Compensation Report. During their term of office in
the period under report, none of the members of the Supervisory Board took part in only half or
less than half of the meetings of the Supervisory Board, the Presiding Board or the committees
to which any given member belongs.
Description of Presiding Board activities and committee work
The Supervisory Board has established a Presiding Board and four committees. The chairpersons
of the various committees reported to the Supervisory Board in depth on any committee meetings
held since the previous meeting of the full Supervisory Board. I brought the representatives
of the shareholders up to date regarding the deliberations of the Nomination Committee. A
detailed description of the duties, composition and work procedures of the various committees
is provided in the Corporate Governance Report.
The Presiding Board convened four times during the year under report. Assuming no other
committee was responsible, the Presiding Board prepared the detailed agenda for the meetings of
the full Supervisory Board, including the careful preparation of topics on the basis of written and
oral reports provided by members of the Board of Management and senior heads of department.
We also stipulated further topics for full Supervisory Board meetings and made suggestions for
reports submitted to the Supervisory Board.
The Audit Committee held four meetings and three telephone conference calls during the financial
year 2016. In the course of those conference calls, together with the Board of Management we
deliberated on the Quarterly Financial Reports prior to their publication. Representatives of the
external auditors were present during the telephone conference call held in conjunction with
the Half-year Financial Report.
The Audit Committee Meeting held in spring 2016 focused primarily on preparing for the
Supervisory Board meeting at which the financial statements were to be examined. Before
recommending to the full Supervisory Board that KPMG AG Wirtschaftsprüfungsgesellschaft
be elected as Company and Group auditor at the Annual General Meeting 2016, we obtained a
Declaration of Independence from KPMG AG Wirtschaftsprüfungsgesellschaft. We also consid-
ered the scope and composition of non-audit services, including tax advisory services provided
by KPMG entities to the BMW Group. There were no indications of conflicts of interest, grounds
for exclusion or lack of independence on the part of the auditor.
The fee proposals for the audit of the year-end Company and Group Financial Statements 2016 and
the review of the Half-year Financial Report were deemed appropriate. Subsequent to the Annual
General Meeting 2016, we therefore appointed KPMG AG Wirtschaftsprüfungsgesellschaft for
the relevant engagements and specified audit focus areas.
The Head of Group Financial Reporting informed us about the internal control system (ICS)
underlying financial reporting and explained measures being taken to develop the system further.
No material ICS weaknesses were identified which would jeopardise the system's effectiveness.
The BMW Group Compliance Committee chairman provided information on the current status of
compliance within the Group as well as changes in the BMW Group Compliance Organisation aimed
at strengthening local compliance management, including the next steps to be taken in this area.
The Head of Group Internal Audit reported on internal audit matters, including a description
of the significant internal audit findings and the planned areas of focus on the industrial and
financial services sides of the business.
On repeated occasions, the Audit Committee dealt with the new requirements for financial year-
end audits, particularly the rules applying to non-audit-related services provided by the auditor
and the procedure for changing the external auditor. In accordance with statutory requirements,
we approved a list of non-audit-related services that may be provided by the external auditor.
Furthermore, we performed our statutory duties in connection with the mandatory audit of
over-the-counter trading with derivatives pursuant to § 20 of the Securities Trading Act (WpHG).
An external auditor confirmed the effectiveness of the system that BMW AG currently employs
to ensure compliance with regulatory requirements. Furthermore, in the Audit Committee we
concurred with the decision of the Board of Management to raise the Company's share capital
in accordance with § 4 (5) of the Articles of Incorporation (Authorised Capital 2014) by €305,000
and, in conjunction with the Employee Share Programme, to issue a corresponding number
of new non-voting bearer shares of preferred stock, each with a par value of €1, at favourable
conditions to employees.
The Personnel Committee convened five times during the financial year 2016. One of the
principal duties of this committee is to prepare decisions of the full Supervisory Board relating
to the composition of the Board of Management. In specific cases, we also gave our approval for
members of the Board of Management to accept non-BMW Group mandates.
The Nomination Committee convened twice during the financial year 2016. At these meetings, we
deliberated on succession planning for mandates of the shareholders' representatives and, taking
account of the composition targets set, made one recommendation for a proposed nomination
of a candidate for election at the Annual General Meeting 2017.
The statutory Mediation Committee was not required to convene during the financial year 2016.
With effect from 1 October 2016, the Supervisory Board appointed Markus Duesman as member
of the Board of Management. Mr Duesmann has many years of management experience in the
automobile industry and has been with BMW AG since 2007. Most recently, he was head of
powertrain and the related process chain within the development area. Mr Duesmann took over
board responsibility for the Purchasing and Supplier Network from Dr Klaus Draeger, whose
mandate ended on 30 September 2016.
12
19
Targets met for financial year 2016
Highly motivated associates are the key to our success
The company is also one of the leading financial services providers in the automotive sector. Our
Financial Services division concluded more than 1.8 million new contracts with retail customers
in 2016. For the first time, the segment Financial Services posted pre-tax earnings of more than
2.1 billion euros and therefore once again made a major contribution to the Group result.
EBT rose slightly as forecast - by 4.8 per cent year-on-year. Annual net profit increased by
8.0 per cent to more than 6.9 billion euros. The EBIT margin in the Automotive segment stands
at 8.9 per cent and therefore remains within our target range.
The BMW Group posted record revenues of over 94.1 billion euros in 2016. Profit before tax also
reached a new high of more than 9.6 billion euros.
We achieved our goals for 2016. We succeeded despite increasing uncertainties in the political
and economic environment and strong competition on the global auto markets.
The desirability of our brands and products is reflected in rankings and awards. The BMW Group
was once again the highest-ranked automobile manufacturer in Fortune Magazine's 2017 "World's
Most Admired Companies" and is the only German company in the top 50. With the "World
Car Award" and "Best Car" for the BMW 7 Series and "Golden Steering Wheel" for the BMW i3,
the BMW Group earned several of the world's top honours in 2016.
The company employed a total of 124,729 people at the end of 2016. This represents a slight
year-on-year increase of 2.0 per cent. In addition to specialists in alternative drivetrains and
automated driving, we are also recruiting experts for our financial services business and expansion
in mobility services. The BMW Group continues to benefit from its status as a highly attractive
employer, as shown in numerous rankings amongst engineering, IT and business graduates. This
helps us attract the young talent we need to implement digitalisation in all our business segments.
The BMW Group continues to benefit from its balanced distribution of sales across the world's
three major market regions: Europe, Asia and the Americas. We are making targeted investments
in our production network of 31 sites in 14 countries on five continents to enhance performance
and flexibility.
cycles and scooters sold.
The BMW brand sold more than two million vehicles for the first time in a single year. Demand
for the X models, the BMW 2 Series and the new BMW 7 Series was particularly strong. The MINI
brand also achieved record sales of 360,233 vehicles; as did BMW Motorrad, with 145,032 motor-
New all-time highs for BMW, MINI and BMW Motorrad brands
BMW Group remains the world's leading premium car company in 2016
In its centenary year 2016, the BMW Group continued its successful business development. For
the sixth consecutive year, sales reached a new all-time high. With a solid increase of 5.3 per cent
over the previous year, sales climbed to more than 2.3 million vehicles. The BMW Group therefore
remains the leading car company in the global premium segment.
We are creating common platforms and architectures for economical industrialisation of com-
bustion engines with Efficient Dynamics technology and electrification across all brands and
model series.
to deliver a further 100,000 electrified vehicles. Our customers can choose between seven
different models.
Rolls-Royce delivered 4,011 vehicles to customers and reported the second-best year in its
113-year history.
and BMW plug-in hybrid models. In 2017, we intend to go one better: this year alone, we aim
In 2016, we once again invested more than 350 million euros in vocational and professional
training for associates. The BMW Group is also training more than 4,600 young people. This
reflects the company's sense of responsibility towards future generations.
Chairman of the Board of Management
19
20
→ Statement of the
Chairman
of the Board of
Management
2017 model offensive
In the 2017 financial year, we will offer customers more than 20 new BMW, MINI and Rolls-Royce
models. For BMW, a highlight for the current financial year will be the arrival of the most innova-
tive BMW 5 Series of all time. This status has been confirmed by awards such as "Best Connected
Car of the Year". Our 5 Series customers can choose from options ranging from a plug-in hybrid
variant to the M Performance model. Our current MINI line-up is young and striking, with five
models full of character that appeal to different target groups. The new MINI Countryman is
our second spearhead in the fast-growing premium compact segment. Motorcycle fans can also
look forward to new models this year with 14 market launches from BMW Motorrad.
Dear Shareholders,
On behalf of the Board of Management, as well as personally, I would like to thank all our
associates worldwide for their dedication during the financial year 2016. I would also like to
thank our business partners and suppliers, as well as the entire retail organisation. You all play
a direct part in our success!
We firmly believe that the diverse challenges of tomorrow's mobility open up new opportunities
for further growth and technological progress which we will pursue in the interest of our
customers. In doing so, we combine fresh thinking, operational excellence and profitability. For
the past seven years, the EBIT margin in the Automotive segment has been within or above our
target range of eight to ten per cent.
In early 2017, the rating agency Moody's upgraded our long-term credit rating to A1 – giving the
BMW Group the best rating of any European automobile manufacturer and the second-highest
worldwide. This financial stability forms the basis for our investments in the future.
It is only right that our shareholders share in our success. In the 101st year of BMW AG, the
Board of Management and Supervisory Board will therefore propose to the Annual General
Meeting the highest dividend in the history of the company for the financial year 2016, with
a total payout of 2.3 billion euros. Associates of BMW AG in Germany will also share in the
company's positive performance through our profit-sharing programme.
I would like to thank all of our shareholders and debt investors. You, dear shareholders and
investors, accompany us as we embark upon a new age of mobility. With our strategy, we have
shown you our roadmap for the future and we are consistently implementing the measures
accordingly. Your commitment is a sign of your appreciation and trust. We will do everything
in our power to ensure that BMW AG remains an attractive investment and a reliable and
future-oriented company that justifies your trust.
Yours
H. 35"
Harald Krüger
-
Between the launch of the BMW i3 in 2013 and 2016, we sold more than 100,000 BMW i models
The BMW Group is currently the world's most successful premium provider of plug-in hybrid
vehicles. In 2017, we will release two more models: the BMW 5 Series iPerformance and the
MINI Countryman. These will be followed in 2018 by the BMW i8 Roadster. A year later, we will
launch an all-electric MINI and in 2020, an all-electric BMW X3.
Demand will increase with more models and greater range - as shown by the example of our
BMW i3 with its new 94-amp-hour battery. We delivered a total of more than 62,000 BMW i
vehicles and BMW plug-in hybrids to customers in 2016. The BMW i3 is one of the leading electric
vehicles available, while the BMW X5 is the top-selling plug-in hybrid. At our car-sharing service
DriveNow, operated with Sixt SE, BMW i3s already make up 20 per cent of the European fleet.
We see this as a great opportunity to make people, especially young people, excited about
electric driving.
15
16
→ Statement of the
Chairman
of the Board of
Management
Harald Krüger
Chairman of the Board of Management
Dear Shareholders,
A new era has begun for your company: in this, the first year of our “Next 100″, we are embarking
on a new age of individual mobility. Everything we do is for our customers. For them, we are
creating a new kind of premium mobility geared entirely towards their individual needs, and
which will continue to thrill and excite them moving ahead.
Our Vision Vehicles fascinate people the world over
Our goal: to sell 100,000 electrified vehicles in 2017
2016 was our centenary year. And you could see the reports everywhere: "The BMW Group is
not resting on its laurels – it is actively shaping the future." The response of many people when
they saw our BMW, MINI, Rolls-Royce and BMW Motorrad Vision Vehicles for the first time,
was unequivocally enthusiastic: "The BMW Group's Vision Vehicles are unlike anything we've
seen before." I experienced this excitement myself in Munich, Beijing and Los Angeles. With
our Vision Vehicles, we are providing a glimpse of mobility beyond 2030, when autonomous
driving, connectivity, electro-mobility and services will be part of everyday life.
Becoming a tech company for premium mobility and premium services
with Strategy NUMBER ONE > NEXT
With its bold, entrepreneurial spirit and ground-breaking innovations, the BMW Group has
always shaped individual mobility - constantly evolving in the process. Through Strategy
NUMBER ONE, we grew from a manufacturer of premium automobiles to a provider of premium
mobility and mobility services. Strategy NUMBER ONE > NEXT maps out the company's
further evolution towards a tech company for premium mobility and premium services. To
achieve this, we will continue to expand our mobility services: DriveNow, ReachNow, ParkNow
and ChargeNow.
Our aspiration to be a technology leader in mobility is firmly anchored in Strategy
NUMBER ONE > NEXT. To achieve this, we need to focus even more on a cooperative spirit.
In the digital age, new players from the IT world are bringing their business model to the
automotive sector - proving once again that individual mobility is an attractive field for
Cooperation for faster technological breakthroughs
Our acquisition, together with other German manufacturers, of map service HERE was followed
by another important strategic decision in 2016: the BMW Group is joining forces with Intel
and sensor specialist Mobileye to advance highly-automated and autonomous driving.
Alongside digitalisation, emission-free mobility is another huge task for our industry. By 2025,
we expect around 15 to 25 per cent of BMW Group sales to be electrified vehicles. To achieve
this, we continue to expand the share of electrified models across all our brands and series.
Firmly on course for sustainable mobility
Later this year, we will begin testing autonomous driving in city centres with a fleet of 40 com-
puter-operated vehicles. Customer safety will naturally be our top priority.
We are developing and testing highly-automated and autonomous vehicles at our new Research
and Development Centre for Autonomous Driving near Munich. This was also decided as part
of Strategy NUMBER ONE > NEXT.
Campus for highly-automated and autonomous vehicles
Semi-automated driving with the new BMW 7 Series and BMW 5 Series
The transition to fully-autonomous driving, from around 2030, will see responsibility shift from
driver to machine in five stages. We already have around 8.5 million connected vehicles on the
road today. Our customers are already benefitting from state-of-the-art driver assistance systems
in the BMW 7 Series and the new BMW 5 Series. We are directing all our efforts towards the next
technological leap, which will bring highly-automated driving and further future technologies
to the road with the iNext in 2021.
future business.
of the Board of
Management
18
17
Autonomous driving opens up new possibilities for customers
Autonomous driving will be a key technology for the future of mobility, opening up totally new
possibilities for our customers. Above all, people will be able to reclaim the time they previously
spent behind the wheel concentrating on the traffic. With all our products and services, we
offer various forms of mobility that generate individual excitement, creative space, are intuitive
to use and, at the same time, fully integrated into our customers' lives. As the vehicle becomes
more familiar with its owner, it offers tailored recommendations to make everyday life easier.
→ Statement of the
Chairman
Brigitte Rödig¹ (*1963)
Werner Zierer¹ (*1959)
Member since 2001
Chairman of the Works Council, Regensburg
Member since 2013
Member of the Works Council, Dingolfing
-
Member since 2011
Regional Head of IG Metall Bavaria
Siemens Healthcare GmbH (Deputy Chairman)
Schaeffler AG (Deputy Chairman)
Mandates
195
Jürgen Wechsler² (*1955)
196
1 Employee representatives (company employees).
→Composition and
Work Procedures
of the Board of
Management of
BMW AG and its
Committees
COMPOSITION AND WORK
PROCEDURES OF THE
BOARD OF MANAGEMENT
OF BMW AG AND ITS
COMMITTEES
The Board of Management governs the enterprise
under its own responsibility, acting in the interests
of the BMW Group with the aim of achieving sustain-
able growth in value. The interests of shareholders,
employees and other stakeholders are also taken into
account in the pursuit of this aim.
The Board of Management determines the strategic
orientation of the enterprise, agrees upon it with the
Supervisory Board and ensures its implementation.
The Board of Management is responsible for ensuring
that all provisions of law and internal regulations are
complied with. Further details about compliance with-
in the BMW Group can be found in the "Corporate
Governance" section of the Annual Report. The Board
of Management is also responsible for ensuring that
appropriate risk management and risk controlling
systems are in place throughout the Group.
During their period of employment for BMW AG,
members of the Board of Management are bound by
a comprehensive non-competition clause. They are
required to act in the enterprise's best interests and
may not pursue personal interests in their decisions
or take advantage of business opportunities intended
for the enterprise. They may only undertake ancillary
activities, in particular supervisory board mandates
outside the BMW Group, with the approval of the
Supervisory Board's Personnel Committee. Each
member of the Board of Management of BMW AG is
obliged to disclose conflicts of interest to the Super-
visory Board without delay and inform the other
members of the Board of Management accordingly.
Following the appointment of a new member to the
Board of Management, the BMW Group Corporate
Governance Officer informs the new member of the
framework conditions under which the board mem-
ber's duties are to be carried out - in particular those
enshrined in the BMW Group's Corporate Govern-
ance Code - as well as the duty to cooperate when a
transaction or event triggers reporting requirements
or requires the approval of the Supervisory Board.
Member of the Works Council, Munich
Head of Indirect Purchasing
Member since 1 January 2017
Ralf Hattler³ (*1968)
AQTON SE (Chairman)
Entrust Datacard Corp.
DELTON AG (Chairman)
Mandates
Statement on
Corporate
Governance
Dr. Dominique Mohabeer¹ (*1963)
Member since 2012
(until 31 August 2016)
Membership of equivalent national or foreign boards of business enterprises.
Deutsche Bank AG
Deutsche Post AG
Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft in München
Susanne Klatten (*1962)
Member since 1997
Entrepreneur
Mandates
ALTANA AG (Deputy Chairman)
SGL Carbon SE (Chairman)
UnternehmerTUM GmbH (Chairman)
Dr. h.c. Robert W. Lane (*1949)
Member since 2009
Former Chairman and Chief Executive Officer of
Deere & Company
Mandates
General Electric Company
-
Horst Lischka² (*1963)
Mandates
President of acatech - Deutsche Akademie
Chairman of the Works Council, Dingolfing
Prof. Dr. rer. nat. Dr. h.c. Reinhard Hüttl (*1957)
Member since 2008
Chairman of the Executive Board
of Helmholtz-Zentrum Potsdam
Deutsches GeoForschungsZentrum - GFZ
University Professor
1 Employee representatives (company employees).
2 Employee representatives (union representatives).
³ Employee representatives (members of senior management).
Membership of other statutory supervisory boards.
Membership of equivalent national or foreign boards of business enterprises.
---Other mandates.
193
194
Statement on
Corporate
Governance
→ Members of the
Supervisory Board
Prof. Dr. rer. nat. Dr.-Ing. E.h.
Henning Kagermann (*1947)
Member since 2010
der Technikwissenschaften e. V.
Other mandates.
Member since 2009
Mandates
-
Delvag Luftfahrtversicherungs-AG (Chairman)
(until 31 August 2016)
Deutsche Post AG
LSG Lufthansa Service Holding AG (Chairman)
(until 31 December 2016)
Lufthansa Cargo AG
(until 31 December 2016)
Lufthansa Technik AG
(until 31 December 2016)
FWB Frankfurter Wertpapierbörse
(Exchange Council)
Entrepreneur
Miles & More GmbH (Chairman Advisory Board)
(until 31 August 2016)
Stefan Schmid¹ (*1965)
² Employee representatives (union representatives).
³ Employee representatives (members of senior management).
Membership of other statutory supervisory boards.
-
General Representative of IG Metall Munich
-
(since 1 September 2016)
KraussMaffei Group GmbH
MAN Truck & Bus AG
Städtisches Klinikum München GmbH
Willibald Löw¹ (*1956)
Member since 1999
Chairman of the Works Council, Landshut
Prof. Dr. rer. pol. Renate Köcher (*1952)
Member since 2008
Director of Institut für Demoskopie
Allensbach Gesellschaft zum Studium der
öffentlichen Meinung mbH
Mandates
Allianz SE (until 3 May 2017)
Infineon Technologies AG
Nestlé Deutschland AG
Robert Bosch GmbH
Ulrich Kranz³ (*1958)
Member from 2014 to 31 December 2016
Head of Product Line BMWi
Simone Menne (*1960)
Member since 2015
Member of Management of Boehringer
Ingelheim Gruppe, Finance
Mandates
Stefan Quandt (*1966)
Member since 1997
Deputy Chairman
Industrial Engineer
DELTON AG (Deputy Chairman)
Franz Haniel & Cie. GmbH (Chairman)
Heraeus Holding GmbH
of Management, the Sustainability Board, the Oper-
ations Committee and the Committee for Executive
Management Matters. At its meetings, the Board
of Management defines the overall framework for
business strategies and the use of resources, takes
decisions regarding the implementation of strategies
and deals with issues of particular importance to the
BMW Group. The full board also takes decisions at a
basic policy level relating to the Group's automobile
product strategies and product projects inasmuch as
these are relevant for all brands. The Board of Man-
agement and its committees may, as required and
depending on the subject matters being discussed,
invite non-voting advisers to participate at meetings.
Terms of reference approved by the Board of Man-
agement contain a planned allocation of divisional
responsibilities between the individual board mem-
bers. These terms of reference also incorporate the
principle that the full Board of Management bears
joint responsibility for all matters of particular impor-
tance and scope. In addition, members of the Board of
Management manage the relevant portfolio of duties
under their responsibility, whereby case-by-case rules
can be put in place for cross-divisional projects. Board
members continually provide the Chairman of the
Board of Management with all information regarding
major transactions and developments within their
area of responsibility. The Chairman of the Board
of Management coordinates cross-divisional matters
with the overall targets and plans of the BMW Group,
involving other board members to the extent that divi-
sions within their area of responsibility are affected.
The Board of Management takes its decisions at
meetings generally held on a weekly basis which are
convened, coordinated and headed by the Chairman
of the Board of Management. At the request of the
Chairman, decisions can also be taken outside of
board meetings if none of the board members object
to this procedure. A meeting is quorate if all Board
of Management members are invited to the meeting
in good time. Members unable to attend any meeting
are entitled to vote in writing, by fax or by telephone.
Votes cast by phone must be subsequently confirmed
in writing. Except in urgent cases, matters relating to
a division for which the responsible board member is
not present will only be discussed and decided upon
with that member's consent.
Unless stipulated otherwise by law or in BMW AG's
statutes, the Board of Management makes decisions
on the basis of a simple majority of votes cast at meet-
ings. Outside of board meetings, decisions are taken
on the basis of a simple majority of board members.
In the event of a tied vote, the Chairman of the Board
of Management has the casting vote. Any changes
to the board's terms of reference must be passed
unanimously. A board meeting may only be held if
more than half of the board members are present.
In the event that the Chairman of the Board of
Management is not present or is unable to attend
a meeting, the member of the board responsible for
Finance will represent him.
Minutes are taken of all meetings and the Board of
Management's resolutions and signed by the Chair-
man. Decisions taken by the Board of Management
are binding for all employees.
The rules relating to meetings and resolutions taken
by the full Board of Management are also applicable
for its committees.
Members of the Board of Management not represent-
ed in a committee are provided with the agendas and
minutes of committee meetings. Committee matters
are dealt with in full board meetings if the committee
considers it necessary or at the request of a member
of the Board of Management.
A secretariat for Board of Management matters has
been established to assist the Chairman and other
board members with the preparation and follow-up
work connected with board meetings.
At meetings of the Operations Committee (general-
ly held every two weeks), decisions are reached in
connection with automobile product projects, based
on the strategic orientation and decision framework
stipulated at Board of Management meetings. The
Operations Committee comprises the Board of
Management member responsible for Development
(who also chairs the meetings), together with the
board members responsible for the following areas:
Purchasing and Supplier Network; Production; Sales
and Marketing BMW, Sales Channels BMW Group;
and MINI, Motorcycles, Rolls-Royce, Aftersales BMW
Group. If the committee chairman is not present or
unable to attend a meeting, the member of the board
responsible for Production represents him. Resolu-
tions taken at meetings of the Operations Committee
are made online.
The full board usually convenes up to twice a year in
its function as Sustainability Board in order to define
strategy with regard to sustainability and decide upon
measures to implement that strategy. The Head of
Corporate Affairs and the Representative for Sus-
tainability and Environmental Protection participate
in these meetings in an advisory capacity.
The Board's Committee for Executive Management
Matters deals with enterprise-wide issues affecting
executive managers of the BMW Group, either in
their entirety or individually (such as the executive
management structure, potential candidates for exec-
utive management, nominations for or promotions to
senior management positions). This committee has,
on the one hand, an advisory and preparatory role
(e.g. making suggestions for promotions to the two
remuneration groups below board level and preparing
decisions to be taken at board meetings with regard
to human resources principles with the emphasis on
executive management issues) and a decision-taking
function on the other (e.g. deciding on appointments
to senior management positions and promotions to
higher remuneration groups or the wording of human
resources principles decided on by the full board).
The Committee has two members who are entitled to
vote at meetings, namely the Chairman of the Board
of Management (who also chairs the meetings) and
the board member responsible for Human Resources.
The Head of "Human Resources Management and
Services" as well as the Head of "Human Resources
Executive Management" also participate in these
meetings in an advisory function. At the request of
the Chairman, resolutions may also be passed outside
of committee meetings by casting votes in writing,
by fax or by telephone if the other member entitled
to vote does not object immediately. The Committee
for Executive Management Matters convenes up to
six times a year.
The Board of Management is represented by its Chair-
man in its dealings with the Supervisory Board. The
Chairman of the Board of Management maintains
regular contact with the Chairman of the Supervisory
Board and keeps him informed of all important mat-
ters. The Supervisory Board has passed a resolution
specifying the information and reporting duties of
the Board of Management. As a general rule, in the
case of reports required by dint of law, the Board of
Management submits its reports to the Supervisory
Board in writing. To the extent possible, documents
required as a basis for taking decisions are sent to
the members of the Supervisory Board in good time
before the relevant meeting. Regarding transactions
of fundamental importance, the Supervisory Board
has stipulated specific transactions which require
the approval of the Supervisory Board. Whenever
necessary, the Chairman of the Board of Management
obtains the approval of the Supervisory Board and
ensures that reporting duties to the Supervisory Board
are complied with. In order to fulfil these tasks, the
Chairman is supported by all members of the Board
of Management. The fundamental principle followed
when reporting to the Supervisory Board is that the
latter should be kept informed regularly, without delay
and comprehensively of all significant matters relating
to planning, business performance, risk exposures,
risk management and compliance, as well as any major
variances between actual and budgeted figures.
197
The Board of Management consults and takes deci-
sions as a collegiate body in meetings of the Board
198
Declaration of the Board of Management and of the
Supervisory Board of Bayerische Motoren Werke
Aktiengesellschaft with respect to the recommen-
dations of the "Government Commission on the
German Corporate Governance Code" pursuant to
§ 161 German Stock Corporation Act
1. Since issuance of the last Declaration in December
2015, BMW AG has complied with all of the rec-
ommendations published officially on 12 June 2015
in the Federal Gazette (Code version dated 5 May
2015), as announced with the exception of sec-
tion 4.2.5 sentences 5 and 6.
MEMBERS OF THE
Supervisory Board
→ Members of the
Board of
Management
→Members of the
Statement on
Corporate
Governance
192
Harald Krüger
Chairman
On behalf of the
Board of Management
Chairman
Dr.-Ing. Dr.-Ing. E. h.
Norbert Reithofer
On behalf of the
Supervisory Board
Bayerische Motoren Werke
Aktiengesellschaft
Munich, December 2016
191
3. It is recommended in section 4.2.5 sentences 5
and 6 of the Code that specified information per-
taining to management board compensation be
disclosed in the Compensation Report. These rec-
ommendations have not been and will not be
complied with, due to uncertainties with respect
to their interpretation and doubts as to whether
the supplementary use of model tables would be
instrumental in making the BMW AG's Compen-
sation Report transparent and generally under-
standable in accordance with generally applicable
financial reporting requirements (see section 4.2.5
sentence 3 of the Code).
2. BMW AG will in future comply with all of the rec-
ommendations published officially on 12 June
2015 in the Federal Gazette (Code version dated
5 May 2015), with the exception of section 4.2.5
sentences 5 and 6.
The Board of Management and Supervisory Board
of Bayerische Motoren Werke Aktiengesellschaft
("BMW AG") declare the following regarding the rec-
ommendations of the "Government Commission on
the German Corporate Governance Code":
BOARD OF MANAGEMENT
Statement on
Corporate
Governance
Work Procedures of
the Supervisory
Board of BMWAG
The number of meetings held by the Presiding Board
and committees depends on requirements. The Pre-
siding Board, the Personnel Committee and the Audit
Committee generally hold several meetings in the course
of the year (see "Report of the Supervisory Board" for
details of the number of meetings held in 2016).
In line with the rules of procedure for the activities of
the plenum, the Supervisory Board has set out proce-
dural rules for the Presiding Board and committees.
Committees only have a quorum when all members
participate. Committee resolutions are passed by a
simple majority, unless otherwise stipulated by law.
Members of the Supervisory Board may not delegate
their duties to others. However, the Supervisory Board,
the Presiding Board and the committees may call on
experts and informed persons to attend meetings and
advise on specific matters.
The Supervisory Board, the Presiding Board and com-
mittees also meet without the Board of Management
when necessary.
BMW AG ensures that the Supervisory Board and its
committees are appropriately equipped to carry out
their duties. This includes providing a central Super-
visory Board office to support Chairpersons in their
coordination work.
In accordance with rules of procedure, the Presiding
Board comprises the Chairman of the Supervisory Board
and Deputies. The Presiding Board prepares Superviso-
ry Board meetings to the extent that the subject matter
does not fall within the remit of a committee. This
includes, for example, preparing the annual Declaration
of Compliance with the German Corporate Governance
Code and assessment of Supervisory Board efficiency.
199
200
Statement on
Corporate
Governance
→ Composition and
Work Procedures of
the Supervisory
Board of BMWAG
and its Committees
The Personnel Committee prepares decisions of the
Supervisory Board with regard to the appointment and,
where applicable, removal of members of the Board of
Management and, together with the full Supervisory
Board and the Board of Management, ensures long-
term succession planning. The Personnel Committee
also
prepares s decisions of the Supervisory Board with
regard to Board of Management compensation and the
regular review of the compensation system for the Board
of Management. In conjunction with resolutions taken
by the Supervisory Board regarding the compensation
of the Board of Management, the Personnel Committee
is responsible for drawing up, amending and revoking
employment contracts or, when necessary, to prepare
and conclude other relevant contracts with members
of the Board of Management. In certain cases, the
Personnel Committee is also authorised to grant the
necessary approval of a business transaction on behalf of
the Supervisory Board. This includes cases of providing
loans to members of the Board of Management or Super-
visory Board, certain contractual arrangements with
members of the Supervisory Board, taking into account
related parties, as well as ancillary activities of members
of the Board of Management, including acceptance of
non-BMW Group supervisory board mandates.
The Audit Committee deals in particular with the super-
vision of the financial reporting process, effectiveness
of the internal control system, the risk management
system, internal audit system and compliance as well
as the performance of Supervisory Board duties in
connection with audits pursuant to § 20 of the German
Securities Trading Act (WpHG). It also oversees the
audit of financial statements, auditor independence
and any additional work performed by the auditor. It
prepares the proposal for the election of the auditor
at the Annual General Meeting, makes a relevant
recommendation, issues the audit engagement and
agrees on points of audit focus as well as the auditor's
fee. The Audit Committee prepares the Supervisory
Board's resolution relating to the Company and Group
Financial Statements and discusses interim reports
with the Board of Management prior to publication.
The Audit Committee also decides on the Supervisory
Board's agreement on the use of Authorised Capital
2014 (Article 4 no. 5 of the Articles of Incorporation)
and on amendments to the Articles of Incorporation
which only affect its wording.
In line with the recommendations of the German Cor-
porate Governance Code, the Chairman of the Audit
Committee is independent, and not a former Chairman
of the Board of Management, and has special knowledge
and experience in the application of financial reporting
standards and internal control procedures. He also
fulfils the requirement of being a financial expert as
defined by § 100 (5) and § 107 (4) AktG.
The Nomination Committee is charged with the task of
finding suitable candidates for election to the Super-
visory Board as shareholder representatives and to
propose them to the Supervisory Board for election at
the Annual General Meeting. In line with the recom-
mendations of the German Corporate Governance Code,
the Nomination Committee is exclusively composed of
shareholder representatives.
The establishment and composition of a mediation com-
mittee are prescribed by the German Co-determination
Act. The Mediation Committee has the task of making
proposals to the Supervisory Board if a resolution for the
appointment of a member of the Board of Management
has not been carried by the necessary two-thirds major-
ity of members' votes. In accordance with statutory
requirements, the Mediation Committee comprises the
Chairman and the Deputy Chairman of the Supervisory
Board, one member selected by shareholder represent-
atives and one by employee representatives.
According to the rules of procedure, the Chairman of the
Supervisory Board is, by virtue of this function, member
and Chairman of the Presiding Board, the Personnel
Committee and the Nomination Committee.
→ Composition and
Composition of the Presiding Board and the committees
is based on legal requirements, the Articles of Incor-
poration, rules of procedure and corporate governance
principles, while taking into particular account the
expertise of Board members.
Members of the Supervisory Board are responsible for
undertaking any training required for the performance
of their duties. The Company provides them with appro-
priate assistance therein.
and its Committees
COMPOSITION AND WORK
PROCEDURES OF THE
SUPERVISORY BOARD OF
BMW AG AND ITS
COMMITTEES
BMW AG's Supervisory Board is composed of ten share-
holder representatives (elected by the Annual General
Meeting) and ten employee representatives (elected in
accordance with the Co-Determination Act). The ten
Supervisory Board members representing employees
comprise seven Company employees, including one
executive staff representative, and three members elect-
ed following nomination by unions. The Supervisory
Board has the task of advising and supervising the Board
of Management in its management of the BMW Group.
It is involved in all decisions of fundamental importance
for the BMW Group. The Supervisory Board appoints
the members of the Board of Management and decides
upon the level of compensation they receive. The Super-
visory Board can revoke appointments for important
reasons.
The Supervisory Board holds a minimum of two meet-
ings per calendar half-year. Normally, five plenary
meetings are held per calendar year. One meeting each
year is planned to extend to several days and is used,
among other things, to enable an in-depth exchange on
strategic and technological matters. The main topics of
meetings in the period under report are summarised
in the Report of the Supervisory Board. Shareholder
representatives and employee representatives generally
prepare Supervisory Board meetings separately and
occasionally with members of the Board of Manage-
ment. Members of the Supervisory Board are specif-
ically legally bound to maintain secrecy with respect
to confidential reports they receive and confidential
discussions in which they partake.
The Chairman of the Supervisory Board coordinates
work within the Supervisory Board, convenes and
chairs its meetings, handles the external affairs of the
Supervisory Board and represents it before the Board
of Management.
The Supervisory Board has a quorum if all members
have been invited to the meeting and at least half the
members of whom it is required to comprise partic-
ipate in the vote. A resolution relating to an agenda
item not included in the invitation is only valid if none
of the members of the Supervisory Board who were
not present at the meeting object to the resolution
and if a minimum of two-thirds of the members are
present.
Resolutions of the Supervisory Board are generally
passed by a simple majority. The German Co-determina-
tion Act contains specific legal requirements with regard
to majorities and technical procedures, particularly with
regard to the appointment and removal of management
board members and the election of Chairman or Deputy
Chairman of the Supervisory Board. In the event of a
tied vote in the Supervisory Board, the Chairman of
the Supervisory Board has two votes in a renewed vote,
assuming it also results in a tie.
In practice, resolutions are regularly passed by the
Supervisory Board and its committees at meetings.
Supervisory Board members who are not present can
submit their vote in written, fax or electronic form via
another Supervisory Board member. This rule also
applies for the second vote of the Chairman of the
Supervisory Board. The Chairman of the Supervisory
Board can also grant a period of time in which all mem-
bers not present at a meeting may retrospectively vote.
In special cases, resolutions may also be passed outside
of meetings, in particular in writing, by fax or by elec-
tronic means. Resolutions and meetings are recorded
in minutes, which are signed by the relevant Chairman.
Following its meetings, the Supervisory Board generally
requests information on new vehicle models in the form
of a short presentation.
Following the election of a new Supervisory Board
member, the Corporate Governance Officer informs
the new member of the main framework for performing
duties, in particular the BMW Group Corporate Gov-
ernance Code and individual contributions required in
circumstances which trigger reporting obligations or are
subject to Supervisory Board approval.
Members of the Supervisory Board of BMW AG take
care to ensure that they have sufficient time to perform
their mandate. If members of the Supervisory Board of
BMW AG are also members of the management board of
a listed company, they may not accept more than three
mandates on non-BMW Group supervisory boards of
listed companies or in other bodies with comparable
requirements.
The Supervisory Board regularly assesses the efficiency
of its activities. To this end, shared discussion is con-
ducted within the Supervisory Board and individual
meetings held with the Chairman, prepared on the basis
of a questionnaire sent in advance, which is drawn up
by the Supervisory Board.
Members of the Supervisory Board of BMW AG are
obliged to act in the best interest of the organisation as
a whole. They may not pursue personal interests in their
decisions or take advantage of business opportunities
intended to benefit the BMW Group.
Members of the Supervisory Board are obliged to inform
the Supervisory Board of any conflicts of interest, in
particular those resulting from a consulting or executive
role with clients, suppliers, lenders or other business
partners, so that the Supervisory Board can report to
the shareholders at the Annual General Meeting on
its treatment of the issue. Material and non-temporary
conflicts of interest of a Supervisory Board member
result in a termination of mandate.
In proposing candidates for election as members of the
Supervisory Board, care is taken that the Supervisory
Board collectively has the required knowledge, skills and
expertise to perform its tasks appropriately.
The Supervisory Board has stated specific targets for its
composition (see section “Composition targets for the
Supervisory Board").
Taking into account the specific circumstances of the
BMW Group and the number of Board members, the
Supervisory Board has set up a Presiding Board and
four committees: the Personnel Committee, the Audit
Committee, the Nomination Committee and the Medi-
ation Committee (see "Overview of Supervisory Board
committees and their composition"). These serve to
raise the efficiency of the Supervisory Board's work and
facilitate handling of complex issues. Establishment and
function of a mediation committee is prescribed by law.
Committee chairpersons report in detail on committee
work at each plenary meeting of the Supervisory Board.
TBG Limited
Klaus Fröhlich (*1960)
Development
HERE International B.V.
Deputy Chairman
Member since 2008
Dr. jur. Karl-Ludwig Kley (*1951)
Henkel AG & Co. KGaA (Shareholders' Committee)
Siemens Aktiengesellschaft
Mandates
Management of BMW AG
Former Chairman of the Board of
Chairman
Member since 2015
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer (*1956)
MEMBERS OF THE
SUPERVISORY BOARD
Dr. Jürgen Reul
General Counsel:
--- Other mandates.
Membership of equivalent national or foreign boards of business enterprises.
- Membership of other statutory supervisory boards.
Chairman of the Supervisory Board of the E.ON SE
(since 8 June 2016)
BMW (South Africa) (Pty) Ltd. (Chairman)
BMW Motoren GmbH (Chairman)
Mandates
Bertelsmann Management SE (until 9 May 2016)
Bertelsmann SE & Co. KGaA (until 9 May 2016)
Deutsche Lufthansa Aktiengesellschaft
-
Mandates
Entrepreneur
Member since 2004
Franz Haniel (*1955)
Deputy Chairman
and General Works Council
Chairman of the European
Deputy Chairman
Member since 1988
Manfred Schoch¹ (*1955)
Robert Bosch GmbH
Mandates
Second Chairman of IG Metall
Member since 2014
Christiane Benner² (*1968)
Verizon Communications Inc.
E.ON SE (Chairman, since 8 June 2016)
Mandates
Mandates
FESTO Management Aktiengesellschaft
Weybourne Investments Holdings
Weybourne Limited (since 3 January 2017)
Weybourne Group Limited (since 25 February 2016)
Mandates
Sales Channels BMW Group
Sales and Marketing BMW,
Dr. Ian Robertson (HonDSc) (*1958)
TÜV SÜD AG (since 15 July 2016)
-
Mandates
Dr.-Ing. Klaus Draeger (*1956)
Purchasing and Supplier Network
(until 30 September 2016)
Milagros Caiña Carreiro-Andree (*1962)
Human Resources, Industrial Relations Director
(Deputy Chairman, since 1 January 2017)
BMW Brilliance Automotive Ltd.
Mandates
(since 1 January 2017)
Dr. Nicolas Peter (*1962)
Finance
Harald Krüger (*1965)
Chairman
(since 25 February 2016)
Oliver Zipse (*1964)
Production
Weybourne Management Limited
Markus Duesmann (*1969)
(Deputy Chairman, until 1 January 2017)
BMW Brilliance Automotive Ltd.
FESTO Aktiengesellschaft
Allianz Deutschland AG (until 30 June 2016)
Allianz SE (since 4 May 2016)
-
Mandates
(until 31 December 2016)
Finance
Dr. Friedrich Eichiner (*1955)
Rolls-Royce Motor Cars Limited (Chairman)
Mandates
MINI, Motorrad, Rolls-Royce,
Aftersales BMW Group
Peter Schwarzenbauer (*1959)
BMW Motoren GmbH (until 7 November 2016)
Mandates
(since 1 October 2016)
Purchasing and Supplier Network
(since 25 February 2016)
Member since 2007
→ Compliance in the
BMW Group
Shareholdings of members of the Board of
Management and the Supervisory Board
The members of the Supervisory Board of BMW AG
hold in total 27.99% of the Company's shares of com-
mon and preferred stock (2015: 43.00%), of which
16.25% (2015: 31.26%) relates to Stefan Quandt,
Germany, and 11.73% (2015: 26.74%) to Susanne
Klatten, Germany. The change from the previous
year is almost entirely due to shares held by Johanna
Quandt GmbH & Co. KG für Automobilwerte no
longer being attributed to Stefan Quandt and Susanne
Klatten following the dissolution of the community of
heirs. The shareholdings of the members of the Board
of Management total less than 1% of all issued shares.
Openness
We are excited by change and open to new opportu-
nities. We learn from our mistakes.
205
206
Statement on
Corporate
Governance
→Information on Cor-
porate Governance
Practices applied
Beyond Mandatory
Requirements
→ Compliance in the
BMW Group
Social responsibility towards employees and
along the supplier chain
We trust and rely on each other. This is essential if we
are to act swiftly and achieve our goals.
The BMW Group stands by its social responsibilities.
Our corporate culture combines the drive for success
with openness, trust and transparency. We are well
aware of our responsibility towards society. Socially
sustainable human resource policies and compliance
with social standards are based on various interna-
tionally recognised guidelines. The BMW Group is
committed to the OECD's guidelines for multinational
companies and the contents of the ICC Business
Charter for Sustainable Development. Details of the
contents of these guidelines and other relevant infor-
mation can be found at → www.oecd.org and www.iccwbo.org.
For the BMW Group, worldwide compliance of these
fundamental principles and rights is self-evident.
Since 2005 employees' awareness of this issue has
therefore been raised by means of regular internal
communications and training on recent developments
in this area. The “Compliance Contact” helpline
and the BMW Group SpeakUP Line are available to
employees wishing to raise queries or complaints
relating to human rights issues. With effect from 2016,
human rights have been incorporated as an integral
component of the BMW Group's worldwide Compli-
ance Management System, representing a further step
in the systematic implementation of the UN Guiding
Principles on Business and Human Rights.
Further information on social responsibility towards
employees can be found in the section "Workforce".
Sustainable business management can only be
effective, however, if it covers the entire value-added
chain. That is why the BMW Group not only sets high
standards for itself, but also expects its suppliers and
partners to meet the ecological and social standards it
sets and strives continually to improve the efficiency
of processes, measures and activities. For instance,
we consistently require our dealers and importers
to comply with ecological and social standards on a
contractual basis. Moreover, corresponding criteria
are embedded throughout the entire purchasing
system - including in enquiries to suppliers, in the
sector-wide OEM Sustainability Questionnaire, in our
purchasing terms and in our evaluation of suppli-
ers in order to promote sustainability aspects in
line with the BMW Group Sustainability Standard.
The BMW Group expects suppliers to ensure that the
BMW Group's sustainability criteria are also adhered
to by their sub-suppliers. Purchasing terms and con-
ditions and other information relating to purchasing
can be found in the publicly available section of the
BMW Group Partner Portal at → https://b2b.bmw.com.
We also work in close partnership with our suppliers
and promote their commitment to sustainability.
COMPLIANCE IN THE
BMW GROUP
Responsible and lawful conduct is fundamental to the
success of the BMW Group. It is an integral part of
our corporate culture and the reason why customers,
shareholders, business partners and the general public
place their trust in us. The Board of Management and
the employees of the BMW Group are obliged to act
responsibly and in compliance with applicable laws
and regulations.
This principle has been embedded in BMW Group's
internal rules of conduct for many years. In order to
protect itself systematically against compliance-relat-
ed and reputational risks, the Board of Management
created a Compliance Committee several years ago,
mandated to establish a worldwide Compliance
Management System throughout the BMW Group.
The BMW Group Compliance Committee comprises
the heads of the following departments: Legal Affairs,
Corporate and Governmental Affairs, Corporate Audit,
Group Reporting, Organisational Development and
Corporate Human Resources. It manages and moni-
tors activities necessary to avoid non-compliance with
the law. These activities include training, information
and communication measures, compliance controls
and following up cases of non-compliance.
The BMW Group Compliance Committee reports
regularly to the Board of Management on all compli-
ance-related issues, including the progress made in
refining the BMW Group Compliance Management
System, details of investigations performed, known
infringements of the law, sanctions imposed and
corrective/preventative measures implemented. This
ensures that the Board of Management is immediately
notified of any cases of particular significance.
The Board of Management signed the United Nations
Global Compact in 2001 and, in 2005, together with
employee representatives, issued a "Joint Declaration
on Human Rights and Working Conditions in the
BMW Group". This Joint Declaration was reconfirmed
in 2010. With the signature of these documents, we
have given our commitment to abide worldwide by
internationally recognised human rights and with the
fundamental working standards of the International
Labour Organization (ILO). These include in particular
freedom of employment, the principle of non-dis-
crimination, freedom of association and the right to
collective bargaining, the prohibition of child labour,
appropriate remuneration, regulated working times
and compliance with work and safety regulations.
The complete text of the UN Global Compact and
the recommendations of the ILO and other relevant
information can be found at → www.unglobal.compact.org and
→ www.ilo.org. The Joint Declaration on Human Rights
and Working Conditions in the BMW Group can
be found at www.bmwgroup.com under the menu items
"Downloads" and "Responsibility".
BMW Group Compliance Management System
→ 66
Trust
Transparency
Top management within the BMW Group is structured
in terms of functions, following a consistent job eval-
uation system based on Mercer.
Proportion of female executives within
management/function levels I and II
at BMW AG
→ 65
in %
12
10.2
Function levell
6.3
We acknowledge concerns and identify inconsisten-
cies in a constructive way. We act with integrity.
Function level II
During 2016, the proportion of women in both the
workforce as a whole and in management positions
increased, reflecting the positive impact of long-term
measures, dialogue and information events. Further
information on the topic of diversity within the
BMW Group can be found in the section "Workforce".
INFORMATION ON
CORPORATE GOVERNANCE
PRACTICES APPLIED
BEYOND MANDATORY
REQUIREMENTS
Core values
Within the BMW Group, the Board of Management,
the Supervisory Board and the employees base their
actions on five core values which are the cornerstone
of the success of the BMW Group:
Responsibility
We take consistent decisions and commit to them
personally. This allows us to work freely and more
effectively.
Appreciation
We reflect on our actions, respect each other, offer
clear feedback and celebrate success.
Diversity contributes to greater competitiveness
and innovation at BMW Group. Working together
in mixed, complementary teams raises performance
levels and helps sharpen the focus on the customer.
The requirement of an appropriate gender balance is
seen as an essential component of the BMW Group's
diversity concept. Further increase in the proportion
of women therefore remains an objective of the Board
of Management.
For the next target attainment time frame, which has
been selected to run to 31 December 2020, the Board
of Management has set target ranges of 10.2 - 12% for
the first level of executive management and 8 – 10%
for the second.
Compliance
Risk Analysis
Supervisory Board BMW AG
A coordinated set of instruments and measures is
employed to ensure that the BMW Group, its repre-
sentative bodies, its managers and staff act in a lawful
manner. Particular emphasis is placed on compliance
with antitrust legislation and the avoidance of corrup-
tion risks. Compliance measures are supplemented
by a whole range of internal policies, guidelines and
instructions, which in part reflect applicable legisla-
tion. The BMW Group Policy "Corruption Prevention"
and the BMW Group Instruction "Corporate Hospi-
tality and Gifts" deserve particular mention: these
documents deal with lawful handling of gifts and
benefits and define appropriate assessment criteria
and approval procedures for specified actions. In 2016
a new BMW Group Policy "Antitrust Compliance",
was introduced in 2016 to establish binding rules of
conduct for all employees across the BMW Group to
prevent unlawful restriction of competition.
Compliance measures are determined and priori-
tised on the basis of a group-wide compliance risk
assessment covering all 340 organisational units and
functions worldwide within the BMW Group. The
assessment of compliance risks is updated annually.
Measures are realised with the aid of a regionally
structured compliance management team covering
all parts of the BMW Group, which oversees a network
of more than 210 Compliance Responsibles.
The various elements of the BMW Group Compliance
Management System are shown in the diagram on the
previous page and are applicable for all BMW Group
organisational units worldwide. To the extent that
additional compliance requirements apply to indi-
vidual countries or specific lines of business, these
are covered by supplementary compliance measures.
The BMW Group Legal Compliance Code is the corner-
stone of the Group's Compliance Management System,
spelling out the Board of Management's commitment
to compliance as a joint responsibility ("tone from
the top"). This document, which was revised and
expanded in 2016, explains the significance of legal
compliance and provides an overview of the various
areas relevant for the BMW Group. It is available both
as a printed brochure and for download in German
and English. In addition, translations into nine other
languages are available in the BMW Group intranet.
Managers in particular bear a high degree of respon-
sibility and must set a good example with regard to
preventing infringements. Managers throughout the
BMW Group acknowledge this principle by signing
a written declaration, in which they also undertake
to inform staff working for them of the content and
significance of the Legal Compliance Code and make
them aware of legal risks. Managers must, at regular
intervals and on their own initiative, verify compliance
with the law and communicate regularly with staff on
this issue. Any indication of non-compliance with the
law must be rigorously investigated.
More than 32,500 managers and staff worldwide have
received training in essential compliance matters
since the introduction of the BMW Group Compli-
ance Management System. The training material is
available on an Internet-based training platform in
German and English and includes a final test. Suc-
cessful completion of the training programme, which
is documented by a certificate, is mandatory for all
BMW Group managers. Appropriate processes are in
place to ensure that all newly recruited managers and
promoted staff undergo compliance training. In this
way, the BMW Group ensures full training coverage
for its managers in compliance matters.
In addition to this basic training, more in-depth
training is also provided to certain groups of staff on
specific compliance issues. Since 2013, employees
have been trained related to an extended Antitrust
law training, targeting employees who come into con-
tact with antitrust-related issues as a result of their
functions within sales and marketing, purchasing,
production or development. Around 16,900 employees
have already completed this training. The relevant
divisions also implemented and stepped up further
antitrust compliance measures and processes in 2016
to make employees who participate in meetings with
competitors or work with suppliers or sales partners
sufficiently aware of antitrust risks.
Additional compliance coaching has also been imple-
mented for international sales and financial service
locations in local markets. These multi-day classroom
seminars strengthen the understanding of compliance
in selected organisational units and enhance cooper-
ation between the central BMW Group Compliance
Committee Office and decentralised compliance
offices. In 2016, market coaching was conducted in
Italy, Belgium, Austria, China and Japan.
In order to avoid legal risks, all members of staff are
expected to discuss compliance matters with their
managers and with the relevant departments within
the BMW Group, in particular Legal Affairs, Corporate
Audit and Corporate Security. The BMW Group Com-
pliance Contact serves as a further point of contact for
both employees and non-employees for any questions
regarding compliance.
The Board of Management keeps track of and analyses
compliance-related developments and trends on the
basis of the Group's compliance reporting and input
from the BMW Group Compliance Committee. Meas-
ures to improve the Compliance Management System
are initiated on the basis of identified requirements.
In 2016, to strengthen local compliance manage-
ment, local compliance functions were established
at 69 BMW Group affiliated companies. Their activi-
ties follow a standardised management process with
clearly defined tasks and responsibilities.
Employees also have the opportunity to submit infor-
mation - anonymously and confidentially - via the
BMW Group SpeakUP Line about possible breaches
of the law within the company. The BMW Group
SpeakUP Line is available in a total of 34 languages
and can be reached via local toll-free numbers in
all countries in which BMW Group employees are
engaged in activities.
Through the group-wide reporting system, Com-
pliance Responsibles throughout the BMW Group
report on compliance-relevant issues to the Compli-
ance Committee on a regular basis, and, if necessary,
on an ad hoc basis. This includes reporting on the
compliance status of the relevant organisational units,
on identified legal risks and incidences of non-com-
pliance, as well as on corrective or preventative
measures implemented.
Compliance with and implementation of the Legal
Compliance Code are audited regularly by Corporate
Audit and subjected to control checks by Corporate
Security and the BMW Group Compliance Committee
Office. As part of its regular activities, Corporate Audit
carries out on-site audits. The BMW Group Compli-
ance Committee also engages Corporate Audit to
perform compliance-specific checks. In addition, three
BMW Group Compliance Spot Checks, sample tests
specifically designed to identify potential corruption
risks, were carried out in 2016. Compliance control
activities are coordinated by the BMW Group Panel
Compliance Controls. Any necessary follow-up meas-
ures are organised by the BMW Group Compliance
Committee Office.
It is essential that employees are aware of and comply
with applicable legal regulations. The BMW Group
does not tolerate violations of the law by its employees.
Culpable violations of the law result in employment-
contract sanctions and may involve personal liability
consequences for the employee involved.
To avoid this, BMW Group employees are kept fully
up-to-date with the instruments and measures used
by the Compliance Management System via various
internal channels. As of 2014, all new staff receive
a welcome email underscoring the BMW Group's
special commitment to compliance when they join
the company. The central means of communication
is the Compliance website within the BMW Group's
intranet, where employees can find compliance-
related information and access training materials
in both German and English. The website contains a
special service area where various practical tools are
made available to employees to help them deal with
typical compliance-related matters. Since mid-2015,
BMW Group employees have also had access to an
IT system, which helps them verify legal admissibility
and approve and document benefits, especially in
connection with corporate hospitality.
In the same way that the BMW Group is committed
to lawful and responsible conduct, it expects no less
from its business partners. In 2012, the BMW Group
developed a new Business Relations Compliance pro-
gramme aimed at ensuring the reliability of its business
relations. Relevant business partners are checked and
evaluated with a view to identifying potential compli-
ance risks. These procedures are particularly relevant
for relations with sales partners and service providers,
such as agencies and consultants. Depending on the
results of the evaluation, appropriate measures - such
as communication measures, training and possible
monitoring - are implemented to manage compliance
risks. The Business Relations Compliance programme
has already been introduced in 37 organisational units
since its launch and, over the coming years, will be
rolled out successively throughout the BMW Group's
worldwide sales organisation. In 2016, the company
also continued integrating compliance clauses to pro-
tect contractual relationships into dealer and importer
contracts. An IT system to verify customer integrity
was developed and introduced in 20 markets under
expanded anti-money-laundering measures.
209
210
Statement on
Corporate
Governance
Compliance-related queries and concerns are
documented and followed up by the BMW Group
Compliance Committee Office using an electronic
Case Management System. If necessary, Corporate
Audit, Corporate Security, the Works Council and
legal departments may be called upon to assist in the
investigation process.
Compliance
Investigations
and Controls
The Chairman of the BMW Group Compliance Com-
mittee keeps the Audit Committee (which is part of the
Supervisory Board) informed on the current status of
compliance activities within the BMW Group, both on
a regular and a case-by-case basis as the need arises.
Statement on
Corporate
Governance
Annual
Report
Board of Management BMW AG
Annual
Report
BMW Group Compliance Committee
BMW Group Compliance Committee ←
Office
Company-wide Compliance
Network
Annual
Compliance
Reporting
Compliance Instruments and
Measures of the BMW Group
→ Compliance in the
BMW Group
Legal Compliance Code
and Regulations
Compliance
Reporting
Compliance
Contact and
SpeakUP Line
Compliance
Training
Compliance
Governance and
Processes
The decisions taken by the BMW Group Compliance
Committee are drafted in concept, and implement-
ed operationally, by the BMW Group Compliance
Committee Office. The BMW Group Compliance
Committee Office comprises 13 employees and is
allocated in organisational terms to the Chairman of
the Board of Management.
207
208
Compliance
Communication
The BMW Group is committed to respecting inter-
nationally recognised human rights, in particular
the UN Guiding Principles on Business and Human
Rights, the ten principles of the UN Global Compact
and the ILO Core Labour Conventions. The company
focuses on topics and areas of activity where it can
leverage its influence as a commercial enterprise.
stood at 10.2% and 6.3% respectively. The targets were
therefore achieved within the stipulated time frame.
As its target for the proportion of women on the Board
of Management for the time frame from 1 January 2017
to 31 December 2020, the Supervisory Board has stip-
ulated that the Board of Management should continue
to have at least one female member. Assuming that
the Board of Management continues to comprise eight
members, this would correspond to a proportion of
at least 12.5%. The Supervisory Board considers it
desirable to increase the proportion of women on the
Board of Management and fully supports the Board of
Management's endeavours to increase the proportion
of women at the highest executive management levels
within the BMW Group.
of areas of audit emphasis and fee agreements with external auditor
The BMW Group underlined its position back in 2005
with the Joint Declaration on Human Rights and
Working Conditions at the BMW Group. This was
followed by systematic introduction and upgrading of
measures to protect human rights. Henceforth, these
already established measures were integrated into the
BMW Group's group-wide Compliance Management
System in 2016.
Group Financial Statements
discussion of interim reports with Board of Management prior to publication
― decision on approval for utilisation of Authorised Capital 2014
Karl-Ludwig Kley 1,2
Norbert Reithofer
Manfred Schoch
Stefan Quandt
Stefan Schmid
- amendments to Articles of Incorporation only affecting wording
establishment in accordance with the recommendation contained in the
German Corporate Governance Code, activities based on terms of reference
preparation of proposals for election of external auditor at Annual General Meeting,
engagement of external auditor and compliance of audit engagement, determination
NOMINATION COMMITTEE
― establishment in accordance with the recommendation contained in the German Corpo-
rate Governance Code, activities based on terms of reference
Norbert Reithofer¹
Susanne Klatten
Karl-Ludwig Kley
Stefan Quandt
(In line with the recommendations of the German Corporate Governance
Code, the Nomination Committee comprises only shareholder representa-
tives.)
MEDIATION COMMITTEE
-
proposal to Supervisory Board if resolution for appointment of Board of Management
member has not been carried by the necessary two-thirds majority of Supervisory Board
members' votes
― committee required by law
Norbert Reithofer
Manfred Schoch
Stefan Quandt
Stefan Schmid
― identification of suitable candidates (male/female) as shareholder representatives on the
Supervisory Board to be put forward for inclusion in the Supervisory Board's proposals for
election at the Annual General Meeting
(In accordance with statutory requirements, the Mediation Committee
comprises the Chairman and Deputy Chairman of the Supervisory Board
and one member each selected by shareholder representatives and
employee representatives.)
-
supervision of the financial reporting process, the effectiveness of the internal control
system, the risk management system, internal audit arrangements and compliance as
well as the performance of Supervisory Board duties in connection with audits pursuant
to § 20 of the German Securities Trading Act (WpHG)
Pursuant to Article 19 of the EU Market Abuse Regu-
lation (MAR), members of the Board of Management
and the Supervisory Board and any persons closely
related to those members are required to give notice
to BMW AG and the Federal Agency for the Super-
vision of Financial Services (BaFin) of transactions
with equity or debt instruments of BMW AG or with
related derivatives or other financial instruments, if
the total sum of such transactions reaches or exceeds
an amount of €5,000 during any given calendar year.
BMW AG publishes such information without delay
and communicates it to the Companies Register
for archiving. Notice of publication is issued to the
Federal Agency for the Supervision of Financial Ser-
vices. Securities transactions notified to BMW AG
during the financial year 2016 are also reported on
the Company's website.
Reportable securities transactions
("Managers' transactions")
In the interest of investor protection and to ensure
that the BMW Group complies with regulations
relating to potential insider information, the Board of
Management appointed an Ad-hoc Committee back in
1994, consisting of representatives of various specialist
departments, whose members examine the relevance
of issues for ad-hoc disclosure purposes. All persons
working on behalf of the company who have access
to insider information in accordance with existing
rules have been, and continue to be, included in a
corresponding, regularly updated list and informed
of the duties arising from insider rules.
Compliance is also an important factor in safeguarding
the future of the BMW Group workforce. With this
in mind, the Board of Management and the national
and international employee representative bodies
of the BMW Group have agreed on a binding set of
Joint Principles for Lawful Conduct. In doing so, all
parties involved made a commitment to the principles
contained in the BMW Group Legal Compliance Code
and to trustful cooperation in all matters relating to
compliance. Employee representatives are therefore
regularly involved in the process of refining compli-
ance measures within the BMW Group.
Overview of Supervisory Board committees
and their composition
Principal duties, basis for activities
PRESIDING BOARD
-
― supervision of external audit, in particular auditor independence and additional work
performed by external auditor
preparation of Supervisory Board meetings to the extent that the subject matter to be
discussed does not fall within the remit of a committee
-activities based on terms of reference
Norbert Reithofer¹
Manfred Schoch
Stefan Quandt
Stefan Schmid
Karl-Ludwig Kley
PERSONNEL COMMITTEE
-
preparation of decisions relating to the appointment and revocation of appointment of
members of the Board of Management, the compensation and the regular review of the
Board of Management's compensation system
conclusion, amendment and revocation of employment contracts (in conjunction with
the resolutions taken by the Supervisory Board regarding the compensation of the Board
of Management) and other contracts with members of the Board of Management
― decisions relating to the approval of ancillary activities of Board of Management
members, including acceptance of non-BMW Group supervisory mandates as well as the
approval of transactions requiring Supervisory Board approval by dint of law (e.g. loans
to Board of Management or Supervisory Board members)
― set up in accordance with the recommendation contained in the German Corporate
Governance Code, activities based on terms of reference
Norbert Reithofer¹
Manfred Schoch
Stefan Quandt
Stefan Schmid
Karl-Ludwig Kley
AUDIT COMMITTEE
Members
For the first target attainment time frame up to
31 December 2016, target ranges of 10 to 12% and 6 to
8% respectively were set by the Board of Management
for the proportion of women to be represented in the
first and second levels of executive management. On
31 December 2016, the proportion of women within
the first and second executive management levels
1 Chair.
201
-
Three members of the Supervisory Board should
if possible be figures from the worlds of busi-
ness, science or research who have experience
in areas relevant to the BMW Group, e.g. chem-
istry, energy supply, information technology, or
who have specialist knowledge in fields relevant
for the future of the BMW Group, e.g. custom-
er requirements, mobility, resources or sustain-
ability.
When seeking qualified individuals for the
Supervisory Board whose specialist skills and
leadership qualities are most likely to strength-
en the Board as a whole, consideration is also
to be given to diversity. When preparing nomi-
nations, the extent to which the work of the
Supervisory Board would benefit from diversi-
fied professional and personal backgrounds
(including international aspects) and from an
appropriate gender representation is also to be
taken into account. It is the joint responsibility
of all those participating in the nomination and
election process to ensure that qualified wom-
en are considered for Supervisory Board mem-
bership.
Of the 20 members of the Supervisory Board at
least twelve should be independent members
within the meaning of section 5.4.2 of the Ger-
man Corporate Governance Code, including
at least six as representatives of the Company's
shareholders.
Two independent members of the Supervisory
Board should have expert knowledge of
accounting or auditing.
No persons carrying out directorship functions
or advisory tasks for important competitors of
the BMW Group may belong to the Supervisory
Board. In compliance with applicable legisla-
tion, members of the Supervisory Board are to
take care that no persons will be nominated
for election with whom a serious, non-temporary
conflict of interests could arise due to other
activities and functions carried out by them out-
side the BMW Group, in particular advisory
activities or directorships with customers, sup-
pliers, creditors or other business partners.
An age limit for membership of the Supervisory
Board of 70 years should generally be applied.
In exceptional cases, members may remain on
the Board until the end of the next Annual Gen-
eral Meeting after reaching the age of 73, in
order to fulfil legal requirements or to facilitate
smooth succession in the case of key roles or
specialist qualifications.
As a general rule, members of the Supervisory
Board should not hold office for longer than
until the end of the Annual General Meeting at
which the resolution is passed ratifying the
member's activities for the 14th financial year
after the beginning of the member's first period
of office. This excludes the financial year in
which the first period of office began. This rule
does not apply to natural persons who either
directly or indirectly hold significant investments
in the Company. In the Company's interest,
deviation from the general maximum period is
possible, for instance in order to work towards
another composition target, in particular diversi-
ty of gender and technical, professional and per-
sonal backgrounds.
The time schedule set by the Supervisory Board for
achieving the above-mentioned composition targets
is the period up to 31 December 2017. Proposals for
nomination made by the Supervisory Board at the
Annual General Meeting - insofar as they apply to
shareholder Supervisory Board members - should
take account of these objectives in such a way that
they can be achieved with the support of the appro-
priate resolutions at the Annual General Meeting. The
Annual General Meeting is not bound by nominations
for election proposed by the Supervisory Board. The
freedom of employees to vote for the employee mem-
bers of the Supervisory Board is also protected. Under
the rules stipulated by the German Co-Determination
Act, the Supervisory Board does not have the right
to nominate employee representatives for election.
The objectives which the Supervisory Board has set
itself with regard to its composition are therefore not
intended to be instructions to those entitled to vote
or restrictions on their freedom to vote.
Three of the shareholder representatives in the
Supervisory Board should if possible be entre-
preneurs or persons who have previous experi-
ence in the management or supervision of
another medium or large-sized company.
In the Supervisory Board's opinion, its composition
as at 31 December 2016 fulfilled the composition
objectives detailed above. In order to make it easier to
assess the actual composition and composition targets,
brief curricula vitae of the current members of the
Supervisory Board are available on the Company's
website at → www.bmwgroup.com. Information relating to
members' practised professions and to mandates in
other statutory supervisory boards and equivalent
national or foreign company boards, including the
length of their periods of service on the Supervisory
204
Statement on
Corporate
Governance
→Composition and
Work Procedures of
the Supervisory
Board of BMWAG
and its Committees
→ Disclosures Pursuant
to the Act on Equal
Gender Participation-
Targets for the
Proportion of Women
on the Board of
Management and at
Executive Manage-
ment Levels I and II
→ Information on Cor-
porate Governance
Practices applied
Beyond Mandatory
Requirements
is
Board, is provided in the section “Statement on Cor-
porate Governance". Based on this information, it
is evident that the Supervisory Board of BMW AG
very diversified, with significantly more than the
targeted four members having international experi-
ence or specialist knowledge with regard to one or
more of the non-German markets important to the
BMW Group. In-depth knowledge and experience
from within the enterprise are provided by seven
employee representatives, as well as the Chairman
of the Supervisory Board. Only one previous Board of
Management member holds office in the Supervisory
Board. At least four members of the Supervisory Board
have experience in managing another company. The
Supervisory Board also has three entrepreneurs as
members. Most of the members of the Supervisory
Board – including employee representatives – have
experience in supervising another medium-sized or
large company. Moreover, more than three members
of the Supervisory Board have experience and special-
ist knowledge in subjects relevant for the future of the
BMW Group, such as customer requirements, mobility,
resources, sustainability and information technology.
For the purpose of assessing the independence of its
members, the Supervisory Board follows the recom-
mendations of the German Corporate Governance
Code. In the opinion of the Supervisory Board, the
fact that a member has a substantial shareholding
in the Company, or holds office as an employee
representative, or was previously a member of the
Board of Management, does not rule out that he or
she is independent. A substantial and not merely
temporary conflict of interests within the meaning
of section 5.4.2. of the German Corporate Governance
Code does not apply to any of the Supervisory Board
members. Employees holding office in the Supervi-
sory Board are protected by law when performing
their duties. All other Supervisory Board members
have a sufficient degree of economic independence
from the Company. Business with entities, in which
the members of the Supervisory Board carry out a
significant function, is conducted on an arm's length
basis. The Supervisory Board has therefore concluded
that all of its members are independent. At least three
members meet the requirements for being designated
as an independent financial expert. At the end of
the reporting period, the Supervisory Board had six
female members (30%), comprising three shareholder
representatives and three employee representatives.
The Supervisory Board has 14 male members (70%),
comprising seven shareholder representatives and
seven employee representatives. The Company there-
fore complies with the statutory gender quota of at
least 30% female members applicable in Germany
since 1 January 2016. The Supervisory Board does not
currently have any members more than 70
years old.
DISCLOSURES PURSUANT
TO THE ACT ON EQUAL
GENDER PARTICIPATION -
TARGETS FOR THE PROPOR-
TION OF WOMEN ON THE
BOARD OF MANAGEMENT
AND AT EXECUTIVE MAN-
AGEMENT LEVELS I AND II
The Act on Equal Participation of Women and Men
in Executive Positions in the Private and the Public
Sector ("Act on Equal Gender Participation") was
passed into German law in 2015.
In accordance with this legislation, the Supervisory
Board of BMW AG is required to set a target for the
proportion of women on its Board of Management
and a time frame for meeting this target. Likewise, the
Board of Management of BMW AG is required to estab-
lish targets and a time frame for attaining these targets
with respect to the two executive management levels
below the Board of Management. As its target for the
Board of Management through to 31 December 2016,
the Supervisory Board had stipulated that the Board
of Management should continue to have at least one
female member. This target was achieved: the Board
of Management has one female member (12.5%).
203
2 (Independent) financial expert within the meaning of §§ 100 (5) and 107 (4) AktG, no. 5.3.2 GCGC.
The Supervisory Board should include if possi-
ble seven members who have acquired in-depth
knowledge and experience within the
BMW Group, though no more than two former
members of the Board of Management.
-
202
Statement on
Corporate
Governance
→ Composition and
Work Procedures of
the Supervisory
Board of BMWAG
and its Committees
Board of Management succession planning,
diversity concept
The Supervisory Board, in collaboration with the
Personnel Committee and the Board of Management,
ensures long-term succession planning. In their assess-
ment of candidates for Board of Management posi-
tions, the underlying suitability criteria applied by the
Supervisory Board are expertise in the relevant function,
outstanding leadership qualities, proven track record
and knowledge of the Company. The Supervisory Board
has adopted a diversity concept for the composition
of the Board of Management, which is also aligned
with recommendations of the German Corporate
Governance Code. In considering which individuals
would best complement the Board of Management, the
Supervisory Board also takes diversity into account. The
criteria diversity is taken by the Supervisory Board to
encompass in particular different, mutually comple-
mentary profiles, professional and life experiences also
at the international level and an appropriate gender
representation. In reaching its decisions, the Supervi-
sory Board also considers the following:
-
-
-
Four members of the Supervisory Board should
if possible have international experience or
specialist knowledge of one or more non-German
markets important to the BMW Group.
-
At least two members should have international
management experience.
At least two members of the Board of Manage-
ment should have a technical background.
The Board of Management should collectively
have extensive experience in the fields of devel-
opment, production, sales and marketing,
finances and human resources.
The Supervisory Board has stipulated a target
for the proportion of women on the Board of
Management. This is outlined in the section
“Disclosures pursuant to the Act on Equal Gen-
der Participation”. The Board of Management
reports to the Personnel Committee and the
Supervisory Board at regular intervals on the
proportion and development of women in
senior management positions, in particular at
executive levels.
In accordance with the recommendation of the
German Corporate Governance Code, the
Supervisory Board has set a standard age limit
for Board of Management membership. This
aims at a retirement age of 60. Consideration is
also given to achieving an appropriate age-mix
within the Board of Management.
When selecting an individual for a particular Board of
Management position, the Supervisory Board decides
in the best interest of the Group and after due con-
sideration of all relevant circumstances.
Composition objectives of the Supervisory Board,
diversity concept
The Supervisory Board is to be composed in such a way
that its members collectively possess the knowledge,
skills and experience required to properly perform
its tasks.
To this end, the Supervisory Board has approved the
following concrete objectives for its composition, tak-
ing into account recommendations contained in the
German Corporate Governance Code. These objectives
also describe the concept for achieving diversity in
the composition of the Supervisory Board (diversity
concept):
The members of the Board of Management
should have a long-standing track record of
management experience, ideally with experi-
ence in different professional fields.
preparation of Supervisory Board's resolution on Company and
Member of the Board of Management
215
The Supervisory Board has stipulated caps for variable
remuneration components and for the remuneration
of Board of Management members in total. The caps
are shown in the table "Overview of compensation
system and compensation components".
Total compensation of the Board of Management for
the financial year 2016 (2015)
The total compensation of the current members
of the Board of Management of BMW AG for the
financial year 2016 amounted to €37.6 million (2015:
€35.5 million), of which €7.8 million (2015: €7.7 mil-
lion) relates to fixed components (including other
remuneration). Variable components amounted to
€29.0 million (2015: €27.1 million) and the share-
based remuneration component to €0.8 million (2015:
€0.7 million).
in € million
2016
2015
Amount
Proportion in %
Amount
Proportion in %
Fixed compensation
Variable cash compensation
7.8
20.8
7.7
21.7
29.0
77.1
27.1
76.3
Share-based compensation component*
0.8
2.1
Remuneration caps
0.7
No commitments or agreements exist to pay com-
pensation for early termination of a board member's
mandate in the event of a change of control or a take-
over offer. No members of the Board of Management
received any payments or benefits from third parties
in 2016 on account of their activities as members of
the Board of Management.
Termination benefits on premature termination of
board activities, benefits paid by third parties
In conjunction with the consensual early termina-
tion of Dr Eichiner's Board of Management mandate
with effect from the expiry of 31 December 2016, the
Company also reached an agreement with Dr Eichiner
concerning an amendment to his service contract,
which ends on 31 May 2017. For the period from
the termination of his board mandate through to
31 May 2017, he continues to receive fixed compen-
sation of €0.38 million. A payment of €0.75 million,
payable in 2017, was agreed to settle all other com-
pensation entitlements for the remainder of the
800,000
800,000
1,200,000
5,500,000
6,000,000
1,400,000
1,400,000
1,500,000
9,850,000
*Including basic remuneration, other fixed remuneration elements and pension contribution. The overall cap is lower than the sum of the maximum amounts for each of the individual components.
If a mandate is terminated, the new defined contribu-
tion system provides entitlements which can be paid
either (a) in case of death or invalidity as a one-off
amount or in instalments, or (b) upon retirement –
depending on the wish of the ex-board member con-
cerned in the form of a lifelong monthly pension,
as a one-off amount, in instalments, or in a combined
form (for instance a combination of a one-off payment
and a proportionately reduced lifelong monthly pen-
sion). Former members of the Board of Management
are entitled to receive the retirement benefit at the
earliest upon reaching the age of 60, or in the case
of entitlements awarded after 1 January 2012, upon
reaching the
age of 62.
The amount of the benefits to be paid is determined
on the basis of the amount accrued in each board
member's individual pension savings account. The
amount on this account arises from annual contribu-
tions paid in, plus interest earned depending on the
type of investment.
If a member of the Board of Management with a
vested entitlement dies prior to the commencement
of benefit payments, a surviving spouse or otherwise
surviving children - in the latter case depending on
their age and education – are entitled to receive ben-
efits as surviving dependants. In case of invalidity or
death, the minimum benefit promised is based on
the number of annual contributions possible up to
the age of sixty (up to a maximum of 10). In addition,
following the death of a retired board member who
has elected to receive a lifelong pension, 60% of that
amount is paid as a lifelong widow's pension. Pensions
are increased annually by at least 1%.
Depending on the length of membership in the Board
of Management and previous activities, the annual
contribution to be paid amounts to between €350,000
and €400,000 for each member of the Board of Man-
agement and €500,000 for the Chairman of the Board
of Management. The guaranteed minimum rate of
return p. a. corresponds to the maximum interest rate
used to calculate insurance reserves for life insurance
policies (guaranteed interest on life insurance policies).
When granting pension entitlements, the Supervisory
Board considers the targeted level of pension provision
in each case as well as the resulting expense for the
BMW Group.
Contributions falling due under the defined con-
tribution model are paid into an external fund in
conjunction with a trust model that is also used to
fund pension obligations to employees.
Income earned on an employed or a self-employed
basis up to the age of 63 may be offset against pension
entitlements. In addition, certain circumstances have
216
Statement on
Corporate
Governance
→ Compensation
Report
been specified, in the event of which the Company no
longer has any obligation to pay benefits. Transitional
payments are no longer provided.
Board of Management members who retire immedi-
ately after their service on the board and who draw a
retirement pension are entitled to purchase vehicles
and BMW Group services at conditions that also apply
for Company pensioners and to lease BMW Group
vehicles in accordance with the guidelines applicable
to senior heads of departments. Retired Chairmen
of the Board of Management are entitled to use a
BMW Group vehicle as a company car on a similar
basis to senior heads of departments, and depend-
ing on availability and against payment, use BMW
chauffeur services.
contractual period. The Company will make a final
pension contribution of €0.167 million on behalf of
Dr Eichiner for the financial year 2017.
3,500,000
2.0
37.6
675,000
(900,000)
187,500
13,929
201,429
18,719 1,518,719 5,947,178
(21,809) (1,302,454) (4,786,438)
74,461 974,461 3,469,214
(74,717) (899,717) (3,058,588)
29,440 704,440 2,601,910
(24,797) (924,797) (3,293,863)
743,403
1,752
(1,478)
1,097
(1,014)
823
(1,092)
288
(-)
(-)
Friedrich Eichiner5
900,000
25,413
925,413 3,469,214
1,097
(900,000)
(23,982)
(923,982) (3,293,863)
(1,092)
Klaus Fröhlich
Ian Robertson
750,000 57,311
(750,000) (71,792)
900,000 18,735
807,311 2,973,589
(821,792) (2,823,290)
Markus Duesmann4
Total compensation
Klaus Draeger³
900,000
100.0
35.5
100.0
* Matching component; provisional number or provisional monetary value calculated at grant date (date on which the entitlement became binding in law). The final number of matching shares is determined in
each case when the requirement to invest in BMW AG common stock has been fulfilled.
Compensation of the individual members
of the Board of Management for the
financial year 2016 (2015)
Share-based
Fixed compensation
in € or
Other
number of matching shares
compensation
compensation
Total
Variable cash
compensation
compensation component
(matching component)
Compensation
Total
Total value of
benefits
allocated in
financial year²
Number Monetary value
Harald Krüger
1,500,000
(1,280,645)
Milagros Caiña Carreiro-Andree
(825,000)
876
4,925,000
700,000
The variable remuneration of Board of Management
members comprises variable cash remuneration on
the one hand and a share-based remuneration com-
ponent on the other.
Variable cash remuneration, in particular bonuses
Variable cash remuneration consists of a cash bonus
and share-based remuneration component equiva-
lent to 20% of a board member's total bonus after
taxes, which the board member is required to invest
in BMW AG common stock. Taxes and social insur-
ance relating to the share-based remuneration are
also borne by the Company. In justified cases, the
Supervisory Board also has the option of paying an
additional special bonus.
The bonus comprises two components, each equally
weighted, namely a corporate earnings-related bonus
and a personal performance-related bonus. The target
bonus (100%) for a Board of Management member,
for both components of variable compensation, totals
€1.5 million p. a., rising to €1.75 million p. a. from the
second term or fourth year of office onwards. The
equivalent figure for the Chairman of the Board of
Management is €3 million p. a. The bonus figure is
capped for all Board of Management members at 200%
of the relevant target bonus.
The corporate earnings-related bonus is based on the
BMW Group's net profit and post-tax return on sales
(which are combined in a single earnings factor) and
the level of the dividend (common stock). The corpo-
rate earnings-related bonus is derived by multiplying
the target amount fixed for each member of the Board
of Management by the earnings factor and by the
dividend factor. In exceptional circumstances, for
instance when there have been major acquisitions or
disposals, the Supervisory Board may adjust the level
of the corporate earnings-related bonus.
An earnings and dividend factor of 1.00 would give
rise to an earnings-based bonus of €0.75 million for
the financial year 2016 for a member of the Board
of Management during the first period of office and
one of €0.875 million during the second term of
appointment or from the fourth year in office. The
equivalent bonus for the Chairman of the Board of
Management is €1.5 million. The earnings factor is
1.00 in the event of a Group net profit of €3.1 billion
and a post-tax return on sales of 5.6%. The dividend
factor is 1.00 in the event that the dividend paid on
the shares of common stock is between 101 and 110
cents. If the Group net profit were below €2 billion,
or if the post-tax return on sales were less than 2%,
the earnings factor for the financial year 2016 would
be zero. In this case, no corporate earnings-related
bonus would be paid.
The personal performance-related bonus is derived by
multiplying the target amount set for each member
of the Board of Management by a performance factor.
The Supervisory Board sets the performance factor
on the basis of its assessment of the contribution
of the relevant Board of Management member to
sustainable and long-term oriented business devel-
opment. In setting the factor, equal consideration is
given to personal performance and decisions taken
in previous planning periods, key decisions affecting
the future development of the business and the effec-
tiveness of measures taken in response to changing
external conditions as well as other activities aimed
at safeguarding the future viability of the business
to the extent not included directly in the basis of
measurement. Performance factor criteria include
innovation (economic and ecological, e.g. reduction
of carbon emissions), customer focus, ability to adapt,
leadership accomplishments, shaping corporate cul-
ture and promoting integrity, contributions to the
Company's attractiveness as an employer, progress
in implementing the diversity concept, and activities
that foster corporate social responsibility. The target
bonus and the key figures used to determine the cor-
porate earnings-related bonus are fixed in advance for
a period of three financial years, during which time
they may not be amended retrospectively.
Share-based remuneration programme
The compensation system includes a share-based
remuneration programme, in which the level of share-
based remuneration is based on the amount of bonus
paid. The system is aimed at creating further long-term
incentives to encourage sustainable governance.
This programme envisages a share-based remuner-
ation component equivalent to 20% of the board
member's total bonus after taxes, which the board
member is required to invest in BMW AG common
stock. Taxes and social insurance relating to the share-
based remuneration component are borne by the
Company. As a general rule, the shares must be held
for a minimum of four years. As part of a matching
plan, at the end of the holding period the Board of
Management members will normally receive from
the Company either one additional share of common
stock or an equivalent cash amount for three shares
of common stock held, to be decided at the discretion
of the Company (share-based remuneration compo-
nent/matching component). Special rules apply in the
case of death or invalidity of a Board of Management
member or early termination of the contractual rela-
tionship before fulfilment of the holding period.
Retirement and surviving dependants' benefits
The provision of retirement and surviving depend-
ants' benefits for Board of Management members
was changed to a defined contribution system with a
guaranteed minimum return with effect from 1 Janu-
ary 2010. However, given the fact that board members
appointed for the first time prior to 1 January 2010 for
the most part had a legal right to receive the benefits
already promised to them, these board members were
given the option to choose between the previous sys-
tem and the new one.
In the event of the termination of mandate, Board
of Management members appointed for the first
time prior to 1 January 2010 are entitled to receive
certain defined benefits in accordance with the rules
of an older (defined benefit) pension plan. Under the
213
214
Statement on
Corporate
Governance
→ Compensation
Report
defined benefit plan, the entitlement to retirement
benefits arises at the earliest on reaching the age of
60 or in case of invalidity. The amount of the pen-
sion comprises a basic monthly amount of €10,000
plus a fixed amount. The fixed amount is made up
of approximately €75 for each year of service in the
Company before becoming a member of the Board of
Management plus between €400 and €600 for each 7
Overview of compensation system and
compensation components
full year of service on the board (up to a maximum
of 15 years). Pension payments are adjusted based
on the rules applicable for the adjustment of civil
servants' pensions, i.e. the pensions of members of
the Board of Management are adjusted when the civil
servants remuneration level B6 (excluding allowances)
is increased by more than 5% or in accordance with
the Company Pension Act.
Component
BASIC COMPENSATION P. A.
Parameter/measurement base
Variable remuneration
Member of the Board of Management:
The basic remuneration of members of the Board of
Management was unchanged from the previous year,
namely €0.75 million p. a. for a board member during
the first term of office, €0.9 million p.a. for a board
member from the second term of office or fourth
year of office onwards and €1.5 million p. a. for the
Chairman of the Board of Management.
Fixed remuneration
Share-based compensation programmes for
employees and members of the Board of
Management
Three share-based remuneration schemes were
in place at BMW AG during the year under report,
namely the Employee Share Programme (under which
entitled employees of BMW AG have been able to
participate in the enterprise's success since 1989 in
the form of non-voting shares of preferred stock), a
share-based remuneration programme for Board of
Management members, and a share-based remuner-
ation programme for senior heads of department
(relating in both cases to shares of common stock).
The share-based remuneration programme for Board
of Management members is described in detail in
the Compensation Report (see also the "Share-based
remuneration" section in the Compensation Report
and → note 39 to the Group Financial Statements).
The share-based remuneration programme for qual-
ifying heads of department, introduced with effect
for financial years beginning after 1 January 2012, is
closely based on the programme for Board of Manage-
ment members and is aimed at rewarding a long-term,
entrepreneurial approach to running the business on
a sustainable basis.
Under the terms of the programme, participants give
a commitment to invest an amount equivalent to 20%
of their performance-based bonus in BMW common
stock and to hold the shares so acquired for a min-
imum of four years. In return for this commitment,
BMW AG pays 100% of the investment amount as a net
subsidy. Once the four-year holding period require-
ment has been fulfilled, the participants receive – for
each three common stock shares held and at the
Company's option one further share of common
stock or the equivalent amount in cash.
-
→ see
note 39
→ see
notes
29 and 39
Under the terms of the Employee Share Programme,
in 2016 employees were entitled to acquire packages
of between four and eleven shares of non-voting pre-
ferred stock with a discount of €22.72 (2015: €20.83)
per share compared to the market price (average
closing price in Xetra trading during the period from
4 to 9 November 2016: €66.86). All employees of
BMW AG and its (directly or indirectly) wholly owned
German subsidiaries (if agreed to by the directors
of those entities) were entitled to participate in the
programme. Employees were required to have been
in an uninterrupted employment relationship with
BMW AG or the relevant subsidiary for at least one
year at the date on which the allocation for the year
was announced. Shares of preferred stock acquired
in conjunction with the Employee Share Programme
are subject to a blocking period of four years, starting
from 1 January of the year in which the employees
acquired the shares. A total of 305,029 (2015: 309,944)
shares of preferred stock were acquired by employees
under the programme in 2016; 305,000 (2015: 309,860)
of these shares were drawn from Authorised Capital
2014, the remainder were bought back via the stock
exchange. Every year the Board of Management of
BMW AG decides whether the scheme is to be con-
tinued. Further information is provided in → notes 29
and 39 to the Group Financial Statements.
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→ Compensation
Report
COMPENSATION REPORT
The following section describes the principles govern-
ing the compensation of the Board of Management
and the stipulations set out in the statutes relating
to the compensation of the Supervisory Board. In
addition to explaining the compensation system, the
components of compensation are also disclosed in
absolute figures. Furthermore, the compensation
of each member of the Board of Management and
the Supervisory Board for the financial year 2016 is
disclosed per individual member and analysed in its
component parts.
1. Board of Management compensation
Responsibilities
The full Supervisory Board is responsible for deter-
mining and regularly reviewing Board of Management
compensation. The necessary preparation for these
tasks is undertaken by the Supervisory Board's Per-
sonnel Committee.
Principles of compensation
The compensation system for the Board of Man-
agement at BMW AG is designed to encourage a
management approach focused on the sustainable
development of the BMW Group. One further prin-
ciple applied when designing remuneration systems
at BMW is that of consistency at different levels. This
means that compensation systems for the Board of
Management, senior management and employees
of BMW AG are composed of similar elements. The
Supervisory Board carries out regular checks to ensure
that all Board of Management compensation compo-
nents are appropriate, both individually and in total,
and do not encourage the Board of Management to
take inappropriate risks on behalf of the BMW Group.
At the same time, the compensation model used for
the Board of Management needs to be sufficiently
attractive for highly qualified executives in a compet-
itive environment.
The compensation of members of the Board of Man-
agement is determined by the full Supervisory Board
on the basis of performance criteria and after taking
into account any remuneration received from Group
companies. The principal performance criteria are the
nature of the tasks allocated to each member of the
Board of Management, the economic situation and the
performance and future prospects of the BMW Group.
The Supervisory Board sets ambitious and relevant
parameters as the basis for variable compensation.
It also ensures that variable components based on
multi-year assessment criteria take account of both
positive and negative developments and that the pack-
age as a whole encourages a long-term approach to
business performance. Targets and other parameters
may not be changed retrospectively. The Supervisory
Board reviews the appropriateness of the compensa-
tion system annually. In preparation, the Personnel
Committee also consults remuneration studies. The
Supervisory Board reviews the appropriateness of the
compensation system in horizontal terms by compar-
ing compensation paid by other DAX companies and
in vertical terms by comparing board compensation
with the salaries of executive managers and with the
average salaries of employees of BMW AG based in
Germany, in both cases with regard to their various
levels and to changes over time. Recommendations
made by an independent external remuneration
expert and suggestions made by investors and analysts
are also considered in the consultative process.
Compensation system, compensation components
The compensation of the Board of Management com-
prises both fixed and variable remuneration as well as
a share-based component. Retirement and surviving
dependants' benefit entitlements are also in place.
Fixed remuneration consists of a base salary (paid
monthly) and other remuneration elements, which
comprise mainly the use of company and leased cars
as well as the payment of insurance premiums, con-
tributions towards security systems and an annual
medical check-up. Members of the Board of Manage-
ment are also entitled to purchase vehicles and other
services of the BMW Group at conditions that also
apply in each relevant case for employees.
1,000,000
€0.75 million (first term of appointment)
€1.50 million
Principal features
a) Defined benefits
(only applies to board members appointed for the first time before
1 January 2010; based on legal right to receive the benefits already
promised to them, this group of persons is entitled to opt between
(a) and (b)
b) Defined contribution system with guaranteed minimum rate of return
Pension of €120,000 p. a. plus fixed amounts based on length of Company
and board service
Pension based on amounts credited to individual savings accounts for contributions paid
and interest earned, various forms of disbursement
Pension contributions p. a.:
Member of the Board of Management: €350,000-€400,000
Chairman of the Board of Management: €500,000
REMUNERATION CAPS (MAXIMUM REMUNERATION)
in € p. a.
in the first term of appointment
Member of the Board of Management
in the second term of appointment or from fourth year in office
Chairman of the Board of Management
Share-based compensation programme
Cash compen-
sation for share
Bonus
acquisition
Monetary value
of matching
component
Possible
special bonus
Total*
3,000,000
700,000
Model
- €0.90 million (from second term of appointment onwards or fourth year in office)
Chairman of the Board of Management:
RETIREMENT AND SURVIVING DEPENDANTS' BENEFITS
OTHER COMPENSATION
VARIABLE COMPENSATION
Bonus
a) Corporate earnings-related bonus
(corresponds to 50% of target bonus if target is 100% achieved)
b) Performance-related bonus
(corresponds to 50% of target bonus if target is 100% achieved)
Special bonus payments
Share-based remuneration programme
a) Cash compensation component
b) Share-based remuneration component
(matching component)
Target bonuses p. a. (if target is 100% achieved):
-
€1.50 million (first term of appointment)
€1.75 million (from second term of appointment onwards or fourth year in office)
€3.00 million (Chairman of the Board of Management)
Quantitative criteria fixed in advance for a period of three financial years
Formula: 50% of target bonus x earnings factor x dividend factor (common stock)
The earnings factor is derived from the Group net profit and the Group post-tax return
on sales
Primarily qualitative criteria, expressed in terms of a performance factor aimed at
measuring the board members' contribution to sustainable and long-term performance
and the future viability of the business
Formula: 50% of target bonus x performance factor
Criteria for the performance factor also include: innovation (economic and ecological,
e.g. reduction of CO2 emissions), customer orientation, ability to adapt, leadership
accomplishments, corporate culture and promoting integrity, attractiveness as employer,
progress in implementing the diversity concept and activities that foster corporate social
responsibility
May be paid in justified circumstances on an appropriate basis, contractual basis,
no entitlement
Requirement for Board of Management members to each invest an amount equivalent to
20% of their total bonus (after tax) in BMW AG common stock
Earmarked cash remuneration equivalent to the amount required to be invested in
BMW AG shares, plus taxes and social insurance contributions
Once the four-year holding period requirement is fulfilled, Board of Management mem-
bers receive for each three common stock shares held either - at the Company's option -
one further share of common stock or the equivalent amount in cash
Contractual agreement, main points: use of Company cars, insurance premiums,
contributions towards security systems, medical check-up
(871)
Basic
1,097
(1,427,072)
87,500
87,500
622,236
620,307
(-)
(-)
189,754
407,706
6,856,658
5,622,284
(201,018)
(408,960)
(5,465,539)
918,735 3,469,214
354,365
356,743
1,935,142
1,935,142
(350,000)
(350,000)
(1,510,725) (1,510,706)
424,411
(1,427,599)
408,564
(364,656)
1,879,263
Peter Schwarzenbauer
Oliver Zipse
Total³
Klaus Draeger4
Service cost in
accordance with
IFRS for the
Service cost in
accordance with
HGB for the
financial year 20165 financial year 20165
Present value of
pension obliga-
tions (defined
benefit plans),
in accordance
with IFRS6
Present value of
pension obliga-
tions (defined
benefit plans),
in accordance
with HGB6
507,444
510,811
4,764,941
4,763,838
(175,287)
(358,331)
(3,993,819)
(3,992,702)
358,490
360,785
1,879,851
(360,767)
4,469,471
3,502,860
(448,139)
1 Member of the Board of Management since 1 October 2016.
2 Member of the Board of Management until 31 December 2016.
3 Disclosures for the previous year include amounts relating to a member of the Board of Management who left office during the financial year 2015.
4 Member of the Board of Management until 30 September 2016.
5 Service cost differs due to the different valuation bases used to measure pension obligations for HGB purposes (expected settlement amount) and for IFRS purposes
(present value of the defined benefit obligation).
6 Based on a legal right to receive the benefits already promised to them, Board of Management members appointed for the first time prior to 1 October 2010 were given the option of choosing between the
previous defined benefit model and the new defined contribution model.
219
220
Statement on
Corporate
Governance
→ Compensation
Report
2. Supervisory Board compensation
Responsibilities, regulation pursuant to
Articles of Incorporation
The compensation of the Supervisory Board is specified
either by a resolution of the shareholders at the Annu-
al General Meeting or in the Articles of Incorporation.
The compensation regulation valid for the financial
year under report was resolved by shareholders at the
Annual General Meeting on 14 May 2013 and is set
out in Article 15 of BMW AG's Articles of Incorpo-
ration, which can be viewed and/or downloaded at
→ www.bmwgroup.com/ir under the menu items "Facts about
the BMW Group" and "Corporate Governance".
Compensation principles, compensation components
The Supervisory Board of BMW AG receives a fixed
compensation component as well as a Company per-
formance-related compensation component, which is
oriented toward sustainable growth and based on a
multi-year assessment. The Company performance-
related component is based on average earnings per
share of common stock for the remuneration year and
the two preceding financial years.
The fixed and performance-related components in
combination are intended to ensure that the compen-
sation of Supervisory Board members is appropriate
in relation to the tasks of Supervisory Board members
and the Company's financial condition and also takes
account of business performance over several years.
In accordance with the Articles of Incorporation, each
member of BMW AG's Supervisory Board receives, in
addition to the reimbursement of reasonable expens-
es, a fixed amount of €70,000 (payable at the end of
the year) as well as a Company performance-related
compensation of €170 for each full €0.01 by which
the average amount of (undiluted) earnings per s share
(EPS) of common stock reported in the Group Finan-
cial Statements for the remuneration year and the two
preceding financial years exceed a minimum amount
of €2.00 (payable after the Annual General Meeting
held in the following year). An upper limit correspond-
ing to twice the amount of the fixed compensation
is in place for the Company performance-related
compensation. The limit for a member of the Supervi-
sory Board with no additional compensation-relevant
function is therefore set at €140,000.
With this combination of fixed compensation ele-
ments and a Company performance-related com-
pensation component oriented toward sustainable
growth, the compensation structure in place for
BMW AG's Supervisory Board complies with the rec-
ommendation on supervisory board compensation
contained in section 5.4.6 paragraph 2 sentence 2 of
the German Corporate Governance Code (version
dated 5 May 2015).
The German Corporate Governance Code also recom-
mends in section 5.4.6 paragraph 1 sentence 2 that
the exercising of chair and deputy chair positions in
the Supervisory Board as well the chair and member-
ship of committees should also be considered when
determining the level of compensation.
Accordingly, the Articles of Incorporation of BMW AG
stipulate that the Chairman of the Supervisory Board
shall receive three times the amount and each Deputy
Chairman shall receive twice the amount of the remu-
neration of a Supervisory Board member. Provided the
relevant committee convened for meetings on at least
three days during the financial year, each chairman
of the Supervisory Board's committees receives twice
the amount and each member of a committee receives
one-and-a-half times the amount of the remuneration
of a Supervisory Board member. If a member of the
Supervisory Board exercises more than one of the
functions referred to above, the compensation is
measured only on the basis of the function that is
remunerated with the highest amount.
In addition, each member of the Supervisory Board
receives an attendance fee of €2,000 for each full
meeting of the Supervisory Board (Plenum) which
the member has attended (payable at the end of the
financial year). Attendance of more than one meeting
on the same day is not remunerated separately.
The Company also reimburses to each member of
the Supervisory Board reasonable expenses and any
value-added tax arising on the member's remunera-
tion. The amounts disclosed below are net amounts.
For performance of his duties, the Chairman of the
Supervisory Board has the use of an office with admin-
istrative support, as well as the BMW car service.
(5,011,606)
(5,251,799)
5,649,230
7,864,591
(411,555)
(3,279,690)
(2,968,379)
357,203
359,548
1,481,134
1,480,940
(360,305)
(364,312)
(1,081,408)
(1,081,155)
Ian Robertson
355,045
1,621,507
1,620,978
(221,667)
(221,667) (1,188,313)
(1,187,721)
2,634,212
(2,301,249)
2,849,067 23,630,940
(2,888,441) (23,198,892)
21,425,612
(22,343,033)
174,793
(184,066)
407,706
(408,960)
357,410
Klaus Fröhlich
(5,163,692)
Markus Duesmann¹
4 Member of the Board of Management since 1 October 2016.
5 Member of the Board of Management until 31 December 2016.
6 Disclosures for the previous year include amounts relating to a member of the Board of Management who left office during the financial year 2015.
In addition, an expense of €2.8 million (2015: €2.6 mil-
lion) was recognised in the financial year 2016 for
current members of the Board of Management for
the period after the end of their service relationship,
which relates to the expense for allocations to pension
provisions.
Total benefits paid to former members of the Board of
Management and their surviving dependants for the
financial year 2016 amounted to €6.5 million (2015:
€8.0 million).
Pension obligations to former members of the Board of
Management and their surviving dependants are cov-
ered by pension provisions amounting to €86.4 million
(2015: €71.8 million), recognised in accordance with
IAS 19.
217
218
Statement on
Corporate
Governance
→ Compensation
Report
Share-based component of the individual members
of the Board of Management for the
financial year 2016 (2015)
in €
Harald Krüger
Milagros Caiña Carreiro-Andree
Klaus Draeger²
Markus Duesmann³
Friedrich Eichiner4
Klaus Fröhlich
Ian Robertson
Peter Schwarzenbauer
3 Member of the Board of Management until 30 September 2016.
Oliver Zipse
1 Provisional number or provisional monetary value calculated at grant date (date on which the entitlement became binding in law). The final number of matching shares is determined in each case when the
requirement to invest in BMW AG common stock has been fulfilled. See note 39 to the Group Financial Statements for a description of the accounting treatment of the share-based compensation component.
² Value of benefits granted for work performed on the Board of Management during the financial year 2016 plus the amount falling due for payment in conjunction with a share-based remuneration component
granted in a previous year and for which the holding period requirements were met.
(8,032)
(900,000)
(14,501)
(914,501) (3,293,863)
(1,092)
Peter Schwarzenbauer
862,500
32,689
895,189 3,345,313
Friedrich Eichiner²
(750,000)
(31,101)
(781,101) (2,823,311)
(936)
Oliver Zipse
Total6
750,000 114,694 864,694 2,973,589
(475,806) (44,089) (519,895) (1,791,119)
7,425,000 385,391 7,810,391 28,992,624
(7,333,870) (318,440) (7,652,310) (27,105,316)
876
(457)
8,964
161,622 7,627,519 7,545,122
(130,079) (6,218,971) (6,088,892)
101,198 4,544,873 4,443,675
(89,242) (4,047,547) (3,958,305)
75,922 3,382,272 3,404,174
(96,107) (4,314,767) (4,218,660)
21,629 966,461 944,832
(-)
101,198
(96,107)
80,811
(76,657)
101,198 4,489,147 4,483,005
(96,107) (4,304,471) (4,208,364)
97,601 4,338,103 4,240,502
(82,377) (3,686,789) (3,604,412)
80,811 3,919,094 3,838,283
(48,602) (2,359,616) (2,311,014)
821,990 37,625,005 37,172,944
(-)
4,495,825 4,492,451
(4,313,952) (4,217,845)
3,861,711 3,780,900
(3,721,739) (3,645,082)
(715,278) (35,472,904) (34,757,626)
Total5
1,058
in accordance with
HGB and IFRS
(224,354)
(491,185)
95,615
196,362
(59,311)
(100,747)
61,370
71,285
(9,915)
(9,915)
829,579
2,614,266
(1,106,057)
(2,959,655)
1 Provisional number or provisional monetary value calculated on the basis of the closing price of BMW common stock in the Xetra trading system on 30 December 2016 (88.75 €)
(fair value at reporting date).
² Member of the Board of Management until 30 September 2016.
3 Member of the Board of Management since 1 October 2016.
"Member of the Board of Management until 31 December 2016.
Pension entitlements
in €
Harald Krüger
Milagros Caiña Carreiro-Andree
Expense in 2016
435,753
68,865
5 Disclosures for the previous year include amounts relating to a member of the Board of Management who left office during the financial year 2015.
(34,245)
(34,375)
279,932
557,844
Provision at
31.12.2016 in
accordance with
HGB and IFRS¹
(369,498)
15,276
284,247
(109,760)
(268,970)
102,338
465,494
(166,581)
(497,690)
(90,275)
76,878
(497,259)
489,900
127,176
(133,415)
2,130
2,130
(-)
111,253
Similar to "value at risk" (see definition below).
Basic earnings per share are calculated for common
and preferred stock by dividing the net profit after
minority interests, as attributable to each category of
stock, by the average number of shares in circulation.
Earnings per share of preferred stock are computed
on the basis of the number of preferred stock shares
entitled to receive a dividend in each of the relevant
financial years.
EBIT margin
Profit/loss before financial result as a percentage of
Cash flow at risk
Abbreviation for "Earnings Before Interest and Taxes",
equivalent in the BMW Group income statement to
"Profit/loss before financial result".
EBIT
Liquid funds generated (cash inflows) or used (cash
outflows) during a reporting period.
Cash flow
Investments in property, plant and equipment and
other intangible assets (excluding capitalised
development costs) as a percentage of Group
Capitalised development costs as a percentage of
research and development expenditure.
Capitalisation rate
revenues.
Capital expenditure ratio
Financial swap agreements, under which creditors of
securities (usually bonds) pay premiums to the seller
of the CDS to hedge against the risk that the issuer of
the bond will default. As with credit default insurance
agreements, the party receiving the premiums gives
a commitment to compensate the bond creditor in
the event of default.
Credit default swap (CDS)
The process of combining separate financial state-
ments of Group entities into Group Financial State-
ments, depicting the financial position, net assets
and results of operations of the Group as a single
economic entity.
Consolidation
The sum of the balance sheet line items “Leased prod-
ucts" and "Receivables from sales financing" (current
and non-current), as reported in the balance sheet for
the Financial Services segment.
Earnings per share (EPS)
revenues.
A hedge against exposures to fluctuations in the fair
value of a balance sheet item.
A hedge against exposures to the variability in fore-
casted cash flows, particularly in connection with
exchange rate fluctuations.
Gross margin
Gross profit as a percentage of Group revenues.
Business volume in balance sheet terms
A measure of the potential maximum loss in value of
an item during a set time period, based on a specified
probability.
Value at risk
Goodwill corresponds to the consideration paid to
acquire an entity, less the fair value of the separate
assets acquired and liabilities assumed. The buyer
is willing to pay the additional amount in return for
future expected earnings.
Goodwill
RoE in the Financial Services segment is calculated as
segment profit before taxes, divided by the average
amount of equity capital attributable to the Financial
Services segment.
Return on Equity (ROE)
ROCE in the Automotive and Motorcycles segments
is measured on the basis of relevant segment profit
before financial result and the average amount of
capital employed in the segment concerned. Capital
employed corresponds to the sum of all current and
non-current operational assets, less liabilities that do
not incur interest.
Return on Capital Employed (ROCE)
Fair value hedge
The amount for which an asset could be exchanged,
or a liability settled, between knowledgeable, willing
parties in an arm's length transaction.
Fair value
total.
Equity capital as a percentage of the balance sheet
Equity ratio
The effective tax rate is calculated by dividing the
income tax expense by the Group profit before tax.
Effective tax rate
Cash flow hedge
A securitised debt instrument in which the issuer
certifies its obligation to repay the nominal amount
at the end of a fixed term and to pay a fixed or variable
rate of interest.
BALANCE SHEET
A form of corporate financing involving the sale of
receivables to a financing company.
Income taxes
Effective tax rate
Return on sales (earnings before tax/revenues)
Earnings before tax
Earnings before financial result
Gross profit margin³
1.06/1.08
0.30/0.32
0.30/0.32
1.30/1.32
694
197
197
852
1,508
2.30/2.32
2.50/2.52
1,640
100,041
75,612
107,539
76,704
Post-tax return on sales
Net profit for the year
Bond
Non-current assets
Current assets
Capital expenditure ratio (capital expenditure/revenues)
Asset-backed financing transactions
Short-term debt instruments with a term of less than
one year which are usually sold at a discount to their
face value.
Commercial paper
GLOSSARY
→ Glossary
Other
Information
228
227
Dividend per share of common stock/preferred stock
DIVIDEND
Dividend total
Personnel cost per employee
Workforce at year-end5
PERSONNEL
Cash and cash equivalents at balance sheet date
Operating cash flow Automotive segment4
CASH FLOW STATEMENT
Balance sheet total
Current provisions and liabilities
Non-current provisions and liabilities
Equity
Equity ratio
Capital expenditure (excluding capitalised development costs)
Group net profit as a percentage of Group revenues.
In accordance with Article 15 of the Articles of Incor-
poration, the compensation of the Supervisory Board
for activities during the financial year 2016 totalled ¬
Group profit/loss before tax as a percentage of Group
Dow Jones Sustainability Index World
Digitalisation → 23, 45, 51, 55, 85, 96
Dividend → 109, 137
→ 191
Corporate Governance Code
Declaration with respect to the
Dealer organisation/dealerships → 23,55
D
→74 et seq.
→ 161
L
→ 190 et seq.
→ 109
per share
Key data
K
Investments accounted for using the equity method
and other investments → 143 et seq.
Inventories → 71, 80, 148
→ 80, 142
→ 65, 135 et seq., 156
E
→ 63, 77, 112 et seq., 133 et seq.
Earnings per share → 5, 137
EBIT margin/return on sales
Efficient Dynamics → 52
Employees 4, 39, 57 et seq., 85
Equity →73, 149
Exchange rates
→ 61
Total compensation of the Supervisory Board for the
2016 financial year
96,230
72,349
→ 130 et seq.
New financial reporting rules
5,63
Net profit
N
Marketable securities → 67 et seq., 125, 140 et seq.
→ 48
Motorcycles segment
→ 193 et seq.
Mandates of members of the Supervisory Board
Mandates of members of the Board of Management
→ 192
M
List of investments → 180 et seq.
Locations → 24 et seq.
→ 143
→ 49 et seq.
Leased products
Lease business
5, 29 et seq., 40, 65, 86
→ 35, 84, 97, 122, 170
Intangible assets
Income taxes
Income statement
Financial result → 65,78
Financial liabilities → 70, 157 et seq.
Financial assets
Financial instruments → 162 et seq.
→ 80, 146 et seq., 162 et seq.
F
→ 122 et seq.
Automotive segment
Accounting policies
Apprentices → 57
A
INDEX
→ Index
Other
Information
230
229
Research and non-capitalised development costs as a
percentage of Group revenues.
Research and development expense ratio
The sum of research and non-capitalised development
cost and capitalised development cost (not including
the associated scheduled amortisation).
Research and development expenditure
revenues.
Financial Services segment
Fleet emissions
→ 42 et seq.
G
→ 121
→ 121
→133
Cost of sales
Cost of materials
Corporate Governance
Consolidated companies
Consolidation principles
Contingent liabilities
→ 52 et seq.
Connected Drive
Compensation Report → 212 et seq.
Compliance → 207 et seq.
Pre-tax return on sales
Cash flow statement → 67 et seq., 116 et seq.
CO2 emissions → 4, 39, 61, 86 et seq.
→ 67 et seq., 162 et seq.
C
Group tangible, intangible and investment
assets → 124, 140 et seq.
→ 70, 157 et seq.
→ 72
Balance sheet structure
Bonds
B
→ 4, 39, 61, 86
→ 49 et seq.
Capital expenditure → 5, 65 et seq.
Cash and cash equivalents
Cash flow → 5, 68 et seq., 116 et seq.
83,141
10,000
95,453
(194,960)
(116,960)
(8,000)
(70,000)
208,220
130,220
8,000
70,000
(196,960)
(116,960)
(10,000)
(70,000)
208,220
130,220
8,000
Werner Zierer¹
70,000
70,000
130,220
1 These employee representatives have - in line with the guidelines of the Deutsche Gewerkschaftsbund - requested that their remuneration be paid into the Hans Böckler Foundation.
² Figures for the previous year include the remuneration of members of the Supervisory Board who left office during the financial year of 2015.
(5,053,009)
(3,042,241)
(190,000)
(1,820,768)
5,393,720
3,385,720
188,000
1,820,000
Total²
(196,960)
(116,960)
(10,000)
(70,000)
210,220
10,000
3. Other
Jürgen Wechsler¹
(196,960)
(10,000)
(70,000)
210,220
130,220
10,000
70,000
Willibald Löw¹
(194,960)
(116,960)
(8,000)
(70,000)
210,220
130,220
10,000
70,000
(116,960)
Brigitte Rödig¹
(196,960)
70,000
(116,960)
(10,000)
(70,000)
210,220
130,220
10,000
70,000
Dominique Mohabeer¹
(127,347)
(74,662)
(8,000)
(44,685)
210,220
130,220
10,000
Simone Menne
Apart from vehicle lease and financing contracts
entered into on customary conditions, no advances
or loans were granted to members of the Board of
Management and the Supervisory Board of BMW AG
or its subsidiaries, nor were any contingent liabilities
entered into on their behalf.
RESPONSIBILITY
STATEMENT BY THE
COMPANY'S LEGAL
REPRESENTATIVES
Motorcycles¹
Automobiles
SALES VOLUME
TEN-YEAR COMPARISON
BMW GROUP
Comparison
→ BMW Group
Ten-year
Other
Information
226
Contacts
Financial Calendar
Index of Graphs
Index
Glossary
Ten-year
Comparison
PRODUCTION VOLUME
Other
Information
Automobiles
2016
€ million
Business volume (based on balance sheet carrying amounts)²
contracts
Contract portfolio
FINANCIAL SERVICES
2,165,566 2,006,366
133,615 110,127
2,279,503
151,004
2,359,756
145,555
units
units
2,117,965 1,963,798
123,495 115,215
2,367,603 2,247,485
145,032 136,963
units
units
2013
2014
2015
Motorcycles¹
5
5
→Page 234 Contacts
224
223
Oliver Zipse
Peter Schwarzenbauer
Dr. Ian Robertson (HonDSc)
Dr. Nicolas Peter
Klaus Fröhlich
Milagros Caiña Carreiro-Andree Markus Duesmann
Harald Krüger
The Board of Management
Aktiengesellschaft
Bayerische Motoren Werke
Munich, 14 February 2017
"To the best of our knowledge, and in accordance with
the applicable reporting principles, the Consolidated
Financial Statements give a true and fair view of the
assets, liabilities, financial position and profit of the
Group, and the Group Management Report includes
a fair review of the development and performance of
the business and the position of the Group, together
with a description of the principal opportunities and
risks associated with the expected development of
the Group."
Statement pursuant to § 37y No. 1 of the
Securities Trading Act (WpHG) in conjunction
with § 297 (2) sentence 4 and § 315 (1) sentence
6 of the German Commercial Code (HGB)
Statement on
Corporate
Governance
→ BMW Group
Auditor's Report
BMW GROUP
AUDITOR'S REPORT
We have audited the consolidated financial statements
prepared by the Bayerische Motoren Werke Aktien-
gesellschaft, comprising the income statement for
group and statement of comprehensive income
for group, the balance sheet for group, cash flow
statement for group, group statement of changes in
equity and the notes to the group financial statements,
together with the group management report for the
business year from 1 January to 31 December 2016.
The preparation of the consolidated financial state-
ments and the group management report in accord-
ance with IFRSs, as adopted by the EU, and the
additional requirements of German commercial law
pursuant to § 315 a Abs. 1 HGB [Handelsgesetzbuch
"German Commercial Code"] are the responsibility
of the parent company's management. Our respon-
sibility is to express an opinion on the consolidated
financial statements and on the group management
report based on our audit.
→ Page 233 Financial Calendar
→ Page 232 Index of Graphs
→Page 230 Index
→Page 228 Glossary
→ Page 226 BMW Group Ten-year Comparison
OTHER
INFORMATION
Feege
Wirtschaftsprüfer
Horst Lischka¹
Wirtschaftsprüfer
Wirtschaftsprüfungsgesellschaft
KPMG AG
Munich, 24 February 2017
In our opinion, based on the findings of our audit,
the consolidated financial statements comply with
IFRSS, as adopted by the EU, the additional require-
ments of German commercial law pursuant to § 315 a
Abs. 1 HGB and give a true and fair view of the net
assets, financial position and results of operations of
the Group in accordance with these requirements.
The group management report is consistent with the
consolidated financial statements, complies with
the German statutory requirements, and as a whole
provides a suitable view of the Company's position
and suitably presents the opportunities and risks of
future development.
Our audit has not led to any reservations.
financial statements in accordance with the applica-
ble financial reporting framework and in the group
management report are detected with reasonable
assurance. Knowledge of the business activities and
the economic and legal environment of the Group and
expectations as to possible misstatements are taken
into account in the determination of audit procedures.
The effectiveness of the accounting-related internal
control system and the evidence supporting the dis-
closures in the consolidated financial statements and
the group management report are examined primarily
on a test basis within the framework of the audit. The
audit includes assessing the annual financial state-
ments of those entities included in consolidation, the
determination of entities to be included in consoli-
dation, the accounting and consolidation principles
used and significant estimates made by management,
as well as evaluating the overall presentation of the
consolidated financial statements and group man-
agement report. We believe that our audit provides a
reasonable basis for our opinion.
We conducted our audit of the consolidated financial
statements in accordance with § 317 HGB [Handels-
gesetzbuch "German Commercial Code"] and German
generally accepted standards for the audit of financial
statements promulgated by the Institut der Wirtschaft-
sprüfer [Institute of Public Auditors in Germany]
(IDW). Those standards require that we plan and
perform the audit such that misstatements materially
affecting the presentation of the net assets, financial
position and results of operations in the consolidated
Sailer
(196,960)
(116,960)
(10,000)
(233,920)
(10,000)
(140,000)
410,440
260,440
10,000
140,000
Manfred Schoch (Deputy Chairman)¹
(366,041)
(223,986)
(8,000)
(134,055)
610,660
390,660
10,000
(383,920)
210,000
Stefan Quandt (Deputy Chairman)
10,000
(383,920)
(233,920)
(10,000)
(140,000)
410,440
260,440
10,000
140,000
Stefan Schmid (Deputy Chairman)¹
(383,920)
(233,920)
(10,000)
(140,000)
410,440
260,440
140,000
Total
Variable
compensation
Attendance fee
Proportion in %
Amount
Proportion in %
Amount
2015
2016
Supervisory Board members did not receive any
ther compensation or benefits from the BMW Group
for advisory and/or agency services personally ren-
dered.
fur-
Total compensation
Variable compensation
Fixed compensation
in € million
221
€5.4 million (2015: €5.1 million). This amount includes
fixed compensation of €2.0 million (2015: €2.0 million)
and variable compensation of €3.4 million (2015:
€3.1 million).
84,887
2.0
37.0
2.0
39.2
compensation
Fixed
Norbert Reithofer (Chairman)
in €
Compensation of the individual members of the Supervisory Board for the financial year 2016 (2015)
→ Responsibility
Statement by the
Company's Legal
Representatives
Statement on
Corporate
Governance
Karl-Ludwig Kley (Deputy Chairman)
222
5.1
100.0
5.4
60.8
3.1
63.0
3.4
100.0
5,114,906
123,394
140,000
260,440
210,220
130,220
10,000
70,000
Renate Köcher
(196,960)
(116,960)
(10,000)
(70,000)
210,220
130,220
10,000
70,000
Susanne Klatten
(196,960)
(70,000)
(116,960)
(10,000)
(196,960)
(70,000)
208,220
130,220
8,000
70,000
Robert W. Lane
(196,960)
(116,960)
(10,000)
(70,000)
210,220
130,220
10,000
70,000
Ulrich Kranz
(116,960)
(10,000)
(70,000)
208,220
70,000
Franz Haniel
(196,960)
(116,960)
(10,000)
(70,000)
210,220
130,220
70,000
Christiane Benner¹
(377,920)
(233,920)
(4,000)
(140,000)
408,440
8,000
130,220
208,220
(70,000)
130,220
8,000
70,000
Henning Kagermann
(196,960)
(116,960)
(10,000)
8,000
(70,000)
130,220
10,000
70,000
Reinhard Hüttl
(196,960)
(116,960)
(10,000)
210,220
4,718,970
111,191
→ Compensation
Report
4,130,002
4,853
7,383
7,803
4,212
921
289
5,111
8,018
8,275
21.8
11.4
18.1
21.1
20.2
56,018
413
53,197
351
10.2
49.2
33.1
33.5
34.5
739
21
203
1,610
2,476
2,692
6.9
0.7
0.8
8.0
10.7
3,873
6.0
50,681
68,821
Automobiles
1,541,503
104,396
1,439,918
104,220
82,631
99,236
1,258,417
1,481,253
1,738,160
110,360
1,861,826
113,811
PRODUCTION VOLUME
Motorcycles¹
SALES VOLUME
Automobiles
1,500,678
102,467
1,435,876
101,685
1,286,310
87,306
Motorcycles¹
60,477
FINANCIAL SERVICES
3,592,093
76,848
Revenues
INCOME STATEMENT
Business volume (based on balance sheet carrying amounts)²
51,257
60,653
61,202
66,233
75,245
80,974
Contract portfolio
2,629,949
3,031,935
3,085,946
3,190,353
3,846,364
19.1
5,111
4,907
123,429
131,835
33,784
39,287
36,919
40,134
47,213
48,395
33,469
41,526
45,119
46,100
49,113
52,834
24.4
110,164
20.1
101,953
88,997
4,359,572
96,390
100,306
105,876
89,161
6,246
4,471
4,921
8,149
8,110
9,167
2,393
7,454
7,767
7,432
7,776
8,370
101,086
19.5
21.7
22.0
38,670
39,944
43,151
49,004
50,530
56,619
62,416
62,009
67,013
74,425
81,305
3,134
330
210
3,243
32,378
4,151
2,720
2,312
23.2
21,744
20,273
19,915
23,930
27,103
30,606
98,047
5.2
4.7
3.8
4.0
5.4
2,933
2,980
2,383
5.6
1,461,166
10.5
1,845,186
106,358
Capital expenditure (excluding capitalised development costs)
Current assets
Non-current assets
BALANCE SHEET
5,329
5,817
6,396
6,910
€ million
Net profit for the year
32.5
33.2
30.7
28.5
%
Capital expenditure ratio (capital expenditure/revenues)
Effective tax rate
Equity
Non-current provisions and liabilities
3,826
3,731
€ million
52,184
56,844
61,831
66,864
€ million
86,193
97,959
110,343
121,671
€ million
Balance sheet total
Current provisions and liabilities
Equity ratio
2,564
2,890
2,828
Earnings before financial result
20.1
21.2
19.7
19.9
%
Gross profit margin³
76,059
80,401
92,175
94,163
€ million
Revenues
INCOME STATEMENT
84,347
€ million
9,386
9,593
9,118
2,755
€ million
Income taxes
1,668,982
104,286
10.8
10.0
10.3
4,601
%
7,893
8,707
9,224
9,665
€ million
Earnings before tax
7,978
Return on sales (earnings before tax/revenues)
4,967
10.4
4.0
116,324
92,337
122,244
97,136
124,729
99,575
€
€ million
€
Dividend per share of common stock/preferred stock
Dividend total
DIVIDEND
Personnel cost per employee
Workforce at year-end5
PERSONNEL
9,964
9,423
11,836
110,351
89,869
2,102
1,904
2007
%
2008
2009
2010
2011
2012
11,464
6 Proposal by management.
4 Figures are reported in the cash flow statement up to 2006 as cash inflow from operating activities of Industrial Operations.
3 Research and development expenses included in cost of sales with effect from 2008.
1 Excluding Husqvarna, sales volume up to 2013: 59,776 units; production up to 2013: 59,426 units.
² Amount computed on the basis of balance sheet figures: until 2007 from the Group balance sheet, from 2008 onwards from the Financial Services segment balance sheet.
1,707
2.60/2.62
2.90/2.92
3.20/3.22
3.506/3.526
5 Figures exclude dormant employment contracts, employees in the non-work phases of pre-retirement part-time arrangements and low wage earners.
€ million
2,300
7,671
63,819
73,183
€ million
25.7
24.2
25.1
%
58,288
35,600
42,764
47,363
€ million
6.5
Operating cash flow Automotive segment4
5.7
4.2
37,437
51,643
24.8
€ million
7,880
€ million
6,122
CASH FLOW STATEMENT
138,377
154,803
172,174
Cash and cash equivalents at balance sheet date
188,535
€ million
51,134
59,078
65,591
67,989
7,688
Financial Calendar
↑↑
→ Index of Graphs
Other
Information
232
231
→ 148 et seq.
→160
INDEX OF GRAPHS
Sustainability → 59 et seq.
Tangible, intangible and investment assets
T
→112, 139
Statement of Comprehensive Income
Stock → 107 et seq.
Shareholdings of members of the Board of Manage-
ment and the Supervisory Board → 174
Finances
→ 140 et seq.
BMW Group in Figures
→ 207
→ 6
→ 24 et seq.
BMW Group Locations
Selling and administrative expenses →65,133
Sales volume and locations
→ 72
→ 88
BMW Group Financial liabilities
Balance sheet structure - Group → 72
Balance sheet structure - Automotive segment
BMW Group value added 2016 → 75
Risk management in the BMW Group
Development of BMW stock → 107, 108
BMW Group Compliance Management System
→ 70
BMW Group Change in cash and cash equivalents
→ 68
→ 54
Regional mix of BMW Group purchase volumes
2016
→ 51
→ 50
Development of credit loss ratio
Contract portfolio retail customer financing of
Financial Services segment 2016
BMW Group new vehicles financed or leased by
Financial Services segment → 49
→ 49
Contract portfolio of Financial Services segment
→ 29
BMW Group Value drivers
Segment information → 175 et seq.
P
Sales volume
Profit before financial result → 5 et seq., 63 et seq.,
Production network → 24 et seq., 44 et seq.
→ 138
→ 4 et seq., 29 et seq., 39 et seq.,
73, 80, 127, 151 et seq.
Production → 44 et seq.
Personnel expenses
85 et seq.
Performance indicators
Pension provisions
→ 134
→156
Outlook → 82 et seq.
Other provisions
Other operating income and expenses
Other investments →165
Other financial result → 134
0
BMW Group - key automobile markets 2016
BMW Group sales volume of motorcycles → 48
BMW Group-key motorcycle markets 2016
65 et seq.
Profit before tax → 5 et seq., 39, 65, 85, 87
Property, plant and equipment
Purchasing
S
→ 88 et seq.
→ 5,30 et seq., 41, 87
RoE
ROCE → 5, 29 et seq., 40, 86
Risks and opportunities
Revenues → 5,40 et seq., 63, 66 et seq., 78, 86 et seq., 133
→ 65
Revenue reserves → 149
→ 4, 39 et seq., 42 et seq., 48, 86 et seq.
Return on sales → 5,29 et seq., 40, 65, 86
→ 172 et seq.
→ 71, 145 et seq.
Related party relationships
Refinancing → 69 et seq.
Receivables from sales financing
Rating → 110
R
→ 142
→ 54
Remuneration system → 212 et seq.
Report of the Supervisory Board → 8 et seq.
Research and development →51 et seq.
Result from equity accounted investments
→ 42
Trade payables
Trade receivables
Workforce
at www.bmwgroup.com/ir.
Investor Relations information is available directly
Further information about the BMW Group is
available online at → www.bmwgroup.com.
The BMW Group on the Internet
ir@bmwgroup.com
+49 89 382-1 46 61
+49 89 382-2 53 87
E-mail
Fax
Telephone +49 89 382-3 16 84
Investor Relations
presse@bmwgroup.com
+49 89 382-2 44 18
Fax
E-mail
+49 89 382-2 41 18
Business and Finance Press
Telephone +49 89 382-2 45 44
CONTACTS
→ Contacts
Other
Information
and
234
www.rolls-roycemotorcars.com.
towards preserving resources
→ 48
Telephone +49 89 382-0
Germany
80788 Munich
Aktiengesellschaft
Bayerische Motoren Werke
PUBLISHED BY
This version of the Annual Report is a translation
from the German version. Only the original German
version is binding.
print production
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The BMW Annual Report was printed on paper produced in accordance with the internation-
A further contribution
233
Information about the various BMW Group brands
is available at www.bmw.com, www.mini.com
7 November 2018
Annual Accounts Press Conference
21 March 2017
2017
FINANCIAL CALENDAR
→ 35
→ 36
→ 36
Exchange rates compared to the euro
Further information
→ 60
Materiality matrix
Sustainability
→205
Proportion of female executives within management
→ 59
Employee attrition rate at BMW AG
→ 57
Quarterly Report to 30 September 2018
BMW Group apprentices at 31 December
Proportion of female employees in management
functions at BMW AG/BMW Group → 58
22 March 2017
Analyst and Investor Conference
Oil price trend
Precious metals price trend
Steel price trend → 37
Quarterly Report to 31 March 2017
Quarterly Report to 30 June 2018
4 May 2017
Annual General Meeting
17 May 2018
Quarterly Report to 31 March 2018
4 May 2018
Analyst and Investor Conference
22 March 2018
Annual Accounts Press Conference
21 March 2018
2 August 2018
21 March 2018
Annual Report 2017
Annual General Meeting
3 August 2017
Quarterly Report to 30 June 2017
11 May 2017
Quarterly Report to 30 September 2017
2018
7 November 2017
Germany
Germany
United Kingdom
Brazil
Germany
United Kingdom
Thailand
Germany
South Africa
USA
Austria
Germany
Chassis and drivetrain components
Components for electric mobility
Rolls-Royce bodywork, pressed parts
BMW motorcycles, Maxi-Scooter, car brake discs
BMW 1 Series, BMW 3 Series, BMW 5 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X5
BMW 3 Series, BMW 4 Series, BMW 5 Series, BMW 6 Series, BMW 7 Series
M-models: BMW M5, BMW M6
Plug-in-hybrid vehicles: BMW 5 Series, BMW 7 Series
Toolmaking, outer body parts for Rolls-Royce, aluminium tanks for BMW Motorrad
Petrol engines for BMW, MINI
BMW i8 Plug-in-hybrid engines
Production of core engine parts
Components and electric drive systems
BMW 1 Series, BMW 2 Series
M-models: BMW M2
Plug-in-hybrid vehicles: BMW 2 Series, BMW i8
United Kingdom
BMW 3 Series, BMW X1, BMW X3, BMW X4
Germany
The 19 BMW Group plants comprise 13 automobile
and engine plants, two plants for BMW motorcycles,
three sites for the production of components, pressed
parts and tools and one supply centre.
Brazil
Germany
India
Electric vehicles: BMW i3
Locations
BMW GROUP PLANTS
Araquari
Berlin
Chennai
Dingolfing
Eisenach
Hams Hall
Germany
Landshut
Leipzig
Oxford
Rayong
Regensburg
Rosslyn
Spartanburg
Steyr
Swindon
Wackersdorf
Country
Products
Manaus
Munich
Motorcycles
Combined
Management
Report
M-models: BMW M4
BMW 5 Series Extended-Wheelbase Version
Plug-in-hybrid vehicles: BMW 5 Series Extended-Wheelbase Version
BMW 2 Series, BMW 3 Series (+Extended-Wheelbase Version),
BMW X1 Extended-Wheelbase Version
Plug-in-hybrid vehicles: BMW X1 Extended-Wheelbase Version
Petrol engines, production of core engine parts
SGL Automotive Carbon Fibers (SGL ACF) is a joint
operation of the BMW Group with the SGL Group.
At the Moses Lake site in the US State of Washington,
carbon fibres are produced for subsequent use in the
production of carbon fibre fabrics in Wackersdorf.
Locations
JOINT OPERATION
SGL AUTOMOTIVE CARBON FIBERS
Moses Lake
Wackersdorf
Country
USA
Germany
Products
Carbon fibres
Carbon fibre fabrics
27
27
28
throughout the BMW Group production network
worldwide.
General Information
on the BMW Group
Products
China
China
China
Plug-in-hybrid vehicles: BMW 3 Series
Petrol and diesel engines, high-performance engines for M-models
Production of core engine parts
MINI Hatch, MINI Clubman
BMW 1 Series, BMW 3 Series, BMW 5 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X4, BMW X5, MINI Countryman
Motorcycles
BMW 1 Series, BMW 2 Series, BMW 3 Series, BMW 4 Series,
BMW X1, BMW Z4
M-models: BMW M3, BMW M4
BMW 3 Series
BMW X3, BMW X4, BMW X5, BMW X6
M-models: BMW X5 M, BMW X6 M
Plug-in-hybrid vehicles: BMW X5
Petrol and diesel engines for BMW and MINI,
Production of core engine parts
High performance engines for M-models
Pressed parts and bodywork components
Distribution center for parts and components
Cockpit assembly
Processing of carbon fibre components
BMW 3 Series, BMW 4 Series
Rolls-Royce Phantom, Ghost, Wraith, Dawn
United Kingdom
The plants in Shenyang (China) are operated together
with the joint venture partner, Brilliance China Auto-
motive Holdings Ltd., manufacturing exclusively for
the Chinese market. The Shenyang site comprises
the Dadong and Tiexi automobile plants as well as
an engine plant complete with foundry.
Locations
JOINT VENTURE BMW BRILLIANCE
AUTOMOTIVE HOLDINGS LTD.
Dadong (Shenyang)
Tiexi (Shenyang)
Tiexi (Shenyang)
Country
Rolls-Royce Manufacturing Plant Goodwood
At the end of the reporting period, the Group's pro-
duction network comprised a total of 31 locations in 14
countries. The 31 locations comprise 19 BMW Group
manufacturing facilities, five plants belonging to joint
ventures/operations, five partner plants and two con-
tract production plants. The same quality, safety and
sustainability standards are applicable for all plants
Great Britain
General Information
on the BMW Group
→ Organisational
BMW Group Engineering Japan,
Tokyo, Japan
BMW Group Engineering USA,
Woodcliff Lake, USA
BMW Technology, Chicago, USA
Sales subsidiaries and
Financial Services
locations worldwide
1 Sales locations only.
2 Financial Services only.
Russia
India
China
South Korea
Japan
Hong Kong”
Thailand
Malaysia
Singapore¹
Indonesia¹
Australia
BMW Group locations in Europe
→ 10
China, Shanghai, and BMW Group
Designworks Studio Shanghai, China
BMW Group Engineering China,
Beijing, China
BMW Group ConnectedDrive Lab
Oxnard, USA
Emission Test Center,
USA
Mexico
United Arab
Emirates
Brazil
Argentina¹
South Africa
New Zealand
☐
25
Production
■BMW Group plant Araquari, Brazil
BMW Group plant Chennai, India
BMW Group plant Manaus, Brazil
BMW Group plant Rayong, Thailand
BMW Group plant Rosslyn, South Africa
BMW Group plant Spartanburg, USA
BMW Brilliance Automotive, China
(joint venture-3 plants)
SGL Automotive Carbon Fibers
(joint operation-2 plants)
Partner plants
outside Europe
Partner plant, Hosur, India
Partner plant, Jakarta, Indonesia
Partner plant, Cairo, Egypt
Partner plant, Kaliningrad, Russia
Partner plant, Kulim, Malaysia
▲ Research and development
network outside Europe
BMW Group Designworks, Newbury
Park, USA
BMW Group Technology Office USA,
Mountain View, USA
BMW Group Engineering and
outside Europe
Structure and
Business Model
25
Germany
BMW Group plant Munich
BMW Group plant Regensburg
BMW Group plant Wackersdorf
BMW Group plant Steyr, Austria
BMW Group plant Hams Hall, GB
BMW Group plant Oxford, GB
BMW Group plant Swindon, GB
Rolls-Royce Manufacturing Plant,
Goodwood, GB
Partner plants
in Europe
Partner plant, Born,
Netherlands
Partner plant, Graz,
Austria
▲ Research and development
network in Europe
BMW Group Research and Innovation
Centre (FIZ), Munich, Germany
BMW Group Research and
Technology, Munich, Germany
BMW Car IT, Munich, Germany
BMW Innovation and Technology
Centre, Landshut, Germany
BMW Diesel Competence Centre,
Steyr, Austria
Sales subsidiaries and
Financial Services
locations Europe
Hungary¹
Romania¹
Bulgaria¹
Greece
26
Combined
Management
Report
BMW Group plant Leipzig
BMW Group plant Landshut
BMW Group plant Eisenach
BMW Group plant Dingolfing
Netherlands
→ Organisational
Structure and
Ireland
Sweden
Finland¹
Denmark
Czech
Republic¹
Poland¹
Belgium
Norway
France
Slovakia¹
Switzerland
Spain
Portugal
Italy
Slovenia¹
Malta
■Production in Europe
BMW Group plant Berlin
Austria
Business Model
Revenues
7
23
Under the motto "THE NEXT 100 YEARS", the
BMW Group celebrated its centenary in March
2016, showcased by a major centenary event held
in Munich. The four concept vehicles unveiled over
the course of the year for the brands BMW, MINI,
Rolls-Royce and BMW Motorrad provided visionary
insights into the future of individual mobility. At
the same time, the BMW Group also presented its
Strategy NUMBER ONE > NEXT, which builds on
the existing strategy and expands its contents on the
basis of recent developments. At the heart of Strategy
Originally founded in 1916 as Bayerische Flugzeug-
werke AG (BFW), it emerged as Bayerische Motoren
Werke G.m.b.H. in 1917, before finally becoming Bay-
erische Motoren Werke Aktiengesellschaft (BMW AG)
in 1918. The BMW Group comprises BMW AG itself
and all subsidiaries over which BMW AG has either
direct or indirect control. BMW AG is also responsible
for managing the BMW Group as a whole.
Organisational Structure and Business Model
Bayerische Motoren Werke Aktiengesellschaft
(BMW AG), based in Munich, Germany, is the parent
company of the BMW Group. The general purpose
of the Corporation is the development, production
and sale of engines, engine-equipped vehicles, related
accessories and products of the machinery and metal-
working industry as well as the rendering of services
related to the aforementioned items. The BMW Group
is sub-divided into the Automotive, Motorcycles,
Financial Services and Other Entities segments (the
latter primarily comprising holding companies and
Group financing companies). The BMW Group oper-
ates on a global scale and is represented in more than
150 countries worldwide. At the end of the reporting
period, the BMW Group employed a workforce of
124,729 people.
General information on the BMW Group is provided
below. There have been no significant changes com-
pared to the previous year.
General information on the BMW Group
This Combined Management Report incorporates the
management reports of Bayerische Motorenwerke
Aktiengesellschaft (BMW AG) and the BMW Group.
ORGANISATIONAL
STRUCTURE AND
BUSINESS MODEL
→ www.bmwgroup.com/company
Distribution network enlarged
Digitalisation and connectedness
consistently increased
THE NEXT 100 YEARS -
shaping the future
BMW GROUP
GENERAL
INFORMATION
ON THE
Structure and
Business Model
on the BMW Group
→ Organisational
General Information
Management
Report
Combined
22
23
NUMBER ONE > NEXT is a commitment to consistent
future-oriented activity, focusing on developing prod-
ucts, brands and services for individual mobility in the
premium segment. New technologies, digitalisation
and connectedness as well as social responsibility are
further areas of strategic focus.
The BMW Group is one of the most successful makers
of passenger cars and motorcycles worldwide and
among the largest industrial companies in Germany.
With BMW, MINI and Rolls-Royce, the BMW Group
owns three of the strongest premium brands in the
automotive industry. The vehicles manufactured by
the BMW Group set exceptionally high standards in
terms of aesthetics, dynamics, technology and quality,
and are the culmination of expertise in engineering
and innovation. Its research and innovation network
spans 13 locations in five countries. In addition to its
strong position on international motorcycle markets,
the BMW Group also offers its customers a successful
range of financial services. In recent years, it has also
established itself as a leading provider of premium
services in the field of individual mobility.
→ see section
Motorcycles
segment
→ Organisational
on the BMW Group
General Information
Management
Report
Combined
24
24
→ The core BMW brand caters to a broad array of → see sections
customer wishes, ranging from fuel-efficient and
innovative models equipped with Efficient Dynam- Sales and
ics through to efficient, high-performance BMW M
vehicles, which help bring a touch of the flair of motor-
sport to the roads. At the same time, the BMW Group
continues to push the boundaries of “premium” to
new levels with its BMW i models. Designed to the core
for even greater sustainability, the BMWi embodies
the vehicle of the future – with its electric drivetrain,
intelligent lightweight construction, exceptional
design and newly developed range of mobility services.
Marketing
22
Automotive
segment and
→ BMW Group is also working on an integrated digital → see section
concept, Connected Drive, to bring together driver
and vehicle. Through this service, the vehicle becomes
an intelligent companion, digitally integrated and
adapted to the individual needs of each user. The
BMW iNEXT is scheduled to enter the market in 2021,
electrically powered, autonomously driven and fully
→ The BMW Group is also among the leading pro-
viders of financial services in the automobile sector,
segment operating more than 50 entities and cooperation
arrangements with local financial services providers
and importers worldwide. Credit financing and the
leasing of BMW Group brand cars and motorcycles
to retail customers represent the segment's main line
of business. It also provides customers with access
to a wide range of insurance and banking products.
Operating under the brand name "Alphabet”, the
BMW Group's international multi-brand fleet business
provides fleet financing products and comprehensive
management services for corporate car fleets in 19
countries. Within the multi-brand financing line of
business, credit financing, leasing and other services
are marketed to retail customers under the brand
name “Alphera”. Providing support to the dealership
organisation, such as by financing dealership vehicle
inventories, rounds off the segment's product range.
→ The motorcycles business is also focused on the
premium segment, with the model range currently
comprising motorcycles for the Sport, Tour, Roadster,
Heritage, Adventure and Urban Mobility segments.
BMW Motorrad also offers a broad range of equip-
ment options designed to enhance rider safety and
comfort. The motorcycles business sales network is
organised similarly to that of the automobile business.
Currently, around 1,180 BMW Motorrad dealerships
operate worldwide.
The Automotive segment's worldwide distribution net-
work currently consists of around 3,400 BMW, 1,580
MINI and 140 Rolls-Royce dealerships. In Germany,
products and services are sold through BMW Group
branches and by independent authorised dealers.
Sales outside Germany are handled primarily by
subsidiary companies and by independent import
companies in a number of markets. The BMW i deal-
ership and agency network currently covers more
than 1,300 locations.
The MINI brand is a veritable icon in the premium
small car segment, offering unrivalled driving pleasure
in its class. Rolls-Royce has a tradition in the ultra-lux-
ury segment stretching back over more than 100 years.
Research and
Development
→ Long-term thinking and responsible action have
long been the cornerstones of the BMW Group's Sustainability
success. Ecological and social sustainability along
the entire value-added chain, full responsibility for
its products and a clear commitment to preserving
resources are prime objectives firmly embedded in
the BMW Group's corporate strategy. The BMW Group
has ranked among the most sustainable companies in
the automotive industry for many years.
→ see section
Financial
Services
→ see sections
Workforce and
connected.
Structure and
2
→Page 103 Disclosures Relevant for Takeovers
Automotive Segment
→ Page 42
Review of Operations
→ Page 42
Financial and Non-financial Performance Indicators
→ Page 39
Overall Assessment by Management
→ Page 38
General and Sector-specific Environment
→ Page 34
Report on Economic Position
→ Page 34
→ Page 29 Management System
→ Page 24 Locations
→ Page 22 Organisational Structure and Business Model
→Page 22 General Information on the BMW Group
REPORT
COMBINED MANAGEMENT
Canada
→ Page 48
Motorcycles Segment
→ Page 49
Financial Services Segment
→ Page 101 Internal Control System and Risk Management
System Relevant for the Financial Reporting Process
Risks and Opportunities
→ Page 88
→ Page 82 Report on Outlook, Risks and Opportunities
→Page 82 Outlook
→Page 76 Comments on Financial Statements of BMW AG
→ Page 63 Results of Operations, Financial Position and Net Assets
Sustainability
→ Page 59
→Page 57 Workforce
→ Page 107 BMW Stock and Capital Markets in 2016
Capital Markets
General Information
Economic Position
Outlook, Risks and
Opportunities
Combined
Management
Report
2
Sales and Marketing
→ Page 55
Purchasing and Supplier Network
→Page 54
Research and Development
→ Page 51
BMW Stock and
The primary function of the four partner plants of
the BMW Group is to serve nearby regional markets.
During the year under report, BMW and MINI vehicles
were also manufactured in Kaliningrad (Russia), Cairo
Business Model
BMW Group locations worldwide
MINI Hatch, MINI Convertible, MINI Countryman
MINI Countryman, MINI Paceman
MANAGEMENT SYSTEM
The business management system applied by the
BMW Group follows a value-based approach, with
a clear focus on achieving profitability, consistent
growth, increasing the value of the business for cap-
ital providers and safeguarding jobs. Achieving the
desired degree of corporate autonomy can only be
ensured in the long term if available capital is prof-
itably employed. The prerequisite for this is that the
amount of profit generated sustainably exceeds the
cost of equity and debt capital.
The BMW Group's internal management system is
based on a multi-layered structure, with varying ¬
BMW Group - value drivers
→ 11
degrees of detail, depending on the level of
aggre-
gation. Operating performance, for instance, is
managed primarily at segment level. In order to
manage long-term performance and assess strate-
gic issues, additional key performance figures are
taken into account at Group level. In this context,
with effect from the beginning of the 2017 financial
year, the pre-tax return on sales will be used as an
additional indicator of earnings quality throughout
the BMW Group. The contribution made to enter-
prise value during the financial year continues to be
measured in terms of value added. This approach is
translated into operational processes at both Group
and segment level in the form of key financial and
non-financial performance indicators (value drivers).
The link between value added and the relevant value
drivers is shown in a simplified form in the following
diagram.
Return on capital
Value added
(ROCE/ROE)
Return on sales
Capital turnover
Cost of capital
··
Profit
Capital employed
Average weighted
cost of capital rate
Expenses
29
Products
Austria
Netherlands
Country
(Egypt), Jakarta (Indonesia) and Kulim (Malaysia). In
addition, BMW motorcycles were manufactured by the
cooperation partner, TVS Motor Company, in Hosur
(India).
→ Management System
Locations
PARTNER PLANTS
Hosur
Jakarta
Cairo
Kaliningrad
Kulim
Country
29
India
Indonesia
Egypt
Russia
Products
Motorcycles
BMW 3 Series, BMW 5 Series, BMW 7 Series, BMW X1, BMW X3, BMW X5
BMW 3 Series, BMW 5 Series, BMW 7 Series, BMW X3, BMW X4, BMW X5, BMW X6
BMW 3 Series, BMW 5 Series, BMW X1, BMW X3, BMW X4, BMW X5, BMW X6
BMW 1 Series, BMW 3 Series, BMW 5 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X4, BMW X5, BMW X6, MINI Countryman
The BMW Group also awards production contracts to
external partners for specific vehicle types. During
the period under report, various MINI models were 7
produced by Magna Steyr Fahrzeugtechnik in Graz
(Austria) and VDL Nedcar in Born (Netherlands).
Locations
CONTRACT PRODUCTION
Born
Graz
Malaysia
→ Locations
30
General Information
on the BMW Group
2016
2015
7,695
7,836
10,361
10,854
74.3
72.2
Capital employed corresponds to the sum of all cur-
rent and non-current operational assets, less liabilities
that do not incur interest (e.g. trade payables and
other provisions).
Due to its key importance for the Group as a whole,
the Automotive segment is managed on the basis of
additional key performance indicators with varying
degrees of detail, which have a significant impact on
ROCE and hence on segment performance. These
value drivers are sales volume, segment revenues and
the operating return on sales (EBIT margin: profit/loss
before financial result as a percentage of revenues) as
the key performance indicator for segment profitabil-
ity. Average CO2 emissions for the fleet are also taken
into account, due to its impact on ongoing develop-
ment expenses
and the significant long-term impact
of regulatory requirements on Group performance.
Fleet emissions corresponds to average CO2 emissions
of new cars sold in the EU-28 countries.
Managing the business on the basis of key value
drivers makes it easier to identify the reasons for
changes in ROCE and define suitable measures to
drive its development.
Research and
development
locations
13
Production and
assembly plants
31
Financial Services
locations worldwide
7 Sales subsidiaries and
43
→ 09
2015
2016
2015
2016
→ Management System
Due to the high level of aggregation involved, it is
impractical to manage the business on the basis of
value added. This key indicator therefore only serves
for reporting purposes. Relevant value drivers which
could have a significant impact on business perfor-
mance and enterprise value are defined for each
controlling level. The financial and non-financial
value drivers are reflected in the key performance
indicators used to manage the business. In the case
of project-related decisions, the system incorporates a
project-oriented control logic focused on value-based
and return-based performance indicators, which
therefore provide a sound basis for decision-making.
Management of operating performance
at segment level
→ Operating performance at segment level is managed
at its highest level on the basis of return on capital.
Depending on the business model, the segments are
measured on the basis of return on total capital or
equity. Specifically, the return on capital employed
(ROCE) is used for the Automotive and Motorcycles
segments and the return on equity (ROE) for the
Return on Capital Employed
→ 12
→ see sections
Indicators and
Performance
Outlook
Combined
Management
Report
Financial Services segment. As an overall reflection
of profitability (return on sales) and capital efficiency
(capital turnover), these key performance indicators
provide a wide range of information into the factors
driving segment performance and changes in the
value of the business.
The most comprehensive key performance indica-
tor used for the Automotive segment is RoCE. This
indicator provides information on profitability of
capital employed and on operational business. ROCE
is measured on the basis of segment profit before
financial result and the average amount of capital
employed in segment operations. The strategic target
for the Automotive segment's RoCE is 26%.
ROCE Automotive =
Profit before
financial result
Average capital
employed
Automotive
Average
Profit before financial result in € million
capital employed in € million
Return on capital employed in %
Automotive segment
Headquarters
Interest levels remained low in the world's indus-
trialised countries. The US Federal Reserve initially
refrained from tightening its monetary policies, before
finally deciding to raise the benchmark interest rate
by 0.25% in December.
10
Group profit before tax
71 +4.8%
€9,665 million
Record results in operational
segments
Record sales volumes for automobiles
and motorcycles - expectations
exceeded
Centenary year sees best Company
performance
ON ECONOMIC
POSITION
REPORT
specific Environment
→ General and Sector-
Economic Position
Report on
Management
Report
Combined
==
34
33
2015
10,000
9,723
6,407
6,040
3,593
at record level
3,683
Value-based project management
Operational business in the Automotive and Motor-
cycles segments is largely shaped by its life-cycle-
dependent project character. Projects have a sub-
stantial influence on future business performance.
Project decisions are therefore a crucial component
of financial management for the BMW Group.
Project decisions are taken on the basis of calculations
measured in terms of the cash flows each individual
project is expected to generate. Calculations are made
for the full term of a project, incorporating all future
years in which the project is expected to generate cash
flows. Project decisions are taken on the basis of net
present value and internal rate of return calculated
for the project.
The net present value of a project indicates the extent
to which a project will be able to generate a positive
contribution to earnings over and above the cost of
capital. A project with a positive net present value
enhances value added and therefore results in an
increase in the value of the business. The internal
rate of return of the project corresponds to the aver-
age return on capital employed in the project and, in
terms of significance, is equivalent to the multi-year
average RoCE for an individual project. It is therefore
consistent with one of the key performance indicators.
The criteria used for taking decisions as well as the
long-term impact on periodic earnings is document-
ed for all project decisions and incorporated in the
long-term Group forecast. This approach enables an
analysis of the periodic reporting impact of project
decisions on earnings and rates of return over the
term of each project. The overall result is a cohesive
controlling model.
33
Capital employed comprises the average amount of
Group equity employed during the year as a whole, the
financial liabilities of the Automotive and Motorcycles
segments, and pension provisions. The earnings meas-
ure for these purposes corresponds to Group profit
before tax, adjusted for interest expense incurred in
conjunction with the pension provision and on the
financial liabilities of the Automotive and Motorcycles
segments (earnings before interest expense and taxes).
The cost of capital is the minimum rate of return
expected by capital providers in return for the capital
employed. Since capital employed comprises an equity
capital element (e.g. share capital) and a debt capital
element (e.g. bonds), the overall cost of capital rate is
determined on the basis of the weighted average rates
for equity and debt capital, measured using standard
market procedures. The pre-tax average weighted
cost of capital for the BMW Group in 2016 was 12%,
unchanged from the previous year.
GENERAL AND
SECTOR-SPECIFIC
ENVIRONMENT
General economic environment
The global economy grew at a relatively stable pace
in the face of external influences at a rate of 3.1%
in 2016. Against a background of multiple political
uncertainties, global growth seems relatively robust.
The eurozone continued to record moderate economic
growth, helped among other factors by favourable
conditions on the job market. Although the pace of
the economy in China slowed, the decrease was only
marginal. The USA recorded slight growth in 2016. By
contrast, the emerging economies of Russia and Brazil
contracted again in 2016, despite Russia benefiting
from rising raw materials prices.
100
LLL LL
2012
2013
2014
2015
150
2016
2017
200
150
Russian Rouble
Japanese Yen
British Pound
Source: Reuters.
2016
200
→ 15
Gross domestic product (GDP) in the eurozone grew
by 1.7% year-on-year. The European Central Bank
(ECB) continued to pursue its expansive monetary
policies. Boosted by strong exports and robust domes-
tic demand, the German economy grew by 1.8%, its
fastest rate for five years. France (+1.2%) and Italy
(+0.9%) saw growth at similar levels to the previous
year. In both countries, structural reforms designed to
stimulate the economy remain in the implementation
phase.
In the UK, the year 2016 was marked by the Brexit
decision, the economic impact of which is expected to
be felt from 2017 onwards. For the year under report,
a robust GDP growth rate of 2.0% was recorded. Polit-
ical uncertainty did not have an adverse impact on
household spending. The growth rate also benefited
from falling unemployment. The increase in invest-
ments by companies was significantly lower than in
previous years, while the rise in government spending
was below average. Despite the massive devaluation
of the British pound after the referendum, exports fell
far short of matching the high growth rate recorded
one year earlier.
The new strategic direction adopted for China's econ-
omy presented significant challenges for the country's
government. In response to the stock market slump
at the beginning of the year and fears that econom-
ic growth was set to slow down, the government
imposed measures to stimulate the economy. The
6.7% GDP growth rate in China for the full year was
slightly down on the previous year, though within the
pursued target range.
The US economy continued to show a solid perfor-
mance, growing year-on-year by 1.6%. The unem-
ployment rate fell by 0.4 percentage points to 4.9%.
At the same time, however, domestic spending rose
at a slightly lower rate than one year earlier. Exports
only grew slightly as a result of the strong US dollar.
In view of these developments and in anticipation of
a rising inflation rate, the US Federal Reserve (Fed)
raised its benchmark interest rate in December 2016.
The domestic economy in Japan was held down in
particular by high debt levels and the appreciation
of the yen in 2016. After a two-year downward trend,
household spending increased, albeit at a moderate
rate, while exports remained weak. Ultimately, only
economic stimulus programmes prevented Japan from
stagnating in 2016, with the GDP growth rate finishing
at a modest 0.9%.
Thanks to its economic reforms, India posted a GDP
growth rate of 7.0%, achieving growth of at least 7.0%
for the third year in succession. By contrast, Russia
and Brazil failed once again to pull out of recession.
Although industrial production picked up in Russia,
domestic consumption fell sharply, causing economic
output to fall overall (-0.6%). Brazil, however, recorded
its second consecutive year of deep recession (−3.4%).
Figures for consumption expenditure (household and
public sector) and business investments dropped to
new lows.
Index: December 2011=100
7
The British pound weakened significantly in the wake
of the Brexit decision. Compared to its average rate
of 0.78 to the euro during the first half of the year,
it fell sharply during the second half of the year to
0.86 to the euro. The Bank of England reacted to
increasing post-referendum uncertainty by lowering
interest rates, thus contributing to the weakening of
the pound.
The Chinese renminbi lost in value compared to the
previous year, finishing with an average exchange rate
for the
year of 7.35 renminbi to the euro.
Despite volatility during the course of the year, the
US dollar remained unchanged compared to the pre-
vious year at an average exchange rate of 1.11 to the
euro in 2016. The Fed shifted only moderately from
its expansionary monetary policies during the year
under report.
The Japanese yen appreciated by approximately 10%
in 2016, despite the expansion of money supply by
the Bank of Japan. The average exchange rate for the
year was 120.25 yen to the euro.
Currencies in emerging economies reflected a mixed
picture. While the Brazilian real was down by approx-
imately 4% against the euro, the Russian rouble was
up by approximately 9% against the euro after a strong
rally.
Exchange rates compared to the euro
Currency markets
Value added Group
2015
2016
182
566
576
33.0
31.6
In view of the increasing strategic importance of the
Motorcycles segment, the EBIT margin will be added
as a key performance indicator with effect from the
beginning of the 2017 financial year. In conjunction
187
40
Return on Equity
→ 14
with the non-financial value driver sales volume, this
will enable ROCE development to be understood in
greater detail.
Financial Services segment. The strategic RoE target
for the Financial Services segment is at least 18%.
RoE Financial
Services
Profit before tax
As is common practice in the banking sector, the
performance of the Financial Services segment is
measured on the basis of return on equity. RoE is
defined as segment profit before taxes, divided by the
average amount of equity capital attributable to the 7
Average equity capital
2015
2015
Motorcycles segment
As with the Automotive segment, operating perfor-
mance for the Motorcycles segment is managed on the
basis of RoCE. Capital employed is measured on the
same basis as in the Automotive segment. The strategic
RoCE target for the Motorcycles segment is 26%.
Return on Capital Employed
→ 13
Motorcycles
Profit before
2016
financial result
7
Average capital
employed
Profit before financial result in € million
2016
2015
Average
capital employed in € million
2016
Return on capital employed in %
ROCE
Motorcycles
100
Financial Services
2016
→ Management System
Strategic management at Group level
Strategic management and quantification of the
financial impacts as part of the long-term corporate
planning are performed primarily at Group level. The
most significant performance indicators for these
purposes are Group profit before tax and the size of
the Group's workforce at the year-end. Group profit
before tax provides a comprehensive measure of the
Group's overall performance after consolidation
effects and a transparent basis for comparing perfor-
mance, particularly over time. The size of the Group's
workforce is monitored as an additional non-financial
performance indicator.
Information provided by these two key performance
indicators is reported with the performance indi-
cators, pre-tax return on sales and value added. Value
added, as a highly aggregated performance indicator,
provides an insight into capital efficiency and the
(opportunity) cost of capital required to generate
Group profit. Value added corresponds to the amount
of earnings over and above the cost of capital and gives
an indication of whether the Group is meeting the
minimum requirements for the rate of return expected
by capital providers. A positive value added means
that a company is generating more additional value
than the cost of capital.
Value added
Group
General Information
on the BMW Group
= earnings amount —
cost of capital
in € million
BMW Group
Earnings amount
Cost of capital
2016
2015
earnings amount —
(cost of capital rate ×
capital employed)
Profit before tax in € million
Combined
Management
Report
32
Average equity capital in € million
Return on equity in %
2015
2016
2015
2016
32
2015
1,975
10,236
9,756
21.2
20.2
31
2,166
Chinese Renminbi
Financial Services segment
35
As foreseen in the outlook for the financial year 2016,
the Group's profit before tax was slightly higher than
one year earlier and therefore in line with expectations.
Profit before tax: slight increase
During the financial year 2016, the BMW Group
continued to invest in innovative technologies and
its production network to ensure future sustainabil-
ity. The Group nevertheless remained on course in
terms of earnings. With a Group profit before tax of
€9,665 million (2015: €9,224 million; +4.8%), earn-
ings reached a new high, despite the continuation
of intensive competition on the world's automobile
markets. In addition to an excellent sales volume
performance, Group earnings also benefited from
an improved financial result.
BMW Group
The following section provides information on the key
financial and non-financial performance indicators
used as the basis for managing the BMW Group and
its segments. As part of the analysis of operations and
the financial condition of the BMW Group, forecasts
made the previous year for the financial year 2016 are
compared with actual outcomes in 2016.
FINANCIAL PERFORMANCE
INDICATORS
FINANCIAL AND NON-
Overall assessment of business performance
The BMW Group can look back on a successful
business performance in 2016, despite increased
competition and growing uncertainties in the inter-
national environment. The overall picture was positive
in terms of results of operations, financial position
and net assets. Overall, management expectations
for the period were therefore met. This assessment
also takes into account events after the end of the
reporting period.
BY MANAGEMENT
OVERALL ASSESSMENT
Prices in the premium segment of mainland Europe's
pre-owned car markets rose slightly at the beginning
of 2016, before settling at a similar level to the previous
year in the course of the year. Pre-owned car market
prices in the UK were slightly down year-on-year. Price
levels remained stable on Asian markets. The slight
downward trend continued in North America, despite
a stronger performance during the summer months.
High public-sector spending and expansionary mon-
etary policies adopted by the Chinese central bank
only partially absorbed the slowdown of the Chinese
economy, resulting in a further normalisation of GDP
growth over the course of the year. The Japanese cen-
tral bank broadened the scope of its expansionary
monetary policies in 2016 in order to stimulate the
economy and reverse deflationary tendencies.
In a bid to prevent a severe economic downturn after
the Brexit decision, the Bank of England lowered its
reference interest rate in August and announced addi-
tional expansionary measures, including extending its
bond purchasing programme.
In March 2016, the European Central Bank (ECB)
resolved to broaden the scope of its expansionary
monetary policies with a comprehensive package of
measures to generate economic growth through more
favourable lending conditions.
The global economy grew at a moderate pace in 2016,
with conditions for financial services business gener-
ally tending to be favourable.
Financial services markets
mance Indicators
Financial and Non-
financial Perfor-
Motorcycle markets
Since the beginning of the financial year 2016, market
analysis has been expanded from the half-litre class
(500 cc) to cover the entire 250 cc plus class. This fol-
lows BMW Motorrad's entrance with the entry-level
G 310 R model into a new market segment within the
250 cc plus class.
Global motorcycle markets in the 250 cc plus class
were flat year-on-year, mainly reflecting weaker per-
formance in some overseas regions (+/-0.0%). The
European market grew by 12.4% overall, benefiting
primarily from the significant recovery in Southern
Europe. While the French market grew by an encour-
aging 6.7%, markets in Germany, Italy and Spain all
recorded double-digit increases, expanding by 13.9%,
12.8% and 23.5% respectively. The US market finished
3.8% down year-on-year.
33
37
88
Workforce at year-end: slight increase
38
Report on
Economic Position
→ General and Sector-
specific Environment
→ Overall Assessment
↑
by Management
Combined
Management
Report
As at 31 December 2016, the BMW Group employed
a workforce of 124,729 (2015: 122,244; +2.0%) world-
wide. The slight company-wide increase was due to
the need for additional qualified staff for the develop-
ment of electric mobility and other technology fields
and the growth of the financial services business.
The systematic expansion of mobility services also
contributed to the increase in the workforce size.
As foreseen in the outlook for the financial year
2016, there was a slight increase in the size of the
BMW Group's workforce, in line with expectations.
1 Including the
joint venture
Report on
financial Perfor-
mance Indicators
Revenues: slight increase
Automotive segment revenues edged up by 1.0%
to a new record figure of €86,424 million (2015:
€85,536 million), with currency exchange effects
holding down the scale of the increase. The forecast
of a slight rise in Automotive segment revenues made
in the Annual Report 2015 therefore was confirmed.
EBIT margin in target range of between 8 and 10%
The EBIT margin in the Automotive segment (profit
before financial result divided by revenues) came
in at 8.9% (2015: 9.2%; -0.3 percentage points). As
foreseen for the financial year 2016, the EBIT mar-
gin from automobile business was within the target
range of between 8 and 10% and therefore in line
with expectations.
Return on capital employed (RoCE): slight increase
The return on capital employed (RoCE) amounted to
74.3% (2015: 72.2%; +2.1 percentage points). Amongst
other factors, transactions with other segments and
the expansion of business with service and Connected
Drive contracts made positive contributions to ROCE
for the Automotive segment.
Management
Report
The outlook for RoCE, which was already raised in
the Quarterly Report to 30 June 2016 from a mod-
erate decrease to a slight decrease, was once more
exceeded. In the Annual Report 2015, a moderate
decrease in ROCE was foreseen. The rate achieved by
the Automotive segment in 2016 was therefore once
again well above the minimum target of 26%.
Deliveries to customers: solid increase
In a highly favourable market environment, most nota-
bly in Europe, BMW Motorrad reported a solid 5.9%
increase, with 145,032 units sold (2015: 136,963 units).
These figures benefited from unexpectedly good sales
figures for Europe and Latin America.
The forecast increase, upgraded in the Quarterly
Report to 30 June 2016 from slight to solid, was
therefore realised. In the Annual Report 2015, only
a slight increase in deliveries to customers had been
foreseen for the Motorcycles segment.
Return on capital employed: slight increase
The Motorcycles segment generated a return on capital
employed (ROCE) of 33.0% in the year under report
(2015: 31.6%; +1.4 percentage points), slightly above
the previous year, mainly reflecting effective working
capital management and the improvement in earnings.
The reported figures also benefited from the trend
towards high-value models and the new brand strategy
initiated in 2014.
The forecast RoCE, which had already been changed
from a slight decrease to "at the previous year's level"
in the Quarterly Report to 30 June 2016, was therefore
once again exceeded. In the Annual Report 2015, a
slight decrease in ROCE had been foreseen.
US Dollar
Motorcycles segment
2017
Combined
As foreseen in the outlook for the full year 2016, fleet
carbon emissions fell slightly and were therefore in
line with forecast.
BMW Brilliance
Automotive Ltd.,
Shenyang
units, 2015:
282,000 units).
Automotive segment
Deliveries to customers: solid increase
39
In 2016, the Automotive segment sold a record number
of vehicles for the sixth year in succession. Dynamic
market conditions, particularly in Europe, influenced
automobile sales volumes more strongly than expect-
ed. Consumer spending in the UK in 2016 remained
stable, despite the Brexit decision. The upward trend
from the previous year in southern European coun-
tries also continued unbroken. Despite growing polit-
ical and economic uncertainties in the international
environment, deliveries to customers increased by a
solid 5.3% to a total of 2,367,603¹ BMW, MINI and
Rolls Royce brand vehicles (2015: 2,247,485¹ units).
2 EU-28.
In the Annual Report 2015, the outlook for the full year
2016 had foreseen a slight increase in sales volume.
The generally positive sentiment among consumers,
especially in Europe, but also in Asia, helped the
BMW Group to exceed its original forecast.
Fleet carbon dioxide (CO2) emissions²:
slight decrease
-
-
The fleet-wide deployment of Efficient Dynamics
technologies including drivetrain electrification
contributes to the efficient reduction of carbon dioxide
emissions. CO2 emissions produced by the vehicle
fleet sold in Europe (EU-28) decreased slightly to
124 grams CO2/km (2015: 127 grams CO2/km; -2.4%)
in the year under report.
(2016: 316,200 BMW, the Group's core brand, reported a solid 5.2%
increase to 2,003,359¹ units (2015: 1,905,234¹ units),
taking it over the two-million-unit threshold for the
first time in a single year. MINI also recorded solid
growth, with deliveries to customers up by 6.4% to
360,233 units (2015: 338,466 units). Rolls-Royce Motor
Cars sold 4,011 units (2015: 3,785 units; +6.0%).
Source: Working Group for the Iron and Metal Processing Industry.
Economic Position
→ Financial and Non-
2015
60
30
30
2012
2013
2014
90
2015
2017
Source: Reuters.
Precious metals price trend
→ 17
Index: December 2011 = 100
150
2016
100
120
60
35
2016
36
Combined
Management
Report
Price in US Dollar
Price in €
Report on
Oil price trend
→ 16
Price per barrel of Brent Crude
120
90
00
Economic Position
50
→ General and Sector-
specific Environment
150
→ 18
Index: January 2012 = 100
Automobile markets
The positive trend on international automobile mar-
kets seen in the previous year continued in 2016.
Worldwide registrations of passenger cars and light
commercial vehicles grew by 5.9% to 87.4 million
units. Strong momentum from China (24.1 million
units; +17.4%) and Europe (15.2 million units; +6.6%)
made significant contributions to growth. By contrast,
the USA recorded only a slight increase (17.6 million
units; +0.4%).
Europe's automobile markets presented a mixed
picture. After a strong performance in the previous
year, the UK saw only comparatively low growth in
the number of new registrations in 2016 (2.7 million
units; +2.3%). The French automobile market was in
even better shape than one year earlier, recording a
5.3% increase to 2.0 million registrations, ahead of
Germany's growth rate of 4.5% (3.4 million units).
Italy (1.8 million units; +16.2%) and Spain (1.1 million
units; +10.9%) both recorded double-digit percentage
increases.
Steel price trend
Japan was unable to turn around the previous year's
negative trend, with the market contracting by a
further 1.6% to 4.8 million units.
110
60
2014
2012
Source: Reuters.
2013
Automobile markets in major emerging economies
continued to suffer from recession in 2016. Russia saw
a 4.7% drop to 1.2 million units, while registrations
in Brazil slumped by nearly one third (-32.2%) to
1.7 million units.
Steel markets saw at times sharp price rises. During
the course of the year, the USA and the EU imposed
anti-dumping duties on Asian steel products, while
the USA did likewise on European steel products.
The situation was further exacerbated by the Chinese
government's decision to cut working hours in coal-
mines. The price of coal, an important cost factor in
the production of steel, rose accordingly.
85
The price of Brent crude oil – the most relevant bench-
mark for Europe - fell at the beginning of the year for a
short time to below the level of 30 US dollars per barrel.
A subsequent volatile upward trend saw the price rise
to a high of 57 US dollars per barrel, bolstered by the
agreement reached by the Organisation of Petroleum
Exporting Countries (OPEC) and Russia to cut back oil
production. Despite these developments, the average
price of Brent crude oil fell to 44 US dollars per barrel,
compared to 52 US dollars per barrel in the previous
year. WTI, the benchmark for crude oil in the USA,
followed a similar trend.
Gold
Platinum
After dropping to new lows at the turn of 2015/2016,
precious metals prices stabilised in the course of 2016
at higher levels. The lower prices seen in preced-
ing years have resulted in manufacturers reducing
over-capacities, while at the same time demand has
recovered.
50
2012
2013
2014
0
100
2016
2017
Raw materials prices
Palladium
2015
-
Sales volume of BMW vehicles by model variant*
BMW 2 Series
BMW 1 Series
Proportion of
BMW sales volume
2016 in %
→ 22
2016
in units
The BMW X family remained extremely popular in
2016, with sales rising by more than one fifth world-
wide to 644,992 units (2015: 527,319 units; + 22.3%).
Sales volume growth of the BMW X1 was particularly
pronounced with a jump of 83.6% to 220,378 units
(2015: 120,011 units). The BMW X3 also saw a sig-
nificant year-on-year rise in deliveries to customers
(157,017 units; 2015: 137,810 units; +13.9%). At
166,219 units, sales of the BMW X5 were only slight-
ly lower than one year earlier (2015: 168,143 units;
-1.1%).
BMW 3 Series
sales of the new BMW 7 Series were over two thirds up
on the previous year (61,514 units; 2015: 36,364 units;
+69.2%).
Change in %
2015
BMW X1
BMW 5 Series
BMW 6 Series
BMW 7 Series
BMW X3
BMW X4
BMW X5
BMW X6
BMW Z4
contrast, at 196,183 units, sales of the BMW 2 Series
were nearly a quarter higher (2015: 157,144 units;
+24.8%). Sales figures for the BMW 3 Series fell
year-
on-year to 411,844 units (2015: 444,338; -7.3%). Near-
ing the end of its life cycle, sales of the BMW 5 Series
at 331,410 units narrowly missed the previous year's
high figure (2015: 347,096 units; -4.5%). Worldwide
BMW i
176,032
182,158
BMW 4 Series
The BMW 1 Series fell just short of its previous year's
performance with a sales volume of 176,032 units in
the year under report (2015: 182,158 units; -3.4%). By
Other markets
BMW* brand exceeds the two-million threshold,
again taking a top position in the premium
segment
348.5
Asia*
-3.4
747.3
685.8
658.4
578.7
493.4
thereof China*
516.8
464.1
456.7
The BMW brand exceeded the two-million threshold
for the first time in 2016, selling 2,003,359 units.
391.7
67.7
65.4
62.7
61.8
61.1
Total*
2,367.6
2,247.5
2,118.0
1,963.8
1,845.2
* Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2016: 316,200 units, 2015: 282,000 units, 2014: 275,891 units, 2013: 198,542 units, 2012: 141,165 units).
327.3
8.8
58,055
157,144
55,050
5.5
2.9
166,219
168,143
−1.1
8.3
43,323
46,305
-6.4
2.2
5,432
7,950
-31.7
0.3
29,280
29,513
-0.8
1.5
BMW total
2,003,359
1,905,234
5.2
376.6
100.0
7.8
13.9
137,810
157,017
24.8
9.8
411,844
444,338
-7.3
20.5
133,272
152,390
-12.5
6.6
331,410
347,096
196,183
-4.5
13,400
20,962
-36.1
0.7
61,514
36,364
69.2
3.1
220,378
120,011
83.6
11.0
16.5
397.0
Q2: solid increase
Q2: in line with last
366.5
FINANCIAL SERVICES SEGMENT
Return on equity
in line with last year's level
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2016: 316,200 units).
2 EU-28.
Actual outcome
in 2016
€ million
9,665 (+4.8%)
124,729 (+2.0%)
units
g CO2/km
2,367,603 (+5.3%)
124 (-2.4%)
€ million
86,424 (+1.0%)
%
8.9 (-0.3%pts)
%
74.3 (+2.1 %pts)
slight increase
units
145,032 (+5.9%)
slight decrease
year's level
%
33.0 (+1.4%pts)
%
Return on capital employed
Sales volume
MOTORCYCLES SEGMENT
Return on capital employed
*Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2016: 316,200 units, 2015: 282,000 units).
Financial Services segment
Return on equity: slight increase
Growth in business volumes and an improved risk
profile in the Financial Services segment had a posi-
tive impact on segment return on equity (RoE) in 2016.
At 21.2%, the RoE was slightly higher than expected
(2015: 20.2%; +1.0 percentage point).
7
Comparison of 2016 forecasts with actual outcomes 2016
In the Annual Report 2015, ROE was forecast to be
at the previous year's level. As expected, it remained
ahead of the long-term target of 18%.
The following overall picture arises for the key per-
formance indicators used by the BMW Group and its
segments:
→ 19
Forecast for 2016
in 2015 Annual Report
BMW GROUP
21.2 (+1.0%pts)
Profit before tax
AUTOMOTIVE SEGMENT
slight increase
slight increase
Sales volume¹
Fleet emissions²
slight increase
slight decrease
slight increase
target range
between 8 and 10
moderate decrease
Q2: slight decrease
Revenues
EBIT margin
Workforce at year-end
41
42
42
2012
Europe
thereof Germany
thereof Great Britain
Americas
thereof USA
1,092.2
1,000.4
914.6
859.5
865.4
298.9
2013
286.1
259.2
287.4
252.2
231.0
205.1
189.1
174.5
460.4
495.9
482.3
463.8
425.3
272.3
405.7
2014
2016
Combined
Management
Report
Report on
Economic Position
→ Review of Operations
→ Automotive segment
REVIEW OF OPERATIONS
Automotive segment
Solid growth in deliveries to customers
The BMW Group sold 2,367,603* BMW, MINI and
Rolls-Royce brand vehicles worldwide in 2016, thereby
setting a new record for the sixth year in succession
(2015: 2,247,485* units; +5.3%). The BMW brand
recorded a solid 5.2% increase to 2,003,359* units,
thereby exceeding the two-million threshold for
the first time (2015: 1,905,234* units). MINI also
achieved a solid 6.4% increase to 360,233 units (2015:
338,466 units). Rolls-Royce Motor Cars delivered
4,011 luxury automobiles to customers during the
year under report (2015: 3,785 units; +6.0%). A new
all-time high was therefore not only recorded at Group
level, but also for the BMW and MINI brands.
under report,
also developed positively during the year
with sales rising to a total of 252,205 units (2015:
230,982 units; +9.2%). Sales volume growth was again
recorded in Asia. Overall, sales of the Group's three
brands in the region totalled 747,291* units (2015:
685,792* units; +9.0%), including 516,785* units sold
in China, 11.4% more than one year earlier (2015:
464,086* units). Total sales of BMW, MINI and Rolls-
Royce brand vehicles on the American continent were
down year-on-year within a highly competitive market
environment, falling by 7.2% to 460,398 units (2015:
495,897 units). Sales in the USA fell by 9.7% to 366,493
units (2015: 405,715 units).
BMW Group - key automobile markets 2016
2015
→ 20
Other 29.1
21.8 China
Dynamic growth in Europe and Asia, challenges on
the US market
Within a generally favourable market environment,
the BMW Group surpassed the one-million mark for
sales of BMW, MINI and Rolls-Royce brand vehicles in
Europe for the second year in succession in 2016 with
1,092,155 units sold (2015: 1,000,427 units; +9.2%).
Sales figures for Germany were up 4.5% year-on-year
to 298,928 units (2015: 286,098 units). Despite the
Brexit decision, automobile business in Great Britain
Japan 3.2
Italy 3.5
France 3.6
Great Britain 10.7
BMW Group sales volume of vehicles by region and market
→ 21
in 1,000 units
15.5 USA
12.6 Germany
as a percentage of sales volume
43
Forecast revision
during the year
44
Sales of motorcycles in Europe grew by 7.5% to
87,983 units (2015: 81,834 units) year-on-year. These
figures include 24,894 units sold in Germany (2015:
23,823 units; +4.5%), 12,300 units in Italy (2015:
11,150 units; +10.3%) and 13,350 units in France (2015:
12,550 units; +6.4%). Market conditions in the USA
remained very difficult. The number of motorcycles
sold dropped significantly to 13,730 units (2015:
16,501 units; -16.8%).
Dynamic growth in Europe
106.4
115.2
123.5
137.0
145.0
2012
75
in 1,000 units
Solid sales volume growth for BMW Motorrad
The Motorcycles segment profited from a favourable
market environment during the period under report,
particularly in Europe and Latin America, thereby
achieving a record sales volume performance for the
sixth year in succession. Deliveries of BMW motor-
cycles to customers worldwide rose by a solid 5.9%
to 145,032 units (2015: 136,963 units).
Motorcycles segment
→ Financial Services
segment
segment
→ Motorcycles
Review of Operations
150
Economic Position
2013
2015
Growth in insurance business
Demand for insurance products remained high in
2016, with the number of new insurance contracts
signed rising by 4.6% to 1,262,973 (2015: 1,207,196
contracts). At 31 December 2016, the contract port-
folio comprised 3,411,872 contracts (2015: 3,200,742
contracts; +6.6%).
Great Britain 5.8
43
markets, in which
Other 43.2
Started in 2015, expansion work on the BMW Group
plant in Berlin continued during the year under report.
In addition to measures to increase production capac-
ity, a state-of the-art logistics centre is being built near
the Berlin plant and scheduled to begin operations
from the end of 2017.
2014
A total of 145,555 motorcycles rolled off production
lines during the year under report (2015: 151,004 units;
-3.6%). The slight drop was largely attributable to the
higher number of new model production start-ups in
the second half of 2016 compared to one year earlier.
Production of the G 310 R commenced at the
Group's cooperation partner TVS Motor Company
in India during the year under report. Operations
at the Group's partner plant in Thailand were also
ramped up. Following the takeover of production in
Manaus (Brazil) in October 2016, for the first time,
BMW Motorrad now operates its own manufacturing
facilities at a location outside Europe.
Internationalisation continues
as a percentage of sales volume
→ 27
BMW Group - key motorcycle markets 2016
* Excluding Husqvarna, sales volume up to 5 March 2013: 59,776 units.
2016
Motorcycle production slightly down on
previous year
Report on
Report
Management
SGL Automotive Carbon Fibers (SGL ACF), the joint
operation between the BMW Group and the SGL
Group, is also based in Wackersdorf. In Moses Lake
(USA), SGL ACF operates a carbon fibre production
plant that is powered by hydroelectricity and supplies
carbon fibres to the SGL ACF plant in Wackersdorf,
where they are processed into textile cores.
The Wackersdorf Innovation Park is the logistical hub
for materials management and just-in-sequence deliv-
ery to BMW Group assembly plants in ten different
countries. For the first time, a fleet of ten self-driving
Smart Transport robots is being used in Wackersdorf
to transport components within the logistics centre.
These self-driving transport robots are capable of driv-
ing freely within the logistics centre and transporting
loads of up to 500 kilograms.
Since its opening, some 160 engineers have been
engaged in research at the Lightweight and Engineer-
ing Center in Landshut, designing innovative hi-tech
materials and composite concepts for the vehicles of
the future. The think tank, built near the production
facilities, concentrates lightweight construction know-
how at the Landshut plant.
The BMW Group plant in Leipzig produced over 29,000
BMW i model vehicles during the period under report.
The BMW i3 is one of the three best-selling electric
vehicles worldwide. In addition to the Munich plant,
Leipzig is now the second BMW Group site to utilise
electric trucks, powered exclusively by electricity gen-
erated via renewable sources, to transport its materials
on public roads. In 2016, a total of 246,550 vehicles
rolled off production lines in Leipzig, the highest
figure to date for the plant.
In 2016, the BMW Group plant in Regensburg cele-
brated its 30th anniversary. The highly flexible plant
manufactures eight different models on one line.
During the reporting period, production volume was
boosted to over 346,000 units, approximately 14% up
on the previous year.
Economic Position
Review of Operations
→ Automotive segment
Report on
During the year under report, the BMW Group plant
in Eisenach commissioned a state-of-the-art servo
tryout press. Eisenach is one of three BMW Group
plants worldwide specialised in making pressing
tools. Moreover, some 250 employees at the plant
manufacture the majority of the outer body parts from
sheet metal, aluminium and stainless steel for the
Rolls-Royce plant in Goodwood (UK) as well as parts
for BMW motorcycle production in Berlin.
Combined
Management
Report
Extensive expansion work is also progressing at the
main plant in Munich. By mid-2017, a state-of-the-art
painting line will be completed that meets the very
highest standards in efficiency and economical use of
resources. The new building is part of an extensive
investment project that also includes the enlargement
of the body-making section and vehicle assembly as
well as parts of the logistics system.
In November 2016, the BMW Group began manufactur-
ing the seventh generation of the BMW 5 Series at its
Dingolfing assembly plant, which underwent numerous
conversion and building measures to prepare for the
new model. Dingolfing therefore remains the centre of
competence for producing the top BMW model series.
The German plants play a leading role within the
Group's international network. For the sixth year
in succession, the BMW Group produced over one
million vehicles at its German plants in Munich,
Dingolfing, Regensburg and Leipzig.
Strong production base in Germany
Flexibility, quality and efficiency are key characteris-
tics of the Group's production system. Its great ability
to adapt enables the BMW Group to respond rapidly
to changing market situations and fluctuations in
regional sales volumes by adapting production plans.
Digitalisation, standardised modules and intelligent
composite construction methods demonstrate the
high performance of the Group's production net-
work. At the same time, the production system offers
customers an impressive level of individualisation,
allowing changes in order specifications up to six days
prior to delivery. The production expertise within
the BMW Group thus gives it a crucial competitive
advantage that contributes to the profitability and
sustainable success of the Company.
45
45
46
Four engine production plants worldwide
In 2016, the joint venture BBA opened a new engine
plant in Shenyang (China) to produce the latest gen-
eration of BMW TwinPower Turbo 3- and 4-cylinder
petrol engines. The new light metal foundry, which
was opened at the same time, is designed for sus-
tainable production. Both the engine plant and the
light metal foundry meet state-of-the-art production
standards and supply the BMW Brilliance manufac-
turing plants in Dadong and Tiexi. The BMW Group
now manufactures engines at a total of four locations:
Munich (Germany), Hams Hall (UK), Steyr (Austria)
and Shenyang (China).
The BMW Group's largest engine plant, located in
Steyr, produces 3-, 4- and 6-cylinder diesel engines as
well as 3-, 4- and 6-cylinder petrol engines. Engines
made in Steyr are installed in more than half of
all BMW vehicles and in over one third of all MINI
vehicles. In September 2016, the development centre
for diesel engines, which adjoins the manufacturing
plant, took the first new, state-of-the-art engine testing
facilities into service. The Steyr plant established a
new production record of 1,261,449 engines in 2016.
Combined
→ 26
BMW Group sales volume of motorcycles*
48
During the period under report, a total of 32,256 auto-
mobiles were produced at the Group's various partner
plants, which mainly serve their regional markets.
The manufacturing sites in Chennai (India) and Ray-
ong (Thailand) complete the BMW Group's interna-
tional production network. In 2016, the plant in India
produced the 50,000th BMW for the local market. The
BMW plant in Thailand is the only facility within the
production network that manufactures not only BMW
and MINI automobiles, but also BMW motorcycles.
In Shenyang (China), the BBA plants in Dadong and
Tiexi produced over 305,000 units, setting a new record
in the process. Comprehensive expansion work at the
Dadong plant has been continued. The extension will
improve the flexibility of the plant and prepare it for
the manufacture of future models.
In Rosslyn (South Africa), preparations are already
underway for producing the next generation of the
BMW X3. In May 2016, work began on the body-mak-
ing facility, which is being enlarged by 50%.
Important work was carried out to convert and expand
the Rolls-Royce manufacturing plant in Goodwood
(UK) during the period under report. For future mod-
els, the BMW Group is investing in a new production
system on one line at the plant. The new Technology
and Logistics Centre in Bognor Regis, near Goodwood,
was opened in January 2016.
In Europe, the British production cluster comprising
the MINI assembly facility in Oxford, the pressing
plant in Swindon and the engine manufacturing plant
in Hams Hall is a key element in the BMW Group's
production network. In order to secure greater capac-
ity for forecast growth, the MINI 3-door model, the
MINI Convertible and the MINI Countryman are also
being produced for the BMW Group at the automotive
manufacturer VDL NedCar in Born, the Netherlands.
In San Luis Potosí (Mexico), preparations for construct-
ing the new plant are running on schedule and a local
training centre has already been opened at the site. The
plant is due to commence operations in 2019.
In North America, expansion work has been con-
tinued at the BMW plant in Spartanburg (USA). In
2016, the plant set a new annual record, turning out
over 411,000 units. In terms of production volume,
the Spartanburg plant is therefore the largest in the
BMW Group's network.
By expanding its international production network,
the BMW Group follows global market developments
with the aim of ensuring a balanced distribution of
added value.
Internationalisation of BMW production network
progresses
47
47
The BMW Group develops and manufactures battery
cell modules, high-voltage storage systems and electric
motors at a total of five locations. The most important
electric drivetrain technologies and components are
developed at the prototype construction facility in
Munich and produced at the Dingolfing and Landshut
plants. The Dingolfing plant manufactures battery
cell modules and installs them in high-voltage storage
systems for the BMW i3, the BMW i8 and the Group's
plug-in hybrid models. The electric motors and range
extenders for the BMWi models are made at the
Landshut plant. The Spartanburg plant in the USA
produces and installs high-voltage storage systems
for the BMW X5 iPerformance. The BBA joint venture
plant in Shenyang is currently building a new centre
for high-voltage storage systems.
The BMW Group is one of Europe's foremost leasing
and full-service providers. The Financial Services
segment's fleet management line of business offers
leasing and financing arrangements as well as other
fleet-related services to commercial customers under
the brand name "Alphabet". The number of new con-
tracts signed rose by 7.0% during the financial year
2016. At 31 December 2016, the segment was thus
managing a portfolio of 644,420 fleet contracts (2015:
602,303 contracts).
100.0
Fleet business expanded
27.6 EU Bank*
Credit financing and leasing business with retail
customers remain a major factor for the success of
the Financial Services segment. During the period
from January to December 2016, 1,811,157 new cred-
it financing and leasing contracts were concluded
with customers, 9.4% up on the previous year (2015:
1,655,961 contracts). This increase reflected a signif-
icant 11.1% rise in credit financing and a solid 6.2%
rise in leasing contracts. Overall, leasing accounted
for 34.2% of new business (2015: 35.3%), with credit
financing at 65.8% (2015: 64.7%).
Almost every second new BMW Group vehicle (49.6%)
was leased or financed by the Financial Services seg-
ment in the financial year 2016, 3.3 percentage points
more than one year earlier (2015: 46.3%).*
In the BMW and MINI pre-owned vehicle financing
and leasing lines of business, the number of new con-
tracts signed by the segment increased significantly
entity. in 2016 (+10.5 %) to 361,928 contracts (2015: 327,391
contracts).
is represented by
a consolidated
The total volume of new credit and leasing contracts
concluded with retail customers during the twelve-
month period under report grew by 9.3% year-on-year
to €55,327 million (2015: €50,606 million).
2012
2013
Growth in new business volumes
2014
2016
BMW Group new vehicles financed or
leased by Financial Services segment*
→ 29
in %
50
49.6
46.3
2015
44.0
Services segment
9.5 USA
* The calculation
only includes
automobile
|||||
3,846
4,130
4,360
4,719
5,115
17.2 Germany
- 3,000
in 1,000 units
→ 28
Contract portfolio of
Financial Services segment
Financial services business continues to grow
As in the previous year, the Financial Services segment
continued to perform well in 2016, despite the volatile
market environment. In balance sheet terms, business
volume grew by 11.0% to €123,394 million (2015:
€111,191 million). The contract portfolio under man-
agement at 31 December 2016 comprised 5,114,906
contracts and therefore grew 8.4% year-on-year (2015:
4,718,970 contracts).
Financial Services segment
8.5 Italy
6.6 Spain
9.2 France
6,000
41.7
40.4
22.3
Economic Position
Review of Operations
→ Financial Services
segment
→ Research and
Development
The increase in credit financing and leasing business
with retail customers is reflected in the overall contract
portfolio. A total of 4,703,417 contracts were in place
with retail customers at 31 December 2016 (2015:
4,326,631 contracts; +8.7%). By region, Asia/Pacific
continued to enjoy significant growth, recording an
18.0% increase in the contract portfolio, mainly driv-
en by greater demand in China. The Europe/Middle
East/Africa region (+8.6%), the Americas region
(+7.1%) and the EU Bank* region (+5.3%) also record- *EU Bank compris Dealer financing up year-on-year
ed year-on-year growth.
Decrease in multi-brand financing
Multi-brand financing saw a moderate decrease
(-5.9%) in the number of new contracts signed in
2016, which fell to 153,297 (2015: 162,870 contracts).
At 31 December 2016, the total portfolio comprised
466,436 contracts, in line with the previous year (2015:
470,150 contracts; -0.8%).
Contract portfolio retail customer financing
of Financial Services segment 2016
Report on
→ 30
Asia/Pacific 17.7
es BMW Bank
GmbH, its branch-
es in Italy, Spain
and Portugal, and
its subsidiary in
France.
The total volume of dealer financing increased in 2016,
growing by 6.7% to €18,307 million at the end of the
reporting period (2015: €17,156 million).
Deposit business volume at previous year's level
Customer deposits provide an important source of
refinancing for the Financial Services segment. The
volume of deposits at the end of the reporting period
stood at €13,512 million, in line with the previous
year's level (2015: €13,509 million; +/− 0.0%).
Europe/
Middle East/
Africa 24.8
29.9 Americas
in % per region
Combined
Management
Report
50
49
22.1
21.5
Leasing 19.7
20.9
25
27.3
Financing 20.7
22.5
24.2
20.8
2012
2013
2014
2015
2016
*Until 2015 excluding Rolls-Royce.
49
* EU Bank comprises BMW Bank GmbH, its branches in Italy, Spain and Portugal, and its
subsidiary in France.
3.5
the Financial
2,359,756
88,477
-22.8
19.0
360,233
338,466
6.4
100.0
68,301
Strong performance by Rolls-Royce
Sales volume of Rolls-Royce vehicles
by model variant
→ 24
in units
2016
2015
Change in %
Rolls-Royce Motor Cars enjoyed the second-best year
in its history, with 4,011 luxury automobiles delivered
to customers (2015: 3,785 units; +6.0%). This perfor-
mance includes an all-time quarterly high contribution
of 1,386 units in the fourth quarter (2015: 1,181 units;
+17.4%). A high proportion of these sales related to
the new Rolls-Royce Dawn, of which 1,283 units were
sold worldwide after its mid-year launch.
Phantom (incl. Coupé,
17.6
63,509
MINI Convertible/Coupé / Roadster
MINI Clubman
MINI Countryman/Paceman
MINI total
2016
2015
Change in %
8,003
Proportion of
MINI sales volume
2016 in %
221,982
-10.6
55.1
30,050
20,004
50.2
8.3
198,373
Drophead Coupé,
Extended Wheelbase)
389
→ 25
in units
Spartanburg
Regensburg
Dingolfing
Leipzig
Munich
Vehicle production of the BMW Group by plant
Oxford
Dadong1
Rosslyn
Rayong
Araquari
Chennai
Goodwood
2,279,503
Tiexi¹
New production records were set in 2016, with a
total of 2,359,756* BMW, MINI and Rolls-Royce
brand vehicles manufactured (2015: 2,279,503* units;
+3.5%), comprising 2,002,997* BMW (2015: 1,933,647*
units; +3.6%), 352,580 MINI (2015: 342,008 units;
+3.1%) and 4,179 Rolls-Royce brand vehicles (2015:
3,848 units; +8.6%).
287,755 units).
Automotive Ltd.,
Shenyang
(2016: 305,833
units, 2015:
488
-20.3
7
Ghost
1,175
1,609
-27.0
Wraith/Dawn
Rolls-Royce total
2,447
1,688
45.0
3,785
6.0
High capacity utilisation throughout
production network
In 2016, buoyant customer demand and various new
model start-ups resulted in high capacity utilisation
throughout the BMW Group production network. At
the same time, rapid progress was made in expanding
the Group's international manufacturing locations.
The production network currently comprises 31 loca-
tions in 14 countries worldwide.
* Including the
joint venture
BMW Brilliance
MINI Hatch (3- and 5-door)
in units
4,011
Sales volume of MINI vehicles by model variant
55.1
9,936
15,408
0.7
99.9
8,928
17,844
0.6
2.7
71,353
63,117
6.1
0.7
142,767
143,825
6.9
-11.5
8,568
7,716
11.0
18.5
27,216
→ 23
32,256
1.4
2.3
-35.2
82,655
53,528
3.7
53.6
57,019
87,609
0.2
8.6
4,179
0.4
11.7
144,988
3,848
8.9
2.6
400,904
411,171
Proportion of
production in %
Change in %
2015
2016
1 Joint Venture BMW Brilliance Automotive Ltd., Shenyang.
2 Contract production.
BMW Group
Partner plants (Jakarta, Cairo, Kaliningrad, Kulim)
Graz (Magna Steyr)²
Born (VDL Nedcar)²
Combined
Management
Report
161,901
MINI sets new sales volume record
The MINI brand also set a new sales volume record
in 2016 with a total of 360,233 units sold (2015:
338,466 units; +6.4%). Positive contributions to this per-
formance came from the new Convertible (29,758 units;
2015: 14,145 units) and the new Clubman (63,509 units;
2015: 8,003 units). With 198,373 units sold, the MINI
Hatch 3- and 5-door models fell short of the previous
year's high level (2015: 221,982 units; -10.6%).
17.4
346,291
Report on
Economic Position
Review of Operations
→ Automotive segment
13.7
9.2
-2.4
210,971
201,206
304,509
4.9
216,769
10.4
5.5
221,998
246,550
14.4
-5.8
360,804
339,769
14.7
233,656
115
116
2012
0
1.41
Other
Üli
2.70
2.08
as a percentage of workforce
3.87
3.5
7.0
9.1
→ 36
Employee attrition rate at BMW AG*
At the same time, the workforce in Germany is becoming
more international. Employees from over 100 countries
work together successfully at the Munich site alone.
Moreover, a balanced age structure in the workforce
encourages an exchange between generations and plays
a role in reducing the loss of know-how when employees
retire.
59
59
* Reporting on the proportion of women in management was changed in 2016 and is now
based on the criterion "management function" rather than individual employee
classification. Prior year figures have been adjusted accordingly.
2016
2015
3.47
7,697
111,410
Financial Services
2014
The revised model of the BMW 3 Series Gran Turismo
has been available since July 2016. The new modular
engines and Connected Drive range of services com-
bine the sporting flair typical of BMW with superb
efficiency and a high level of connectedness. The
BMW 1 Series and the 2 Series Convertible and Coupé
models have also been available as M Performance
versions since July 2016. In the course of the year,
the BMW X1 and the BMW 1 Series were launched
in China. Since autumn 2016, the BMW M2 Coupé
has been on sale in the compact high-performance
sports car segment.
both
The first official information on the seventh generation
of the new BMW 5 Series was published in mid-Octo-
ber 2016. The new 5 Series Sedan had its worldwide
debut in Detroit in January 2017 and has been on sale
since mid-February 2017. The success story of the
BMW 5 Series in the sporty business class is being
continued with this dynamic, efficient, innovative
vehicle.
57
52
As the first concrete steps in implementing the Strat-
egy NUMBER ONE > NEXT, numerous new concepts
and innovations have been presented to the public,
such as the BMW i8 Spyder, which celebrated its world
premiere at the Consumer Electronics Show (CES) in
Las Vegas, followed by the M Performance model of
the BMW 7 Series at the Geneva International Motor
Show. The China version of the BMW X1 was present-
ed at the show in Beijing and the BMW Concept X2
at the Paris Motor Show (Mondial de l'Automobile).
MINI launches new convertible
The new MINI Convertible has been on the market
since March 2016. The new model was launched fea-
turing five different versions of the new generation
of engines with MINI TwinPower Turbo technology.
The sports version, the MINI John Cooper Works
Convertible, became available in May. The new MINI
Convertible keeps up the tradition of highly dynamic
driving pleasure and continues to offer its owners the
typical MINI go-kart feeling.
→ www.bmwgroup.com/careers
Slight increase in workforce
8,394
At 31 December 2016, the BMW Group employed a
workforce of 124,729 worldwide, 2.0% more than one
year earlier (2015: 122,244 employees). The increase
was primarily due to the expansion of the internation-
al production network and financial services business.
Moreover, skilled workers and IT specialists were
increasingly recruited for future-oriented areas, such
as software architecture and development, artificial
intelligence and autonomous driving.
→ 33
Automotive
31.12.2016
31.12.2015
Change in %
112,869
1.3
Motorcycles
3,351
3,021
10.9
BMW Group employees
2013
2012
10.6
Report on
Combined
Management
Report
58
2016
2015
2014
2013
2,500
4,266
4,613
4,700
Economic Position
Review of Operations
4,445 4,595
→ 34
BMW Group apprentices at 31 December
Dual vocational training expanded worldwide
The BMW Group increased its international appren-
ticeship activities during the year under report, due
amongst others to the higher number of apprentices
employed at plants, for example in the USA and
Thailand. The number of new entrants at German
sites remained constant at 1,200 apprentices. At the
end of the reporting period, 4,613 young people were
engaged in vocational training and other training pro-
grammes designed to promote young talent within
the BMW Group (2015: 4,700).
The new Rolls-Royce Dawn has been available since
mid-2016. The Dawn was first presented to the media
in March 2016 amid high acclaim. The luxury con-
vertible boasts a special in-house designed roof that
reduces interior noise levels to a minimum. During
the year under report and to celebrate the end of the
vehicle's life cycle, a special edition of 50 Rolls-Royce
Phantoms was built – the Phantom Zenith Collection.
Rolls-Royce Dawn launched
2.0
122,244
124,729
BMW Group
-0.9
In early 2016, BMW presented the first iPerformance
model, the plug-in version of the 3 Series. With emis-
sions of only 44g CO2/km and an electric range of
up to 40 km, the iPerformance Sedan combines the
driving dynamics of the 3 Series with the advantages
of an electric drive system. A plug-in hybrid version
of the current 7 Series was launched in July. With
only 45 g CO2/km, the efficient, powerful 4-cylinder
engine sets new standards in the luxury segment. The
BMW 2 Series Active Tourer is also available as an
iPerformance model. With its 3-cylinder combustion
engine and 100 kW/136 hp of power output and a
65 kW/88 hp electric motor, it emits 46 g CO2/km.
5,000
2012
→ Workforce
High level of investment to bolster
11.3
12.5
BMW Group 12.1
BMWAG 10.0
13.3
13.0
13.5
14.3
15.3
16
in %
→ 35
→ Sustainability
Proportion of female employees in manage-
ment functions at BMW AG/BMW Group*
functions and
Diversity represents a key factor in ensuring the
BMW Group's continued competitiveness going forward,
focusing on the three aspects of gender, cultural back-
ground, and age/experience. The aim is to ensure equal
opportunities for all employees. A variety of measures
were implemented in 2016 to promote and benefit from
diversity in the workforce.
Diversity as a competitive factor
Demographic and economic conditions relevant for
the provision of pension benefits are changing at an
increasingly rapid pace. In 2016, the BMW Group there-
fore enhanced the Company pension plan to make it
more sustainable and viable for the future. To mark the
occasion of its centenary, nearly all employees of the
BMW Group were awarded a one-time centenary bonus.
BMW AG employees received the bonus mainly in the
form of a starting contribution to the new BMW sup-
plementary benefit plan, which serves as an additional
component in the Company pension plan.
BMW supplementary benefit plan
and centenary bonus
The BMW Group came top in Trendence's “Young
Professional Barometer Germany" for the fifth year
in succession. It also improved its position again in
the Trendence "Graduate Barometer Germany - IT
Edition" for highly sought-after IT specialists, taking
second place in 2016. In Universum's "Young Profes-
sionals Study Germany", the BMW Group took top
spot in both the “Engineering" and "Business" cate-
gories and came third in the "IT" category, confirming
the excellent results of the previous year. Overall, the
BMW Group finished as the best-placed company in
the study.
The BMW Group retained its status as one of world's
most attractive employers in 2016. In the latest
"World's Most Attractive Employers" rankings pub-
lished by the agency Universum, the BMW Group was
once again named best German employer across all
sectors and the most attractive automotive company
in the world.
Highly attractive employer
activities.
At €352 million, expenditure on basic and further
training remained unchanged at a high level. By
improving the skill sets of its workforce for example
in electric mobility, hydrogen and fuel cell technology,
lightweight construction and robot technology, the
BMW Group is creating a solid foundation for future
employee skill sets
The proportion of women in the workforce, management
young talent
programmes continued to
increase during the year under report. The percentage of
women in the total BMW Group workforce rose to 18.7%
(BMW AG: 15.8%), above the internal target range of 15 to
17%. The proportion of women in management positions
rose to 15.3% for the BMW Group as a whole and 13.3%
for BMW AG. Female representation in programmes for
young employees and interns in the year under report
was approximately 44% for trainee programmes and 29%
for student training programmes.
BMW continues electrification strategy with
iPerformance
Workforce
ParkNow is a comprehensive parking solution for Web,
app and navigation systems. When parking on the
street, payment is made cash-free via smartphone.
When parking in multi-storey car parks, ParkNow
provides support in finding, reserving, booking and
paying for parking spaces. ParkNow was launched in
Germany, Austria and France during the year under
report.
Economic success, the responsible use of resources
and the assumption of social responsibilities form the
basis for long-term growth within the BMW Group.
The Group secures the future of its business model
through sustainable activity. In promoting sustaina-
bility, the BMW Group concentrates on three areas:
the development of products and services for
sustainable individual mobility (for example
electric mobility and services such as DriveNow
and ReachNow)
With ChargeNow, the BMW Group provides easy
access to a constantly growing network of public
charging stations that currently includes over 65,000
charging points in 29 countries. Customers can locate
the BMWi partner charging stations directly via the
navigation system integrated in the vehicle, via the
ChargeNow app or via the website. ChargeNow inte-
grates the charging stations of various operators to
form one large, expanding network.
the efficient use of resources along the entire
value chain
responsibility towards employees and society in
general
Through its sustainability policy, the BMW Group is
supporting the achievement of the UN's Sustainable
Development Goals (SDG), which were adopted in
September 2015.
Further information on the subject of sustainability
within the BMW Group and related topics is provided
in the Sustainable Value Report 2016, published online
at → www.bmwgroup.com. The Sustainable Value Report is
drawn up in accordance with the Guidelines of the
Global Reporting Initiative (GRI G4), the most wide-
ly used set of guidelines for sustainability reporting
worldwide. The Sustainable Value Report corresponds
to the "comprehensive" option, in which all relevant
information and indicators of the aspects identified
as essential are reported on. It will be published at
the same time as the Annual Report 2016.
60
60
Combined
Management
Report
Report on
Economic Position
Review of Operations
Sustainability
Social dialogue and materiality analysis as a basis
for sustainability management
The BMW Group is in continual dialogue with a large
number of stakeholders, both in Germany and abroad.
Dialogue helps the Company to recognise global trends
at an early stage, achieve sustainability objectives
more effectively and strengthen social commitment.
In the course of this dialogue, the BMW Group gains
a clear picture of how current trends are changing the
business environment and what role the BMW Group
can play. For example, stakeholder dialogue events
on the topic of urban mobility were held in Seattle,
Boston, Madrid, Tokyo and Barcelona during the
period under report.
Materiality matrix
→ 37
7
In order to identify important sustainability topics at
an early stage, the BMW Group also conducts mate-
riality analyses on a regular basis. Moreover, social
challenges are continually monitored and analysed
in order to gauge their significance, from the point
of view of both external and internal stakeholders.
The materiality analysis is used to create a materi-
ality matrix, which is used as a basis to check the
strategic direction of sustainability management. The
materiality matrix is described in greater detail in the
Sustainable Value Report 2016.
→ www.bmwgroup.com/responsibility
Sustainability
* Number of employees on unlimited employment contracts leaving the Company.
2016
2012
0.32
0.37
0.25
0.46
0.5
0.48
0.50
Absolutely
crucial
in %
Development of credit loss ratio
Despite ongoing political and economic uncertain-
ties, including the UK's decision to leave the EU, the
stable trend in the global economy during the year
under report contributed to an improvement in the
risk situation of the Financial Services segment's total
portfolio. The risk profile for the segment's credit
financing portfolio also improved slightly. The credit
loss ratio on the total credit portfolio for the twelve-
month period decreased to 0.32%, slightly down on
the previous year's level (2015: 0.37%).
Risk profile improved
5555
51
2013
2014
2015
→ 31
2013
Importance for the stakeholders
materiality
Water consumption
Waste and water pollution
Use of urban space
Involvement with local communities
Biodiversity
Corporate volunteering
Donations and philanthropy
Corporate Citizenship
Responsible marketing and product communication
Responsible financial services
Employee-management relations
Efficient use of materials in operations
and supply chain
Political involvement
←
Importance for the BMW Group
→
Absolutely
crucial
Less
important
important
Less
materiality
Vehicle efficiency and CO2 emissions
Medium
materiality
Air emissions of operations
and supply chain
Energy use and GHG emissions
of operations and supply chain
Air emissions of vehicles
Occupational health and safety
Environmental and social standards
in the supply chain/sustainable sourcing
Human rights
High
Prevention of corruption and
anticompetitive behaviour
Product safety
Connected and autonomous driving
Mobility concepts
and services
Data protection
Attractive workplace, talent attraction and retention
Diversity and equal opportunity
Employee development and training
Socio-economic impacts in society
Customer satisfaction
Design for recycling and resource efficiency
Low
Alternative drivetrain technologies
2014
With its C-evolution, BMW Motorrad presented in
2016 the second edition of an all-electric "Maxi Scoot-
er” with greatly improved range and higher top speed.
2016
NAFTA 17.2
1.3 Africa
39.8 Germany
20.6 Eastern Europe
Sales and Marketing
→ www.bmwgroup.com/brands
The BMW Group's sales and distribution network
comprises some 3,400 BMW, 1,580 MINI and 140
Rolls-Royce dealerships worldwide. Products and
services are sold by independent authorised dealer-
ships, BMW Group branches and subsidiaries, as well
as independent importers in certain markets. The
dealership and agency network for BMW i currently
covers over 1,300 locations.
100th anniversary of BMW
In March 2016, the company celebrated its 100th anni-
versary with the slogan THE NEXT 100 YEARS. The
anniversary year kicked off with a major centenary
event in Munich for employees and the general public.
The four vision vehicles of BMW, MINI, Rolls-Royce
and BMW Motorrad, presented over the course of the
year, provided the international public with a visionary
glimpse into the future of individual mobility.
The BMW VISION NEXT 100 demonstrates how
driving pleasure could look in the future. The MINI
VISION NEXT 100 offers an individualised, continu-
ally available form of urban mobility. The Rolls-Royce
VISION NEXT 100 provides an insight into the future
world of highly customised automotive luxury. Future
motorcycling pleasure with the BMW Motorrad
VISION NEXT 100 promises unlimited freedom.
Digitalisation continued
Rest of Western
Europe 15.4
In 2016, the BMW Group continued to digitalise its
processes in both sales and marketing. The aim is to
make customer contact possible at an earlier stage
and provide individualised offers for vehicle sales and
services. Moreover, online sales help to attract new
customer groups. For example, at the end of 2015 a
nationwide online pilot project began across the UK.
Over the course of the year under report, the sale
of new vehicles via the Internet established itself as
a further sales channel to supplement on-location
dealership sales. This method enables customers to
purchase any BMW model online. The service covers
all aspects of the purchase, including selecting the
right model, fully customised vehicle configuration,
financing and payment. It is even possible to trade in
a used vehicle online. If required, customers can also
receive personal advice from a vehicle specialist (BMW
Product Genius) or take up direct contact with a dealer.
Under the brand name BMW i, the BMW Group offers
a range of electric mobility solutions that include not
only the vehicles, but also services such as journey
planning using different modes of transport and
charging of electric vehicles. Over 100,000 electric
and electrified vehicles have been sold to customers
since the BMW i brand was launched. BMW i vehicles
are meanwhile available in 52 countries worldwide.
Since first going on sale in 2013, the BMW i3 has
established itself as the front runner in its segment.
Over 80% of BMW i3 buyers are first-time customers
for the BMW Group. Since summer 2016, the BMW i3
has been optionally available with a battery that pro-
vides 50% more capacity and a range of around 300
kilometres in the European driving cycle.
The BMW i8 plug-in hybrid sports car continues to
be the best-selling vehicle in its class since its market
launch in 2014. The eDrive technology of the BMW i8
is also integrated in the new BMW iPerformance mod-
els of the 2, 3 and 7 Series as well as in the X5.
The global dealership and agency network for BMW i
currently covers over 1,300 locations. In addition,
BMWi models are offered via new channels, such
as the Customer Interaction Center. Moreover, the
Mobile Sales Advisor is now established as a core
element of the sales model in six markets. The BMWi
online store gives customers in the Netherlands, Bel-
gium, Luxembourg, Austria and Italy the opportunity
to order their BMW i3 via the Internet.
Under the name 360° ELECTRIC, BMWi provides a
comprehensive range of products and services for both
all-electric vehicles and plug-in hybrids worldwide.
A new generation of the BMWi wallbox has been
launched for quick, easy charging at home. It can
now charge vehicles at up to three times the previous
speed. While on the road, drivers can now use the
BMW i service ChargeNow with over 65,000 charging
points in 29 different countries.
55
55
99
56
Digital connectivity has also become a key topic for
the Group's motorcycles. With its optionally avail-
able "Intelligent Emergency Call", BMW Motorrad
has announced that eCall for urgent help in case of
emergency or accidents will also be added as a feature
of its motorcycles as from 2017.
Combined
Management
Report
BMW i becoming further established
Economic Position
Review of Operations
Asia/Australia 5.7
→ 32
Next generation of the Air Touch virtual
touchscreen
The BMW Group made further progress in the field
of interaction between the driver and the vehicle
during the year under report. Following up on BMW
Gesture Control, which is already available for the
new BMW 5 and 7 Series, in 2016 the Group pre-
sented its enhanced AirTouch system, which enables
drivers to use simple gestures with an open hand to
activate command fields on a large panorama screen
on the dashboard. At the beginning of 2017, the BMW
HoloActive Touch system was presented to the public
for the first time. The innovative interface between
driver and vehicle is similar to a virtual touchscreen,
which is operated using finger gestures on a screen
that appears to float freely in space.
Extreme lightweight construction in the BMW HP4
BMW Motorrad demonstrated with the exclusive BMW
HP4 RACE experimental motorcycle how extreme
lightweight construction can be realised based on
carbon fibre technology. Among other features, this
motorcycle, which is fit for racing, is equipped with a
highly innovative frame structure made of pure carbon
as well as carbon wheel-rims.
Numerous awards for innovations
The BMW Group won over 50 national and interna-
tional awards during the year under report. Among
other honours, the BMW 7 Series was named World
Luxury Car at the renowned World Car Awards.
At the "International Engine of the Year Award", the
most prestigious engine competition worldwide, the
drivetrain of the BMW i8 was winner in the 1.4- to
1.8-litre category. At the Automotive Innovations
Award, jointly awarded by the Center of Automotive
Management and the auditing and consulting firm
PricewaterhouseCoopers, BMW drivetrains were
adjudged to be the most innovative conventional
systems across all models.
The BMW i3 won the "Golden Steering Wheel" award
in the "Alternative drives" category. In 2016, the
BMW Group won numerous design awards, includ-
ing the International Forum Design Awards for its
Rolls-Royce Dawn, MINI Clubman, MINI Convertible,
BMW M2, BMW X1 and BMW 7 Series.
2015
53
54
Combined
Management
Report
in %, basis: production material
Report on
Review of Operations
→ Purchasing and
Supplier Network
→Sales and Marketing
Purchasing and Supplier Network
Charting a course in a volatile environment
Despite the increasingly volatile environment, the Pur-
chasing and Supplier Network ensures that the Group
is capable of flexibly responding to fluctuations in
demand when purchasing production materials, raw
materials, capital goods and services. The main focus
is on high quality standards, innovation, a flexible
and reliable supply structure and competitive costs.
Connecting procurement markets
Continually rising vehicle sales and production vol-
umes outside Europe are also changing the regional
distribution of purchasing volumes, for example due to
the expansion of production capacities in the Group's
plant in Spartanburg, USA, or the construction of
the BMW Group plant in San Luis Potosí, Mexico,
which is scheduled to begin production in 2019. The
BMW Group remains committed to its strategy of
maintaining a regionally balanced growth in sales
volume, production and purchasing volumes. This
strategy also makes an important contribution to
natural hedging against currency risks.
Investments ensure expertise in productivity
and technology
A further important area is the production of key
components for BMW Group vehicles. Investments in
state-of-the-art manufacturing facilities and efficient
structures ensure the competitiveness of in-house
component production.
During the period under report, the new Lightweight
and Engineering Center was opened in Landshut,
the Group's most important components plant. In
future, research will be conducted at the centre on
new materials, composite material concepts and
production processes for future vehicle generations,
encompassing a wide range of technologies.
Regional mix of BMW Group
purchase volumes 2016
Economic Position
→ Sales and Marketing
→ Workforce
Report on
The BMW Group has been developing its range of
mobility services under the brand NOW since 2011.
In Europe, the USA and China, the BMW Group now
offers its customers individually tailored solutions
for urban mobility. The range includes car sharing,
on-demand mobility such as DriveNow and Reach-
Now as well as parking and charging solutions such
as ParkNow and ChargeNow.
BMW Connected digital platform presented
52
52
At the same time, the BMW Group is conducting
research into highly automated systems that do not
need to be permanently monitored by the driver and
fully automated systems that no longer require the
driver to monitor them at all. At the end of 2016,
some 600 BMW Group employees were engaged in
the development of highly automated driving tech-
nologies. Beginning in 2017, the BMW Group plans
to concentrate its expertise in the field of vehicle
connectivity and automated driving at one location.
With extended functions built into the optionally avail-
able Active Cruise Control (ACC) and the steering and
lane control assistant, the BMW 5 Series represents
a further step towards automated driving, including
recognition of speed limits, which the optional Speed
Limit Assist shows the driver. The assistance system
supports the driver in keeping a correct distance at
speeds up to 210 km/h as well as at accelerating and
braking. These features offer drivers a significant ben-
efit in terms of convenience, particularly at low speeds
and in slow-moving traffic. The optional Remote
Parking feature of the BMW 5 Series Sedan enables
drivers to manoeuvre the vehicle into the tightest of
parking spaces using a remote-control car key.
The new BMW 5 Series offers drivers extensive sup-
port with a variety of assistance systems. It is fitted
with a stereo camera as standard, which monitors
the vehicle's environment together with optionally
available radar and ultrasound sensors. New features
in the BMW 5 Series include an avoidance assistant,
a crossing-traffic warning, a lane-change assistant
and a lane control assistant with active side collision
protection, which monitors the driving lanes and
developments next to the vehicle and actively supports
the driver in the event of imminent collision with a
corrective steering intervention.
Driver assistance systems, highly and fully
automated driving
At the same time, the BMW Group continues to work
on enhancing its existing range of highly efficient
combustion engines. 2016 saw the launch of the new
BMW 7 Series, featuring a newly developed inline
6-cylinder diesel engine that combines high perfor-
mance with low fuel consumption. The BMW 1 and 2
Series M Performance models were presented with a
new, powerful inline 6-cylinder petrol engine in 2016.
For the medium and long term, the BMW Group is also
developing a fuel cell electric vehicle (FCEV). The fuel
cell electric drive system, which converts hydrogen to
electricity and steam, combines locally emission-free,
electrically powered driving with the dynamic flair
typical of the BMW brand, capability for covering long
distances, and short refuelling times. Battery and fuel
cell technology can be combined in one vehicle.
In 2016, an additional version of the BMW i3 was
launched, featuring significantly greater battery
capacity. The vehicle is also available with or without
a range extender. During the reporting year, plans
were laid for both the first all-electric MINI and for
an electrically powered BMW X3. In 2017, the new
BMW 5 Series and the MINI Countryman are both due
to be launched as plug-in hybrid versions. A roadster
version of the BMW i8 has also been announced for
2018.
The BMW Group is consistently extending its portfolio
of electrically powered vehicles. At the end of 2016,
it included the BMW i3 all-electric, battery-powered
vehicle, six plug-in hybrid vehicles for the global
market, and an additional plug-in hybrid exclusively
developed for the Chinese market.
Expertise in drivetrain technology
Economic Position
Review of Operations
→ Research and
Development
Premium services for individual mobility
Report on
Combined
Given the pace of technological change, collaboration
in the field of research and development is customary
in the automotive industry. The BMW Group also
enters into collaboration arrangements with selected
partners. The aim of these research and development
activities, which may also include cross-sector cooper-
ation, is to help find innovative solutions for individual
mobility. The focus is on future-oriented technologies
such as digitalisation and alternative drive systems.
note 7
Research and development expenditure totalled
€5,164 million during the year under report, in
line with the previous twelve-month period (2015:
€5,169 million; -0.0%). At 5.5%, the research and
development expenditure ratio was also practically
identical to that of the preceding year (2015: 5.6%).
The ratio of capitalised development costs to total
research and development expenditure for the period
(capitalisation ratio) was 40.5% (2015: 39.9%). Amor-
tisation of capitalised development costs totalled
€1,222 million (2015: €1,166 million; +4.8%). Further
information on research and development expendi-
ture is provided in the "Report on Economic Position
→see (Results of Operations)" and in → note 7 to the Group
Financial Statements.
Research and development are of central importance
for the BMW Group as a premium manufacturer. As
part of the Efficient Dynamics strategy, continual
efforts are undertaken to improve energy efficiency
and reduce emissions across the full range of auto-
mobiles and motorcycles. In line with its Connected
Drive strategy, the BMW Group is engaged in work on
the connectedness of driver, vehicle and the outside
world. The Group seeks to take a leading position in
the field of autonomous driving. At 31 December 2016,
a total of 13,103 people at 13 locations in five coun-
tries worldwide were employed in the BMW Group's
research and innovation network.
→ www.bmwgroup.com/innovation
Research and Development
Average sales proceeds per vehicle, generated from
remarketing pre-owned BMW and MINI brand vehi-
cles, reflected the marginally less favourable situation
on international pre-owned markets, and were there-
fore slightly down on the previous year. Residual value
losses on such vehicles rose moderately year-on-year,
mainly due to greater competition in North America.
Further information on the risk profile is provided in
the section "Risks and Opportunities".
In April 2016, the BMW Group launched ReachNow
in Seattle (USA), a further development of car sharing.
The ReachNow fleet in Seattle and Portland now com-
prises 800 BMW and MINI brand vehicles. Electrically
powered BMW i3 vehicles make up 20% of the fleet. In
addition to Seattle and Portland, in November 2016
Brooklyn/New York became the third US city to
launch ReachNow. Currently, membership amounts
to more than 32,000 in the three cities. In Decem-
ber 2016, ReachNow began offering Ride in Seattle,
its new mobility service, which enables members to
order a vehicle optionally with a driver. In residential
areas, Fleet Solutions offers the exclusive use of a fleet
of premium vehicles that are permanently available
on location. The ReachNow Reserve service makes it
possible to book a specific vehicle for longer periods
of between two and five days and have it delivered
at the time and place of the customer's choice. Via
ReachNow Share, MINI owners will be able in the
future to rent out their vehicle when they do not need
it themselves.
The DriveNow premium car-sharing service, a joint
venture between BMW AG and Sixt SE, now has over
750,000 customers in seven countries and is repre-
sented in eleven European cities. Around 20% of
DriveNow vehicles in Europe are electrically powered
and the number is scheduled to grow. With Alphacity,
the BMW Group also provides car-sharing services
for companies.
Management
Report
With BMW Connected, the BMW Group presented
a comprehensive digital concept that facilitates
individual mobility. Based on a flexible platform,
BMW Connected seamlessly combines the vehicle
with the digital life of the user through user devices
such as smartphones. The functions of existing BMW
ConnectedDrive apps will be integrated in BMW
Connected. The security and anonymisation of data
have the highest priority for the BMW Group, both
internally and for its customers.
6.6
19,449
20,723
Sustainability along the value chain
Social engagement
Cost of sales relating to financial services business
94,163
-75,442
Change in %
2015
2016
Profit before financial result
Other operating expenses
Other operating income
Selling and administrative expenses
Gross profit
Cost of sales
Sustainability criteria also play a key role when select-
ing and assessing suppliers as well as in the field of
transport logistics. The BMW Group has therefore
integrated a comprehensive sustainability manage-
ment strategy in its purchasing processes. The positive
business performance in recent years has also caused a
significant rise in the Group's transportation require-
ments worldwide. The principle adhered to by the
BMW Group that "production follows the market" is
an effective method of significantly reducing the need
for transportation, therefore keeping CO2 emissions
as low as possible.
Revenues
→ 38
BMW Group Income Statement
MINI and Rolls-Royce brand cars sold rose by a solid
5.3% to 2,367,603* units.
Once again, the BMW Group achieved year-on-year
growth in revenues, sales volume and profit before
tax in the financial year 2016. The number of BMW, 7
Results of operations
RESULTS OF OPERATIONS,
FINANCIAL POSITION AND
NET ASSETS
CREATE.
A key reason for the BMW Group's long-term suc-
cess and an example for the high level of employee
identification with it are the personal engagement
and the ideas brought forward by staff members,
demonstrated by the €25.1 million saved in 2016 in
conjunction with the idea management programme
In 2016, the BMW Group continued to consolidate
its position as one of the most attractive employers
worldwide. Its leading role in terms of sustainability
is a key reason for the high degree of employee loyalty
within the BMW Group and one of the reasons for
the low staff attrition rate, enabling the BMW Group
to maintain a low level of personnel recruitment
expenditure. Further information on the attrition rate
is provided in the section "Workforce".
Sustainability in human resources policies
In 2016, the BMW Group contributed a total of
€87.8 million for social engagement (2015: €39.1 mil-
lion), including €70.4 million for donations (2015:
€17.1 million). The significant increase in the Com-
pany's centenary year was mainly due to a donation
to a BMW foundation.
in € million
-1.2
Management
43,175
Interest and similar income
196
185
5.9
Interest and similar expenses
-489
-618
20.9
-14.9
Other financial result
Profit before tax
-454
279
-369
9,665
9,224
4.8
Income taxes
Financial result
518
441
Result from equity accounted investments
92,175
2.2
-74,043
-1.9
18,721
18,132
3.2
-9,158
-8,633
-6.1
670
914
-26.7
-847
-820
-3.3
9,386
9,593
-2.2
-2,755
-2,828
2.6
Net profit
3.4
3.5
100.0
100.0
Other regions
Group
*Includes the joint venture BMW Brilliance Automotive, Shenyang Ltd. (2016:
316,200 units, 2015: 282,000 units).
64
Combined
Report
Report on
Economic Position
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
BMW Group cost of sales
→ 40
in € million
Manufacturing costs
2016
2015
Change in %
23.3
43,685
20.7
27.6
6,910
6,396
8.0
6
63
Profit before tax for the financial year 2016 was slightly
up year-on-year. At 10.3%, the pre-tax return on sales
was similar to one year earlier (2015: 10.0%).
BMW Group revenues increased slightly by 2.2% year-
on-year to reach €94,163 million (2015: €92,175 mil-
lion). The primary drivers of this performance were
the higher volume of BMW, MINI and Rolls-Royce
brand vehicles sold and the growth in size of the
Financial Services segment's contract portfolio.
Continued fierce competition and negative currency
factors held down the scale of revenue growth. The
negative currency impact on revenues was mainly
attributable to changes in the average exchange rates
of the British pound, Chinese renminbi and South
African rand against the euro. Group revenues by
region were as follows:
BMW Group revenues by region
→ 39
in %
2016
2015
Europe (including Germany)
47.1
45.6
Asia (including China)
28.8
Americas (including USA)
131
12,000
1,638
388
5,404
5,792
Free cash flow Automotive segment
-1,332
1,092
-240
69
Net investment in marketable securities and investment funds
-7,524
-5,432
Cash outflow from investing activities
-372
11,836
11,464
Cash inflow from operating activities
2,092
69
Cash outflows from operating activities in the Finan-
cial Services segment are driven primarily by cash
flows relating to leased products and receivables from
sales financing and totalled €9,844 million (2015:
€10,351 million). The cash outflow from investing
activities totalled €102 million (2015: €140 million).
Cash inflows from financing activities went up by
€1,573 million to €11,601 million, mainly influenced
by the change in other financial liabilities.
Net financial assets of the Automotive segment com-
prise the following:
11,278
12,077
assets
Intragroup net financial
-179
4,326
4,147
investment funds
Marketable securities and
842
3,952
4,794
Cash and cash equivalents
Change
2015
2016
in € million
Change
799
2015
4,000
12,000
31.12.2015
Cash and
cash
equivalents
6,122
- 4,000
8,000
Although energy and water consumption per vehicle
produced rose slightly, both the use of resources and
the production-related emissions fell by an average of
4.9% in 2016. However, the slight increase in energy
and water consumption per vehicle produced gave rise
to additional costs totalling €2.8 million. The reduction
in resource consumption and production-related emis-
sions
per vehicle produced since 2006 corresponds to
a cost saving of €155.3 million.
+3,173
in € million
BMW Group Change in cash and cash equivalents
After adjustment for the effects of exchange rate
fluctuations and changes in the composition of the
BMW Group totalling a positive amount of €55 million
(2015: €73 million), the various cash flows resulted in
an increase in cash and cash equivalents of €1,758 mil-
lion (2015: decrease of €1,566 million).
7
The cash outflow from investing activities exceeded the
cash inflow from operating activities by €2,690 million
in the financial year 2016. A similar constellation arose
in the previous year, when the shortfall amounted to
€6,643 million.
The Group's financing activities resulted in inflows
and outflows in conjunction with bonds amounting
to €967 million and €1,466 million respectively.
Economic Position
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Report on
→ 44
+4,393
+55
7,880
in € million
Free cash flow for the Automotive segment was as
follows:
31.12.2016
equivalents
cash
Group composition
changes in
Cash and
Cash inflow
from
financing
activities
activities
activities
from
investing
from
operating
Cash outflow
Cash inflow
-5,863
8,000
2016
Financial assets
21,018
19,556
1-5
1
later
within between
Maturity (years)
0
11,261
than 5
25,000
44,144
50,000
in € million
→ 46
BMW Group financial liabilities
14,892
Liabilities to banks
42,326
Asset-backed
financing
transactions
Programme
and 37
notes 29, 33
Further information with respect to financial liabili-
→ see ties is provided in → notes 29, 33 and 37 to the Group
Financial Statements.
At 31 December 2016, liquid funds stood at a solid
level of €13.2 billion. The BMW Group also has access
to a syndicated credit line of €6 billion, with a term
up to October 2018. This credit line, provided by a
consortium of 38 international banks, was not being
utilised at the end of the reporting period.
3.9
13.8
0.3
1.7
Australian Medium Term Notes
Commercial Paper
34.4
50.0
Euro Medium Term Notes
in € billion
16,474
utilised
Amount
Programme
framework
* Measured at ex- The following table provides an overview of amounts*
utilised at 31 December 2016 in connection with the
BMW Group's money and capital market programmes:
Twelve public ABS transactions were executed in 2016,
including three in the USA, two each in Germany,
South Africa and China, and one each in Canada,
South Korea and France, with a total volume equiv-
alent to €7.3 billion. Further funds were also raised
via new ABS conduit transactions in Japan and the
USA totalling €1.4 billion. Other existing transactions
remained in place in various countries, including
Germany, Switzerland, the UK, South Korea, South
Africa and Australia.
In the course of 2016, the BMW Group issued four euro
benchmark bonds on the European capital market
with a total issue volume of €2.75 billion. For the first
time, it also issued bonds on the US capital market
with a total issue volume of US Dollar 6.25 billion.
Bonds were also issued in British pounds, Chinese
renminbi, Canadian and Australian dollars and Nor-
wegian krone for a total amount €1.9 billion. Private
placements totalling €4.3 billion were also issued.
change rates at
31.12.2016.
kets
1. The ability to act at all times by assuring perma-
nent access to strategically important capital mar-
The overall objective of Group financing is to ensure
the solvency of the BMW Group at all times. Achieving
this objective is tackled in three strategic areas:
A broadly based range of instruments transacted on
international money and capital markets is used to
refinance worldwide operations. Close to all of the
funds raised are used to finance the BMW Group's
Financial Services business.
Refinancing
* Excluding derivative financial instruments.
2,609
16,911
19,520
Automotive segment
Net financial assets
1,147
-2,645
-1,498
liabilities*
Less: external financial
1,462
2. Autonomy through the diversification of refi-
nancing instruments and investors
Combined
Management
Report
3. Focus on value by optimising financing costs
Apart from issuing commercial paper on the money
market, the BMW Group's financing companies also
issue bearer bonds. In addition, retail customer and
dealer financing receivables on the one hand and leas-
ing rights and obligations on the other are securitised
in the form of asset-backed securities (ABS) financing
arrangements. Financing instruments employed by
the Group's in-house banks in Germany and the USA
(e.g. customer deposits) are also used as a supplemen-
tary source of financing. Loans are also taken out with
international banks.
Bonds
44,421
Other 1,249
13,512
deposits (banking)
from customer
Liabilities
Commercial paper 3,852
Derivate instruments 3,331
in € million
→ 45
BMW Group financial liabilities
Thanks to its excellent ratings and the high level
of acceptance it receives on capital markets, the
BMW Group was again able to refinance operations
on debt capital markets during the financial
year 2016.
In addition to the issue of bonds and loan notes and
private placements, commercial paper was also issued.
Additional funds were raised via new securitised
instruments and the prolongation of existing instru-
ments. As in previous years, all issues were highly
sought after by private and institutional investors alike.
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Economic Position
Report on
Combined
Management
Report
70
Financing measures undertaken centrally ensure
access to liquidity for the Group's operating subsidiar-
ies at market-based, consistent conditions. Funds are
acquired with a view to achieving a desired structure
for the composition of liabilities, comprising a finely
tuned mix of financing instruments. The use of longer-
term financing instruments to finance the Group's
financial services business and the maintenance of
a sufficiently high liquidity reserve serves to avoid
the liquidity risk intrinsic to any large portfolio of
contracts. This prudent approach to financing also
bolsters BMW AG's ratings. Further information is
provided in the section “Liquidity risks" within the
"Report on Outlook, Risks and Opportunities".
thereof interest expense relating to financial services business
98
The decrease in cash outflows from the Group's
investing activities primarily reflects lower net
investments in marketable securities and investment
funds in connection with the Group's liquidity reserve
(€1,369 million). The net outflow for these items
comprises investments in marketable securities and
investment funds on the one hand, and proceeds from
the sale of marketable securities and investment funds
on the other.
2015
2016
Currency adjusted
Other Entities
Financial Services
Motorcycles
Automotive
Change in %
in € million
Revenues by segment
Results of operations by segment
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Economic Position
Report on
Combined
Management
Report
66
→ 41
change* in %
86,424
85,536
-4.8
-19,097
-20,017
-14.3
-14.3
7
6
9.9
8.2
23,739
25,681
5.6
4.0
1,990
2,069
3.1
1.0
99
94,163
69
The post-tax return on sales was 7.3% (2015: 6.9%).
1,891
2,165
Cost of sales
Other cost of sales
Service contracts, telematics and roadside assistance
Warranty expenses
4.8
14.5
1,166
thereof amortisation of capitalised development costs
0.5
4,271
4,294
Research and development expenses
9.6
1,495
1,222
2,018
1,771
13.9
Income tax expense amounted to €2,755 million (2015:
€2,828 million), corresponding to an effective tax rate
of 28.5% (2015: 30.7%). The lower income tax expense
was partly attributable to transfer pricing and the
revaluation of tax-related items.
Profit before tax increased to €9,665 million (2015:
€9,224 million), helped by a number of factors, includ-
ing higher volumes and the improved financial result.
The result on investments for the year
under report
includes impairment losses on other investments
totalling €192 million (2015: €25 million).
The financial result was a net positive amount of
€279 million, an improvement of €648 million com-
pared to the previous year, mainly thanks to net gains
on commodity derivatives on the one hand and lower
losses on currency derivatives on the other. Interest
and similar expenses improved by €129 million to
a net negative amount of €489 million year-on-year,
mainly reflecting lower interest expense on pension
obligations and lower other refinancing costs. The
result from equity accounted investments includes the
Group's share of the results of the joint ventures BMW
Brilliance Automotive Ltd. and the two DriveNow enti-
ties, DriveNow GmbH & Co. KG and DriveNow Ver-
waltungs GmbH. The figure also includes the Group's
share of the result of the associated company THERE
Holding B.V. Compared to the previous year, the result
from equity accounted investments fell by €77 mil-
lion to €441 million. This deterioration was primarily
attributable to the inclusion of THERE Holding B.V.,
with a negative impact of €56 million, largely reflecting
scheduled depreciation and amortisation on purchase
price allocations on the one hand and transaction costs
on the other. At €507 million, the contribution made
by BMW Brilliance Automotive Ltd. was slightly down
on the previous year (2015: €522 million), partly due
to currency factors, including the fact that costs were
incurred for model revisions of vehicles already adapt-
ed for the local market (BMW X1 and BMW 5 Series) as
well as for the localisation of further products.
Profit before financial result (EBIT) amounted
to €9,386 million in the year under report (2015:
€9,593 million), slightly down on the previous year,
with the positive effect of greater volumes offset by
higher expenses and lower other operating income.
The net amount of other operating income and
expenses deteriorated from a net positive amount
of €94 million to a negative amount of €177 million,
mainly due to lower gains on the disposal of assets and
higher expenses for provisions. A donation to a BMW
foundation also increased other operating expenses.
Depreciation and amortisation on property, plant
and equipment and intangible assets recorded in cost
of sales and in selling and administrative expenses
totalled €4,806 million (2015: €4,659 million). The slight
increase compared to the previous year was mainly
attributable to investments and capitalised develop-
ment costs recorded in previous accounting periods.
Sales and administrative expenses rose by €525 million
year-on-year to €9,158 million, resulting in an expense
ratio of 9.7% (2015: 9.4%). The increase was due to a
number of factors, including the larger workforce and
higher expenses for IT projects.
Gross profit came in slightly higher (+3.2%) at
€18,721 million, reflecting sales volume growth in the
Automotive segment and increased business volumes
in the Financial Services segment. The gross profit
margin was 19.9% (2015: 19.7%).
Warranty expenses include the accrued expense for
vehicle recall actions, the cost of which is expected to
exceed amounts previously recognised. Accordingly,
a further amount of €678 million was allocated to the
warranty provision for various issues, including airbags
supplied by the Takata group of companies, the ISOFIX
attachment system used for child car seats, and costs
relating to the provision of the network service for
telematics (2G). Expenses relating to telematics and
roadside assistance have increased, primarily due to
the greater volume of service contracts and Connected
Drive products.
The Group's cost of sales was slightly higher than in the
previous year, due to sales volume and portfolio factors.
Cost of sales relating to financial services business rose
by €1,274 million to €20,723 million, reflecting the
increased portfolio size. Research and development
expenses were at a similar level to the previous year
in absolute terms and, with an expense ratio of 4.6%,
also in relative terms. Total research and development
expenditure – comprising research costs, non-capital-
ised development costs and capitalised development
costs (excluding systematic amortisation thereon),
amounted to €5,164 million in the year under report
(2015: €5,169 million). As a result of the continuous
expansion and revision of the BMW Group's various
model series, research and development expenditure
remains at a generally constant level. These factors
resulted in a research and development expenditure
ratio of 5.5% (2015: 5.6%) and a capitalisation ratio of
40.5% (2015: 39.9%).
1.9
74,043
75,442
3.1
2,976
3,067
65
92,175
2.2
4.3
2015
2016
in € million
→ 43
BMW Group financial position
Cash flows from operating activities are determined
indirectly, starting with Group and segment net profit.
By contrast, cash flows from investing and financing
activities are based on actual payments and receipts.
The consolidated cash flow statements for the Group
and the Automotive and Financial Services segments
show the sources and applications of cash flows for
the financial years 2016 and 2015, classified into cash
flows from operating, investing and financing activities.
Cash and cash equivalents in the cash flow statements
correspond to the amounts disclosed in the balance
sheet.
Change
Financial position
Profit before tax in the Other Entities segment was sig-
nificantly lower than one year earlier. The net positive
result from other operating income and expenses
fell
from €192 million to €7 million year-on-year, mainly
due to lower income from the reversal of provisions
in 2016. The decrease was cushioned by the improve-
ment in the net interest result, which was due to lower
refinancing costs.
Other Entities segment/Eliminations
Higher business volumes and a slightly improved
credit risk situation contributed to the solid increase
in the Financial Services segment's profit before tax.
Selling and administrative expenses in the segment
went up by €130 million to €1,294 million, mainly
due to the increased size of the workforce and greater
expense for new IT projects.
The Financial Services segment revenues showed
a solid growth on the back of a dynamic operating
performance, clearly reflected in the upward trend
of its contract portfolio.
Financial Services segment
Motorcycles segment revenues increased slightly
compared to the previous year. The gross profit
margin dropped from 22.5% to 20.8%, mainly due
to higher expenses incurred in conjunction with the
implementation of the segment's new strategy and the
expansion of its model range. The increased workforce
size is reflected in higher selling and administrative
expenses. As a result of income from the reversal of
write-downs, the Motorcycles segment recorded a
slightly higher profit before tax than one year earlier.
Inter-segment eliminations reduced Group profit
before tax, partly reflecting higher eliminations trig-
gered by the growth in new leasing business and the
ensuing increase in leased products.
Cash inflow from operating
activities
3,173
960
The increase in cash flows from the Group's operating
activities was primarily attributable to the higher net
profit for the year (€514 million), higher depreciation
and amortisation (€312 million), provisions (€587 mil-
lion) and the change in other operating assets and
liabilities (€679 million).
3,324
-1,566
1,758
-18
73
55
Effects of exchange rate
and composition of Group
Change in cash and cash
equivalents
-611
5,004
4,393
Cash inflow from financing
activities
1,740
-7,603
-5,863
Cash outflow from invest-
ing activities
2,213
Motorcycles segment
62
67
Overall, the Automotive segment reported a solid
increase in pre-tax profit. This outcome was largely
due to the improved financial result, which benefited
from net gains on commodity derivatives, reduced
refinancing costs and lower interest expense on pen-
sion obligations.
7,523
7,916
Change in %
2015
2016
Group
Eliminations
Other Entities
Financial Services
Motorcycles
Automotive
in € million
→ 42
Profit/loss before tax by segment
*The adjustment for exchange rate factors is calculated by applying the relevant current exchange rates to the prior year's figures.
Group
Eliminations
5.2
68
185
3.4
Due to the various factors described above, at
€7,695 million (2015: €7,836 million), profit before
financial result was slightly down on the previous
year. The EBIT margin came in at 8.9% (2015: 9.2%).
The main factors for the decrease were tougher com-
petition and increased costs, partially countered by
the positive impact of sales volume growth.
The net negative amount of other operating income
and expenses deteriorated by €70 million to €152 mil-
lion, mainly due to lower gains on the disposal of
assets and higher expenses for provisions. A donation
to a BMW foundation also increased other operating
expenses.
At €7,604 million, selling and administrative expens-
es were €385 million higher than the previous year.
Administrative expenses increased due to a number
of factors, including the larger workforce, a new
allocation of expenses relating to internal activities,
and higher expenses for IT projects. Overall, as a
percentage of revenues, the expense ratio was 8.8%
(2015: 8.4%).
Automotive segment revenues grew slightly on the
back of higher sales volumes, with currency factors
holding revenue growth down. The gross profit mar-
gin increased slightly to 17.9% year-on-year (2015:
17.7%).
Automotive segment
4.8
9,224
9,665
-16.3
-664
-772
-19.4
211
170
9.7
1,975
2,166
179
Review of Operations
→ Sustainability
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Currency
translation,
Report on
Economic Position
Top rankings in sustainability ratings
The BMW Group again achieved top rankings in
prestigious ratings on the topic of sustainability in
2016, thus maintaining its leading position as a sus-
tainable automotive manufacturer. In the 2016 rating
for the Dow Jones Sustainability Indices (DJSI), the
BMW Group again headed the Automobiles sector
and is therefore the only carmaker to have been listed
consecutively since the inception of the index.
In the Carbon Disclosure Project (CDP), the Group
achieved the best evaluation for its efforts in the field
of climate protection. The BMW Group is therefore
one of only two companies worldwide to have reached
the highest category seven times in a row. Moreover,
the BMW Group was again included in the British
FTSE4Good Index in 2016.
Clean production
Integrated sustainability management in production
processes ensures the efficient use of resources. Since
2006, the consumption of resources and emissions per
vehicle produced has been reduced by an average of
50.0%. The individual figures are as follows:
in %
Non-recyclable waste
Solvent emissions
CO₂ emissions
2016
-35.4%
-31.0%
-48.8%
Energy consumption
Water consumption
Process wastewater
-54.6%
-81.5%
Combined
62
62
Management
Report
Despite record temperatures and long, hot periods at
some assembly plants in 2016, at 2.25 m³ per vehicle
produced, water consumption was in line with the
previous year (2015: 2.24 m³; +0.4%). At 0.42 m³, the
volume of process wastewater generated per vehicle
produced fell by 6.7% (2015: 0.45 m³). The volume of
non-recyclable production waste was further reduced
to 3.51 kg per vehicle produced during the year under
report (2015: 4.00 kg; -12.3%). Solvent emissions were
cut by 6.6% to 1.14 kg per vehicle produced during
2016 (2015: 1.22 kg).
61
In 2016, at 2.21 MWh per vehicle produced, the
amount of energy consumed rose slightly compared
with the previous year (2015: 2.19 MWh; +0.9%). The
higher figure is due amongst others to the start-up of
the new engine plant in Shenyang, China. In addition,
the construction of a new, more efficient painting line
in Munich made it necessary to run two painting lines
in parallel for a certain period.
In 2016, the BMW Group's fleet of new vehicles sold
in Europe (EU-28) consumed an average of 4.6 litres of
diesel and 5.6 litres of petrol per 100 km respectively.
CO2 emissions averaged 124 grams per km.
The development of sustainable products and services
is an integral part of the BMW Group's business model.
The fleet-wide deployment of Efficient Dynamics tech-
nologies is helping to continually reduce CO2 emission
levels. The electrification of the fleet continued to
progress in 2016. Due to the expansion of the mod-
el range, annual sales of electrified BMW vehicles
increased strongly, surpassing the 62,000-unit mark
in the course of 2016. These measures form the basis
for complying with the legally stipulated CO2 and fuel
consumption limits going forward. Between 1995 and
2016, the average CO2 emissions of the three brands
sold by the BMW Group in Europe fell by 41.0%.
Fleet carbon dioxide emissions reduced
-48.6%
Despite the slight increase in the average amount
of energy consumed per vehicle, the use of highly
efficient, ecologically sustainable combined heat and
power plants and electricity generated from renewable
sources at production sites enabled the Company to
reduce production-related CO₂ emissions per vehicle
by a further 5.3% year-on-year to 0.54 tonnes during
the period under report (2015: 0.57 tonnes).
Liabilities to subsidiaries
Trade payables
Liabilities to banks
7,699
7,699
7,617
12,927
82
93
30
30
Other liabilities
7,606
Liabilities
Total equity and liabilities
1,343
34,977
36,299
14,122
1,549
2,066
Deferred income
995
12,772
239
406
6,690
5,951
4,500
5,030
12,382
2,102
Revenue reserves
8,061
3,911
2,676
2,478
19,975
19,333
Prepayments
430
303
Surplus of pension and similar plan assets over liabilities
1,183
722
Total assets
36,299
34,977
EQUITY AND LIABILITIES
Subscribed capital
19
9,038
2,107
2,127
657
657
Provisions
2,300
Other provisions
Registered profit-sharing certificates
Equity
Unappropriated profit available for distribution
*German Accounting Directive Implementation Act (BilRUG) applied with effect from the beginning of the financial year 2016. Comparative figures for 2015 have not been adjusted.
Capital reserves
79
Pension provisions
80
In order to secure obligations resulting from pre-re-
tirement part-time work arrangements and pension
obligations, investments in fund assets totalling
€490 million were transferred to BMW Trust e. V.,
Munich, in conjunction with a Contractual Trust
Arrangement (CTA). Fund assets are offset against the
related guaranteed obligations. The resulting surplus
of assets over liabilities is reported in the BMW AG
balance sheet on the line "Surplus of pension and
similar plan assets over liabilities”.
Combined
Management
Report
Pension provisions increased significantly compared
to the end of the financial year 2015, mainly due to the
lower discount factors applied in Germany and the UK.
The Group equity ratio at the end of the reporting
period was 25.1% (31 December 2015: 24.8%). The
equity ratio for the Automotive segment was 41.3%
(31 December 2015: 40.1%) and that for the Financial
Services segment stood at 8.0% (31 December 2015:
8.2%).
Group equity rose by €4,599 million to €47,363 million.
Equity increased year-on-year as a result of the net prof-
it attributable to shareholders of BMW AG amounting
to €6,863 million and fair value gains on derivative
financial instruments amounting to €2,008 million.
Decreases in equity arose in particular in connection
with the dividend payment of €2,102 million and
the negative impact of remeasurements of the net
defined benefit liability for pension plans amounting to
€1,858 million, the latter due mainly to lower discount
rates applied in Germany and the UK.
thereof cash and cash equivalents 5%
Current assets 52%
0
43% Current provisions and liabilities
2015
2016
2015
5%
40%
33
17% Non-current provisions and liabilities
19%
99
66
83
Non-current assets 48%
66
48%
33
200
Other provisions also increased significantly compared
to 31 December 2015, mostly reflecting the higher level
of warranty provisions for vehicle recall actions, the
cost of which is expected to exceed amounts previously
recognised. Accordingly, a further amount of €678 mil-
lion was allocated to the warranty provision for various
issues, including airbags supplied by the Takata group
of companies, the ISOFIX attachment system used for
child car seats, and costs relating to the provision of
the network service for telematics (2G).
133
100
41%
40% Equity
||||
2016
52%
66
The year-on-year increase in financial liabilities was
primarily attributable to the issue of bonds and higher
liabilities to banks, in both cases securing favourable
refinancing conditions on a long-term basis. In addition,
new ABS transactions were concluded including the
USA and Germany. Lower commercial paper volumes
and the more favourable development of derivatives
kept the increase in financial liabilities down.
The sharp rise in other liabilities reflects the increased
scale of service contracts and Connected Drive prod-
ucts, advance payments received from leasing custom-
ers, and the expected higher level of payments due to
dealerships and importers for bonuses, rebates and
other price deductions.
The increase in trade payables mainly reflects higher
production volumes.
Pension provisions, net of designated plan assets,
increased from €82 million to €93 million.
Under the motto “THE NEXT 100 YEARS", almost all
of the workforce received a special bonus in conjunc-
tion with the BMW AG's centenary anniversary. For
the most part, the bonus was paid in the form of a
starting contribution to a new defined contribution
component of the BMW pension plan. In future, 10%
of the annual profit share payable by BMW AG will
be paid into the plan, for which a minimum rate of
return is guaranteed.
3,846
Equity rose by €1,195 million to €14,122 million, tak-
ing the equity ratio from 37.0% to 38.9%.
Cash and cash equivalents went up by €198 million
to €2,676 million. At the same time, intragroup refi-
nancing volumes at the level of BMW AG were reduced.
Liquidity within the BMW Group is managed centrally
by BMW AG on the basis of a group-wide liquidity
concept, which revolves around the strategy of con-
centrating a significant part of the Group's liquidity
at the level of BMW AG. An important instrument
used to achieve this aim is the cash pool headed by
BMW AG. The liquidity position reported by BMW AG
therefore reflects the global activities of BMW AG and
other Group companies.
Other provisions were at a similar level to the previous
year and comprise mainly obligations for person-
nel-related expenses, warranties, selling activities,
litigation and liability risks as well as risks relating
to commodity and currency contracts.
The increase in other receivables and other assets
to €2,525 million (2015: €1,820 million) was mainly
attributable to higher receivables from companies with
which an investment relationship exists. Tax receiv-
ables and genuine repurchase (repo) transactions in
place at the end of the reporting period also increased
year-on-year.
At €4,260 million, inventories were practically identical
to the end of the previous year (2015: €4,267 million).
At €3,238 million, the carrying amount of investments
was similar to one year earlier (2015: €3,250 mil-
lion). Further shares in SGL Carbon SE, Wiesbaden,
were purchased during the financial year 2016. An
impairment loss of €64 million (2015: €13 million)
was recognised in the year under report, reflecting
the decreased fair value in the investment in SGL
Carbon SE at 31 December 2016.
Capital expenditure on intangible assets and prop-
erty, plant and equipment in the year under report
totalled €2,346 million (2015: €2,748 million), down
by 14.6% compared to the previous year. Depreciation
and amortisation amounted to €2,233 million (2015:
€2,072 million).
Financial Statements
of BMW AG
Economic Position
→ Comments on
Report on
Receivables from subsidiaries, most of which relate
to intragroup financing receivables, decreased slightly
by €228 million to €6,001 million.
60
Liabilities to banks decreased as a result of the repay-
ment of project-related loans.
in € million
Overall, the results of operations, financial position
and net assets position of the BMW Group continued
to develop positively during the year under report.
73
74
Combined
Management
Report
Report on
Economic Position
Deferred income went up by €517 million to
€2,066 million and comprised mainly amounts relat-
ing to services still to be performed for service and
maintenance contracts.
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
The value added statement shows the value of work
performed, less the value of work bought in by the
BMW Group during the financial year. Depreciation
and amortisation, cost of materials, and other expens-
es are treated as bought-in costs in the net value added
calculation. The allocation statement applies value
added to each of the participants involved in the value
added process. The bulk of the net value added is
applied to employees. The remaining portion will be
retained in the Group to finance future operations. It
should be noted that the gross value added amount
treats depreciation as a component of value added
which, in the allocation statement, is treated as inter-
nal financing.
Net valued added by the BMW Group in the financial
year 2016 remained at a high level.
BMW Group value added statement
→ 50
2016
Value added statement
1,820
Report on
6,229
12.2
Bought-in costs
63,781
66.6
62,543
67.0
2.0
Gross value added
31,927
33.4
30,746
33.0
3.8
Depreciation and amortisation of total tangible,
intangible and investment assets
8,304
8.7
Group
Shareholders
Government/public sector
Providers of finance
Employees
APPLIED TO
11,398
4.9
22,524
24.7
23,623
Net value added
8.8
8,222
24.2
Minority interest
14.1
54.8
2015
in € million
in %
Change in %
WORK PERFORMED
Revenues
Financial income
Other income
Total output
Cost of materials*
Other expenses
94,163
98.4
92,175
98.8
875
0.9
51,145
52.5
50,279
2.6
100.0
93,289
13,502
100.0
1.0
914
0.7
670
0.2
200
95,708
Net value added
11,535
48.8
in %
Depreciation and
amortisation 8.7
14.1 Other expenses
Cost of materials 52.5
C
48.8% Employees
24.7 Net value added
8.3% Providers of finance
13.7% Government/public sector
9.7% Shareholders
19.3% Group
-0.2% Minority interest
15
75
66
76
Combined
6,001
628
BMW AG develops, manufactures and sells cars and
motorcycles as well as spare parts and accessories
manufactured in-house, by foreign subsidiaries and
by external suppliers, and performs services related to
these products. Sales activities are carried out primarily
through branches, subsidiaries, independent dealer-
ships and importers. In 2016, BMW AG increased auto-
mobile sales volume by 80,359 units to 2,355,726 units.
This figure includes 305,726 units relating to series sets
supplied to the joint venture BMW Brilliance Automo-
tive Ltd., Shenyang, an increase of 17,971 units over
the previous year. At 31 December 2016, BMW AG
employed a workforce of 85,754 people, 894 more than
one year earlier.
Business environment and review of operations
The general and sector-specific environment in
which BMW AG operates is the same as that for the
BMW Group and is described in the “Report on Eco-
nomic Position" section of the Combined Management
Report.
The German Accounting Directive Implementation Act
(BilRUG) was applied for the first time with effect from
the beginning of the 2016 financial year. Comparative
figures have not been restated where this gave rise to
changes in the presentation of items in the balance
sheet or income statement. Further information
regarding the impact of BilRUG and the comparabil-
ity of individual income statement line items for the
financial year 2016 with those of the previous year
is provided in the notes to the Financial Statements
of BMW AG.
Differences between the accounting policies used
in the BMW AG financial statements (prepared in
accordance with HGB) and the BMW Group Finan-
cial Statements (prepared in accordance with IFRS)
arise primarily in connection with the capitalisation
of intangible assets, the creation of valuation units,
the recognition and measurement of financial instru-
ments and provisions and the recognition of deferred
tax assets. Differences also arise in the presentation
of assets and liabilities in the balance sheet and of
income and expense items in the income statement.
→ 51
The key financial and non-financial performance
indicators relevant for BMW AG are largely identical
and synchronous with those of the Automotive seg-
ment of the BMW Group and are described in detail
in the "Report on Economic Position" section of the
Combined Management Report.
COMMENTS ON FINANCIAL
STATEMENTS OF BMW AG
Financial Statements
of BMW AG
→ Comments on
Economic Position
83
Management
Report
Bayerische Motoren Werke Aktiengesellschaft
(BMW AG), based in Munich, Germany, is the parent
company of the BMW Group. The comments on the
BMW Group and Automotive segment provided in
earlier sections are also relevant for BMW AG, unless
presented differently in the following section. The
Financial Statements of BMW AG are drawn up in
accordance with the provisions of the German Com-
mercial Code (HGB) and the relevant supplementary
provisions contained in the German Stock Corpora-
tion Act (AktG).
BMW Group value added 2016
* Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).
4.9
2,300
-3.8
14.8
3,340
13.7
3,213
9.7
2.5
1,918
8.3
1,965
6.1
48.3
10,870
8.5
2,525
2,102
9.4
100.0
22,524
100.0
23,623
74.1
0.1
9.3
27
47
6.9
19.0
4,267
19.3
4,563
0.2
89
Current assets 35%
100
Group
ASSETS
in € million
→ 47
BMW Group condensed balance sheet at 31 December
Net assets
667
4,267
4,260
Current assets
Cash and cash equivalents
Marketable securities
Other receivables and other assets
Receivables from subsidiaries
Trade receivables
Inventories
14,619
2016*
2015
ASSETS
Intangible assets
310
353
Currency adjusted
Property, plant and equipment
11,016
Investments
3,238
3,250
Tangible, intangible and investment assets
14,711
11,163
in € million
2016
Change in %
30.5
30.8
428
560
Other investments
1.4
14.0
14.0
2,233
2,546
Investments accounted for using the equity method
20.0
7.3
8.1
34,965
37,789
Leased products
change in %
Proportion of
balance sheet
total in %
Intangible assets
8,157
7,372
10.6
2015
11.4
Property, plant and equipment
17,960
17,759
1.1
1.1
9.5
4.3
→ 53
BMW AG Balance Sheet at 31 December
Financial and net assets position
-4,758
-4,504
-2,610
-2,504
-3,427
-3,635
14,620
14,404
-57,764
-60,946
72,384
75,350
2015
2016*
Net profit
Other taxes
Profit after income tax
Results of operations
BMW AG Income Statement
→ 52
in € million
Revenues
Cost of sales
-137
Gross profit
Administrative expenses
Research and development expenses
Other operating income and expenses
Result on investments
Financial result
Income taxes
Selling expenses
184
1,015
1,606
78
Combined
Management
Report
Report on
Economic Position
→ Comments on
Financial Statements
of BMW AG
77
As a consequence of the first-time application of the
Financial Reporting Implementation Act (BilRUG) in
2016, the previous year's figures are only comparable
to a limited extent with those of the financial year
under report. In particular, the amounts reported for
revenues, cost of sales, expenses by function, other
operating income and expenses are affected by the
new, extended definition of "revenues" and the nec-
essary reclassification of expenses related to revenues.
Revenues increased by 4.1% year-on-year, mainly
reflecting higher sales volumes of the BMW X1 and
BMW 7 Series. In geographical terms, most of the
increase related to Asia and Europe. Sales to Group
entities accounted for €56,412 million or 74.9% of
total revenues of €75,350 million.
Selling and administrative expenses increased overall
year-on-year, partly reflecting the cost of the larger
workforce and IT projects.
Research and development expenses related mainly
to new vehicle models (including relevant expenses
relating to the start-up of the new BMW 5 Series),
the development of drive systems and work on other
innovations. Compared to the previous year, research
and development expenses decreased by 5.3%.
The net amount of other operating income and expens-
es deteriorated by €321 million to a negative amount
of €137 million, whereby the year-on-year decrease
mainly reflected the reclassification of income from
other services to the line item "Revenues" in conjunc-
tion with the first-time application of BilRUG. Higher
income from the reversal of provisions and the lower
expense for allocations to provisions, in particular
for commodity and currency contract risks, worked
in the opposite direction.
The result on investments was down on the previous
year due to lower profit transfers from Group com-
panies. By contrast, the financial result improved by
€1,008 million, mainly due to the higher gains arising
on the fair value measurement of designated plan
assets and lower interest expenses for pensions. In
the latter case, the improvement was attributable to
a change in legislation concerning the methodology
required to be applied to determine the discount factor
for pension provisions.
The expense for income taxes relates primarily to
current tax for the financial
year 2016.
After deducting the expense for taxes, the Company
reports a net profit of €3,277 million, compared to
€2,741 million in the previous year.
Cost of sales increased by 5.5% to €60,946 million,
mostly due to the higher cost of materials. As a result,
gross profit decreased by €216 million to €14,404 mil-
lion.
0.3
* German Accounting Directive Implementation Act (BilRUG) applied with effect from the beginning of the financial year 2016. Comparative figures for 2015 have not been adjusted.
2,300
-35
-1,043
-1,308
-1,782
3,296
2,790
2,102
-19
3,277
2,741
Transfer to revenue reserves
-977
-639
Unappropriated profit available for distribution
-49
89
Receivables from sales financing
70,043
72
22
71
ber 2016.
Cash and cash equivalents went up by €1,758 million,
thus ensuring a solid level of liquid funds at 31 Decem-
Inventories went up by a solid 7.0% compared to the
end of 2015, with most of the increase relating to fin-
ished goods, reflecting general business growth and
stocking up in the various markets.
The growth in business reported by the Financial Ser-
vices segment is reflected in the significant increase
in receivables from sales financing and a solid rise in
the volume of leased products. A total of 1,811,157 new
contracts were concluded with retail customers (leasing
and credit financing) in 2016, 9.4% more than one year
earlier. The credit financing contract portfolio grew
by 9.5% to 3,022,904 contracts, with growth reported
primarily in China and the USA. The lease contract
portfolio increased by 7.3% to stand at 1,680,513 con-
tracts at 31 December 2016.
The balance sheet total of the BMW Group increased
by a solid 9.5% compared to 31 December 2015. The
changes in individual balance sheet items caused by
currency factors relate primarily to changes in the
exchange rates of the US dollar, British pound, South
African rand and Chinese renminbi against the euro.
100.0
9.5
9.5
172,174
188,535
Total equity and liabilities
8.3
12.1
13.0
97,731
91,683
6.6
5.5
51.8
Trade payables
Combined
8,512
9.5
10.5
4.5
Other liabilities
15,555
13,767
7,773
Financial liabilities
Management
Report
Economic Position
Total equity and liabilities in € billion
→ 49
Balance sheet structure - Automotive segment
2015
2016
2015
2016
4%
thereof cash and cash equivalents 4%
38% Current provisions and liabilities
36%
36%
2015
66
37% Non-current provisions and liabilities
39%
64%
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Balance sheet structure - Group
→ 48
Total equity and liabilities in € billion
200
Report on
189
172
25%
172
25% Equity
133
Non-current assets 65%
189
2.1
3.9
88
6,682
1.5
5.4
2.7
2,751
2,825
Total assets
Cash and cash equivalents
Other assets
Trade receivables
6.3
7.0
7.0
11,071
11,841
Inventories
2.3
11.7
12.3
41.5
Financial assets
9,770
8,843
6,261
10.5
5.2
Deferred and current tax
4,265
4,326
-1.4
-3.2
9.9
6.7
6.2
3.5
4,587
3,000
52.9
60.9
2.4
Other provisions
Pension provisions
10,918
13.4
13.0
5.8
Deferred and current tax
3,869
3,557
9,630
78,260
25.1
10.8
7,880
6,122
28.7
27.6
4.2
188,535
13.6
172,174
9.5
100.0
EQUITY AND LIABILITIES
Equity
47,363
42,764
9.5
2016
in %
As a worldwide-leading manufacturer of premium cars
and motorcycles and provider of premium financing
and mobility services, the BMW Group is exposed
to numerous uncertainties and changes. Making full
use of the opportunities arising out of change is a
fundamental aspect of the Group's corporate success.
In order to achieve growth, drive profitability, boost
efficiency and maintain sustainable levels of business
going forward, the BMW Group consciously takes
certain risks.
The continuous optimisation of important business
processes and strict cost controls are essential to
ensuring profitability and a high return on capital
employed. Probable measures to increase profitability
are incorporated in the outlook. One example is the
implementation of modular-based production and
common architectures, which enable a greater com-
monality between different models and product lines.
This strategy contributes to improved profitability by
reducing development costs and other investment on
the series development of new vehicles. This supports
economies of scale in production costs and increases
production flexibility. Moreover, a more competitive
cost basis opens up opportunities to engage in new
market segments.
Deliveries to customers: slight increase expected
The BMW Group expects a further year-on-year
increase in sales of BMW, MINI and Rolls-Royce brand
vehicles and aims to achieve again in 2017 a leading
position in the global premium segment. Balanced
growth in major sales regions will help to even out
volatilities in individual markets. Assuming economic
conditions do not deteriorate, deliveries to custom-
ers are forecast to rise slightly to a new high (2016:
2,367,603¹ units) in 2017.
Automotive segment
→ Outlook
Opportunities
Report on Outlook,
Risks and
Report
Combined
Management
86
98
85
85
Workforce size at year-end: slight increase expected
Based on current forecasts, the BMW Group's work-
force is again expected to grow slightly in 2017 (2016:
124,729 employees). The main factors driving the
expected increase will be projects aimed at securing
the Group's future, growth of automobile and motor-
cycles business and the expansion of financial and
mobility services.
Nevertheless, the BMW Group intends to continue its
growth course in 2017. New vehicles such as the new
BMW 5 Series and the new MINI Countryman and
new motorcycles such as the two R NineT models as
well as services are expected to make a contribution
to earnings growth. Investments in future-oriented
projects, including vehicle electrification, digitalisa-
tion and the expansion of the production network,
will, however, counteract the general upward trend.
Overall, Group profit before tax is expected to increase
slightly year-on-year (2016: €9,665 million).
Competition on international automobile markets
is set to remain intense during the current year. The
situation is likely to be exacerbated by political and
macroeconomic uncertainties in Europe as well as the
unforeseeable consequences of the Brexit decision in
the UK. Moreover, the strategy of the new US admin-
istration regarding economic policy remains unclear.
Further information is provided in the sections on
political and economic risks in the section "Risks and
Opportunities".
Profit before tax: slight increase expected
BMW Group
Outlook for the BMW Group
-
-
Due to its global business model, the BMW Group
is well placed at all times to exploit opportunities,
including those arising at short notice. Coordination
between the Group's sales and production networks
also helps cushion the impact of unforeseeable
developments in the various regions. Investments
in markets important for the future are also a basis
for further growth, while simultaneously expanding
the global presence of the BMW Group. Thanks to
its three strong brands BMW, MINI and Rolls-
Royce the BMW Group is expected to remain on
course for success during the current year.
Expected consequences for the BMW Group
Future developments on international automobile
markets also have a direct impact on the BMW Group.
Whereas competition is likely to intensify in con-
tracting markets, new opportunities appear in
growth regions. Sales volumes in some countries
are likely to be significantly affected by challenges
in the competitive environment. Europe's markets
are not expected to maintain the pace of growth
seen in 2016. Demand in the Americas region is
likely to remain flat. Asia is expected to continue
its upward trend.
Japan's central bank may have few tools left to stimu-
late the country's economy and rate of inflation. Public
sector spending is therefore expected to increase as a
means to kick-start growth.
Growth in China is set to cool further in 2017, with
the Chinese central bank expected to implement a raft
of measures to accompany the transformation process
for the domestic economy.
The UK economy is expected to come under more
pressure as a consequence of the Brexit vote. The Bank
of England has already announced its intention to
take appropriate measures as necessary.
The Fed is expected to continue raising interest rates in
the course of 2017. The expansionary monetary poli-
cies of the ECB are likely to be continued in 2017, with
a slightly reduced volume of monthly bond purchases.
Important contributions to continued growth will
come in particular from new models. The all-new
BMW 5 Series Sedan has been available since mid-Feb-
ruary 2017. The BMW 5 Series iPerformance and M
Performance models followed in March. The BMW
5 Series iPerformance model as a plug-in hybrid
is now available worldwide. The model revisions
of the BMW 4 Series and the BMW M4 Coupé and
Convertible were also launched in March. The new
BMW 5 Series Touring is scheduled for launch in mid-
June. The second generation of its highly successful
MINI Countryman model was introduced in February.
Towards the middle of year, a John Cooper Works and
a plug-in hybrid will be added to the MINI Country-
man range. Further new models are planned for the
second half of 2017.
Fleet carbon dioxide emissions²:
slight decrease expected
The BMW Group is continuing its efforts to reduce
fuel consumption and carbon dioxide emissions.
According to forecasts, carbon dioxide emissions
for the vehicle fleet will decrease slightly during the
outlook period, thus continuing the trend seen in
previous years (2016: 124 grams CO2/km).
Revenues: slight increase expected
Automotive segment revenues are expected to rise
slightly in line with sales volume. The Company
expects that segment revenues will increase slightly
in 2017 (2016: €86,424 million).
Profit before tax
BMW GROUP
Depending on the political and economic situation
and the outcomes of the risks and opportunities
described below, actual business performance could,
however, differ from current expectations.
in deliveries to customers, Automotive segment rev-
enues are also expected to increase slightly in 2017.
At the same time, a slight decrease in fleet carbon
dioxide emissions is expected. The Group's targets are
to be met with a slight rise in the workforce size. The
Automotive segment's EBIT margin in 2017 is set to
remain within the target range of between 8 and 10%,
while its ROCE is forecast to decrease slightly. A slight
fall is also forecast for the RoE in the Financial Services
segment. Both performance indicators will be above
their long-term targets of 26% (RoCE) and 18% (ROE)
respectively. Deliveries to customers in the Motor-
cycles segment are forecast to rise significantly, with
an EBIT margin within the target range of between 8
and 10% and ROCE at the previous year's level.
→ 54
Key performance indicators
Overall assessment by Group management
Business is expected to develop positively in the
financial year 2017. The introduction of numerous
new automobile and motorcycle models as well as the
expansion of individual mobility-related services give
reason to expect that profitable growth will contin-
ue in the current year. Despite the many challenges
described above, Group profit before tax is forecast to
grow slightly. Based on the forecast of a slight increase
Return on equity: slight decrease expected
According to forecasts, the Financial Services segment
is likely to continue performing well in 2017. However,
it is expected that regulatory requirements for equity
capital will be tightened and the risk situation will
normalise in the forecast period. The segment RoE is
therefore expected to decrease slightly year-on-year
(2016: 21.2%). The target of at least 18% is neverthe-
less likely to be exceeded again.
Financial Services segment
Segment RoCE in 2017 is forecast to be in line with
the previous year (2016: 33.0%). The long-term target
ROCE of 26% for the Motorcycles segment will there-
fore be surpassed.
Return on capital employed expected at previous
year's level
In this context, a target range of 8 to 10% has also been
set for the Motorcycles segment. The EBIT margin for
the Motorcycles segment is expected to lie within this
range in 2017 (2016: 9.0%).
The pace of global economic growth is expected to pick
up slightly in 2017. With the exception of the USA,
central banks in industrialised countries are likely to
maintain their expansionary course.
With effect from the beginning of the financial
year 2017, the EBIT margin will also serve as a key
performance indicator for the Motorcycles segment.
Accordingly, segment performance will also be man-
aged based on the operating return on sales (EBIT
margin) in future. Further information can be found
in the description of the Group management system in
the section "General Information on the BMW Group".
2 EU-28.
The BMW Group expects the upward trend in the
Motorcycles segment to continue. New models, includ-
(2016: 316,200 ing the R NineT Pure, the R NineT Racer, the K 1600 B
and the G 310 GS were unveiled at international trade
fairs held in autumn 2016. Together with updated
versions of the R 1200 GS, the S 1000 R, the S 1000 RR,
the K 1600 GT and the luxury GTL, the new models
will expand the product portfolio significantly and
appeal to new customer groups. Overall, deliveries of
BMW motorcycles to customers are forecast to increase
significantly year-on-year (2016: 145,032 units).
significant increase expected
Motorcycles segment
Deliveries to customers:
Segment RoCE is forecast to decrease slightly (2016:
74.3%). However, the long-term target RoCE of at
least 26% for the Automotive segment will be easily
surpassed.
slight decrease expected
Return on capital employed:
units).
BMW Brilliance
Automotive,
Shenyang Ltd.
1 Includes the
joint venture
An EBIT margin within a range of 8 to 10% (2016:
8.9%) remains the target for the Automotive segment.
EBIT margin in target range between 8 and 10%
expected
EBIT margin in target range between 8 and 10%
expected
Financial Services markets
The world's motorcycle markets in the 250 cc plus class
are forecast to grow slightly in 2017. In Europe, the
positive trend is set to continue in the major markets
of Germany, France, Italy and Spain. The BMW Group
expects the US market to remain at the previous year's
level during the current financial year.
Motorcycle markets
The continuous forecasting process ensures that the
BMW Group is ready to take advantage of oppor-
tunities as they arise and to react appropriately to
unexpected risks. The principal risks and opportuni-
ties are described in detail in the section "Risks and
Opportunities". The risks and opportunities discussed
in that section are relevant for all of the BMW Group's
performance indicators and could result in variances
between the outlook and actual outcomes.
The following outlook relates to a forecast period
of one year and is based on the composition of the
BMW Group during that period. The outlook takes
account of all information known up to the date on
which the financial statements were prepared for issue
and which could have an effect on the overall perfor-
mance of the Group. The expectations contained in
the outlook are based on the BMW Group's forecasts
for 2017 and reflect its most recent status. The basis
for the preparation of and the principal assumptions
used in the forecasts - which consider the consensus
opinions of leading organisations, such as economic
research institutes and banks - are set out below. The
BMW Group's forecast is based on these assumptions.
Assumptions used in the outlook
The report on outlook, risks and opportunities
contains forward-looking assertions based on the
BMW Group's expectations and assessments, which
are subject to uncertainty. As a result, actual outcomes
can deviate, for example on account of political and
economic developments - either positively or nega-
tively - from the expectations described below. Further
information can be found in the section "Risks and
Opportunities".
The report on outlook, risks and opportunities describes
the expected development of the BMW Group, includ-
ing the associated material risks and opportunities,
from a Group management perspective. In line with
the Group's internal management system, the out-
look covers a period of one year. However, risks and
opportunities are managed on the basis of a two-year
assessment. The report on risks and opportunities
therefore covers a period of two years.
OUTLOOK
World economy expected to grow
despite risks
Outlook foresees increase in
revenues and profit
Automobile and motorcycle sales
expected to reach new record levels
Positive Company performance
expected to continue in 2017
REPORT ON OUT-
LOOK, RISKS AND
OPPORTUNITIES
Opportunities
Economic outlook
Risks and
Management
Report
Combined
62
82
81
KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, has
issued an unqualified audit opinion on the financial
statements of BMW AG, of which the balance sheet and
the income statement are presented here. The BMW AG
financial statements for the financial year 2016 will
be submitted to the operator of the electronic version
of the German Federal Gazette and can be obtained
via the Company Register website. These financial
statements are available from BMW AG, 80788 Munich,
Germany.
Due to its dominant role in the Group and its close ties
with Group entities, expectations for BMW AG with
respect to the Company's financial and non-financial
performance indicators correspond largely to the
BMW Group's outlook for the Automotive segment,
which is described in detail in the "Report on Outlook,
Risks and Opportunities" section of the Combined
Management Report.
Outlook
BMW AG is integrated in the group-wide risk man-
agement system and internal control system of the
BMW Group. Further information is provided in the
"Internal Control System and Risk Management System
Relevant for the Financial Reporting Process" section
of the Combined Management Report.
BMW AG's performance is highly dependent on the
same set of risks and opportunities that affect the
BMW Group and which are described in detail in the
"Report on Outlook, Risks and Opportunities" section
of the Combined Management Report. As a general
rule, BMW AG participates in the risks entered into by
Group entities on the basis of the relevant shareholding
percentage.
Risks and opportunities
The implementation of identified opportunities is
undertaken on a decentralised basis within the rel-
evant functions. The significance of opportunities
for the BMW Group is classified in the categories
"significant" and "insignificant".
Report on Outlook,
Workforce at year-end
Despite greater political uncertainty, the global
economy is forecast to grow by around 3.4% in 2017,
slightly faster than in the preceding year. A number of
factors make uncertainty likely to persist with regard
to future economic and political developments. These
include the negotiations between the UK and the EU
following the Brexit vote and the future course of the
new US administration. Moreover, the existing risks to
financial stability due to high sovereign debt levels in
Europe and Japan, more restrictive monetary policies
in the USA and high levels of corporate debt in China
have not diminished compared to the previous year.
Further information on political and global economic
risks can be found in the section "Risks and Oppor-
tunities".
of 1.7%.
After dropping back in 2016, the automobile markets
in the world's major emerging economies are expected
to recover in 2017, with registrations predicted to grow
by 4.1% to 1.3 million units in Russia and by 3.0% to
1.7 million units in Brazil.
The automobile market in Japan is likely to contract
further in 2017. Registrations are forecast to be in the
region of 4.7 million units and hence 1.6% down on
the previous year.
Despite the region's continued economic revival,
automobile markets in Europe are not expected to
grow significantly. The trend in Germany is expected
to remain flat (3.4 million). Registrations in France are
forecast to fall slightly (-1.7%) to around 1.95 million
units. After its strong performance in 2016, the Italian
automobile market is expected to grow at a modest
0.7% to around 1.86 million units.
Overall, the world's automobile markets are forecast
to grow by around 1.8% to an estimated 89.0 mil-
lion units in 2017. The US market is expected to
grow by 0.3% to 17.6 million units. The forecast for
China points to an increase of around 5.7% to some
25.5 million units. The country's interior provinces
are expected to contribute significantly to growth as
they catch up.
Automobile markets
As US monetary policies continue to normalise, the
currencies of numerous emerging economies are
likely to remain under pressure in the short term.
Countries that export raw materials and have current
account and fiscal deficits, such as South Africa or
Brazil, are most likely to be affected. Any increase in
raw materials prices would generally have a positive
impact on these economies.
The central bank in Japan could continue to pursue its
highly expansionary monetary policy for the foresee-
able future. This policy could result in the yen hardly
changing in value against the euro or even losing in
value, given that monetary policy in the eurozone is
currently not expected to be expanded.
The uncertain political situation in the UK following
the Brexit vote could lead to capital exports and
encourage the Bank of England to retain its expan-
sionary monetary policy. If the UK economy slows
down at a more pronounced rate than expected in
2017, the Bank of England could adopt additional
measures to increase the money supply. As a result,
the British pound could either stabilise at its current
level or continue to lose value in the short term.
A more restrictive monetary policy in the USA would
boost the value of the US dollar against the euro.
Continued economic recovery in the eurozone, com-
bined with rising inflation, could prompt the ECB to
implement a gradual reduction in government bond
purchases. In that case, the loss in value of the euro
against the US dollar would be less pronounced.
Given that the Chinese renminbi is likely to continue
to move in the same direction as the US dollar in the
short term, it is likely to appreciate slightly against the
euro in 2017. If, however, the Chinese central bank
decides to intervene in the currency markets, it could
result in a relatively narrow fluctuation range.
Currencies of particular importance for the interna-
tional operations of the BMW Group are the Chinese
renminbi, the US dollar, the British pound and the
Japanese yen. These major currencies could be subject
to a significant degree of fluctuation again in 2017.
Currency markets
Economic growth in the eurozone is forecast to slow
down slightly to 1.5% in 2017. Germany, Europe's
largest economy, is expected to grow at a similar rate
(+1.5%). In macroeconomic terms, the prospects of the
other eurozone countries are also expected to develop
positively. GDP growth rates in France (+1.3%) and
Italy (+0.8%) in 2017 are expected to be similar to the
preceding year. The Spanish economy is forecast to
grow by 2.4% and therefore faster than the eurozone
average. Greece also is expected to achieve growth
→ Outlook
Risks and
Report on Outlook,
Management
Report
Combined
84
83
83
The Indian economy is forecast to expand by 7.4%
in 2017, boosted by the gradual implementation of
business-friendly structural reforms. After a number
of years of deep recession, Russia (+1.2%) and Brazil
(+0.6%) could return to growth in 2017, helped by
rising raw materials prices.
According to forecasts, Japan can expect a GDP growth
rate of 1.0% in 2017, with rising exports potentially
providing renewed economic momentum. An expect-
ed increase in domestic consumer spending could also
help revive the Japanese economy.
Despite uncertainty regarding the country's future
political and economic course, GDP in the USA is
expected to grow faster in 2017 than in the preced-
ing year (+2.3%). The US Federal Reserve is likely to
continue its policy of moderate interest rate rises in
2017. After decreasing in 2016, industrial production is
predicted to grow significantly in 2017, with a positive
impact on GDP growth.
In China, economic growth is again predicted to
weaken slightly in the current year, resulting in a
growth rate of around 6.4%. Reducing over-capaci-
ties in various industrial sectors and the controlled
reduction of high debt levels will present the Chinese
government with significant challenges in 2017. The
risk of a significant economic downturn in China
therefore cannot be ruled out.
It is currently assumed that the UK government will
give notice of its intention to leave the EU during the
first half of 2017, thus triggering the start of official
negotiations. Uncertainty regarding the future rela-
tionship is currently influencing both investment
and consumer spending levels in the UK. As a result
of the current situation, it is expected that the UK
economy will see a distinct loss of momentum, with
a significantly lower year-on-year growth rate of 1.2%.
Opportunities
AUTOMOTIVE SEGMENT
→ Outlook
Fleet emissions²
measures.
Risks reported from within the network are firstly
presented for review to the Risk Management
Steering Committee, chaired by Group Controlling.
After review, the risks are reported to the Board
of Management and the Supervisory Board. Risks
which are significant or which threaten the Group's
going-concern status are classified according to their
potential to impact the Group's results of operations,
financial position and net assets. The level of risk is
then quantified in each case according to its proba-
bility of occurrence and the respective risk mitigation
The risk management process applies throughout the
Group and comprises the early identification and
assessment of risks, comprehensive analysis and risk
measurement, the coordinated use of suitable man-
agement tools and also the monitoring and evaluation
of any measures taken.
Risk management process
Risk management for the Group as a whole falls under
the remit of the Risk Management Steering Commit-
tee, the Compliance Committee, the Internal Control
System and the Group Internal Audit.
structure.
In view of the dynamic growth of business of the
BMW Group and the increasingly volatile environ-
ment in which it operates, one of the key areas con-
sidered in developing the risk management system
has been the ability to assess the overall risk situation
of the BMW Group. A risk-bearing capacity model has
been developed for the BMW Group, based on the
established controlling models used in the Financial
Services segment as in the banking sector to ensure
risk-bearing capacity. Using a limit control system
to manage significant financial risks on a month-by-
month basis, measures are in place to ensure that
the asset cover, in the form of equity and forecast
Group earnings for the next twelve months, always
exceeds the prevailing risk situation and the risk level
associated with the business strategy currently being
pursued. These controls facilitate the early identifica-
tion of developments which could pose a threat to the
BMW Group's going-concern status. The results of the
calculations of risk bearing capacity are incorporated
in the assessment of the overall risk situation. The
processes and methodologies used to report risks are
regularly reviewed. During the financial year 2016,
the risk catalogue introduced three years earlier was
tested for effectiveness and revised as appropriate.
Identified risks are aggregated into risk categories on
the basis of the risk catalogue. Improved reporting
channels ensure effective systematic risk control and
earlier reporting of risks. Transparency of external
reporting has also been increased, including the
introduction of an additional sub-category "Market
development" to the category "Sales and marketing”,
which enables a distinction to be made between mar-
ket risks typical for the sector and operational risks
relating to the BMW Group's specific sales network
The Group risk management system comprises
a decentralised network covering all parts of the
business and is steered by a centralised risk manage-
ment function. Each of the BMW Group's divisions
is represented within the risk management network
by so-called Network Representatives. The network is
embedded within the formal organisational structure.
This promotes its visibility and underlines the impor-
tance of risk management within the BMW Group. The
duties, responsibilities and tasks of the centralised risk
management unit and the Network Representatives
are clearly described, documented and understood.
Group risk management is geared towards meeting
the following three criteria: effectiveness, usefulness
and completeness.
89
99
Group
Audit
Board of
Management
The risk management system is regularly examined by
the Internal Audit. By sharing experiences with other
companies on an ongoing basis, the BMW Group
endeavours to incorporate new insights in the
risk management system, thus ensuring continual
improvement. Regular training and further develop-
ment programmes as well as information events at
the BMW Group, particularly within the risk man-
agement network, are invaluable ways of preparing
those involved in the process for new or additional
challenges.
Board
Risk
Management
Steering
Committee
Controlling
Measures
Analysis and
Measurement
Internal Control System
risk management
Group-wide
Identification
Completeness
Reporting/
Monitoring
Compliance
Committee
Usefulness
Supervisory
Effectiveness
In addition to comprehensive risk management, man-
aging the business on a sustainable basis also consti-
tutes one of the Group's core corporate principles.
Any risks or opportunities relating to sustainability
issues are examined and discussed by the Sustain-
ability Committee. Resulting strategic options and
measures for the BMW Group are put forward to
the Sustainability Board, which includes the entire
Board of Management. Risk aspects discussed are
integrated within the Group-wide risk network. The
overall composition of the Risk Management Steering
Committee and the Sustainability Committee ensures
that risk and sustainability management are closely
coordinated.
90
New opportunities regularly present themselves in
the dynamic business environment in which the
BMW Group operates. Macroeconomic trends and
sector-specific and general business environment,
including external regulations, suppliers, customers
and competitors, are monitored on a continual basis.
Identifying opportunities is an integral part of the
process of developing strategies and drawing up
forecasts for the BMW Group. The Group's product
and service portfolio is continually reviewed on the
strength of these analyses and new product projects,
for example, presented to the Board of Management
for consideration.
Sales volume¹
> €400 million
> €50-400 million
> €0-50 million
Risk amount
Opportunity management system and
opportunity identification
High
Low
Medium
Overall, the following criteria apply for the purposes
of classifying the risk level:
of occurrence. The risk level is approximated in the
case of risks measured on the basis of "value at risk"
and "cash flow at risk" models. These approximations
flow into the assessment of the significance of the
risks, resulting in increased comparability between
risk categories compared to the previous year.
The significance of risks for the BMW Group is deter-
mined on the basis of risk level. The measurement of
risk level takes account of both earnings impact (net
of appropriate countermeasures) and the likelihood
90
In the following sections, the term “earnings impact"
is used consistently to cover the overall impact on the
results of operations, financial position and net assets.
> €0-500 million
> €500-2,000 million
Earnings impact
Medium
High
Low
Class
When a risk materialises, the overall impact on the
results of operations, financial position and net assets
is measured for the two-year assessment period and
allocated according to the following categories:
In order to determine which risks can be considered
significant in relation to results of operations, financial
position and net assets and to performance indica-
tors of the BMW Group, risks are classified as high,
medium or low. The impact of risks is measured and
reported net of risk mitigation measures (net basis).
Risk measurement
Risk management procedures in place in the Financial
Services segment also address regulatory issues and
requirements, such as Basel III. Internal methods used
to identify, measure, manage and monitor risks within
the Financial Services segment comply with national
and international standards. The adopted risk strategy,
in combination with a set of strategic principles and
guidelines, serves as the basis for risk management
within the Financial Services segment. At the heart
of the risk management process is a clear division
between front- and back-office activities and a compre-
hensive internal control system. The main instrument
of risk management within the Financial Services
segment is ensuring that the Group's risk-bearing
capacity is not exceeded. All risks (defined as unex-
pected losses) must be covered at all times in line
with risk appetite by an asset cushion in the form
of equity capital. Unexpected losses are measured
according to various value-at-risk models, which are
validated at regular intervals. Risks are aggregated
after taking account of correlation effects. In addition
to assessing the Group's ability to bear risk under nor-
mal circumstances, stress scenarios are also taken into
consideration. The segment's risk-bearing capacity is
monitored regularly with the aid of an integrated limit
system that also differentiates between the various
risk categories.
→ Risks and
Opportunities
Report on Outlook,
Risks and
Opportunities
Combined
Management
Report
> €2,000 million
→ 55
Class
The objective of the risk management system, and one
of the key functions of risk reporting, is to identify,
record and actively manage any internal or external
risks that could pose a threat to the attainment of
the Group's corporate targets. The risk management
system covers all significant risks to the Group and
any which could pose a threat to its going-concern
status. In terms of structure, the responsibility for
risk reporting lies with each individual employee
and manager in their specific roles - and not with
a centralised unit. Every employee and manager is
required to report any risks identified via the relevant
reporting channels. This requirement is set out in
guidelines that apply throughout the Group.
%
between 8 and 10
8.9
%
slight increase
86,424
€ million
slight decrease
124
g CO2/km
slight increase
2,367,603
74.3
units
slight increase
9,665
124,729
€ million
Revenues
2017 Outlook
2016
Return on capital employed
Sales volume
MOTORCYCLES SEGMENT
Return on capital employed
Risk management in the BMW Group
EBIT margin
slight increase
slight decrease
EBIT margin
145,032
7
units
Risk management system
Opportunities and risks are assessed as a general rule
over a medium-term period of two years. As part of
the risk management process, all potential risks of
loss (individual and accumulated risks) that represent
a threat to the company are monitored and managed.
As a matter of principle, any risks capable of posing a
threat to the going-concern status of the BMW Group
are avoided. If there is no specific reference to a seg-
ment, opportunities and risks relate to the Automotive
segment. The scope of entities covered by the report
on risks and opportunities corresponds to the scope
of consolidated entities included in the BMW Group
Financial Statements.
RISKS AND
OPPORTUNITIES
→ Risks and
Opportunities
Risks and
Opportunities
Report on Outlook,
Combined
Management
Report
88
88
87
80
Management of opportunities and risks is a funda-
mental prerequisite for the Group's ability to react
appropriately to changes in political, legal, technical
or economic conditions. All identified opportunities
and risks are addressed in the Outlook Report, if
likely to materialise. The following sections focus
on potential future developments or events, which
could result in a positive deviation (opportunities)
or a negative deviation (risk) from the BMW Group's
outlook. As a general rule, the earnings impact of
risks and opportunities is assessed separately, i.e.
without off-setting.
slight decrease
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2016: 316,200 units).
2 EU-28.
significant increase
%
%
33.0
between 8 and 10
FINANCIAL SERVICES SEGMENT
Return on equity
%
21.2
in line with last year's level
9.0
-5.6
8.1
-1.0
21.8
31.6
33.0
9.1
34.0
28.4
18.1
RoE in % (change in %pts)
19.4
20.2
21.2
14.8
-3.3
Further financial performance figures
→ 04
in € million
2014
2015
FINANCIAL SERVICES SEGMENT
9.0
61.7
6.7
85,536
2016
86,424
85,742
85,846
0.1
EBIT margin¹ in % (change in %pts)
9.6
9.2
8.9
9.1
9.2
-2.0
ROCE¹ in % (change in %pts)
72.2
74.3
77.7
49.8
-27.9
MOTORCYCLES SEGMENT
EBIT margin in % (change in %pts)
ROCE¹ in % (change in %pts)
7.2
2017
98,282
Change in %
Automotive¹
75,173
85,536
86,424
85,742
85,846
0.1
Motorcycles¹
Financial Services
1,679
-0.8
1,990
2,272
2,173
-4.4
20,599
23,739
25,681
27,567
28,165
75,173
2.2
2,069
97,480
94,163
92,175
Total capital expenditure²
6,100
5,890
5,823
7,112
8,013
12.7
Depreciation and amortisation
4,170
4,659
4,806
4,822
5,113
6.0
Free cash flow Automotive segment
3,481
5,404
5,792
4,459
2,713
-39.2
Group revenues¹
80,401
2018
Revenues¹ in € million
4,107
-8.1
2014
2015
2016
2017
2018
Change in %
Deliveries
BMW2
MINI
Rolls-Royce
AUTOMOTIVE SEGMENT
1,811,719
302,183
4,063
2,117,965
1,905,234
338,466
3,785
2,247,485
2,003,359
360,233
4,011
2,367,603
2,088,283
371,881
3,362
2,463,526
2,125,026
1.8
361,531
-2.8
22.2
2,490,664
Total²
1.1
→ 02
0.9
Other Entities
3.7
AUTOMOTIVE SEGMENT
Deliveries²
2,117,965
2,247,485
2,367,603
Fleet emissions in g CO2/km³
130
127
Further non-financial performance figures
124
2,490,664
1.1
128
MOTORCYCLES SEGMENT
Deliveries
123,495
136,963
145,032
164,153
165,566
2,463,526
1284
Production volume
BMW5
MINI
1,811,157
1,828,604
1,908,640
4.4
Figures exclude suspended contracts of employment, employees in the non-work phases of pre-retirement part-time arrangements and low income earners.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2014: 275,891 units, 2015: 282,000 units, 2016: 316,200 units, 2017: 384,124 units, 2018: 459,581 units).
3 EU-28.
Adjusted value based on planned conversion to WLTP (Worldwide Harmonised Light Vehicles Test Procedure).
5 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2014: 287,466 units, 2015: 287,755 units, 2016: 305,726 units, 2017: 396,749 units, 2018: 491,872 units).
Key financial performance indicators
→ 03
GROUP
1,655,961
Profit before tax¹ in € million
2015
2016
2017
2018
Change in %
8,707
9,224
9,665
10,675
9,815
2014
1,509,113
-12.4
162,687
Rolls-Royce
Total 5
1,838,268
322,803
4,495
2,165,566
1,933,647
342,008
3,848
2,279,503
2,002,997
352,580
4,179
2,359,756
2,123,947
378,486
3,308
2,505,741
2,168,496
2.1
368,685
-2.6
4,353
2,541,534
31.6
1.4
MOTORCYCLES SEGMENT
Production volume
BMW
FINANCIAL SERVICES SEGMENT
New contracts with retail customers
133,615
151,004
145,555
185,682
AUTOMOTIVE SEGMENT
7
7,207
10.82/10.84
6
Shareholders
→ BMW Group
in Figures
BMW Group deliveries of automobiles¹
→ 05
BMW Group revenues
→ 07
in 1,000 units
2,500
2,367.6
2,463.5 2,490.7
To Our
2,247.5
1,250
0
2014
2015
2016
2017
2018
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang
(2014: 275,891 units, 2015: 282,000 units, 2016: 316,200 units, 2017: 384,124 units,
2018: 459,581 units).
BMW Group profit before financial result (EBIT)
→ 06
2,118.0
in € million
60
3 Group profit before tax as a percentage of Group revenues.
-33
Group net profit¹
Earnings per share¹ in €
5,817
8.83/8.85
6,396
6,910
8,675
9.70/9.72
10.45/10.47
13.07/13.09
5
134,682
-17.2/-17.2
Pre-tax return on sales ¹³ in % (change in %pts)
10.8
10.0
10.3
10.9
10.1
-0.8
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
² Expenditure for capitalised development costs, other intangible assets and property, plant and equipment.
-16.9
11,000
9,593
9,899
9,224
8,707
5,500
2014
2015
2016
20172 2018
1
REPORT OF THE
SUPERVISORY BOARD
STATEMENT OF THE
CHAIRMAN OF THE
9,815
To Our
Shareholders
Report of the
Supervisory Board
Statement of
the Chairman of
the Board of
Management
BMW AG Stock and
Capital Markets
BOARD OF MANAGEMENT
BMW AG STOCK AND
CAPITAL MARKETS IN 2018
80
To Our
Shareholders
→ Report of the
Supervisory Board
Norbert Reithofer
Chairman of the Supervisory Board
BMW Group in
Figures
9,665
11,000
10,675
9,118
9,386
9,121
5,500
2014
2015
2016
20172 2018
2 Prior year figures adjusted due to first-time application of IFRS 15,
see note 6 to the Group Financial Statements.
in € billion
98.3
97.5
100
94.2
92.2
80.4
50
2014
2015
2016
20172 2018
BMW Group profit before tax
→ 08
in € million
Loss from discontinued operations
7
-16.5
8,675
182
187
207
175
-15.5
Financial Services
1,756
1,981
2,184
2,194
112
2,190
Other Entities
71
169
-17
14
-27
Eliminations¹
-65
-575
-663
-0.2
-404
Motorcycles¹
6,182
7
6
-14.3
Eliminations1
-17,057
-19,097
-20,017
-17,306
-18,710
-8.1
-21.6
Group profit before financial result (EBIT)1
9,593
9,386
9,899
9,121
-7.9
Automotive¹
7,244
7,836
7,695
7,888
9,118
601
Group profit before tax (EBT)1
8,707
154
211
170
80
-45
Eliminations¹
-163
-664
-772
-534
Other Entities
553
-2,890
-2,828
-2,755
-2,000
-2,575
-28.8
Profit from continuing operations
5,817
6,396
6,910
Group income taxes¹
-2.1
2,161
2,207
9,224
9,665
10,675
9,815
-8.1
Automotive1
6,886
7,523
7,916
8,717
6,977
-20.0
Motorcycles¹
107
179
185
205
169
-17.6
Financial Services
1,723
1,975
2,166
7,240
129,932
→Page 16 Statement of the Chairman of the
122,244
Members of the Supervisory Board
→Page 206
2
COMBINED
MANAGEMENT REPORT
→Page 26 General Information and Group Profile
→Page 26 Organisation and Business Model
→Page 36 Management System
→ Page 40 Report on Economic Position
→ Page 40 General and Sector-specific Environment
→Page 44 Overall Assessment by Management
→Page 45 Comparison of Forecasts for 2018 with Actual Results in 2018
→Page 48 Review of Operations
→ Page 65 Results of Operations, Financial Position and Net Assets
→ Page 80 Comments on Financial Statements of BMW AG
→ Page 84 Report on Outlook, Risks and Opportunities
→Page 84 Outlook
→Page 90 Risks and Opportunities
→Page 103 Internal Control System Relevant for Accounting and
Financial Reporting Processes
→ Page 104 Disclosures Relevant for Takeovers and
Explanatory Comments
Composition and Work Procedures of the Board of
Management of BMW AG and its Committees
→Page 208 Composition and Work Procedures of the
Supervisory Board of BMW AG and its Committees
→ Page 215 Disclosures Pursuant to the Act on Equal
Gender Participation
→Page 216 Information on Corporate Governance Practices Applied
beyond Mandatory Requirements
Compliance in the BMW Group
→Page 218
→Page 223 Compensation Report
(Part of the Combined Management Report)
→ Page 239 Responsibility Statement by the
Company's Legal Representatives
→ Page 240 Independent Auditor's Report
5
→ Page 203
OTHER INFORMATION
Members of the Board of Management
→Page 20 BMW AG Stock and Capital Markets in 2018
124,729
ANNUAL REPORT 2018
#Milestones
in Future Mobility
BMW
GROUP
THE NEXT
100 YEARS
B
M
M
MINI
Rolls-Royce
Motor Cars Limited
We are inventing the mobility of the future,
in which we think and work in new ways.
We invite you to learn more about how we
see the future today.
CONTENTS
→ Page
1
TO OUR SHAREHOLDERS
4 BMW Group in Figures
→ Page
8
Report of the Supervisory Board
Board of Management
4
CORPORATE
GOVERNANCE
→ Page 200
→ Page 201
→ Page 202
→Page 248 BMW Group Ten-year Comparison
→Page 200 Statement on Corporate Governance
(Part of the Combined Management Report)
Information on the Company's Governing Constitution
Declaration of the Board of Management and of the
Supervisory Board Pursuant to § 161 AktG
→Page 252 Index
The figures for fuel consumption, CO₂ emissions and power consumption are calculated
based on the measurement methods stipulated in the current version of Regulation
(EU) 715/2007. This information is based on a vehicle with basic equipment in Germany;
ranges take into account differences in wheel and tire size selected as well as optional
equipment and can change based on configuration. Fuel consumption and CO₂ emissions
information are available on page 108.
The figures have been calculated based on the new WLTP test cycle and adapted to NEDC
for comparison purposes. In these vehicles, different figures than those published here may
apply for the assessment of taxes and other vehicle-related duties which are (also) based
on CO2-emissions. These figures are provisional.
For further details of the official fuel consumption figures and official specific CO2 emissions
of new cars, please refer to the "Manual on fuel consumption, CO₂ emissions and power
consumption of new cars", available at www.dat.de/co2/.
TO OUR SHAREHOLDERS
1
To Our
Shareholders
BMW Group in
Figures
Report of the
Supervisory Board
Statement of
the Chairman of
the Board of
Management
BMW AG Stock and
Capital Markets
→Page 4 BMW Group in Figures
→Page 8 Report of the Supervisory Board
→ Page 16 Statement of the Chairman of the Board of Management
→Page 20 BMW AG Stock and Capital Markets in 2018
1
→ BMW Group
in Figures
BMW GROUP IN FIGURES
Key non-financial performance indicators
→ 01
GROUP
2014
2015
2016
2017
2018
Change in %
Workforce at year-end¹
→Page 250 Glossary - Explanation of Key Figures
116,324
www.annual-report2018.bmwgroup.com
Our Annual Report is also available
in digital form under:
To Our
Shareholders
MILESTONES
→Page 255 Financial Calendar
IN FUTURE MOBILITY
→Page 254 Index of Graphs
→Page 256 Contacts
3
GROUP FINANCIAL
STATEMENTS
→Page 110 Income Statement
→ Page 110 Statement of Comprehensive Income
→Page 114
Cash Flow Statement
→ Page 116
Statement of Changes in Equity
→ Page 118
→Page 112 Balance Sheet
Notes to the Group Financial Statements
→Page 184 Segment Information
Other Disclosures
→Page 167
→ Page 146
Notes to the Statement of Comprehensive Income
Notes to the Balance Sheet
Notes to the Income Statement
→ Page 139
Accounting Principles and Policies
→Page 118
→ Page 145
→Page 190 List of Investments at 31 December 2018
Risk management as a whole comprises the Risk
Management Steering Committee, the Compliance
Committee, the Internal Control System and the
Group Internal Audit.
Significant risks reported from within the network are
firstly presented for review to the Risk Management
Steering Committee, chaired by Group Controlling.
After review, the risks are reported to the Board of
Management and the Supervisory Board. Risks are
classified according to their potential impact on
earnings and risk-bearing capacity. The expected risk
and worst-case amounts are assessed in each case net
of risk mitigation measures.
During 2018, the risk management system focused
on two main areas. Firstly, generic risk models were
developed for all aspects of the business with a view
to ensuring that recurring individual risks are better
assessed. These risk models were validated by mea-
suring specific risks.
Secondly, procedures to ensure that all risk scenarios
are considered were further tightened. Instead of
quantifying risks by means of a single-point estimate
based on the net loss and probability of occurrence,
risks are assessed using the loss distribution approach
based on expected and worst-case values, thereby
enabling better comparability of risk categories for
both internal and external reporting purposes.
Risk management process
The risk management process covers the entire Group
and comprises the early identification of risks, detailed
analysis and risk assessment, the coordinated use of
relevant management tools as well as monitoring and
evaluation of measures taken.
In order to comply with the CSR Directive Imple-
mentation Act, a review of risks with impact on
non-financial aspects referred to in the law was
conducted as part of the reporting process for the
Group's Non-Financial Declaration. Significant risks
within the meaning of the law are those relating
to business activities, business relationships and
products and services of the BMW Group which are
highly likely to have a serious adverse impact. No
significant risks were identified during the review.
The Group's Non-Financial Declaration is provided in
the Sustainable Value Report 2018, which is available
on the Internet at www.bmwgroup.com/svr.
The risk management system is regularly examined
by Group Internal Audit. An ongoing exchange of
experience with other companies ensures that new
insights are incorporated in the risk management
system of the BMW Group, thus providing for con-
tinual improvement. Training sessions, development
programmes and information events are regularly
conducted across the BMW Group, particularly within
the risk management network. These measures are
essential ways of preparing those involved in the
process for new or additional demands.
In addition to comprehensive risk management,
sustainable business practice constitutes one of the
core strategic principles of the company. Risks or
opportunities relating to sustainability issues are
considered by the Sustainability Committee. Resulting
strategic options and measures are put forward to
the Sustainability Board, which comprises the entire
Board of Management. Where necessary, risk aspects
may be integrated within the Group-wide risk net-
work. The composition of the Risk Management
Steering Committee and the Sustainability Committee
ensures that risk and sustainability management are
closely coordinated.
92
42
91
The Group risk management system is organised
formally as a decentralised, company-wide network
and is steered by a centralised risk management
function. Every BMW Group division is represented
within the risk management organisation by Network
Representatives. This formal structure reinforces the
network's visibility and underlines the importance
of risk management within the BMW Group. Roles,
responsibilities and tasks of the centralised risk man-
agement function and the Network Representatives
are clearly described, documented and understood.
In view of the dynamic growth of business and the
increasingly volatile environment, the BMW Group
regularly reviews its risk management system for
effectiveness and appropriateness.
Overall risk assessment is performed in conjunction
with the calculation of risk-bearing capacity. For this
purpose, worst-case risks are aggregated using a
value-at-risk model, taking correlation effects into
account and compared with the asset cushion. The
segment's risk-bearing capacity is regularly controlled
through an integrated limit system for the various
risk categories.
Group
Audit
Compliance
Committee
Supervisory
Board
The objective of the risk management system, and
the main function of risk reporting, is to identify,
measure and, where possible, actively manage internal
or external risks that could threaten the attainment of
the Group's corporate targets. The risk management
system covers all significant and existential risks
to the Group. Group risk management focuses on
the criteria of effectiveness, practicability and com-
pleteness. Responsibility for risk reporting is not
allocated to a centralised function, but is part of the
task of each employee and manager, according to their
individual function. According to Group-wide rules,
every employee and manager has a duty to report risks
through the relevant reporting channels.
Combined
Management
Report
Effectiveness
Identification
Practicability
Reporting/
Monitoring
Completeness
Group-wide
risk management
Analysis and
Measurement
Measures
Internal Control System
Controlling
Risk
Management
Steering
Committee
Board of
Management
Report on Outlook,
Risks and
Opportunities
7
Opportunities
> €0-50 million
> €50-400 million
> € 400 million
A dynamic market environment also gives rise to
opportunities. The BMW Group continually monitors
macroeconomic trends as well as developments within
the sector and overall environment. This includes
external regulations, suppliers, customers and com-
petitors. Identifying opportunities is an integral part
of the strategic planning process of the BMW Group.
The Group's product and service portfolio is continually
reviewed on the basis of these analyses. This results,
for example, in new product projects being presented
to the Board of Management for consideration.
Continuous monitoring of major business processes
and strict cost controls are essential for ensuring strong
profitability and return on capital employed. Probable
measures to increase profitability are incorporated in
the outlook. The implementation of modular-based
and common architectures, for instance, allows iden-
tical components to be deployed increasingly across
models and product lines. This reduces development
costs and investment on the series development of
new vehicles and contributes positively to profitability.
In addition, it also supports economies of scale in
production costs and increases production flexibility.
Moreover, a more competitive cost basis opens up
opportunities to enter new market segments.
The implementation of identified opportunities is
undertaken on a decentralised basis within the rele-
vant functions. The significance of opportunities for
the BMW Group is classified on a qualitative basis in
the categories "significant" and "insignificant".
Risks and opportunities
The following table provides an overview of all risks
and opportunities and indicates their significance
for the BMW Group. Overall, no risks which could
threaten the continued existence of the BMW Group
were identified either at the balance sheet date or at
the date on which the Group Financial Statements
were drawn
up.
Risks or opportunities which could, from today's
perspective, have a significant impact on the results
of operations, financial position and net assets of the
BMW Group are described below.
RISKS AND OPPORTUNITIES
Risks
Opportunities
Classification of Change compared
risk amount
to prior year*
Risk management system
Risk amount
→ Risks and
purposes
High
In the Financial Services segment risk management
also addresses regulatory requirements, such as Basel
III. Internal methods to identify, measure, manage and
monitor risks within the Financial Services segment
comply with national and international standards.
Risk management in the Financial Services business is
based on the risk strategy, the Internal Capital Adequacy
Assessment Process Framework and a set of rules
comprising strategic principles and guidelines. The
risk management process is ensured organisationally
through a clear division between front- and back-office
activities and a comprehensive internal control system.
The main instrument of risk management within the
Financial Services segment is ensuring the Group's
risk-bearing capacity. At all times, risks in the sense of
unexpected losses must be covered. This is achieved by
means of an asset cushion in the form of equity capital
derived from the entity's risk appetite. Unexpected
losses are measured according to various value-at-risk
models, which are validated at regular intervals. Risks
are aggregated after taking account of correlation
effects. In addition to assessing the Group's ability to
bear risk under normal circumstances, stress scenarios
are also examined. The segment's risk-bearing capacity
is regularly controlled through an integrated limit
system for the various risk categories.
Risk measurement
Risks are classified as high, medium or low, based on
their significance with respect to results of operations,
financial position and net assets and to performance
indicators of the BMW Group. The impact of risks is
measured and reported net of risk mitigation mea-
sures (net basis).
The overall impact of a risk's occurrence on the results
of operations, financial position and net assets on
the basis of worst-case scenarios for the two-year
assessment period is classified as follows:
Class
Low
Medium
High
Potential earnings impact
> €0-500 million
> €500-2,000 million
> €2,000 million
In the following sections, earnings impact is used
consistently to cover the overall impact on results of
operations, financial position and net assets.
The risk amount is the basis for the classification
of risk levels at the BMW Group. These have been
revised as part of the further development of the risk
management system. The risk amount corresponds to
the average earnings impact, taking into account prob-
ability of occurrence and risk mitigation measures.
Overall, the following criteria apply for the
of classifying the risk amount:
Class
Low
Medium
Opportunity management system and
opportunity identification
As part of the risk management process, all individual
and cumulative risks that represent a threat to the
success of the business are monitored and managed.
Any risks capable of posing a threat to the going-
concern status of the BMW Group are generally
avoided. Where no specific reference is made, oppor-
tunities and risks relate to the Automotive segment.
The scope of entities consolidated in the Report on
Risks and Opportunities corresponds to the scope
of consolidated entities included in the BMW Group
Financial Statements.
EBIT margin
→ 65
FINANCIAL SERVICES SEGMENT
Return on equity
² Adjusted in accordance with IFRS 16.
3 Based on adjusted outlook.
4 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2018: 459,581 units).
5 EU-28.
Return on capital employed
2018
reported
2019
Outlook³
€ million
9,815
9,627
significant decrease
20182
adjusted
EBIT margin
Deliveries to customers
MOTORCYCLES SEGMENT
Overall assessment by Group management
Business is expected to be more volatile in the finan-
cial year 2019. While numerous new automobile and
motorcycle models as well as an expanded range of
individual mobility-related services will provide addi-
tional momentum, the various challenges described
above are likely to have an offsetting impact. Research
and development expenses will remain at a high level in
view of future-oriented projects. Accordingly, Group
profit before tax is forecast to decrease significantly.
Automobiles segment deliveries to customers should
increase slightly and reach a new record level. At the
same time, fleet carbon dioxide emissions are forecast
to drop slightly. The Group's targets are to be met
with a workforce size at the previous year's level.
The Automotive segment's EBIT margin in 2019 is
expected to lie within the range of between 6 and 8%.
A significant decrease is forecast for the RoCE of the
Automobiles segment. The RoE for the Financial
Services segment should remain at the previous
BMW Group key performance indicators
→ 64
year's level. However, both performance indicators
will be above their long-term targets of 26% (RoCE)
and 14% (ROE¹) respectively. Deliveries to customers
in the Motorcycles segment are forecast to show a solid
increase, with an EBIT margin within the target range
of between 8 and 10% and the RoCE also showing a
solid increase on the previous year.
Depending on the political and economic situation
and the risks and opportunities described below,
actual business performance could differ from current
expectations.
Growing uncertainty, particularly with regard to
political developments - such as Brexit and inter-
national trade and customs policies may cause
economic developments in many regions to deviate
from expected trends and outcomes. This would also
have a significant impact on the business performance
of the BMW Group.
GROUP
Profit before tax
Workforce at year-end
AUTOMOTIVE SEGMENT
Deliveries to customers4
Fleet emissions5
Classification
Return on capital employed
134,682
in line with last
year's level
units
2,490,664
in line with last
year's level
89
90
90
Combined
Management
Report
Report on Outlook,
Risks and
Opportunities
→ Risks and
Opportunities
RISKS AND
OPPORTUNITIES
As a worldwide-leading provider of premium cars,
motorcycles and mobility services, as well as related
financial services, the BMW Group is exposed to
numerous uncertainties and change. Making full
use of the opportunities arising out of change is a
fundamental basis of the Group's corporate success.
In order to achieve growth, profitability, efficiency
and continued sustainable activities going forward,
the BMW Group must consciously assume risks.
Management of opportunities and risks is essential for
the Group to react appropriately to changes in political,
economic, technical or legal conditions. Opportunities
and risks which are likely to materialise are taken into
account in the Outlook Report. The following sections
focus on potential future developments or events,
which could result in a positive (opportunity) or a
negative (risk) deviation from the BMW Group's out-
look. The earnings impact of risks and opportunities is
assessed separately without offsetting. Opportunities
and risks are assessed with respect to a medium-term
period of two years.
Risk management in the BMW Group
solid increase
7
solid increase
between 8 and 10
%
slight increase
g CO2/km
128
slight reduction
%
7.2
%
49.8
between 6 and 8
significant decrease
units
165,566
%
8.1
%
28.4
14.8
Change compared
to prior year
Raw materials
93
The transition in China from an investment-driven to
a consumer-driven economy is associated with slower
growth rates and, potentially, greater instability in
the short to medium term on financial markets. If the
Chinese economy were to grow at a significantly slower
pace than expected, the consequence would be not
only a decline in automobile sales, but also, potentially,
lower demand for raw materials, which would have a
negative impact above all on emerging economies such
as Brazil, Russia or South Africa. Any further drop in
raw material prices could result for the BMW Group
in lower demand from these countries. Turmoil on
the Chinese property, stock and banking markets
and an overly rapid increase in interest rates by the
US Federal Reserve could pose considerable risks for
global financial market stability. Such developments
could lead to greater currency fluctuations and have
a negative impact on emerging markets in particular.
Furthermore, increasing political unrest, military
conflicts, terrorist activities, natural disasters or
pandemics could have a lasting negative impact on
the global economy and international capital markets.
The BMW Group addresses macroeconomic risks pri-
marily by internationalising its sales and production
structures, in order to minimise the extent to which
earnings depend on risks in individual countries
and regions. Flexible sales and production processes
within the BMW Group increase the limited ability
to react quickly to regional economic developments.
Should the global economy develop significantly bet-
ter than presented in the outlook, macroeconomic
opportunities could arise for the BMW Group's
revenues and earnings. Significantly stronger GDP
growth in China, demand-oriented reforms within the
eurozone, a cancellation of Brexit and intensified trade
relations between the EU and the UK, further growth
stimulus through the tax reform in the USA or more
robust consumer spending in emerging markets due to
rising raw material prices could result in significantly
stronger sales volume growth, reduced competitive
pressures and corresponding improvement in pricing.
The planned expansion of production capacities will
enable emerging opportunities to be exploited to a
greater degree. Macroeconomic opportunities that
could generate a sustainable impact on earnings are
currently classified by the BMW Group as insignificant.
Strategic and sector risks and opportunities
Changes in legislation and regulatory requirements
The sudden introduction of more stringent legislation
and regulations, particularly with regard to emissions,
safety and consumer protection as well as regional
vehicle-related purchase and usage taxes, represents
a significant risk for the automobile industry. Country-
and sector-specific trade barriers can also change at
short notice. A sudden tightening of regulations in
any of these areas can necessitate significantly higher
investments and ongoing expenses or influence cus-
tomer behaviour. Risks from changes in legislation
and regulatory requirements could have a high impact
on earnings over the two-year assessment period.
Compared to the previous year, the potential impact
on earnings has increased. The risk amount attached
to these risks is classified as high. Compared with the
previous year, risks arising from the further tightening
of emissions laws are assessed as being stable.
95
The impending Brexit could have a long-term adverse
impact on the BMW Group, particularly as a result
of increased trade barriers in the form of customs
duties in relation to the European single market. Any
such trade barriers could have a negative impact on
volumes and costs both for vehicles and components
produced in the EU for the UK as well as those pro-
duced in the UK for the European market. In extreme
cases, this could also result in production losses due
to delays in customs clearance. In addition, Brexit
could lead to reduced customer spending in the wake
of weaker economic performance, particularly in
the UK. In the short and medium term, uncertainty
regarding the outcome of the negotiations with the
EU could exacerbate these factors and cause further
negative currency effects. A possible further economic
downturn of countries in the EU could also potentially
reduce growth prospects for the BMW Group. European
integration with a unified economic and currency area
is an important pillar of economic stability in Europe.
95
Further risks can result from the tightening of existing
import and export regulations. These lead primarily
to additional expenses but can also restrict imports
and exports of vehicles or parts.
An established regulatory framework for innovative
mobility solutions as well as government incentives
are important prerequisites for introducing product
innovations, such as autonomous driving, and for
scaling up the range of electric mobility offerings. For
the electrified vehicles of the BMW Group a faster
expansion of charging infrastructure could increase
acceptance and help boost sales of planned or recently
introduced product innovations compared to forecast.
This includes implementation of the 360° ELECTRIC
portfolio in the field of electric mobility and collabo-
ration with Toyota on hydrogen fuel cell technology.
information are
available on
page 108.
The BMW Group's earnings could also be positively *Fuel consumption
affected in the short to medium term by changes in and CO2 emissions
trading policies. A possible reduction in tariff barriers,
import restrictions or direct excise duties could lower
the cost of materials for the BMW Group, and enable
products and services to be offered to customers at
lower prices. Further opportunities for the earnings
performance of the BMW Group from changes in
legislation and regulatory requirements compared
to the outlook are classified as insignificant.
Market development
In addition to economic factors and sector-specific
political conditions, increasingly fierce competition
among established manufacturers and the emergence
of new competitors could also have effects which are
difficult to predict. Unforeseen consumer preferences
and changes in brand perceptions can give rise to
opportunities and risks. If market risks were to mate-
rialise, they could have a high earnings impact over
the two-year assessment period. The risk amount is
classified as high.
At present, the BMW Group sees increasingly
restrictive vehicle emissions regulations, particularly
for conventional drivetrain systems, not only in the
world's major markets (Europe, North America and
China), but also in other markets such as India and
Brazil. In particular, the combination of newly intro-
duced measurement procedures to reflect standard
driving cycles (WLTP) and Real Driving Emissions
(RDE) tests to reflect actual emissions on the road
on the one hand, and significantly lower emissions
thresholds on the other, pose major challenges to the
automotive sector. The BMW Group is addressing this
risk with its Efficient Dynamics concept and is playing
a pioneering role in reducing both fuel consumption
and emissions within the premium segment. One
area of focus of the BMW Group is the systematic
electrification of all brands and model series. The
product range has been increasingly expanded with
electric drivetrain systems in BMWi vehicles since
2013 and with plug-in-hybrid technologies since 2015.
These technologies have contributed to the fulfilment
of legal standards and requirements with regard to
vehicle emissions.
favourable conditions for importing vehicles. Moreover,
countermeasures by the USA's trading partners
could slow down global economic growth and have
a greater-than-expected adverse impact on the export
of vehicles produced in the USA. The BMW Group's
"production follows the market" strategy involves local
production both in the USA and with other important
trade partners. Regional production reduces the exist-
ing risk of trade barriers. Nevertheless, any increase
in trade barriers would have an adverse impact on
the BMW Group.
Opportunities
→ Risks and
Medium
Stable
* Prior year classifications have been amended in line with the revision of the risk modelling described in the "Risk management system" section and the revision of the measurement of risk amount described in
the "Risk measurement" section. In the case of risks for which prior year amounts have been reclassified, risk amounts have been classified to a higher level than reported in the Annual Report 2017.
Macroeconomic risks and opportunities
Economic conditions influence business performance
and hence the results of operations, financial position
and net assets of the BMW Group. Unforeseen dis-
ruptions in global economic relations can have highly
unpredictable effects. Macroeconomic risks can lead
to reduced purchasing power in the countries and
regions affected and lead to reduced demand for the
products and services offered by the BMW Group.
Macroeconomic risks could due to sales volume
fluctuations have a high earnings impact over the
two-year assessment period. Overall, the risk amounts
attached to macroeconomic risks are classified as high.
Macroeconomic risks are evaluated on the basis of
historical data and cash-flow-at-risk scenario analyses.
-
-
In view of the political events of recent years, global
economic developments continue to be subject to a
high degree of uncertainty, in particular with respect
to potential barriers to global trade. A reorientation
of US economic policy, changes within the EU and
possible economic agendas by parties in EU countries
that are critical of globalisation and could therefore
jeopardise stability could lead to more restrictive trade
practices in the coming years.
A possible introduction of further trade barriers,
including anti-dumping customs duties and duties
aimed at protecting national security by the US
administration, could have a significantly adverse
impact on the BMW Group's operations through less
44
94
Combined
Management
Report
93
Risks and
Opportunities
Intense competition, particularly in Western Europe,
the USA and China, is a potential cause for lower
demand and for fluctuations in the regional distribu-
tion and composition of demand for BMW, MINI and
Rolls-Royce brand vehicles and for mobility services.
Greater competition could put pressure on selling
prices and margins. The BMW Group successfully
completed the conversion to the new WLTP test pro-
cedure in 2018. Markets in Europe were nevertheless
subject to a high degree of distortion on the supply
side and pressure on selling prices as a result of the
conversion. Changes in customer behaviour can also
be brought about by changes in attitudes, values,
environmental factors, and fuel or energy prices. In
order to determine price and margin risks, a scenario
approach is used. The BMW Group's flexible sales and
production processes enable risks to be reduced and
newly arising opportunities in market and product
segments to be taken.
Local restrictions affecting product usage in specific
sectors may limit BMW Group sales in individual mar-
kets. In some urban areas, for instance, local measures
are being introduced, including entry restrictions,
congestion charges or, in some situations, highly
restrictive registration rules. These may impact local
demand for the BMW Group vehicles affected and
hence have a negative impact on sales, margins and,
possibly, the residual values of these vehicles. The
BMW Group addresses this risk by offering locally
emissions-free vehicles, such as the BMW i3*, which
benefit from state subsidies and exemptions.
96
96
The BMW Group pays particular attention to the quality
of the parts built into its vehicles. In order to attain a
very high level of quality, it may become necessary to
invest in new technological concepts or discontinue
planned innovations, with the result that the cost of
materials could exceed levels accounted for in the
outlook. By monitoring and developing global supplier
markets, the BMW Group continuously strives to
optimise its competitiveness by working together
with the world's best product and service providers.
Within the Purchasing and Supplier Network, oppor-
tunities arise above all in the area of global sourcing
through increased efficiency and the use of innova-
tions developed by suppliers, which can lead to a
broader range of products. Making full use of location-
specific cost factors, in particular through local supplier
structures in close proximity to new and existing
BMW Group production plants and the introduction
of new, innovative production technologies, could lead
to lower cost of materials for the BMW Group. One
goal of the BMW Group is to manufacture battery cells
in Europe and to establish the relevant value chain for
cell production. In order to secure the BMW Group's
electrification strategy, a contract was signed with
CATL (Contemporary Amperex Technology) for the
supply of battery cells. The plant is currently under
construction in Thuringia. Integration of previously
unidentified innovations from the supplier market
in the Group's product range could provide a further
source of opportunities. The BMW Group offers inno-
vative suppliers numerous possibilities for creating
specific contractual arrangements which are attractive
46
97
96
98
Combined
Management
Report
Report on Outlook,
Risks and
Opportunities
→ Risks and
Opportunities
for those developing innovative solutions. At regular
intervals, the BMW Group honours its most inventive
suppliers with the Supplier Innovation Award. The
BMW Group expects these opportunities to have no
significant earnings impact over the assessment period
as compared to the assumptions made in the outlook.
Risks and opportunities relating to sales and marketing
In order to sell its products and services, the
BMW Group employs a global sales network, com-
prising primarily independent dealerships, branches,
subsidiaries and importers. Any threat to the contin-
ued activities of parts of the sales network would entail
risks for the BMW Group. The occurrence of sales
and marketing risks is associated with a low earnings
impact over the two-year assessment period. The risk
level is classified as low. New developments in the
field of digital communication and connectivity in par-
ticular offer new opportunities for the BMW Group's
brands. Since 2017 BMW CarData has made it possible
to provide customised service offers to BMW drivers
based on data from the vehicle. If customers wish
to use a specific service and actively consent to the
release of their telematics data, requesting companies
receive the data they need for the service in encrypted
form via BMW's secure backend database. This infor-
mation provides the basis for customised, data-based
and innovative service options. Additional opportu-
nities could arise if new sales channels contribute to
greater brand reach to customer groups than currently
envisaged in the outlook. Digital communication
and connectivity enable consumers to be reached
on a more targeted and individualised basis, thus
strengthening long-term relationships and brand
loyalty. This can lead to a more intense product and
brand experience for customers, which could result
in higher sales volume and have a positive impact on
revenues and earnings. The BMW Group invests in
advanced marketing concepts in order to intensify
customer relationships. The BMW Group estimates
the earnings impact as insignificant over the two-year
assessment period as compared to the assumptions
made in the outlook.
Information, data protection and IT
Increasing digitalisation across all areas of business
places considerable demands on the confidentiality,
integrity and availability of electronically processed
data and the associated use of information technology
(IT). In addition to the increased threat of cybercrime,
regulations covering the handling of personal data are
becoming more stringent, for example as a result of
the EU General Data Protection Regulation. If risks
relating to information security, data protection and
IT were to materialise, they could have a high earnings
impact over the two-year assessment period. Despite
extensive security measures, the risks in this area are
classified as high.
In addition to cyberattacks and direct physical inter-
vention, lack of knowledge or misconduct on the
part of employees may also represent a danger to the
confidentiality, integrity and availability of informa-
tion, data and systems. Direct consequences include
expenditure required to limit the immediate damage
and to restore systems promptly. Negative impacts on
revenue due to the non-availability of products and
services or disruptions in the production of compo-
nents or vehicles are also possible. A further indirect
result could be reputational damage.
Great importance is attached to the protection of the
confidentiality, integrity and availability of business
information as well as employee and customer data,
for instance as a result of unauthorised access or
misuse. Data security is an integral component of
all business processes and is aligned with the Inter-
national Standard ISO/IEC 27001. As part of risk
management, information security, data protection
and IT risks are systematically documented, allocated
appropriate measures by the departments concerned
and continuously monitored with regard to threat
level and risk mitigation. Regular analyses and controls
as well as rigorous security management ensure an
appropriate level of security. Despite continuous
testing and preventative security measures, it is impos-
sible to eliminate risks completely in this area. All
employees are required to treat with care information
such as confidential business, customer and employee
data, to use information systems securely and handle
risks with transparency. Group-wide requirements
are documented in a comprehensive set of principles,
guidelines and instructions, such as, for example, the
Privacy Corporate Rules for handling personal data.
Regular communication and awareness-raising mea-
sures create a high level of security and risk awareness
among those involved. Employees receive training to
ensure compliance with the applicable requirements
and internal rules. With regard to cooperations and
business partnerships, the BMW Group protects its
intellectual property as well as customer and employee
data through clear instructions on information secu-
rity and data protection and the use of information
technology. Information pertaining to key areas of
expertise as well as sensitive personal data are subject
to particularly stringent security measures. Technical
data protection incorporates industry-wide standards
and good practices. Responsibility for information
security and data protection lies for each Group
entity with the Board of Management or relevant
management team.
BMW Group checks for compliance with the sus-
tainability standards for the supplier network. This
includes compliance with internationally recognised
human rights and applicable labour and social stan-
dards. The principal means for ensuring compliance
with the Sustainability Standards is a three-stage risk
management system for sustainability. In addition,
the technical and financial capabilities of suppliers
are monitored, especially where modular-based
production is concerned. Supplier sites are assessed
for exposure to natural hazards, such as floods or
earthquakes, in order to identify supply risks at an
early stage and implement appropriate precautions.
Fire risks at series suppliers are evaluated by means
of questionnaires and selective site inspections. In
order to minimise supply risks of raw materials, the
BMW Group draws up measures to reduce the use of
raw materials or to substitute alternative raw materials.
Legal risks
Close cooperation between carmakers and suppli-
ers in the development and production of vehicles
and the provision of services generates economic
benefits, but also increased dependency. Potential
reasons for the failure of individual suppliers include
in particular increased IT-related risk, non-compliance
with sustainability or quality standards, insufficient
financial strength of a supplier, the occurrence of
natural hazards, fires and insufficient supply of raw
materials. In order to ensure a uniform level of security
for all parties concerned along the added value/supply
chain, the BMW Group focuses on obtaining evi-
dence of appropriate IT security certification from
its suppliers. As part of supplier pre-selection, the
Risks and opportunities relating to purchasing
Combined
Management
Report
Report on Outlook,
Risks and
Opportunities
→ Risks and
Opportunities
New opportunities are continuously being sought to
create even greater added value for customers than
currently expected, and thereby to realise signif-
icant opportunities with respect to sales growth and
pricing. Further development of the product and
mobility portfolio and expansion in growth regions
offer the most important medium- to long-term
growth opportunities for the BMW Group. Continued
growth depends above all on the ability to develop
innovative products and services and bring them to
market. In this context, the BMW Group will focus
on developing autonomous driving and on expanding
mobility services via the planned joint venture with
the Daimler Group. If the negative impact of the cur-
rent competitive situation is reduced more quickly
than expected, additional opportunities will arise
for the BMW Group. Compared to the assumptions
made in the outlook, the BMW Group expects these
opportunities to have no significant earnings impact
over the two-year assessment period.
Risks and opportunities relating to operations
Risks and opportunities relating to production
and technologies
Risks relating to production processes and technology
fields are particularly apparent in potential sources
of interruptions in production or additional costs to
comply with quality standards under changed market
conditions. If risks arising from production processes
and technologies were to materialise, they could have
a high earnings impact over the two-year assessment
period. The corresponding risk amounts are classified
as medium.
Production stoppages and downtimes due to fire,
machine and tooling breakdowns, IT disruptions,
damage to infrastructure, power failures, transporta-
tion and logistical disruptions represent risks which
the BMW Group addresses through appropriate
precautions.
Production structures and processes are designed
from the outset with measures to minimise potential
damage and the probability of occurrence. The inter-
changeability of production facilities, preventative
maintenance and management of spare parts across
sites play an important role within the production
network. Risk is also reduced through flexible working
hour models and working time accounts as well as the
ability to build individual split models or engine types
with a high degree of flexibility - either additionally or
alternatively - at plants of the BMW Group, depend-
ing on requirements. These various features enable
pro-
customer wishes to be met appropriately and allow any
backlogs caused by temporary interruptions in
duction to be made up within a short to medium time
frame. Other measures worthy of mention include the
technical fire protection and anti-flooding measures
undertaken at the San Luis Potosí plant in Mexico.
Risks arising from business interruptions due to fire
in production facilities or at suppliers are also appro-
priately covered with insurance companies of good
credit standing. Measures taken in connection with
the current challenges posed by Brexit include build-
ing up adequate levels of safety stocks and increasing
flexibility along the supply chain.
In order to meet high standards in product quality
and achieve favourable external ratings (e.g. for
product safety), reduce statutory and non-statutory
warranty obligations and keep down follow-up costs
arising from other changes in planning assumptions,
it may be necessary to incur a higher level of expen-
diture than originally forecast. If warranty expenses,
including provisions for recalls, were to exceed the
amounts previously recognised and expected, higher
allocations to provisions in connection with goodwill
and warranty measures would have a negative impact
on the BMW Group. Such an allocation, for example,
to the warranty provision was made in 2018, among
other things in connection with the exhaust gas recir-
culation cooler. In addition, availability of products
may be limited, particularly at the start of production
for new vehicle projects. These risks are mitigated
through regular audits and the continual improve-
ment of quality management, which ensures the high
standard of quality. The BMW Group also recognises
appropriate accounting provisions for statutory and
non-statutory warranty obligations. These reduce the
risk to earnings, as they are already taken into account
in the outlook. It cannot be ruled out, however, that
damages could arise that are either not covered or not
fully covered by provisions.
Further information on risks related to provisions for
statutory and non-statutory warranty obligations is pro-
→ see vided in → note 33 to the Group Financial Statements.
notes 33
The BMW Group sees opportunities in production
processes and technology fields primarily through
the competitive edge gained from mastering new
and complex technologies. Opportunities could
arise as a result of further technological innovations
related to products or processes, as well as from
organisational changes which improve efficiency or
increase competitiveness of the BMW Group. The
early integration of WLTP-related requirements into
production and sales planning systems, for instance,
enabled the BMW Group to offer its fleet customers
the usual product range without interruption. Given
the long lead times in developing new products and
processes, additional opportunities are not expected
to have a significant impact on earnings during the
outlook period.
Purchasing risks relate primarily to supply risks
caused by the failure of a supplier as well as risks
associated with the quality of bought-in parts. Pro-
duction problems incurred by suppliers could lead to
increased expenditure for the BMW Group through
to interruptions in production and a corresponding
reduction in sales. The increasing complexity of the
supplier network, especially at the level of lower tier
suppliers, whose operations can only be indirectly
influenced by the BMW Group, is a further poten-
tial cause of downtimes at supplier locations. The
increased threat of cyberattacks along the supplier
chain also give cause for a more critical assessment of
the risk situation, in this case in anticipation of future
potential risks relating to security of supply and the
protection of internal know-how. If purchasing risks
were to materialise, they could have a high earnings
impact over the two-year assessment period. The risk
amount attached to purchasing risks is classified as high.
Stable*
Report on Outlook,
Operational risks
Medium
Insignificant
Stable
Purchasing
High
Stable
Medium
Insignificant
Sales and marketing
Low
Stable
Insignificant
Stable
Information, data protection and IT
Stable
Production and technology
Risks and opportunities relating to operations
Stable
Macroeconomic risks and opportunities
High
Stable
Insignificant
Stable
Strategic and sector risks and opportunities
Changes in legislation and regulatory requirements
High
Stable
Insignificant
Stable
Market developments
High
Stable
Insignificant
High
Stable
Stable
Stable
Credit risk
Medium
Stable
Significant
Stable
Residual value
High
Stable*
Significant
Stable
Interest rate changes
Medium
Stable*
Insignificant
Stable
Risks and opportunities relating to the provision of financial services
Stable
Significant
Stable*
Significant
Financial risks and opportunities
Foreign currencies
High
Stable*
Significant
Stable
Medium
1 Adjusted with effect from the financial year 2018.
Significant
Stable
Liquidity
Low
Stable
Pension obligations
Stable*
High
14.5-14.4
330-328
0
0
13.1
14.6-14.0
14.0
42
341
2.0
46
14.5
BMW i8 Roadster
1.8
15
207-206
56-55
2.5-2.4
9.1
246-243
10.8-10.7
198
9.1
8.5
227-224
10.0-9.8
(combined)
in kWh/100 km
Electric power
consumption
in g/km
(combined)
in l/100 km
(combined)
13.7-13.2
209
Fuel consumption
CO2 emissions
9.0
16.63
16.64
16.6
0.2
20.75
20.7
The voting percentages disclosed above may have
changed subsequent to the stated date if these changes
were not required to be reported to the Company.
As the Company's shares are issued to bearer, the
Company is generally aware of changes in sharehold-
ings only if such changes are subject to mandatory
notification rules.
25.62
Shares with special rights which confer control
rights
Control of voting rights when employees
participate in capital and do not exercise their
control rights directly
Like all other shareholders, employees exercise their
control rights pertaining to shares they have acquired
in conjunction with the Employee Share Programme
and/or the share-based remuneration programme
directly on the basis of relevant legal provisions and
the Company's Articles of Incorporation.
Statutory regulations and Articles of Incorporation
provisions with regard to the appointment and
removal of members of the Board of Management
and changes to the Articles of Incorporation
The appointment or removal of members of the Board
of Management is based on the rules contained in
§ 84 f. AktG in conjunction with § 31 of the German
Co-Determination Act (MitbestG).
Amendments to the Articles of Incorporation must
comply with § 179 ff. AktG. Amendments must be
decided upon by the shareholders at the Annual
General Meeting (§ 119 (1) no.5, § 179 (1) AktG). The
Supervisory Board is authorised to approve amend-
ments to the Articles of Incorporation which only affect
its wording (Article 14 no. 3 of the Articles of Incorpo-
ration). Resolutions are passed at the Annual General
Meeting by simple majority of shares exercised unless
otherwise explicitly required by binding provisions of
law or, when a majority of share capital is required,
by simple majority of shares represented in the vote
(Article 20 no. 1 of the Articles of Incorporation).
105
106
Combined
Management
Report
→ Disclosures Relevant
There are no shares with special rights which confer
control rights.
0.2
voting rights
Indirect share of
As well as shares of common stock, the Company
has also issued non-voting shares of preferred stock.
Further information can be found in the section
"Composition of subscribed capital".
When the Company issues non-voting shares of
preferred stock to employees in conjunction with its
Employee Share Programme, these shares are gener-
ally subject to a company-imposed blocking period
of four years, calculated from the beginning of the
calendar year in which the shares are issued.
Contractual holding period arrangements also apply to
shares of common stock acquired by Board of Manage-
ment members and certain senior department heads
in conjunction with the share-based remuneration
programmes (Compensation Report of the Corporate
Governance section; → note 41 of the Group Financial
Statements).
Direct or indirect investments in capital exceeding
10% of voting rights
Based on the information available to the Company, 1
the following direct or indirect holdings exceeding
10% of the voting rights at the end of the reporting
period were held at the stated reporting date:¹
in %
Stefan Quandt, Germany
AQTON SE, Bad Homburg v. d. Höhe, Germany
AQTON Verwaltung GmbH, Bad Homburg v. d. Höhe, Germany
AQTON GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe, Germany
Susanne Klatten, Germany
Susanne Klatten Beteiligungs GmbH, Bad Homburg v. d. Höhe, Germany
1 Based on voluntary notifications provided by the listed shareholders as at 31 December 2018.
2 Controlled entities, of which 3% or more are attributed: AQTON SE, AQTON Verwaltung GmbH, AQTON GmbH & Co. KG für Automobilwerte.
3 Controlled entities, of which 3% or more are attributed: AQTON Verwaltung GmbH, AQTON GmbH & Co. KG für Automobilwerte.
4 Controlled entities, of which 3% or more are attributed: AQTON GmbH & Co. KG für Automobilwerte.
5 Controlled entities, of which 3% or more are attributed: Susanne Klatten Beteiligungs GmbH.
Direct share of
voting rights
for Takeovers
and Explanatory
Comments
Authorisations of the Board of Management in
particular with respect to the issuing or buying
back of shares
The Board of Management is authorised to buy back
shares and sell repurchased shares in situations speci-
fied in §71 AktG, for example to avert serious and
imminent damage to the Company and/or to offer
shares to persons employed or previously employed
by BMW AG or one of its affiliated companies.
Compensation agreements with members of the
Board of Management or with employees in the
event of a takeover bid
The BMW Group has not concluded any compensation
agreements with members of the Board of Manage-
ment or with employees for situations involving a
takeover offer.
Fuel consumption and CO2 emissions information
→ 66
Model
BMW
BMW M2 Competition
BMW M3
BMW M3 CS
BMW M5/Competition
BMW X3 M40i
MINI
MINI Cooper SE Countryman ALL4
ROLLS-ROYCE
Cullinan
Phantom
BMW i3 (120 Ah) with pure electric drive BMW eDrive
BMW i3s (120 Ah) with pure electric drive BMW eDrive
BMW i8 Coupé
other joint venture partner or in the liquidation
of the joint venture entity.
Restrictions on voting rights or the transfer
of shares
7
and Explanatory
Comments
In accordance with the resolution passed at the
Annual General Meeting on 15 May 2014, the Board of
Management is also authorised up until 14 May 2019
to acquire shares of non-voting preferred stock of the
Company via the stock exchange, up to a maximum
of 1% of the share capital existing at the date of the
resolution. The consideration paid by the Company
per share of non-voting preferred stock (excluding
transaction costs) may not be more than 10% above
or below the market price of the stock determined
by the opening auction on the date of trading in the
Xetra trading system (or a successor system having a
comparable function). Moreover, the Board of Man-
agement is authorised to use the acquired own shares
of non-voting preferred stock for all legally admissible
purposes, specifically including the right to offer for
sale and transfer shares to persons employed by the
Company or one of its affiliated companies up to a
proportionate amount of €5 million of share capital.
The subscription rights of existing shareholders to the
new shares of preferred stock used for the purpose
stated above are excluded. The authorisations may
also be exercised in parts over several transactions.
In accordance with Article 4 no. 5 of the Articles of
Incorporation, the Board of Management is authorised,
with the approval of the Supervisory Board, to increase
for cash contributions BMW AG's share capital during
the period until 14 May 2019 by up to €3,132,883 for
the purposes of an Employee Share Programme by
issuing new non-voting shares of preferred stock,
which carry the same rights as existing non-voting
preferred stock (Authorised Capital 2014). Subscrip-
tion rights of existing shareholders are excluded. No
conditional capital is in place at the reporting date.
Significant agreements of the Company taking
effect in the event of change in control following a
takeover bid
BMW AG is party to the following major agreements,
which contain provisions that would apply in the event
of a change in control or the acquisition of control as a
result of a takeover bid:
An agreement concluded with an international
consortium of banks relating to a syndicated
credit line, which was not being utilised at the
balance sheet date, entitles the lending banks
to give extraordinary notice to terminate the credit
line, such that all outstanding amounts, including
interest, would fall due immediately if one or more
parties jointly acquire direct or indirect control
of BMW AG. The term control is defined as the
acquisition of more than 50% of the share capital
of BMW AG, or the right to receive more than 50%
of the dividend or the right to direct the affairs
of the Company or appoint the majority of the
members of the Supervisory Board.
― A cooperation agreement concluded with
Peugeot SA relating to small (1- to 1.6-litre)
petrol engines entitles each of the cooperation
partners to give extraordinary notification of
termination in the event of a competitor acquiring
control over the other contractual party and if
any concerns of the other contractual party re-
garding the impact of the change of control on
the cooperation arrangements are not resolved
during the subsequent discussion process.
BMW AG acts as guarantor for all obligations aris-
ing from the joint venture agreement relating
to BMW Brilliance Automotive Ltd. in China. This
agreement grants an extraordinary right of termi-
nation to either joint venture partner in the event
that - either directly or indirectly - more than 25%
of the shares of the other party are acquired by a
third party, or if the other party is merged with
another legal entity. The termination of the joint
venture agreement may result in the sale of the
shares to the other joint venture partner or in the
liquidation of the joint venture entity.
Framework agreements are in place with financial
institutions and banks (ISDA Master Agreements)
relating to trading activities with derivative finan-
cial instruments. These agreements include an
extraordinary right of termination which triggers
actions in the event that the creditworthiness of
the party involved is significantly weaker following
a direct or indirect acquisition of beneficially
owned equity capital that confers the power to elect
a majority of the Supervisory Board of a contrac-
tual party or any other ownership interest that
enables the acquirer to exercise control over a
contractual party, or which constitutes a merger
or a transfer of net assets.
Financing agreements in place with the European
Investment Bank (EIB) entitle the EIB to request
early repayment of the loan in the event of an
imminent or actual change in control of BMW AG,
if the EIB has reason to assume - after the change
in control or 30 days after it has made a request
to discuss the situation - that the change in control
could have a significantly adverse impact, or if
the borrower refuses to hold any such discussions.
A change in control of BMW AG arises if one
or more individuals take over or lose control of
BMW AG, with control being defined in the
above-mentioned financing agreements as
(i) holding or having control over more than 50%
of the voting rights, (ii) the right to appoint the
majority of the members of the Board of Man-
agement or Supervisory Board, (iii) the right to
receive more than 50% of dividends payable
or (iv) any other comparable controlling influence
over BMW AG.
On the basis of a Business Combination Agree-
ment concluded on 28 March 2018, BMW AG
and Daimler AG have established five operating
joint ventures in the areas of car sharing, ride
hailing, parking, charging and multimodality, into
which BMW has contributed a number of busi-
nesses, including DriveNow, Parkmobile, Digital
Charging Solutions and ReachNow. The Frame-
work Joint Venture Agreement entitles Daimler AG
and BMW AG (principals) each to initiate a bid-
ding process in the event that (i) a shareholder
or third party notifies the other principal
pursuant to § 33 WPHG that voting rights, includ-
ing those attributed pursuant to § 34 WPHG,
have reached the threshold of 50% or pursuant
to § 20 AktG that a shareholding of more than
50% exists, or (ii) a shareholder or a third party
holds more than 50% of the voting rights or
shares in the other principal, including those at-
tributed pursuant to § 30 WPHG (iii) a share-
holder or third party entered into a domination
agreement with the other principal, who is the
dominated entity. Such a bidding process is re-
quired to be carried out for each of the above-
mentioned business divisions as well as for the
special-purpose entity holding the relevant
trademark rights, whereby the highest bidding
principal for the respective business division
or special-purpose entity wins the relevant bid.
Several supply and development contracts between
BMW AG and various industrial customers, all
relating to the sale of components for drivetrain
systems, grant an extraordinary right of ter-
mination to the relevant industrial customer in
specified cases of a change in control at BMW AG
(for example BMW AG merges with a third party
or is taken over by a third party; an automobile
manufacturer acquires more than 50% of the voting
rights or share capital of BMW AG).
BMW AG is party to the shareholder agreement
relating to There Holding B.V., which is the
majority shareholder of the HERE Group. In
accordance with the shareholder agreement,
each contractual party is required to offer its
directly or indirectly held shares in There
Holding B. V. for sale to the other shareholders
in the event of a change in control. A change
in control of BMW AG arises if a person takes
over or loses control of BMW AG, with control
defined as (i) holding or having control over
more than 50% of the voting rights, (ii) the
possibility to control more than 50% of voting
rights exercisable at Annual General Meetings
on all or nearly all matters, or (iii) the right to
determine the majority of members of the
Board of Management or the Supervisory Board.
Furthermore, a change in control occurs if
competitors of the HERE Group or certain potential
competitors of the HERE Group from the tech-
nology sector acquire at least 25% of BMW AG.
If none of the other shareholders acquire these
shares, the other shareholders are entitled to
resolve that There Holding B. V. be dissolved.
The development collaboration agreement between
BMW AG, Intel Corporation and Mobileye Vision
Technologies Ltd., relating to the development of
technologies used in highly and fully automated
vehicles, may be terminated by any of the con-
tractual parties if a competitor of one of the
parties acquires and subsequently holds at least
30% of the voting shares of one of the contrac-
tual parties.
The development collaboration agreement between
BMW AG, FCA US LLC and FCA Italy S.p.A.,
relating to the development of technologies used
in automated vehicles, may be terminated by
any of the contractual parties if certain competi-
tors in the technology sector acquire and sub-
sequently hold at least 30% of the voting shares
of the other contractual party.
107
108
Combined
Management
Report
→ Disclosures Relevant
for Takeovers
BMW AG has agreed with Great Wall Motor
Company Limited to establish the joint venture
Spotlight Automotive Ltd. in China. The
agreement grants an extraordinary right of
termination to either joint venture partner
in the event that - either directly or indirectly -
more than 25% of the shares of the other
party are acquired by a third party or the other
party is merged with another legal entity.
The termination of the joint venture agreement
may result in the sale of the shares to the
note 41
BMW ELECTRIFIED MODELS
(c) uniform payment of any other dividends on
shares of common and preferred stock, provided
the shareholders do not resolve otherwise at
the Annual General Meeting
The categories of risk relating to financial services
comprise credit and counterparty risk, residual value
risk, interest rate risk, operational risks and liquidity
risk. Evaluation of liquidity risk for the Financial Services
segment is included in the liquidity risk category for
the Group as a whole. The segment's total risk expo-
sure was covered at all times during the 2018 financial
year by the available risk-covering assets. As a result,
the Financial Services segment's risk-bearing capacity
was assured at all times.
Credit and counterparty risks and opportunities
relating to the Financial Services segment
Credit and counterparty default risk arises within the
Financial Services segment if a contractual partner
(e.g. a customer or dealer) either becomes unable or
only partially able to fulfil its contractual obligations,
so that lower income is generated or losses incurred.
If credit and counterparty risks were to materialise,
they could have a medium earnings impact over the
two-year assessment period. The risk amount is clas-
sified as medium. The BMW Group classifies potential
opportunities in this area as significant.
Initial and continuous creditworthiness testing is
an important aspect of the BMW Group's credit
risk management. For this reason, every borrower's
creditworthiness is tested for all credit financing
and lease contracts entered into by the BMW Group.
Opportunities can arise when the managed portfolio
presents itself over time better than as was estimated
at the provision of the credit. An intense management
of the purchase process and the securities evaluation
as well as the development of macroeconomic factors
can strengthen the opportunities. In the case of retail
customer financing, creditworthiness is assessed
using validated scoring systems integrated into the
purchasing process. In the area of dealership financing,
creditworthiness is assessed by means of ongoing
credit monitoring and an internal rating system that
takes account not only of the material credit standing
of the borrower, but also of qualitative factors such
as past reliability in business relations. Changes in
the creditworthiness of customers arising during the
credit term are covered by risk provisioning proce-
dures. The credit risk of the individual customers is
quantified on a monthly basis and, depending on
the outcome, taken into account within the risk
pro-
visioning system. Macroeconomic developments are
currently subject to a higher degree of volatility. If
developments are more favourable than assumed in
the outlook, credit losses may be reduced, leading to
a positive earnings impact.
Residual value risks and opportunities relating
to the Financial Services segment
Risks and opportunities arise in conjunction with
leasing contracts if the market value of a leased vehicle
at the end of the contractual term of a lease differs
from the residual value estimated at the inception
of the lease and factored into the lease payments. A
residual value risk exists if the expected market value
of the vehicle at the end of the contractual term is
lower than its estimated residual value at the date
the contract is entered into. If residual value risks
were to materialise, they could have a high earnings
impact from the Group's perspective over the two-year
assessment period. A high earnings impact would
then arise for the affected Financial Services and
Automotive segments. The risk amount is classified
as high for the Group as a whole. Opportunities can
arise out of a positive deviation from the original
residual value forecast. The BMW Group classifies
potential residual value opportunities as significant.
Each vehicle's estimated residual value is calculated
on the basis of historical external and internal data.
This estimation provides the expected market value
of the vehicle at the end of the contractual period.
Developments on pre-owned car markets represent
an important factor. In 2018, diesel engines were
again the subject matter of political discussions in
the European region. Pre-owned car markets in the
premium segment responded here with price declines
for diesel vehicles. As part of the management of resid-
ual value risks, the net present value of risk costs is
calculated at contract inception. Market developments
are observed throughout the contractual period and
the risk assessment updated.
Interest rate risks and opportunities relating
to the Financial Services segment
Interest rate risks in the Financial Services segment
relate to potential losses caused by changes in market
interest rates. These can arise when fixed interest rate
periods do not match for assets and liabilities recog-
nised in the balance sheet. If interest rate risks were
to materialise, they could have a medium earnings
impact over the two-year assessment period. The risk
amount is classified as medium. The BMW Group
classifies potential interest rate opportunities com-
pared to the outlook as significant. Interest rate risks
in the Financial Services business are managed by
matching maturities for refinancing and by employing
interest-rate derivatives. If the relevant recognition cri-
teria are fulfilled, derivatives used by the BMW Group
are accounted for as hedging instruments. Further
information on risks in conjunction with financial
→ see instruments is provided in → note 39 to the Group
Financial Statements.
notes 39
Operational risks in the Financial
Services segment
Operational risks are defined in the Financial Services
segment as the risk of losses arising as a consequence
of unsuitability or failure of internal procedures
(process risks), people (personnel-related risks), sys-
tems (infrastructure and IT risks) and external events
(external risks). The recording and measurement of
risk scenarios, loss events and countermeasures in
the operational risk management system provide the
basis for a systematic analysis and management of
potential or materialised operational risks. Annual
self-assessments are also carried out. If operational
risks were to materialise, they would be likely to have
a low earnings impact over the two-year assessment
period. The risk amount is classified as medium.
101
102
Combined
Management
Report
Report on Outlook,
Risks and
Opportunities
→ Risks and
Opportunities
→ Internal Control
System Relevant for
Accounting and
Risks and opportunities relating to the Financial
Services segment
Financial Reporting
Process
notes 32
note 39
→ see
Financial risks and risks relating to the use of
financial instruments
With the advance of digitalisation, the BMW Group
is improving the customer experience and its existing
lines of business. At the same time, new digital busi-
ness segments are emerging, which are mainly focused
on information technology. The development and
provision of digital services for customers, increased
vehicle connectivity and autonomous driving solutions
are opening up new opportunities. Through BMW
ConnectedDrive and BMW CarData the range of
services and apps on offer to customers is constantly
being expanded and updated. Starting in March 2019,
the BMW Intelligent Personal Assistant will provide
customers with an intelligent, digital character that
enables voice access to functions and information. The
BMW Group expects these opportunities to have no
significant earnings impact over the assessment period
as compared to the assumptions made in the outlook.
As an internationally operating enterprise, the
BMW Group conducts business in a variety of cur-
rencies, thus giving rise to currency risks and oppor-
tunities. A substantial portion of Group revenues,
purchasing and funding occur outside the eurozone
(particularly in China and the USA). Cash-flow-at-
risk models and scenario analyses are used and
continuously developed to measure currency risks
and opportunities. If currency risks were to materi-
alise, they could be associated with a high earnings
impact over the two-year assessment period. The risk
level attached to currency risks is high. Significant
opportunities can arise if currency developments are
favourable for the BMW Group.
Operational currency management is based on the
results of currency risk analyses. The BMW Group
manages currency risks at both strategic (medium
and long term) and operational level (short and
medium term). Medium- and long-term measures
include increasing production volumes and purchase
volumes in foreign currency regions (natural hedging).
Currency risks are managed in the short to medium
term and for operational purposes by means of hedg-
ing on financial markets. The principal objective of
this currency management process is to increase
planning reliability for the BMW Group. Hedging
transactions are entered into only with financial
partners of good credit standing. Opportunities are
also secured through the use of options during specific
market phases.
Risks and opportunities relating to raw materials
As a large-scale manufacturing company, the BMW Group
is exposed to purchase price risks, particularly in rela-
tion to raw materials used in vehicle production.
The analysis of raw material price risk is based on
planned purchases of raw materials and components
containing those raw materials. If risks relating to raw
materials prices were to materialise, they could have
a medium earnings impact over the two-year assess-
ment period. A medium risk level is attached to risks.
Significant opportunities could arise if raw materials
prices developed favourably for the BMW Group.
Changes in commodity prices are monitored on the
basis of a well-defined management process. The
principal objective is to increase planning reliability
for the BMW Group. Price fluctuations for precious
metals (platinum, palladium, rhodium), non-ferrous
metals (aluminium, copper, lead, nickel) and, to some
extent, for steel and steel ingredients (iron ore, coking
coal) and energy (gas, electricity) are hedged using
financial derivatives and supply contracts with fixed
pricing arrangements.
Liquidity risks
The major part of the Financial Services segment's
credit financing and leasing business is refinanced on
capital markets. Liquidity risks can arise in the form
of rising refinancing costs or from restricted access to
funds as a consequence of the general market situation.
If liquidity risks were to materialise, they would be
likely to have a low earnings impact over the two-year
assessment period. The risk amount associated with
liquidity risk, including the risk of the BMW Group's
rating being downgraded, which would lead to an
increase in financing costs, is classified as low.
99
100
Combined
Management
Report
Report on Outlook,
Risks and
Opportunities
→ Risks and
Opportunities
Based on the experience of the financial crisis, a min-
imum liquidity concept has been drawn up, which is
rigorously adhered to and continuously developed.
Use of the "matched funding principle" to finance the
Financial Services segment's operations eliminates
liquidity risks to a large extent. Solvency is assured at
all times throughout the BMW Group by maintaining
a liquidity reserve and by the broad diversification
of refinancing sources. Regular measurement and
monitoring ensure that cash inflows and outflows for
the various maturities and currencies offset each other.
This approach is incorporated in the BMW Group's
target liquidity concept. The liquidity position is moni-
tored continuously and managed through Group-wide
planning of financial requirements and funding. A
diversified refinancing strategy reduces dependency
on any specific type of instrument. Moreover, the
BMW Group's solid financial and earnings position
results in high credit ratings from internationally
recognised rating agencies.
Further information on risks in conjunction with
financial instruments is provided in → note 39 to the → see
Group Financial Statements.
Risks and opportunities relating to pension obligations
Pension obligations are influenced in particular by
fluctuations of market yields on corporate bonds, as
well as by other economic and demographic para-
meters. Opportunities and risks arise depending
on changes in these parameters. If risks relating to
pension obligations materialised, they could have a
high earnings impact over the two-year assessment
period. Despite the high level of external funding,
the risk amounts relating to pension obligations are
classified as high. Within a favourable capital market
environment, the return generated by growth-oriented
pension assets may exceed expectations and reduce
the deficit of the relevant pension plans. This could
have a significantly favourable impact on the net asset
position of the BMW Group.
Future pension payments are discounted on the basis
of market yields on high-quality corporate bonds.
These yields are subject to market fluctuation and
therefore influence the level of pension obligations.
Changes in other parameters, such as rises in infla-
tion and longer life expectancy, also impact pension
obligations and payments. Regulatory requirements
can influence the amount of pension obligations.
The BMW Group's pension obligations are mainly
held in external pension funds or trust arrangements
and the related assets legally separated from those of
the Group. The amount of funds required to finance
pension payments out of operations in the future is
substantially reduced by the fact that the Group's
pension obligations are mainly settled out of pension
fund assets. The pension assets of the BMW Group
comprise interest-bearing securities, equities, real
estate and other investment classes. Assets held by
pension funds and trust arrangements are monitored
continuously and managed on a risk-and-return basis.
Diversification of investments also helps to mitigate
risk. In order to reduce fluctuations in pension fund-
ing shortfalls, investments are structured to match
the timing of pension payments and the expected
development of pension obligations. Remeasurements
on the liability and fund asset sides are recognised
net of deferred taxes in other comprehensive income
and hence directly in equity (within revenue reserves).
Further information on risks in conjunction with pen-
→ see sion provisions is provided in → note 32 to the Group
Financial Statements.
Legal risks
Currency risks and opportunities
The increasing globalisation of the BMW Group's
operations and of business interdependencies in
general, combined with the variety and complexity
of legal provisions, including, increasingly, import
and export regulations, give rise to an increased risk
of non-compliance with applicable law. A Compliance
Management System is in place at BMW Group to
ensure that the representative bodies, managers
and staff across the globe consistently act in a lawful
manner. Further information on the BMW Group's
Compliance Management System can be found in the
section Corporate Governance.
As part of the ongoing development of accounting and
financial reporting processes at individual entity or
Group level, such controls are adapted to take account
of new requirements and opportunities arising with
advances in information technology. In addition, the
BMW Group uses data analysis tools to ensure that
any control weaknesses are quickly identified and
eliminated.
Responsibilities for ensuring the effectiveness of
the internal control system in relation to individual
entity and Group accounting and financial reporting
processes are clearly defined and allocated to the
relevant line and process managers. These report
annually on their assessment of the effectiveness of the
internal control system for accounting and financial
reporting to the Board of Management. The assessment
also includes the results of internal and external audits
as well as of ongoing data analysis. In this context,
the Group's units confirm the effectiveness of the
internal control system for accounting and financial
reporting. The results of the assessment are gathered
and documented with the aid of tools. Weaknesses in
the control system are eliminated, taking into account
their potential impact on accounting processes. The
Board of Management and Audit Committee are
briefed annually on the assessment of the effective-
ness of the internal control system for accounting and
financial reporting. The Board of Management and,
where applicable, the Supervisory Board are informed
immediately in the event of any significant changes
in the effectiveness of the internal control system.
103
104
Combined
Management
Report
→ Disclosures Relevant
for Takeovers
and Explanatory
Comments
Controls are integrated into the accounting and finan-
cial reporting processes, at both individual entity and
Group level. These are both preventive and detective
in nature and take account, where appropriate, of
the principle of the separation of duties. Important
accounting-related IT systems incorporate controls
which, amongst others, prevent business transactions
from being recorded incorrectly and ensure that
business transactions are recorded completely and in
good time and measured properly in accordance with
applicable requirements. Controls are also in place to
test the appropriateness of consolidation procedures.
The recording of items requiring disclosure is also
performed largely through IT systems.
DISCLOSURES RELEVANT
FOR TAKEOVERS* AND
Composition of subscribed capital
The subscribed capital (share capital) of BMW AG
amounted to €658,122,100 at 31 December 2018
(2017: €657,600,600) and, in accordance with Article 4
no. 1 of the Articles of Incorporation, is subdivided
into 601,995,196 shares of common stock (91.47%)
(2017: 601,995,196; 91.54%) and 56,126,904 shares of
non-voting preferred stock (8.53%) (2017: 55,605,404;
8.46%), each with a par value of €1. The Company's
shares are issued to bearer.
The rights and duties of shareholders derive from the
German Stock Corporation Act (AktG) in conjunction
with the Company's Articles of Incorporation, the
full text of which is available at www.bmwgroup.com. The
right of shareholders to have their shares evidenced
is excluded in accordance with the Articles of Incor-
poration. The voting power attached to each share
corresponds to its par value. Each €1 of par value
of share capital represented in a vote entitles the
holder to one vote (Article 18 no. 1 of the Articles of
Incorporation).
*Disclosures
pursuant to
§ 289 (5) and
§ 315 (2) No. 5
HGB.
The Company's shares of preferred stock are shares
within the meaning of § 139 ff. AktG, which carry a
cumulative preferential right in terms of the allocation
of profit and for which voting rights are excluded.
These shares confer voting rights only in exceptional
cases stipulated by law, in particular when the prefer-
ence amount has not been paid or has not been fully
paid in one year and the arrears are not paid in the
subsequent year alongside the full preference amount
due for that year. With the exception of voting rights,
holders of shares of preferred stock are entitled to
the same rights as holders of shares of common stock.
Article 24 of the Articles of Incorporation confers
preferential treatment to the non-voting shares of
preferred stock with regard to the appropriation of the
Company's unappropriated profit. Accordingly, the
unappropriated profit is required to be appropriated
in the following order:
(a) subsequent payment of any arrears on dividends
on non-voting preferred shares in the order of
The BMW Group is exposed to various legal risks, not
least as a result of its global operations. Legal risks may
result from non-compliance with laws or other legal
requirements or from legal disputes with business
partners or other market participants. If legal risks
were to materialise, they could have a high earnings
impact over the two-year assessment period. The risk
amount attached to significant identified legal risks
is classified as medium. However, it cannot be ruled
out that new legal risks, as yet unforeseen, could
materialise that could have a high earnings impact
for the BMW Group.
EXPLANATORY COMMENTS
pursuant to
§ 289 (5)
and § 315 (2)
no. 5 HGB.
accruement
Guidelines for recognising, measuring and allocating
items to accounts are available to all employees via
the intranet. New accounting standards are assessed
for their impact on the BMW Group's accounting
and financial reporting. Accounting guidelines and
processes are reviewed continuously and revised at
least once a year or more frequently, if necessary.
Like all entities with international operations, the
BMW Group is confronted with legal disputes, claims
particularly relating to warranties and product liability
or rights infringements and proceedings initiated by
government agencies. Any of these could, amongst
other consequences, have an adverse impact on the
Group's reputation. Such proceedings are typical
for the sector and may result as a consequence of
realigning product or purchasing strategies to changed
market conditions. Particularly in the US market,
class action lawsuits and product liability risks can
have substantial financial consequences and cause
damage to the Group's public image. More rigorous
application or interpretation of existing consumer
protection regulations could result in a greater number
of recalls. The high quality of the Group's products,
which is ensured by regular quality audits and ongoing
improvement measures, helps reduce this risk.
Disclosures
Possible risks for the BMW Group related to competi-
tion and antitrust law cannot in detail be predicted or
quantified at present. Further information on current
developments with regard to identified antitrust risks
and contingent liabilities can be found in → note 38
to the Group Financial Statements.
→ see
note 38
→ see
notes 38
The BMW Group recognises appropriate levels of
provision for lawsuits. In addition, a part of these
risks is insured where this makes business sense.
Such items are reported as contingent liabilities. It
cannot be ruled out, however, that damages could
arise that are either not covered or not fully covered
by insurance policies or provisions or reported as
contingent liabilities. In accordance with IAS 37
(Provisions, Contingent Liabilities and Contingent
Assets), the required information is not provided
if the BMW Group concludes that disclosure of the
information could seriously prejudice the outcome of
the relevant legal proceedings. Further information
on contingent liabilities is provided in → note 38 to
the Group Financial Statements.
Overall assessment of the risk and opportunities
situation
The overall risk assessment is based on a consolidated
view of all significant individual risks and opportu-
nities. The overall risk level for the BMW Group as a
whole has increased slightly compared to the previous
year, while there has been no significant change in
the opportunity situation. Exposure to risks in the
individual risk categories remains essentially stable.
In addition to the risk categories described above,
unforeseen events could have a negative impact on
business operations and hence on the BMW Group's
results of operations, financial position and net assets
as well as on its reputation. A comprehensive risk
management system is in place to ensure that the
BMW Group successfully manages these risks.
From today's perspective, management does not see
any threat to the BMW Group's status as a going
concern. As in the previous year, identified risks are
considered to be manageable, but could - like the
opportunities - have an impact on the underlying key
performance indicators, which could then, as a result,
deviate from the outlook if they were to materialise.
The BMW Group's financial position is stable and cash
needs are currently covered by available liquidity and
credit lines.
(b) payment of an additional dividend of €0.02 per
€1 par value on non-voting preferred shares
SYSTEM* RELEVANT FOR
ACCOUNTING AND
FINANCIAL REPORTING
PROCESSES
The internal control system is subject to continuous
improvement, with system effectiveness assessed
regularly on the basis of centralised and decentralised
process analyses, analyses of data within the various
financial systems and audit procedures. The principal
features of the internal control system, as far as they
relate to individual entity and Group accounting and
financial reporting processes, are described below.
process-independent monitoring measures.
organisational measures incorporating the
principle of separation of duties, and
IT systems,
INTERNAL CONTROL
Group-wide mandatory accounting guidelines,
-
The internal control system relevant for accounting
and financial reporting processes has the task of
ensuring that accounting and financial reporting by
the BMW Group is both correct and reliable. Inter-
nationally recognised standards for internal control
systems have been taken into account in the design of
the components of the BMW Group's internal control
system. The system comprises:
controls integrated into processes and
-3,725
Investments in marketable securities and investment funds
969
Proceeds from the sale of subsidiaries and other business units
267
6235
Proceeds from the disposal of investment assets and other business units
-164
Acquisitions of subsidiaries and other business units
-142
Expenditure for investment assets
30
107
Proceeds from the disposal of intangible assets and property, plant and equipment
21
Proceeds from subsidies for intangible assets and property, plant and equipment
-7,112
-209
-4,041
Cash inflow/outflow from investing activities
3,761
30,762
-7,777
-165
-136
38
-2,324
25
-2,630
-6,163
-7,363
Proceeds from the sale of marketable securities and investment funds
Change in cash and cash equivalents
Effect of exchange rate on cash and cash equivalents
Cash inflow/outflow from financing activities
Repayment of non-current financial liabilities³
Proceeds from non-current financial liabilities³
Intragroup financing and equity transactions
Interest paid²
Payment of dividend for the previous year
Payments into equity
3,866
Effect of changes in composition of Group on cash and cash equivalents
Change in other financial liabilities4
Changes in working capital
5,909
-1,693
Change in leased products
-559
355
Change in deferred taxes
-43
-34
Gain/loss on disposal of tangible and intangible assets and marketable securities
-1,134
-739
Result from equity accounted investments
-249
111
Other non-cash income and expense items
4,822
5,113
Depreciation and amortisation of tangible, intangible and investment assets
65
-632
Change in receivables from sales financing
-5,670
-7,440
5,051
1,211
697
752
-82
1,414
-328
45
112
-1,293
-357
Cash inflow/outflow from operating activities
Change in other operating assets and liabilities
Change in provisions
Change in trade payables
Change in trade receivables
Change in inventories
166
-573
Total investment in intangible assets and property, plant and equipment
23,955
-299
-16,801
1
-41
-35
-739
-632
46
33
25
-2
83
34
4,699
4,982
-5
1
89
-165
-
35
-
-71
28
-199
19
60
43
59
-20
7
-1,179
909
-390
176
78
-758
-7,440
-5,670
-1,855
-1,783
-1,872
161
125
170
-315
7,880
9,039
5 Includes dividends received from investment assets amounting to €384 million (2017: €258 million).
4 The change in commercial paper is recognised under change in other financial liabilities. Prior year figures adjusted accordingly.
³ Proceeds/Repayment of bonds are recognised under Proceeds/Repayment of non-current financial liabilities. Prior year figures adjusted accordingly.
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
Interest relating to financial services business is classified as revenues/cost of sales.
Cash and cash equivalents as at 31 December
Cash and cash equivalents as at 1 January
10,979
1,159
64
-25
-223
-19
1,572
4,296
-3,131
-1,161
1,940
9,039
Automotive
(unaudited supplementary
-1,896
-1,751
-114
308
2,699
1,886
33
4,047
1,653
5,299
5,091
2017
2018
20171
2018
information)
(unaudited supplementary
Financial Services
information)
-22,564
Other interest and similar income/expenses²
532
170
-18,096
-17,292
18,102
20,683
14,740
14,919
82,950 -127,818 -120,147
91,596
49
137,828
47,942 -66,585 -67,245
50,256
41,062
47,655
18
351
1,856
1,985
146,808
-66,487 -66,938
72
706
-3,639
-3,843
-39
-40,257
-44,139
35,095
198
36,037
45,942
51,384
60,506
1,168
28,835
128
36,333
17,819
19,170
38
22
4,302
4,611
356
343
44,624
-198
-307
1,163
797
45,963
26,628
33,956
3,082
3,562
-1,964
130
28
442
-40,610
483
1,089
695
176
138
48,321
48,109
-11,457
-10,765
-39
-98
-198
-1,436
-31,783
96,766
48,775
5,331
5,484
460
669
55
79
1,531
1,325
99,153
32,113
152
91
24
17
-52,902
-61,233
35,008
41,340
38,674
-30,981
-34,818
-427
549
114
113
Total equity and liabilities
Current provisions and liabilities
Liabilities in conjunction with assets held for sale
Trade payables
Other liabilities
Current tax
Financial liabilities
Other provisions
Group
Financial
Non-current provisions and liabilities
Financial liabilities
Deferred tax
Other provisions
Pension provisions
Equity
Minority interest
Equity attributable to shareholders of BMW AG
Accumulated other equity
Other liabilities
Revenue reserves
Statements
Cash Flow Statement
Interest received²
-2,301
-1,972
Income taxes paid
2,558
2,220
33
8,675
→ BMW Group
7,207
Loss from discontinued operations
Net profit
20171
2018
Group
in € million
CASH FLOW STATEMENT
BMW GROUP
Current tax
Capital reserves
Subscribed capital
EQUITY AND LIABILITIES
24,971
71,704
71,383
-66,289 -66,926
-307
-98
15,607
11
13,167
12,339
11
12,595
28,811 -66,387 -67,233
849
45,220
950
24,853
25,705
17
17
233
208
9
43,988
146,808
137,828
91,596
Total assets
Current assets
Cash and cash equivalents
Assets held for sale
Financial assets
Current tax
Other assets
Receivables from sales financing
Trade receivables
Inventories
Non-current assets
Other assets
Deferred tax
Financial assets
Receivables from sales financing
Other investments
Investments accounted for using the equity method
Leased products
Property, plant and equipment
Intangible assets
ASSETS
82,950 -127,818 -120,147
125
1,214
Other interest and similar income/expenses²
162
90
7,117
1 January 2018 (adjusted according to IFRS 9)
54,208
436
53,772
5
1,515
168
11
31 December 2017 (adjusted according to IFRS 15)
Effects from the first-time application of IFRS 9
54,107
101
101
5
-82
436
53,671
1,515
-1,494
93
-12
-572
3
-130
-2
-51
34
34
-1,326
-2,630
-906
-2,630
7,207
-604
6,603
90
6,513
-572
-906
-12
168
-604
Net profit
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2018
-1,494
31 December 2017 (as originally reported)
Effect from the first-time application of IFRS 15
54,548
-441
31
31 December 2017*
15
Other changes*
37
relating to preferred stock
-2,300
9,064
658
475
44,036
2,047
657
44,445
-409
2,047
657
31
Revenue
reserves
8,589
2,084
50,815
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
-441
436
54,112
1,515
93
-1,494
Total
interest
of BMW AG
Minority
shareholders
Costs of
hedging
financial
instruments
Securities
Translation
differences
attributable to
Derivative
Equity
Accumulated other equity
-127
reserves
558
57,559
out of Authorised Capital
Subscribed share capital increase
Dividend payments
Net profit*
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2017
(adjusted according to IFRS 15)*
54,107
436
53,671
1,515
Premium arising on capital increase
relating to preferred stock
93
110
95
15
37
37
1
1
-2,300
-1,494
-2,300
Other changes*
117
note 45
In order to provide a better insight into the results of
operations, financial position and net assets of the
BMW Group, and going beyond the requirements of
IFRS 8 (Operating Segments), the Group Financial
Statements also include income statements and bal-
ance sheets for the Automotive, Motorcycles, Financial
Services and Other Entities segments. The Group
Cash Flow Statement is supplemented by the state-
ments of cash flows for the Automotive and Financial
Services segments. This supplementary information is
unaudited. Inter-segment transactions relate primarily
to internal sales of products, the provision of funds
for Group companies and the related interest. These
items are eliminated in the relevant "Eliminations"
columns. A description of the nature of the business
and the major operating activities of the BMW Group's
→ see segments is provided in → note 45 ("Explanatory notes
to segment information").
The BMW Group and segment income statements are
presented using the cost of sales method.
The Group currency is the euro. All amounts are
disclosed in millions of euros (€ million) unless stated
otherwise.
The consolidated financial statements of Bayerische
Motoren Werke Aktiengesellschaft (BMW Group
Financial Statements or Group Financial Statements)
at 31 December 2018 have been drawn up in accord-
ance with International Financial Reporting Standards
(IFRS), as endorsed by the European Union (EU), and
the supplementary requirements of § 315 a (1) of the
German Commercial Code (HGB). The Group Finan-
cial Statements and Combined Management Report
will be submitted to the operator of the electronic
version of the German Federal Gazette and can be
obtained via the Company Register website. Bayerische
Motoren Werke Aktiengesellschaft, which has its
seat at Petuelring 130, Munich, is registered in the
Commercial Register of the District Court of Munich
under the number HRB 42243.
Basis of preparation
01
AND POLICIES
31 December 2017*
ACCOUNTING PRINCIPLES
Policies
Principles and
→ Accounting
Financial Statements
Notes to the Group
Statements
Group
Financial
118
NOTES TO
THE GROUP
FINANCIAL
STATEMENTS
9,305
86
9,219
52
-171
31 December 2018
Other changes
Premium arising on capital increase
relating to preferred stock
Subscribed share capital increase
out of Authorised Capital
Dividend payments
Total
78
Minority
interest
Costs of
hedging
financial
instruments
Securities
Translation
differences
Derivative
Accumulated other equity
58,088
529
Equity
attributable to
shareholders
of BMW AG
47,108
255
-409
1,437
41
-1,323
8,675
630
630
1,437
41
-1,323
86
8,589
1 January 2017 (adjusted according to IFRS 15)
46,954
255
46,699
78
52
-171
1 January 2017 (as originally reported)
Effects from the first-time application of IFRS 15
47,363
-409
-569
109
Capital
Note
-1,859
-4,310
827
73
-2
-1,053
-7,608
-12,071
-48
6,793
-410
12,940
1
-165
-136
4,315
5,097
567
2,099
11,937
-2,324
4,334
-82
Current tax
Loss from discontinued operations
Net profit
1,856
1,985
7,157
8,631
3,046
-31
1,856
7,157
-1,190
129
2,363
1,474
64
-25
-141
4,794
38
25
-2,630
937
3
18
-15
-13
-6,972
-7,618
-6,384
-6,790
105
10,848
705
-1,259
-1,468
175
225
-13
1,069
344
9,352
28
2
2
130
-6,544
-6,769
211
199
3,655
3,562
-231
-63
-3,810
-3,692
969
1
2
1,037
1,210
-209
-482
-145
Income taxes paid
Subscribed
capital
Interest received²
Depreciation and amortisation of tangible, intangible and investment assets
Revenue
reserves
reserves
Capital
Subscribed
capital
Note
Premium arising on capital increase
out of Authorised Capital
Subscribed share capital increase
31
Dividend payments
Net profit*
1 January 2017 (adjusted according to IFRS 15)
Effects from the first-time application of IFRS 15
1 January 2017 (as originally reported)
in € million
31 December 2018
Other changes
relating to preferred stock
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2017
(adjusted according to IFRS 15)*
Premium arising on capital increase
658
51,256
56,121
2,118
658
31
-77
34
-2,630
7,835
2,084
718
50,993
2,084
658
178
50,815
2,084
658
-441
7,117
out of Authorised Capital
Subscribed share capital increase
Dividend payments
Intragroup financing and equity transactions
Payment of dividend for the previous year
Payments into equity
Acquisitions of subsidiaries and other business units
Proceeds from the disposal of investment assets and other business units
Proceeds from the sale of subsidiaries and other business units
Investments in marketable securities and investment funds
Proceeds from the sale of marketable securities and investment funds
Cash inflow/outflow from investing activities
Expenditure for investment assets
Total investment in intangible assets and property, plant and equipment
Proceeds from subsidies for intangible assets and property, plant and equipment
Proceeds from the disposal of intangible assets and property, plant and equipment
Cash inflow/outflow from operating activities
Change in other operating assets and liabilities
Interest paid²
Change in provisions
Change in trade receivables
Change in inventories
Changes in working capital
Change in receivables from sales financing
Change in leased products
Change in deferred taxes
Gain/loss on disposal of tangible and intangible assets and marketable securities
Other non-cash income and expense items
Result from equity accounted investments
Change in trade payables
Proceeds from non-current financial liabilities³
Repayment of non-current financial liabilities³
Change in other financial liabilities4
Cash inflow/outflow from financing activities
Effect of exchange rate on cash and cash equivalents
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2018
Net profit
1 January 2018 (adjusted according to IFRS 9)
31 December 2017 (adjusted according to IFRS 15)
Effects from the first-time application of IFRS 9
Effect from the first-time application of IFRS 15
31 December 2017 (as originally reported)
in € million
STATEMENT OF CHANGES IN EQUITY
BMW GROUP
Changes in Equity
→ BMW Group
Statement of
Statements
Group
Financial
116
115
The reconciliation of liabilities from financing activities is presented in note 35.
Cash and cash equivalents as at 1 January
Cash and cash equivalents as at 31 December
Change in cash and cash equivalents
Effect of changes in composition of Group on cash and cash equivalents
7,160
6,660
640
1
Total comprehensive income attributable to shareholders of BMW AG
9,305
6,603
90
Total comprehensive income attributable to minority interests
Total comprehensive income
630
-604
19
31
155
-1,171
192
Other comprehensive income for the period after tax
Items that can be reclassified to the income statement in the future
Currency translation foreign operations
-597
674
-30
-1,322
-157
6,513
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
6
27,567
28,165
2017*
2018
2017
information)
(unaudited supplementary
86
9,219
Eliminations
2017
information)
(unaudited supplementary
Other Entities
2018
information)
(unaudited supplementary
Financial Services
2018
-620
1,914
-1,381
→ 68
Statement of Comprehensive Income for Group
13.09
10.84
15
Diluted earnings per share of preferred stock in €
13.07
10.82
in € million
15
Dilutive effects
13.09
10.84
15
Basic earnings per share of preferred stock in €
13.07
10.82
15
Diluted earnings per share of common stock in €
Note
2018
2017*
39
-30
475
718
-218
-217
693
935
32
8,675
7,207
Other comprehensive income from equity accounted investments
Deferred taxes
Costs of hedging
Financial instruments used for hedging purposes
Marketable securities (at fair value through other comprehensive income)
Items not expected to be reclassified to the income statement in the future
Deferred taxes
Remeasurement of the net defined benefit liability for pension plans
Net profit
7
Basic earnings per share of common stock in €
-18,710
-24,541
-508
-534
553
80
-45
2,207
2,161
-130
1,840
-48
-18
13
-29
-58
-51
11
-27
1,116
66
1,312
-36
-133
-81
3,983
1,593
64
60
-874
420
61
-19
-81
1,653
-874
420
61
-81
4,047
1,653
-340
4,047
-986
-1,145
-10
96
42
20
16
-27
-79
-1,370
-1,352
126
-449
7
6
3,581
3,624
16,857
19,273
-
-23,986
563
130
-208
-185
-14
-1,246
-1,360
1,110
1,178
12
12
-404
601
14
-27
2,194
2,190
210
230
-96
-80
-113
-124
-17,306
61
142
5,277
-1,738
-69,402
2,272
2,173
85,742
98,282 85,846
-78,329 -71,918
97,480
9 -78,924
18,556
Gross profit
-1,798
Cost of sales
Revenues
2017*
2018
2017*
information)
(unaudited supplementary
Motorcycles
2018
8
2017*
19,953
16,340
4
4
675
810
720
774
11
Other operating income
13,928
-256
-7,927
-7,880
-9,560
-9,558
10
Selling and administrative expenses
474
435
-263
2018
Note
information)
→ Page 190 List of Investments at 31 December 2018
→Page 184 Segment Information
Notes to the Statement of Comprehensive Income
Notes to the Balance Sheet
Other Disclosures
→Page 167
→ Page 146
→ Page 145
→Page 139
3
→ Page 118
Notes to the Income Statement
Notes to the Group Financial Statements
Accounting Principles and Policies
→ Page 116 Statement of Changes in Equity
→Page 114 Cash Flow Statement
→Page 112 Balance Sheet
→Page 110 Statement of Comprehensive Income
→Page 110 Income Statement
GROUP FINANCIAL
STATEMENTS
→ Page 118
3
Group Financial
Statements
Income Statement
Statement of
Comprehensive
Group
(unaudited supplementary
Automotive
in € million
→ 67
Income Statements for Group and Segments
STATEMENT OF COMPREHENSIVE INCOME
INCOME STATEMENT
BMW GROUP
prehensive Income
→ Statement of Com-
Income Statement
→ BMW Group
Statements
Group
Financial
110
Notes
Balance Sheet
Cash Flow
Statement
Income
Other operating expenses
124
11
-1,214
5,299
5,124
8,675
7,240
Profit/loss from continuing operations
-63
-45
-3,418
124
-1,853
-2,575
14
Income taxes
205
169
8,717
6,977
10,675
-2,000
9,815
142
-33
5,061
8,589
7,117
31
Attributable to shareholders of BMW AG
22
30
86
Loss from discontinued operations
90
142
124
5,299
5,091
8,675
7,207
Net profit/loss
-33
Attributable to minority interest
Profit/loss before tax
-2
-6
Interest and similar income
739
632
739
632
24
Result from equity accounted investments
207
12
175
6,182
9,899
9,121
Profit/loss before financial result
-15
-1
-1,200
-676
7,888
397
201
567
829
795
776
694
Financial result
295
129
248
51
13
Other financial result
-6
-530
-533
-412
-386
12
Interest and similar expenses
325
-651
2
420
Revenues
Cost of sales
1,016
2,157
2,166
1,806
14
Deferred tax
101
70
1,456
5,175
5,632
5,632
5,776
33
Other provisions
69
64
2,405
5,363
2,089
Financial liabilities
64,772
17,034
69,634
69,616
79,983
Non-current provisions and liabilities
487
506
6,506
35
7,549
5,045
5,299
36
Other liabilities
832
1,017
53,548
53,521
5,045
3,252
3,252
2,330
31
Revenue reserves
2,084
2,084
2,118
31
Capital reserves
658
56,121
658
31
Subscribed capital
EQUITY AND LIABILITIES
1,230
1,276
93,645
97,118
195,506
658
50,993
Accumulated other equity
31
32
Pension provisions
39,361
39,778
54,107
54,208
58,088
Equity
436
436
529
Minority interest
50,815
114
53,671
53,772
57,559
31
Equity attributable to shareholders of BMWAG
37
-1,338
16,374
195,586
On 19 February 2019, the Board of Management
granted approval for publication of the Group Finan-
Other provisions
information)
Financial Services
(unaudited supplementary
1 The opening balance sheet figures have been adjusted, based on the first-time application of IFRS 15 and IFRS 9, see notes 6 and 7.
² Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
1,230
1,276
93,645
97,118
195,506
2018
195,586
Total equity and liabilities
573
636
37,910
40,306
71,765
71,762
70,909
208,980
Current provisions and liabilities
Other Entities
information)
-8,028
-7,855
20172
44,285
46,427
33
30
1
(unaudited supplementary
1
403
2018
2017
information)
(unaudited supplementary
Eliminations
2018
2017
425
62
62
2
38,825
35
Financial liabilities
874
933
1,124
1,124
1,158
41,097
34
99
101
5,710
5,436
6,367
6,367
6,078
33
Current tax
41,100
879
947
Liabilities in conjunction with assets held for sale
119
187
21,863
24,636
13,443
13,443
15,117
36
Other liabilities
355
348
8,516
8,360
9,731
9,731
9,669
37
Trade payables
657
-874
208,980
753
2,769
2,624
36,257
36,257
38,572
23
388
399
2,769
18,050
18,471
18,471
19,801
22
222
24
Investments accounted for using the equity method
Leased products
19,372
Property, plant and equipment
2,624
Other investments
Deferred tax
1,302
216
2,369
2,369
1,010
26
Financial assets
2,769
48,321
48,109
25
Receivables from sales financing
4,985
4,843
690
690
739
48,475
57
95
8,981
at 31 December 2018
Balance Sheet
→ BMW Group
Statements
Group
Financial
112
111
Attributable to shareholders of BMW AG
Basic earnings per share of common stock in €
Basic earnings per share of preferred stock in €
Dilutive effects
Diluted earnings per share of common stock in €
Diluted earnings per share of preferred stock in €
BMW GROUP
Attributable to minority interest
Financial result
Profit/loss before tax
Income taxes
Other financial result
Result from equity accounted investments
Interest and similar income
Interest and similar expenses
Profit/loss before financial result
Other operating expenses
Other operating income
Selling and administrative expenses
Gross profit
Profit/loss from continuing operations
Loss from discontinued operations
Net profit/loss
BALANCE SHEET AT 31 DECEMBER 2018
in € million
ASSETS
10,472
9,464
9,464
10,971
21
Intangible assets
20172
2018
20172
information)
Motorcycles
(unaudited supplementary
2018
information)
(unaudited supplementary
Automotive
1.1.20181 31.12.2017²
2018
Note
Group
14
Total assets
1,590
1,993
22,016
7,485
7,485
9,790
28
Other assets
714
618
23,124
1,566
1,366
27
Current tax
5,578
4,988
7,965
7,949
6,675
1,566
26
2
Cash and cash equivalents
749
51,030
51,463
73,542
73,496
83,538
Current assets
461
5
461
Assets held for sale
8
12
7,157
8,631
9,039
9,039
10,979
2
Financial assets
32,113
32,087
527
42,615
45,655
121,964
122,090
125,442
Non-current assets
32
477
33
5,085
1,630
1,630
2,026
28
Other assets
2,857
3,043
3,671
Inventories
29
Trade receivables
38,674
25
Receivables from sales financing
160
167
2,354
2,287
2,667
2,663
2,546
30
580
568
12,103
12,462
12,707
12,707
13,047
20
1,965
cial Statements.
9
Russian Rubel
Goodwill arises on first-time consolidation of an
acquired business when the cost of acquisition
exceeds the Group's share of the net fair value of the
assets, liabilities and contingent liabilities identified
during the acquisition.
If there is any indication of impairment of intangible
assets, or if an annual impairment test is required
(i.e. intangible assets with an indefinite useful life,
intangible assets during the development phase and
goodwill), an impairment test is performed. Each
individual asset is tested separately unless the cash
flows generated by the asset are not sufficiently inde-
pendent from the cash flows generated by other assets
or other groups of assets. In this case, impairment is
tested at the level of a cash-generating unit.
For the purpose of the impairment test, the carrying
amount of an asset (or a cash-generating unit) is com-
pared with the recoverable amount. The first step of
the impairment test is to determine the value in use.
If the value in use is lower than the carrying amount,
the next step is to determine the fair value less costs to
sell and compare the amount so determined with the
asset's carrying amount. If the fair value is lower than
the carrying amount, an impairment loss is recognised,
reducing the carrying amount to the higher of the
asset's value in use or fair value less costs to sell.
If the reason for a previously recognised impairment
loss no longer exists, the impairment loss is reversed
up to the level of the recoverable amount, but no higher
than the amortised acquisition or manufacturing cost.
Impairment losses on goodwill are not reversed.
As part of the process of assessing recoverability, it is
generally necessary to apply estimations and assump-
tions - in particular regarding future cash inflows and
outflows and the length of the forecast period - which
could differ from actual amounts. Actual amounts
may differ from the assumptions and estimations
used if business conditions develop differently to
expectations.
The BMW Group determines the value in use on the
basis of a present value computation. Cash flows
used for this calculation are derived from long-term
forecasts approved by management. These long-term
forecasts are based on detailed forecasts drawn up
at an operational level and, with a planning period
of six years, correspond roughly to a typical product
life cycle of vehicle projects. For the purposes of cal-
culating cash flows beyond the planning period, a
residual value is assumed which does not take growth
into account. Forecasting assumptions are continually
adjusted to current information and regularly com-
pared with external sources. The assumptions used
take account in particular of expectations of the prof-
itability of the product portfolio, future market share
development, macroeconomic developments (such
as currency, interest rate and raw materials prices)
as well as the legal environment and past experience.
Amounts are discounted on the basis of a market-
related cost of capital rate. Impairment tests for the
Automotive and Motorcycles cash-generating units
are performed using a risk-adjusted pre-tax cost of
capital (WACC). In the case of the Financial Services
cash-generating unit, a pre-tax cost of equity capital
is used, as is customary in the sector. The following
discount factors were applied:
in %
Automotive
Motorcycles
Financial Services
2018
Development costs for vehicle, module and architecture
projects are capitalised at manufacturing cost, to the
extent that attributable costs (including development-
related overhead costs) can be measured reliably and
both technical feasibility and successful marketing
are assured. It must also be sufficiently probable that
the development expenditure will generate future
economic benefits. Capitalised development costs are
amortised on a straight-line basis following the start
of production over the estimated product life cycle
(usually five to 12 years).
2017
12.0
12.0
12.0
13.4
13.4
The risk-adjusted discount rate, calculated using a
CAPM model, also takes into account specific peer-
group information relating to beta-factors, capital
structure data and borrowing costs. In conjunction
with the impairment tests for cash-generating units,
sensitivity analyses are performed for the main
assumptions in order to rule out that possible changes
to the assumptions used to determine the recoverable
amount would result in the requirement to recognise
an impairment loss.
123
124
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Accounting
Principles and
Policies
All items of property, plant and equipment are measured
at acquisition or manufacturing cost less accumulated
depreciation and accumulated impairment losses. The
cost of internally constructed plant and equipment
comprises all costs which are directly attributable
to the manufacturing process as well as an appro-
priate proportion of production-related overheads.
This includes production-related depreciation and
amortisation as well as an appropriate proportion
of administrative and social costs. Financing costs
are not included in acquisition or manufacturing cost
unless they are directly attributable to the asset. The
carrying amount of items of depreciable property,
plant and equipment is written down according to
scheduled usage-based depreciation - as a general
rule on a straight-line basis - over the useful lives of
the assets. Depreciation is recorded as an expense in
the income statement.
The following useful lives are applied throughout the
BMW Group:
12.0
in years
Purchased and internally-generated intangible assets
are recognised as assets where it is probable that the
use of the asset will generate future economic benefits
and where the costs of the asset can be determined
reliably. Such assets are measured at acquisition
or manufacturing cost, as a general rule without
financing costs, and, to the extent that they have a
finite useful life, amortised on a straight-line basis
over their estimated useful lives. With the exception
of capitalised development costs, intangible assets
are amortised as a general rule over their estimated
useful lives of between three and 20 years.
Public sector grants are not recognised until there is
reasonable assurance that the conditions attaching to
them have been complied with and the grants will be
received. The resulting income is recognised in cost
of sales over the periods in which the costs occur that
they are intended to compensate.
1,298.78
1,276.47
79.72
69.04
74.07
65.91
16.45
14.81
15.62
15.04
1.14
1.20
Earnings per share are calculated as follows: Basic
earnings per share are calculated for common and
preferred stock by dividing the net profit for the year
after minority interests and attributable to each cate-
gory of stock, by the average number of outstanding
shares. Net profit for the year is accordingly allocated
to the different categories of stock. The portion of
net profit that is not being distributed is allocated
to each category of stock based on the number of
outstanding shares. Profits available for distribution
are determined directly on the basis of the dividend
resolutions passed for common and preferred stock.
Diluted earnings per share are calculated and sepa-
rately disclosed in accordance with IAS 33.
1.18
121
122
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Accounting
Principles and
Policies
04
Accounting policies, assumptions, judgements
and estimations
Revenues from contracts with customers include in
particular revenues from the sale of products and
leased assets as well as from services. Revenue is
recognised when control is transferred to the deal-
ership or retail customer. This is usually the case
at the point in time when the risks and rewards of
ownership are transferred. In the case of services,
control is transferred over time. Revenues are stated
net of settlement discount, bonuses and rebates as well
as interest and residual value subsidies. Variable con-
sideration components, such as bonuses and interest
subsidies, are measured at the expected value and, in
the case of multi-component contracts, allocated to all
performance obligations unless directly attributable
to the sale of a vehicle. The consideration arising from
these sales usually falls due for payment immediately
or within 30 days. In exceptional cases, a longer pay-
ment may also be agreed.
Consideration for the rendering of services to customers
usually falls due for payment at the beginning of a
contract and is deferred as a contract liability under
deferred income. The deferred amount is released over
the service period and recognised as revenue in the
income statement. Reflecting the fact that expenses
are incurred over the period in which services are ren-
dered, deferred income is released on the basis of the
expected cost trend. If the sale of products includes a
determinable amount for services (multiple-component
contracts), the related revenues are deferred and
recognised as income in the same way.
Revenues from the sale of vehicles, for which repur-
chase arrangements are in place, are not recognised
immediately in full. Instead, revenues are either recog-
nised proportionately or the difference between the
sales and repurchase price recognised in instalments
over the term of the contract depending on the nature
of the agreement. This includes in particular revenues
from vehicle sales, where it is expected that vehicles
will return to the Group as leased vehicles in the
subsequent period. In this case, assets and liabilities
relating to rights of return are recognised.
Revenues also include lease rentals and interest
income from financial services. Income from lease
instalments arising on operating leases is recognised
on a straight-line over the lease term. Interest income
arising on finance leases as well as on retail customer
and dealership financing is recognised using the effec-
tive interest method and reported as interest income
on loan financing within revenues.
1.13
1,281.41
Factory and office buildings, residential buildings, fixed
installations in buildings and outside facilities
8 to 50
3 to 21
Work in progress and finished goods are stated at
the lower of manufacturing cost and net realisable
value. Manufacturing cost comprises all costs which
are directly attributable to the manufacturing process
as well as an appropriate proportion of production-
related overheads. This includes production-related
depreciation and amortisation and an appropriate
proportion of administrative and social costs. Financ-
ing costs are not included in the acquisition or man-
ufacturing cost of inventories.
Cash and cash equivalents comprise mainly cash on hand
and cash at bank with an original term of up to three
months. With the exception of money market funds,
cash and cash equivalents are measured at amortised
cost.
Provisions for pensions are measured using the projected
unit credit method. Under this method, not only
obligations relating to known vested benefits at the
reporting date are recognised, but also the effect of
future expected increases in pensions and salaries. The
calculation is based on independent actuarial valua-
tions which take into account relevant biometric factors.
In the case of funded plans, the pension obligation is
offset against plan assets measured at their fair value.
If the plan assets exceed the pension obligation, the
surplus is tested for recoverability. In the event that
the BMW Group has a right of reimbursement or a
right to reduce future contributions, it reports an asset
(within Other financial assets), measured on the basis
of the present value of the future economic benefits
attached to the plan assets. For funded plans, in cases
where the obligation exceeds plan assets, a liability is
recognised under pension provisions.
The calculation of the amount of the provision
requires assumptions to be made with regard to
discount rates, salary trends, employee fluctuation
and the life expectancy of employees. Discount rates
are determined by reference to market yields at the
end of the reporting period on high quality fixed-in-
terest corporate bonds. The salary trend relates to
the expected future rate of salary increase which is
estimated annually based on inflation and the career
development of employees within the Group.
Net interest expense on the net defined benefit lia-
bility and net interest income on net defined benefit
assets are presented separately within the financial
result. All other costs relating to allocations to pension
provisions are allocated to costs by function in the
income statement.
Past service cost arises where a BMW Group com-
pany introduces a defined benefit plan or changes
the benefits payable under an existing plan. This cost
is recognised immediately in the income statement.
Similarly, gains and losses arising on the settlement
of a defined benefit plan are recognised immediately
in the income statement.
Remeasurement of the net liability can result from
changes in the present value of the defined benefit
obligation, the fair value of the plan assets or the
asset ceiling. Remeasurement can result, amongst
others, from changes in financial and demographic
parameters, as well as changes following the portfolio
development. Remeasurements are recognised imme-
diately in other comprehensive income and hence
directly in equity (within revenue reserves).
Other provisions are recognised when the BMW Group
has a present legal or factual obligation towards a third
party arising from past events, the settlement of which
is probable, and when the amount of the obligation
can be reliably estimated. Provisions with a remaining
period of more than one year are measured at their
net present value.
The measurement of provisions for statutory and
non-statutory warranty obligations (statutory, contractual
and voluntary) involves estimations. In addition to manu-
facturer warranties prescribed by law, the BMW Group
offers various further standard (assurance-type) war-
ranties depending on the product and sales market.
No provisions are recognised for additionally pur-
chased service packages that are treated as separate
performance obligations.
127
128
Inventories of raw materials, supplies and goods for
resale are stated at the lower of average acquisition
cost and net realisable value.
Group
Financial
Statements
Principles and
Policies
Provisions for statutory and non-statutory warranties
are recognised at the point in time when control over
the goods is transferred to the dealership or retail
customer or when a new category of warranty is
introduced. With respect to the level of the provi-
sion, estimations are made in particular based on past
experience of damage claims and processes. Future
potential repair costs and price increases per product
and market are also taken into account. Provisions
for warranties for all companies of the BMW Group
are adjusted regularly to take account of new infor-
mation, with the impact of any changes recognised
in the income statement. Further information is
pro-
vided in note 33. Similar estimates are also made → see
in conjunction with the measurement of expected
reimbursement claims.
The recognition and measurement of provisions
for litigation and liability risks necessitates making
assumptions in order to determine the probability of
liability, the amount of claim and the duration of the
legal dispute. The assumptions made, especially the
assumption about the outcome of legal proceedings,
are subject to a high degree of uncertainty. The appro-
priateness of assumptions is regularly reviewed, based
on assessments undertaken both by management and
external experts, such as lawyers. If new developments
arise in the future that result in a different assessment,
provisions are adjusted accordingly.
If the recognition and measurement criteria relevant
for provisions are not fulfilled and the outflow of
resources on fulfilment is not unlikely, the potential
obligation is disclosed as a contingent liability.
Related party disclosures comprise information on
associated companies, joint ventures and non-con-
solidated subsidiaries as well as individuals which
have the ability to exercise a controlling or significant
influence over the financial and operating policies
of the BMW Group. This includes all persons in key
positions of the Company, as well as close members
of their families or intermediary entities. In the case
of the BMW Group, this also applies to members of
the Board of Management and the Supervisory Board.
Details relating to these individuals and entities are
provided in → note 40 and in the list of investments
disclosed in → note 46.
note 33
→ see
not 41
→ see
note 40 and 46
Share-based remuneration programmes which are expected
to be settled in shares are measured at their fair value
at grant date. The related expense is recognised as
personnel expense in the income statement over the
vesting period and offset against capital reserves.
Share-based remuneration programmes expected to
be settled in cash are revalued to their fair value at
each balance sheet date between the grant date and
the settlement date and on the settlement date itself.
The expense is recognised as personnel expense in
the income statement over the vesting period and
presented in the balance sheet as a provision.
The share-based remuneration programme for Board
of Management members and senior heads of depart-
ment entitles BMW AG to elect whether to settle its
commitments in cash or with shares of BMW AG
common stock. Based on the decision to settle in cash,
the share-based remuneration programmes for Board
of Management members and senior heads of depart-
ment are accounted for as cash-settled, share-based
remuneration programmes. Further information on
share-based remuneration programmes is provided
in note 41.
Notes to the Group
Financial Statements
→ Accounting
Plant and machinery
Current income taxes are calculated within the
BMW Group on the basis of tax legislation applicable
in the relevant countries. To the extent that judgement
was necessary to determine the treatment and amount
of tax items presented in the financial statements,
there is in principle a possibility that local tax author-
ities may take a different position.
In the case of raw materials hedges that are accounted
for as cash flow hedges, the hedging instruments are
designated in full as part of the hedging relationship.
As an exception to this general rule, the interest
component of raw materials derivative instruments
redesignated in conjunction with the first-time
application of IFRS 9 was not designated as part of the
hedging relationship. Changes in the fair value of
this component are recorded as costs of hedging
on a separate line within accumulated other equity.
Amounts recorded in accumulated other equity are
included in the carrying amount of inventories on
initial recognition.
Other equipment, factory and office equipment
2 to 25
For machinery used in multiple-shift operations,
depreciation rates are increased to account for the
additional utilisation. If there is any indication of
impairment of property, plant and equipment, an
impairment test is performed as described above for
intangible assets.
With respect to lease arrangements of the BMW Group,
use of judgement is required, in particular with regard
to the transfer of economic ownership of a leased item.
Leased items of property, plant and equipment whose
economic ownership is attributed to the BMW Group
(finance leases) are measured on initial recognition at
their fair value or, if lower, at the net present value of
minimum lease payments. The assets are depreciated
using the straight-line method over their estimated
useful lives or, if shorter, over the contractual lease
period. Obligations for future lease payments are
recognised at their net present value in other financial
liabilities.
Group products recognised by BMW Group entities as
leased products under operating leases are measured at
manufacturing cost, including any initial direct costs.
All other leased products are measured at acquisition
cost. All leased products are depreciated over the period
of the lease using the straight-line method down to
their expected residual value. Where the recoverable
amount of a lease exceeds the asset's carrying amount,
changes in residual value expectations are recognised
by adjusting scheduled depreciation prospectively
over the remaining term of the lease. If the recoverable
amount is lower than the asset's carrying amount,
an impairment loss is recognised for the shortfall. A
test is carried out at each balance sheet date to deter-
mine whether an impairment loss recognised in prior
periods no longer exists or has decreased. In such
cases, the carrying amount of the asset is increased
to the recoverable amount, at a maximum up to the
amount of the asset's amortised cost.
Assumptions and estimations are required regarding
future residual values, since these represent a signif-
icant part of future cash inflows. Relevant factors
to be considered include the trend in market prices
and demand on the pre-owned vehicle market. The
assumptions are based on internally available historical
data and current market data as well as on forecasts of
external institutions. Furthermore, assumptions are
regularly validated by comparison with external data.
-
Investments accounted for using the equity method are
measured provided no impairment has been recog-
nised at cost of investment adjusted for the Group's
share of earnings and changes in equity capital.
The Group's financial assets include in particular other
investments, receivables from sales financing, mar-
ketable securities and investment funds, derivative
financial assets, trade receivables and cash and
cash equivalents. Non-derivative financial assets are
accounted for on the basis of the settlement date.
Depending on the business model and the structure of
contractual cash flows, financial assets are classified
as measured at amortised cost, at fair value through
comprehensive income or at fair value through profit
or loss. The category "at fair value through compre-
hensive income" at the BMW Group comprises mainly
marketable securities and investment funds used for
liquidity management purposes. Selected marketable
securities and investment fund, money market funds
within cash and cash equivalents as well as convertible
bonds are recognised at fair value through profit or
loss, as their contractual cash flows do not solely
represent payments of principal and interest.
Deferred taxes are recognised on all temporary differ-
ences between the tax and accounting bases of assets
and liabilities and on consolidation procedures. The
recoverability of deferred tax assets is assessed at each
balance sheet date on the basis of planned taxable
income in future financial years. If with a probabil-
ity of more than 50 percent future tax benefits will
not be realised, either in part or in total, a valuation
allowance is recognised on the deferred tax assets. The
calculation of deferred tax assets requires assumptions
to be made with regard to the level of future taxable
income and the timing of recovery of deferred tax
assets. These assumptions take account of forecast
operating results and the impact on earnings of the
reversal of taxable temporary differences. Since future
business developments cannot be predicted with cer-
tainty and to some extent cannot be influenced by the
BMW Group, the measurement of deferred tax assets
is subject to uncertainty. Deferred taxes are calculated on
the basis of tax rates which are applicable or expected
to apply in the relevant national jurisdictions when
the amounts are recovered.
The market values of financial instruments measured
at fair value are determined on the basis of market
information available at the balance sheet date, such
as quoted prices or using appropriate measurement
methods, in particular the discounted cash flow method.
Receivables from sales financing are measured at amor-
tised cost using the effective interest rate method. This
also includes receivables arising on vehicle finance
leases.
With the exception of operating lease and trade
receivables, the BMW Group applies the general
approach described in IFRS 9 to determine impairment
of financial assets. Under the general approach, loss
allowances are measured on initial recognition on the
basis of the expected 12-month credit loss (stage 1). If
the credit loss risk at the end of the reporting period
has increased significantly since initial recognition,
the impairment allowance is measured on the basis
of lifetime expected credit losses (stage 2 – general
approach). The BMW Group applies the simplified
approach described in IFRS 9 to operating lease
and trade receivables, whereby the amount of the
loss allowance is measured subsequent to the initial
recognition of the receivable on the basis of lifetime
expected credit losses (stage 2 – simplified approach).
For the purposes of allocating an item to stage 2, it
is irrelevant whether the credit risk of the asset
concerned has increased significantly since initial
recognition. In the case of credit-impaired assets
which had not been credit-impaired at the time they
were acquired or originated, an impairment allowance
is recognised at an amount equal to lifetime expected
credit losses (stage 3). This is the case regardless of
whether the general or simplified approach is applied.
As a general rule, the BMW Group assumes that a
receivable is in default if it is more than 90 days
overdue or if there are objective indications of insol-
vency. Credit-impaired assets are identified as such
on the basis of this definition of default. In the case
of stage 3 assets, interest income is calculated on the
asset's carrying amount less any impairment loss.
Loss allowances on receivables from sales financing
are determined primarily on the basis of past expe-
rience with credit losses, current data on overdue
receivables, rating classes and scoring information.
Forward-looking information (for instance forecasts of
key performance indicators) is also taken into account
if, based on past experience, such indicators show a
substantive correlation to actual credit losses.
The measurement of the change in default risk is based
on a comparison of the default risk at the date of initial
recognition and at the end of the reporting period.
The default risk at the end of each reporting period
is determined on the basis of credit checks, current
key economic indicators and any overdue payments.
Loss allowances on trade receivables are determined
primarily on the basis of information relating to over-
due amounts. In the case of marketable securities and
investment funds, the BMW Group usually applies
the option not to allocate financial assets with a low
default risk to different stages. Accordingly, assets
with an investment grade rating are always allocated to
stage 1. The loss allowance on these assets is calculated
using the input factors available on the market, such
as ratings and default probabilities.
The BMW Group writes off financial assets when it has
no reasonable expectation of recovering the amounts
concerned. This may be the case, for instance, if the
debtor is deemed not to have sufficient assets or other
sources of income to service the debt.
125
126
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Accounting
Principles and
Policies
Derivative financial instruments are used within the
BMW Group for hedging purposes in order to reduce
currency, interest rate, fair value and market price
risks. All derivative financial instruments are mea-
sured at their fair value. Fair values are determined
on the basis of valuation models. Observable market
price, tenor and currency basis spreads are taken into
account in the measurement of derivative financial
instruments. Furthermore, the Group's own credit
risk and that of counterparties is taken into account
on the basis of credit default swap values for market
contracts with matching terms.
Where hedge accounting is applied, changes in fair value
are recognised in the income statement in sundry other
financial result or in other comprehensive income as
a component of accumulated other equity, depending
on whether the hedging relationship is classified as a
fair value hedge or a cash flow hedge. Fair value hedges
are mainly used to hedge interest rate risks relating to
bonds, other financial liabilities and receivables from
sales financing. Cross currency basis spreads are not
designated as part of the hedging relationship in the
case of interest rate hedges accounted for as fair value
hedges. Accordingly, changes in the market value of
such instruments are recorded as costs of hedging
within accumulated other equity. Amounts recorded
in equity are reclassified to the income statement over
the term of the hedging relationship.
The time values of option transactions and the interest
component of forward currency contracts are not des-
ignated as part of the hedging relationship in the case
of currency hedges accounted for as cash flow hedges.
Changes in the market value of such components are
recorded as costs of hedging on a separate line within
accumulated other equity. Amounts accumulated in
other equity from currency hedges are reclassified to
cost of sales when the related hedged item is recog-
nised in profit or loss.
Items reported under other investments within the
scope of IFRS 9 are measured at fair value through
profit or loss. Investments in subsidiaries, joint
arrangements and associated companies that are not
material to the BMW Group and which do not fall
within the scope of IFRS 9 are also included in other
investments.
1,271.07
The BMW Group applies the option to recognise the
credit risks arising from the fair values of a group of
derivative financial assets and liabilities on the basis
of their total net amount. Portfolio-based valuation
adjustments (credit valuation adjustments and debit
valuation adjustments) to the individual derivative
financial assets and financial liabilities are allocated
using the relative fair value approach (net method).
130.36
5
Trade payables
16
Provisions
IDENTIFIED LIABILITIES
Cash and cash equivalents
Inventories
Other receivables
Trade receivables
Trademarks
5
1
Deferred tax liabilities
7
22
111
Fair values at
acquisition date
Intangible assets
IDENTIFIED ASSETS
in € million
The following table shows the purchase price allocation:
DriveNow's equity prior to the acquisition stood at
a negative amount of €2 million. As a result of the
step acquisition, the shares already held by BMW
were remeasured to their fair value, giving rise to a
gain of €209 million, which is included in the result
on investments. The fair value of shares already held
amounts to €209 million.
DriveNow GmbH & Co. KG and DriveNow Verwal-
tungs GmbH and their foreign subsidiaries DriveNow
Austria GmbH, DriveNow UK Limited, DriveNow
Sverige AB, DriveNow Belgium S.p.r.l. and DriveNow
Italy S.r.l. have been fully consolidated since the first
quarter of 2018.
services.
Following approval by the antitrust authorities and
with effect from 9 March 2018, the BMW Group
acquired the remaining 50% of the shares of the
DriveNow companies together with their subsidiaries
for a purchase price of €209 million. The purchase
price was settled by the transfer of cash funds. The
acquisition expands the BMW Group's strategic
options for the further development of mobility
Principles and
Policies
9
34
Other liabilities
3
126.68
Japanese Yen
Chinese Renminbi
British Pound
1 Euro =
The exchange rates of currencies which have a mate-
rial impact on the Group Financial Statements were
as follows:
In the single entity accounts of BMW AG and its sub-
sidiaries, foreign currency receivables and payables
are measured on initial recognition using the exchange
rate prevailing at the date of first-time recognition.
At the end of the reporting period, foreign currency
receivables and payables are measured using the clos-
ing exchange rate. The resulting unrealised gains and
losses, as well as realised gains and losses arising on
settlement, are recognised in the income statement.
Non-monetary balance sheet items denominated in
foreign currencies are rolled forward on the basis of
historical exchange rates.
translated using the modified closing rate method.
Under this method, assets and liabilities are translat-
ed at the closing exchange rate, whilst income and
expenses are translated at the average exchange rate.
Differences arising on foreign currency translation are
presented in "Accumulated other equity".
The financial statements of consolidated compa-
nies which are presented in a foreign currency are 7
Foreign currency translation and measurement
03
The other changes to the Group reporting entity do
not have a material impact on the results of operations,
financial position and net assets of the Group.
In December 2017, BMW AG, Audi AG, Ingolstadt,
and Daimler AG, Stuttgart, signed agreements to sell
shares in THERE Holding B.V. (THERE) to Robert
Bosch Investment Nederland B.V., Boxtel, and to
Continental Automotive Holding Netherlands B.V.,
Maastricht. Each of these two parties acquired 5.9% of
the shares, which were sold in equal parts by BMW AG,
Audi AG and Daimler AG. The transactions were
completed during the first quarter of 2018. The sale
does not have a significant impact on the results of
operations, financial position and net assets of the
BMW Group.
As a result of the merger, the investments in the
companies previously held by BMW will be remea-
sured to their fair value. This will give rise to a one-off
positive effect on Group earnings in the region of
between €100 million and €300 million. Due to the
fact that the transaction was completed shortly after
the BMW Group's year-end, the work on opening
balance sheets at the merger date and the calculation
of the final purchase prices have not yet been finalised.
For this reason, the final purchase prices cannot yet
be determined definitively. Similarly, purchase price
allocations have not yet been finalised. The disclosures
made should be regarded as provisional since no fur-
ther information is available at present.
Following approval by the antitrust authorities and
with effect from 31 January 2019, the BMW Group
has now completed the agreement with the Daimler
Group regarding the merger of certain business units
that provide mobility services. Existing on-demand
mobility offerings in the areas of car sharing, ride-
hailing, parking, charging and multi-modality will
be combined and strategically expanded. The
BMW Group and the Daimler Group each hold equal
shares in the joint ventures that comprise the mobility
services referred to above.
Assets and liabilities totalling €461 million and
€62 million respectively are reported as discontin-
ued operations at 31 December 2018. These items are
disclosed separately in the Group Balance Sheet and
allocated to the Automotive segment. The loss after
tax from discontinued operations for the financial
year 2018 amounted to €33 million. This amount is
also disclosed separately in the Income Statements
for the Group and Segments.
On 28 March 2018, the BMW Group signed an agree-
ment with Daimler - subject to anti-trust approval.
regarding the merger of certain business units that
provide mobility services. DriveNow is part of this
agreement and is therefore accounted for as a dis-
continued operation.
321
Goodwill
97
Total identified net assets
418
Consideration transferred (purchase price)
GOODWILL CALCULATION
40
97
Total identified net assets
→ Accounting
Notes to the Group
Financial Statements
Korean Won
Group
Financial
Joint operations and joint ventures are forms of joint
arrangements. Such an arrangement exists when a
BMW Group entity jointly carries out activities with
a third party on the basis of a contractual agreement.
An entity is classified as an associated company if
BMW AG - either directly or indirectly – has the abil-
ity to exercise significant influence over the entity's
operating and financial policies. As a general rule,
the Group is assumed to have significant influence
if it holds 20% or more of the entity's voting power.
An entity is deemed to be controlled if BMW AG -
either directly or indirectly - has power over it, is
exposed or has rights to variable returns from it and
has the ability to influence those returns.
When assessing whether an investment gives rise to a
controlled entity, an associated company, a joint oper-
ation or a joint venture, the BMW Group considers
contractual arrangements and other circumstances, as
well as the structure and legal form of the entity. Discre-
tionary decisions may also be required. If indications
exist of a change in the judgement of (joint) control, the
BMW Group undertakes a new assessment.
All consolidated subsidiaries have the same year-end as
BMW AG with the exception of BMW India Private Ltd.
and BMW India Financial Services Private Ltd., whose
year-ends are 31 March in accordance with local legal
requirements.
The BMW Group Financial Statements include BMW AG
and all material subsidiaries over which BMW AG -
either directly or indirectly - exercises control. This
also includes 58 structured entities, consisting of asset-
backed securities entities and special-purpose funds.
and consolidation principles
Group reporting entity
02
South African Rand
US-Dollar
Argentina has fulfilled the definition of a hyperinfla-
tionary economy since 1 July 2018. For this reason,
IAS 29 (Financial Reporting in Hyperinflationary
Economies) is being applied for the BMW subsidiary in
Argentina with effect from the financial year 2018. The
price indices published by the Federación Argentina
de Consejos Profesionales de Ciencias Económicas
(FACPCE) are used to adjust non-monetary assets and
liabilities and items in the income statement. The
resulting effects are not significant for the BMW Group
and for this reason prior year figures have not been
adjusted.
Closing rate
Average rate
31.12.2018
31.12.2017
2018
2017
0.89
0.88
0.88
7.87
7.80
7.81
7.63
125.77
Statements
134.93
In the case of a joint operation, the parties that have
joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the
arrangement. Assets, liabilities, revenues and expenses
of a joint operation are recognised proportionately in
the Group Financial Statements on the basis of the
BMW Group entity's rights and obligations (propor-
tionate consolidation). Together with SGL Carbon SE,
companies of the BMW Group were previously party
to joint operations for the manufacture of carbon
fibres and carbon fibre fabrics used in vehicle pro-
duction. In November 2017, an agreement was signed
with SGL Carbon SE concerning that entity's gradual
acquisition of the BMW Group's 49% shareholding.
Accordingly, between the beginning of 2018 and the
end of 2020 at the latest, SGL Carbon SE will become
the sole owner of the hitherto joint operations. As a
consequence of the transaction, the joint operations
are no longer consolidated proportionately in the
BMW Group Financial Statements and are no longer
consolidated entities with effect from the financial
year 2018. SGL Composites LLC continues to be held
as an investment.
0.89
In the case of a joint venture, the parties which have
joint control only have rights to the net assets of the
arrangement.
119
120
The BMW Group is also party to a cooperation with
Toyota Motor Corporation, Toyota City, for the devel-
opment of a sports car. This cooperation is accounted
for as a joint operation.
The BMW Group previously operated the joint ven-
tures DriveNow GmbH & Co. KG and DriveNow
Verwaltungs GmbH (DriveNow) together with Sixt SE,
Pullach. DriveNow offers car-sharing services in major
German cities and abroad. In January 2018, the
BMW Group signed an agreement with Sixt SE for
the complete acquisition of the shares in DriveNow.
217
194
23
15
22
31 December 2018
Included at
No longer included
in 2018
2
15
24
The following changes took place in the Group report-
ing entity in the financial year 2018:
first time in 2018
Associated companies and joint ventures are accounted
for using the equity method, with measurement on
initial recognition based on acquisition cost.
Included at
31 December 2017
Included for the
Foreign
Germany
Total
21
187
208
22
Group
Financial
→ Accounting
Principles and
→ Notes to the
Notes to the Group
Financial Statements
Statements
Policies
138
178
Total impact on equity
Total financial liabilities
137
-77
23
Trade payables
Other liabilities
Income Statement
Financial liabilities
FINANCIAL LIABILITIES
The impact of the various changes arising in con-
junction with the first-time application of IFRS 9 is
explained below:
in € million
(b) Selected non-current marketable securities and
loans to third parties, for which the fair value
option available under IAS 39 was previously used,
were reclassified to the category "at fair value
through profit or loss" because their contractual
cash flows do not solely represent payments of
principal and interest on the principal amount
outstanding. There was no difference between
carrying amounts pursuant to IAS 39 and fair
values at 1 January 2018.
Receivables from sales financing
Total financial assets
1.1.2018
IFRS 9
IFRS 9
IAS 39
allowance due to
Impairment
allowances
Adjustment to
impairment
Impairment
allowances
31.12.2017
→ 75
BMW Group reconciliation of impairment allowances
The following table shows the adjustments made to
impairment allowances in the Group Balance Sheet as
a result of the first-time application of IFRS 9.
(h) Some of the money market funds with a fixed
net asset value were reclassified from cash to
the category "at fair value through profit or loss".
They do not meet the criteria for measurement
at amortised cost in accordance with IFRS 9 be-
cause their contractual cash flows do not solely
represent payments of principal and interest on
the principal amount outstanding. There was
no difference between carrying amounts pursuant
to IAS 39 and fair values at 1 January 2018.
(g) Specific listed bonds were reclassified to the cat-
egory "at amortised cost". At the date of first-
time application of IFRS 9, the BMW Group uses
a business model for these bonds, the objective
of which is to collect contractual cash flows that
solely represent payments of principal and interest
on the principal amount outstanding. The market
value of these instruments at 31 December 2018
amounted to €680 million (31 December 2017:
€738 million). If the reclassification to other
comprehensive income had not taken place in
the period under report, a fair value loss of
€2 million would have been recognised through
other comprehensive income.
(f) Adjustment of the amount and presentation of
impairment allowances in accordance with the
new requirements of IFRS 9.
7
(e) Specific investments in debt instruments were
reclassified to the category "at fair value
through profit or loss" because their contractual
cash flows do not solely represent payments
of principal and interest on the principal amount
outstanding.
(d) The new accounting requirements for interest rate
hedges reduce the carrying amount of financial
liabilities designated as hedged items within a
hedge relationship by €30 million and increase
accumulated other equity by €5 million. At the
date of adoption of the new requirements, rev-
enue reserves increased by €18 million, after offset
of deferred tax.
(c) Adjustment of impairment allowances in accor-
dance with the new requirements of IFRS 9.
(a) Financial investments in equity instruments were
reclassified to the category "at fair value through
profit or loss". There was no difference between
carrying amounts pursuant to IAS 39 and fair
values at 1 January 2018.
Other assets
-77
Collateral assets
-30
155
-1,147
-30
116
-8
3
-6
7
-2
.6
2
-2
5
5
c)
93
b)
22
-30
7
FINANCIAL ASSETS
Other investments
Receivables from companies
in which an investment is held
Receivables from subsidiaries
Other assets
Trade receivables
Cash and cash equivalents
Credit card receivables
Other
Loans to third parties
이
b)
Marketable securities and investment funds
Other derivative instruments
Fair value hedges
Cash flow hedges
Derivative instruments
Financial assets
Receivables from sales financing
f)
e)
a
23
128
→ 69
Credit card receivables
-15
-131
-146
Lessor
Changes in timing of income statement recognition of
volume-dependent bonuses
Financial Services
-12
-113
Eliminations
Total impact
-143
-291
Other financial reporting standards issued by the IASB
and not yet applied are not expected to have any
significant impact on the BMW Group Financial
Statements.
06
First-time application of IFRS 15
The new Standard IFRS 15 (Revenue from Contracts with
Customers) assimilates the numerous requirements
and interpretations relating to revenue recognition
into a single Standard. The new Standard also stip-
ulates uniform revenue recognition principles for all
sectors and all categories.
In accordance with the transitional provisions con-
tained in IFRS 15, the BMW Group has applied the
new requirements for revenue from contracts with
customers in the 2018 financial year using the full
retrospective option. For this reason, the opening bal-
ance sheet at 1 January 2017, the figures reported for
the previous year and the balance sheet at 31 Decem-
ber 2017 have been adjusted and made comparable.
The exemption provision, allowing contracts fulfilled
prior to 1 January 2017 not to be newly assessed in
accordance with IFRS 15, has been applied. The impact
of applying the exemption is classified as insignificant
due to the fact that it only affects the BMW Group in
a few individual cases.
Revenue recognition from contracts with customers
is based on a five-stage model. Revenues are required
to be recognised either over time or at a specific point
in time. A major difference to the previous Standard
is the increased scope of discretion for estimates and
the introduction of thresholds, thus influencing the
amount and timing of revenue recognition.
-116
Accounting for buyback arrangements and rights
of return for vehicles sold, but which the Financial
Services segment will subsequently lease to customers,
results in the earlier recognition of intragroup elimina-
tions. The adoption of IFRS 15 results in a retrospective
decrease in Group equity at 1 January 2017 amounting
to €498 million, after offset of deferred tax amount-
ing to €239 million (31 December 2017: reduction
of revenue reserves by €553 million, after offset of
deferred tax amounting to €192 million). The lower
amount of deferred tax at 31 December 2017 results
from the reduction of the US federal corporate tax
rate with effect from 1 January 2018. The earlier date
for consolidating intragroup transactions also results
in the recognition of assets and liabilities relating to
rights of return, causing other current assets and other
current liabilities to increase. The impact on earnings
in the financial year 2018 was not significant.
-32
Measurement of right-of-use assets as if IFRS 16 had
been applied from the inception of the contract
First-time application of requirements applicable to
finance leases of manufacturers or dealers
a)
2,546
The first-time application of IFRS 16 with effect from
1 January 2019, in conjunction with IFRS 15, will also
require the BMW Group to account for finance leases
concluded with retail customers via the Financial
Services segment in accordance with the requirements
applicable to manufacturers or dealers. For this reason,
in future, revenues and cost of sales arising on the
sale of vehicles which will subsequently be leased to
customers under finance lease arrangements will be
recognised at a later date. Revenues and cost of sales
relating to vehicle sales will no longer be recognised at
the time of sale, but rather at the commencement date
of the lease. Revenues will be recognised on the basis
of the leased asset's fair value, reduced by any unguar-
anteed residual value of vehicles that are expected
to be returned to the Group. Cost of sales will also be
reduced for unguaranteed residual values. In addition,
initial direct costs incurred by the Financial Services
segment will be recognised at Group level as cost of
sales. Overall, this results in a retrospective decrease
in Group revenue reserves as at 1 January 2018 of
€15 million, after offset of deferred tax amounting to
€4 million (31 December 2018: decrease of revenue
reserves of €146 million, after offset of deferred tax
amounting to €44 million). The adoption of these
requirements will not have a material impact on the
accounting in the Automotive and Financial Services
segments.
The following table provides an overview of the
expected effects on revenue reserves from the first-
time application of IFRS 16 and the related change
in the methods used to account for leases as a lessor:
in € million
Change
Impact on
Automotive
revenue reserves
Impact on
revenue reserves
1.1.2018
2018
1.1.2019
Segment
Lessee
Lessor
After-tax
earnings impact
-1,019
In accordance with IFRS 15, costs incurred for sales
promotion measures in the Automotive segment,
such as sales support or residual value subsidies,
are required to be treated as variable components of
consideration and therefore have the effect of reducing
revenue. Variable consideration is measured on the
basis of the amount of consideration to which the
BMW Group expects to be entitled. Some of these
costs were previously reported as cost of sales. The
change in classification in the income statement
results in a decrease in both revenues and cost of
sales. For the financial year 2017, the retrospective
reclassification recorded by the Automotive segment
amounted to €2.9 billion, which did not, however,
have a significant impact at Group level.
As a result of the retrospective adjustments described
above, the Automotive segment's EBIT margin for
the financial year 2017 improved by 0.3 percentage
points to 9.2%.
As originally
reported
Adjustment
IFRS 15
Adjusted
according to
IFRS 15
121,671
-1,099
114
-1,213
Total
thereof other assets
-2
Marketable securities and investment funds
-60
-4
-56
Trade receivables
-18
-8
-10
-2
If the sale of products includes a determinable amount
for services (multiple-component contracts), the related
revenues are deferred and recognised as income
over time. Variable consideration to be received for
multi-component contracts is allocated across all
service obligations unless it is directly attributable
to the sale of the vehicle. As a result of the change
in accounting policy for multi-component contracts
with variable consideration components, changes
in the allocation of transaction prices result for the
Automotive segment in higher amounts being recog-
nised for vehicle sales and a lower level of amounts
deferred for service contracts. The shift in the timing
of revenue recognition resulted in a retrospective
increase in Group revenue reserves at 1 January 2017
of €89 million, after offset of deferred tax amounting to
€38 million (31 December 2017: increase in Group rev-
enue reserves of €112 million, after offset of deferred
tax amounting to €42 million). The impact on earnings
in the financial year 2018 was not significant.
Total current assets
thereof deferred tax
A different accounting treatment may be required if
buyback arrangements are in place with customers,
resulting in a shift in the timing of revenue recogni-
tion. The resulting impact was not significant.
Buyback arrangements between the Automotive and
Financial Services segments are not reflected in the
internal management system or reporting and there-
fore, in accordance with IFRS 8, do not result in any
changes in the presentation of segment information.
131
132
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Accounting
thereof other assets
Principles and
The following tables show the impact on the balance
sheets at 1 January 2017 and 31 December 2017,
as well as on the income statement, statement of 7
comprehensive income and cash flow statement for
the financial year 2017:
BMW Group change in presentation of balance sheet at 1 January 2017
in € million
ASSETS
Total non-current assets
thereof investments accounted for using the equity method
Policies
-101
1,108
-8
5,045
69,047
2,718
71,765
6,313
54
6,367
10,779
2,664
13,443
193,483
2,023
195,506
133
BMW Group change in presentation of income statement
for the period 1 January to 31 December 2017
134
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Accounting
-365
5,410
2,157
-84
54,112
-441
53,671
thereof revenue reserves
51,256
-441
50,815
Total non-current provisions and liabilities
69,888
-254
Principles and
69,634
5,437
195
5,632
thereof deferred tax
thereof other liabilities
Total current provisions and liabilities
thereof other provisions
thereof other liabilities
Total equity and liabilities
2,241
thereof other provisions
Policies
→ 71
in € million
Adjustment
IFRS 15
Adjusted
according to
IFRS 15
98,678
-396
98,282
-78,744
415
-78,329
19,934
As originally
reported
19
9,880
19
9,899
10,655
20
10,675
-1,949
-51
-2,000
8,706
19,953
thereof equity attributable to shareholders of BMW AG
The effects of the first-time application of IFRS 15
on equity are shown in the Statement of Changes
in Equity.
Other
Revenues
Cost of sales
Gross profit
Profit/loss before financial result
Profit/loss before tax
Income taxes
Net profit/loss
Attributable to shareholders of BMW AG
Basic earnings per share of common stock in €
Basic earnings per share of preferred stock in €
Diluted earnings per share of common stock in €
Diluted earnings per share of preferred stock in €
Cash inflow/outflow from operating activities
BMW Group change in presentation of statement of comprehensive income
for the period 1 January to 31 December 2017
in € million
Net profit
Total comprehensive income
Total comprehensive income attributable to shareholders of BMW AG
BMW Group change in presentation of cash flow statement
for the period 1 January to 31 December 2017
→ 73
in € million
Net profit
Change in provisions
Change in deferred taxes
→ 72
54,107
-441
54,548
46,699
thereof revenue reserves
44,445
-409
44,036
Total non-current provisions and liabilities
73,183
-100
73,083
thereof other provisions
-409
5,039
5,194
thereof deferred tax
thereof other liabilities
Total current provisions and liabilities
thereof other provisions
thereof other liabilities
Total equity and liabilities
2,795
26
2,821
155
5,357
47,108
46,954
2
2,548
2,327
226
2,553
1,595
-6
1,589
66,864
1,509
thereof equity attributable to shareholders of BMW AG
68,373
1,509
6,596
188,535
1,731
190,266
Total assets
EQUITY AND LIABILITIES
Total equity
47,363
-409
5,087
-31
-281
67,989
63
121,964
2,767
2
2,769
1,927
66
1,993
1,635
-5
121,901
1,630
1,960
73,542
5,525
1,960
7,485
193,483
2,023
195,506
EQUITY AND LIABILITIES
Total equity
71,582
5,076
Adjusted
according to
IFRS 15
As originally
reported
2,240
70,229
5,879
37
5,916
10,198
2,203
12,401
188,535
1,731
Adjustment
IFRS 15
190,266
→ 70
in € million
ASSETS
Total non-current assets
thereof investments accounted for using the equity method
thereof deferred tax
thereof other assets
Total current assets
thereof other assets
Total assets
BMW Group change in presentation of balance sheet at 31 December 2017
-76
8,675
-31
8,407
9,039
Fair value through profit or loss
632
Loans and receivables
At amortised cost
2,667
2,663
Other assets
Receivables from subsidiaries
Receivables from companies
Loans and receivables
At amortised cost
276
276
Loans and receivables
At amortised cost
in which an investment is held
1,334
1,334
Collateral assets
At amortised cost
Cash
184
184
Available-for-sale
Fair value through profit or loss
790
Fair value directly through equity
5,447
3,919
At amortised cost
730
Loans and receivables
At amortised cost
Cash
112
Fair value option
Fair value through profit or loss
2
2
Loans and receivables
At amortised cost
248
240
Loans and receivables
At amortised cost
112
At amortised cost
219
219
Other liabilities
At amortised cost
6,822
6,822
111,201
111,171
Differences through
new
measurement
change of
9,731
evaluation
measurement
-8
Equity effects
Accumulated
Deferred taxes
other equity
Revenue
reserves
Note
128
-35
category
1,340
9,731
Other liabilities
Available-for-sale
Fair value directly through equity
97
97
Other assets
Total financial assets
Loans and receivables
At amortised cost
1,108
222
At amortised cost
105,903
FINANCIAL LIABILITIES
Financial liabilities
Trade payables
Other liabilities
Total financial liabilities
Total impact on equity
Other liabilities
At amortised cost
94,648
94,618
106,011
1,340
Fair value through profit or loss
Held for trading
As originally
reported
Adjustment
IFRS 15
Adjusted
according to
IFRS 15
8,706
-31
8,675
696
56
752
9,219
-609
-559
-2,884
-75
-2,959
5,909
5,909
07
First-time application of IFRS 9
The new requirements contained in IFRS 9 (Finan-
cial Instruments) relating to the classification and
measurement of financial instruments were applied
retrospectively by the BMW Group in the financial
year 2018. The available exemption not to adjust
comparative information for previous periods was
applied. Accordingly, only the opening balance sheet
at 1 January 2018 was adjusted. Apart from a small
number of exceptions, the requirements for hedge
accounting were applied prospectively in the financial
year 2018. The one exception to this is hedge accounting
for the fair value of a portfolio against interest rate
risk, for which the requirements of IAS 39 continue to
be applied. Information on accounting in accordance
with IFRS 9 is provided in the Accounting Policies
section in note 4.
Prior to the adoption of IFRS 9, financial instruments
were accounted for in accordance with IAS 39. In
accordance with those requirements, the Group's
financial assets were allocated to either cash funds
or to the categories "loans and receivables", "available-
for-sale”, “held for trading” or “fair value option”.
Financial liabilities were allocated to the categories
"financial liabilities at fair value through profit or loss"
or "other financial liabilities". On initial recognition,
financial instruments accounted for in accordance
with IAS 39 were measured at fair value, whereby
transaction costs were taken into account except in the
case of financial instruments allocated to the category
"at fair value through profit or loss". Subsequent to
initial recognition, available-for-sale financial assets,
held-for-trading financial instruments and financial
assets for which the fair value option was applied
were measured at their fair value. Financial assets
that were classified as loans and receivables and
financial liabilities (with the exception of derivative
financial instruments) were subsequently measured
at amortised cost using the effective interest method.
50
The IAS 39 impairment model was based on a regular
determination of whether objective evidence indicated
that impairment had already occurred. For the pur-
poses of assessing possible impairment, all available
information, such as market conditions and prices as
well as the length of time and the scale of the decline
in value were taken into account.
-31
9,305
8,589
13.12
-0.05
13.07
13.14
-0.05
13.09
13.12
-0.05
13.07
9,250
13.14
13.09
As originally
reported
Adjustment
IFRS 15
Adjusted
according to
IFRS 15
8,706
-31
8,675
9,336
-31
-0.05
8,620
→ see
note 4
The following table shows the reconciliation of the
categories and carrying amounts of financial instru-
ments as well as the impact on Group equity of the
first-time application of IFRS 9.
Credit card receivables
Other
Cash and cash equivalents
Trade receivables
Carrying amount
IAS 39
IFRS 9
Fair value through profit or loss
366
395
Loans to third parties
29
80,434
80,562
Hedge accounting
Hedge accounting
2,187
2,187
Hedge accounting
Hedge accounting
814
814
At amortised cost
The rules for hedge accounting contained in IAS 39
required an effectiveness test to be performed for
corresponding hedging relationships, based on fixed
ranges, in order to demonstrate the retrospective
effectiveness of the hedge. It was not permitted under
IAS 39 to designate all risk components separately.
Marketable securities and investment funds
Fair value hedges
135
136
Group
Financial
Statements
BMW Group reclassification of financial instruments at 1 January 2018
→ 74
Notes to the Group
Financial Statements
→ Accounting
Principles and
Other derivative instruments
Policies
FINANCIAL ASSETS
Category
IAS 39
IFRS 9
Other investments
Receivables from sales financing
Financial assets
Derivative instruments
Available-for-sale
Fair value option
Loans and receivables
Cash flow hedges
in € million
76
121,893
12.4.2016
(b) Financial reporting pronouncements issued by
the IASB that are significant for the BMW Group,
but have not yet been applied:
→ see
note 6 and 7
7
a foreign currency is recognised, any payments or
receipt of advance consideration should be based on
the exchange rate prevailing at the date of payment.
This situation is relevant in individual cases within
the BMW Group.
Standard/Interpretation
IFRS 16
Leases
Date of
issue by
IASB
Date of
mandatory
application
IASB
Date of
mandatory
application
The Interpretation IFRIC 22 clarifies that when
a non-monetary asset or liability denominated in
EU
1.1.2019
1.1.2019
The new Standard IFRS 16 (Leases) sets out a new
approach to accounting for leases by lessees. While
under IAS 17, the accounting treatment of a lease
was determined on the basis of the transfer of risks
and rewards incidental to ownership of the asset, in
the future, each lease arrangement will, as a general
rule, be accounted for by the lessee in a similar way
to finance leases.
The BMW Group will use the grandfather clause
available for existing leases and apply the available
exemptions regarding the recognition of short-term
leases and low-value leasing assets. The new Standard
will be applied for the first time using the modified
retrospective method. Intragroup leasing arrange-
ments are not reflected in the internal management
system or in internal reporting pursuant to IFRS 16
and therefore, in accordance with IFRS 8, do not
result in any changes in the presentation of segment
information. IFRS 16 has not been adopted prior to
the mandatory application date.
The impact on the BMW Group's results of operations,
financial position and net assets is currently being
analysed as part of a Group-wide implementation
project. A new IT system has been introduced to
account for right-of-use assets and lease liabilities in
the future. At the date of initial adoption, the balance
sheet total is expected to increase by approximately
€2.3 billion as a result of leases previously classified
as operating leases. The reclassification results in a
slight decline in the equity ratio. For a small number of
contracts, the carrying amount of a right-of-use asset
will be determined as if IFRS 16 had been applied from
the inception of the lease. After offsetting deferred
tax effects amounting to €13 million, this results in
a reduction of approximately €32 million in Group
revenue reserves at 1 January 2019. In subsequent
periods, the BMW Group expects a slightly positive
impact on profit before financial result and on cash
inflows/outflows from operating activities and a
slightly negative impact on cash inflows/outflows
from financing activities.
129
130
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Accounting
Principles and
Policies
13.1.2016
Changes due to the new accounting standards IFRS 15
and IFRS 9 are described in → notes 6 and 7.
1.1.2018
1.1.2018
1.1.2018
1.1.2018
05
Financial reporting rules
(a) Standards and Revised Standards significant for
the BMW Group applied for the first time in the
financial year
2018:
Standard/Interpretation
IFRS 15
Revenue from Contracts with Customers
IFRS 9
IFRIC 22
In conjunction with the adoption of IFRS 16, the methods
used to account for leases as a lessor have also been
reviewed, resulting in a change of accounting policy
as described below with effect from the financial year
2019. The change in accounting policy will be applied
retrospectively, with comparative figures restated. In
this context, it will be necessary to restate the opening
balance sheet as at 1 January 2018 and figures for the
financial year 2018.
Financial Instruments
Date of
issue by
IASB
Date of
mandatory
application
IASB
Date of
mandatory
application
EU
28.5.2014
11.9.2015
1.1.2018
1.1.2018
24.7.2014
8.12.2016
Foreign Currency Transactions and Advance Consideration
As a result of the revised definition of initial direct costs
contained in IFRS 16, the BMW Group will change the
timing of income statement recognition for volume-
dependent bonuses relating to Financial Services
segment sales promotions. Rather than being spread
over the term of the underlying lease, in future these
costs will be recognised as an expense in full in the
period in which the entitlement to the bonus arises.
This results in a retrospective decrease in Group
revenue reserves at 1 January 2018 of €101 million,
after offset of deferred tax amounting to €44 million
(31 December 2018: reduction of revenue reserves of
€113 million, after offset of deferred tax amounting
to €49 million).
Research and development expenditure was as follows:
statement.
Expenses for impairment losses for receivables from
sales financing recognised in the income statement
for the financial year 2018 amounted to €142 million.
Because the impairments are of minor importance
compared to the total Group cost of sales, a separate
disclosure has not been provided in the income
in € million
2018
2017
Other interest and similar income
397
201
thereof from subsidiaries:
8
9
11
Other operating income and expenses
Interest and similar income
397
201
Other operating income and expenses comprise the
following items:
Expense relating to interest impact
on other long-term provisions
-91
-66
in € million
2018
2017
Net interest expense on the net defined
benefit liability for pension plans
Other interest and similar expenses
-62
-81
2018
Cost of sales is reduced by public-sector subsidies
in the form of reduced taxes on assets and reduced
consumption-based taxes amounting to €88 million
(2017: €61 million).
in € million
12
2017
Research and development expenses
Amortisation
5,320
4,920
-1,414
-1,236
New expenditure for capitalised
development costs
2,984
2,424
Total research and development
expenditure
6,890
6,108
139
140
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Notes to the
Income Statement
10
Selling and administrative expenses
Selling and administrative expenses relate mainly to
expenses for marketing, personnel and IT.
Net interest result
The major part of revenues expected to arise from the
Group's order book at the end of the reporting period
relates to the sale of vehicles. Revenues resulting from
those sales will be recognised in the short term. The
services included in vehicle sale contracts that will be
recognised as revenues in subsequent years represent
only an insignificant portion of expected revenues.
Accordingly, use has been made of the practical
expedient contained in IFRS 15.121, permitting an
entity not to disclose information on a quantitative
basis due to the short-term nature of items and the
lack of informational value of such disclosures.
16,956
note 45
3,720
3,744
Interest income on loan financing
1,801
2,051
to financial services business
thereof: Interest expense relating
9,816
9,691
Income from lease instalments
22,932
23,383
Revenues from service contracts,
Cost of sales relating to financial services
business
10,467
leased to customers
Sales of products previously
43,442
43,262
Manufacturing costs
69,417
68,194
Sales of products and related goods
2017*
2018
in € million
10,208
An analysis of revenues by segment is shown in the
segment information provided in → note 45. Revenues → see
from the sale of products and related goods are gene-
rated primarily in the Automotive segment and, to a
lesser extent, in the Motorcycles segment. Revenues
from sales of products previously leased to customers,
income from lease instalments and interest income on
loan financing are allocated to the Financial Services
segment. Other income relates mainly to the Auto-
motive segment and the Financial Services segment.
Research and development expenses
4,920
Revenues recognised from contracts with customers
in accordance with IFRS 15 totalled €82,024 million
(2017: €82,894 million).
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
78,329
-233
78,924
Cost of sales
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
2,857
2,996
Other cost of sales
98,282
97,480
5,320
Revenues
1,729
Warranty expenditure
3,384
3,744
2,081
2,234
Other income
and roadside assistance
Expenses for service contracts, telematics
1,737
1,640
telematics and roadside assistance
2,097
-265
thereof subsidiaries:
-2
9,815
10,675
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
Tax rate applicable in Germany
Expected tax expense
30.8%
30.7%
3,023
3,277
Variances due to different tax rates
Tax increases (+)/tax reductions (-) as a
result of non-deductible expenses and
tax-exempt income
-359
-1,026
141
58
Tax expense (+)/benefits (-) for prior
years
-16
-104
Other variances
Profit before tax
-214
2,000
Income taxes
2,220
2,558
Deferred tax expense (+)/
deferred tax income (-)
355
-558
thereof relating to temporary
differences
641
-502
thereof relating to tax loss
carryforwards and tax credits
in € million
2018
2017*
-286
-56
2,575
141
-205
2,000
14.9
German income tax rate
30.8
30.7
Deferred taxes for non-German entities are calcu-
lated on the basis of the relevant country-specific tax
rates. These range in the financial year 2018 between
9.0% and 45.0% (2017: between 9.0% and 45.0%).
Actual tax expense
Effective tax rate
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
In the previous year, variances due to different tax
rates were influenced in particular by the reduction
in the US federal corporate income tax rate, which
was required to be taken into account in the mea-
surement of deferred taxes as of 31 December 2017.
This resulted in a reduction in the tax expense of
€977 million.
Tax increases as a result of non-deductible expenses
and tax reductions due to tax-exempt income
increased compared to one year earlier. As in the
previous year, tax increases as a result of non-tax-
deductible expenses were attributable primarily to
the impact of non-recoverable withholding taxes and
transfer price issues.
Tax income relating to prior years resulted primarily
from adjustments to income tax receivables and pro-
visions for prior years.
Other variances comprise various reconciling items,
including the Group's share of earnings of companies
accounted for using the equity method.
142
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Notes to the
Income Statement
The allocation of deferred tax assets and liabilities to
balance sheet line items at 31 December is shown in
the following table:
15.0
2,575
Municipal trade tax rate
15.8
26.2%
18.7%
Current tax expense includes tax income of €16 mil-
lion (2017: €104 million) relating to prior periods.
The tax expense was reduced by €41 million (2017:
€91 million) as a result of utilising tax loss carryfor-
wards, for which deferred assets had not previously
been recognised and in conjunction with previously
unrecognised tax credits and temporary differences.
The tax expense resulting from the change in the
valuation allowance on deferred tax assets relating to
tax losses available for carryforward and temporary dif-
ferences amounted to €24 million (2017: €67 million).
Deferred taxes are determined on the basis of tax
rates which are currently applicable or expected to
apply in the relevant national jurisdictions when the
amounts are recovered. After taking account of an
average municipal trade tax multiplier rate (Hebesatz)
of 428.0% (2017: 425.0%), the underlying income tax
rate for Germany was as follows:
in %
2018
2017
Corporate tax rate
15.0
15.0
Solidarity surcharge
5.5
5.5
Corporate tax rate including solidarity
surcharge
15.8
2017*
The difference between the expected tax expense
based on the underlying tax rate for Germany and
actual tax expense is explained in the following
reconciliation:
2017*
262
212
Other operating income
774
720
13
Exchange losses
-135
-246
Other financial result
Expense for additions to provisions
-193
-580
Expense for impairment losses and
18,421
-48
-29
Sundry operating income
in € million
80
Gains on the disposal of assets
-2
Exchange gains
185
282
Income from the reversal of provisions
216
138
Interest and similar expenses
-386
-412
Income from the reversal of impairment
losses and write-downs
15
8
Net interest result
11
-211
96
Changes in tax rates resulted in a deferred tax
expense of €90 million (2017: deferred tax income
of €796 million). The principal reason for this devel-
opment in the previous year was the reduction in
the US federal corporate income tax rate from 35.0%
to 21.0% with effect from 1 January 2018.
2018
Sundry operating expenses
Income from the reversal of and expenses for the
recognition of impairment allowances and write-
downs relate mainly to impairment allowances on
receivables.
Impairment losses recognised on receivables from
contracts with customers amounted to €47 million
(2017: €29 million).
The expense for additions to provisions includes
litigation and other legal risks. Income from the
reversal of provisions includes legal disputes that
have been concluded.
Income (+) and expenses (-) from
financial instruments
Sundry other financial result
-105
234
-105
234
Other financial result
51
248
14
Income taxes
Taxes on income of the BMW Group comprise the
following:
in € million
Current tax expense
2018
14
2017
14
Result on investments
-275
-359
Other operating expenses
-651
-1,214
Income from investments in subsidiaries
and participations
278
Other operating income and expenses
123
-494
thereof from subsidiaries:
9
13
14
13
Expenses from investments in subsidiaries
and participations
-122
156
2018
92
Cost of sales
Leased products
2,769
2,546
Investments accounted for using
the equity method
Investments in non-consolidated
192
189
249
308
subsidiaries
484
-76
408
412
226
Participations
2
Group
Financial
Statements
148
147
Other investments
560
690
37,789
596
678
Non-current marketable securities
26
29
-1
-3
-79
36,257
7,886
3,169
238
-62
1,952
8,832
8,995
27,838
158
1,548
2,820
-531
27,092
6,154
6,122
4,966
5
Notes to the Group
Financial Statements
1,970
2,5252
3,633
-379
7,801
Advance payments made and
construction in progress
Property, plant and equipment
721 Other facilities, factory and office equipment
Plant and machinery
829
Land, titles to land, buildings, including
buildings on third party land
18,471
34,774
1,743
3,395
-708
33,830
2,253
17,960
→ Notes to the
Balance Sheet
21
Leased products
Property, plant and equipment include a total of
€89 million (2017: €94 million) relating to land and
buildings, for which economic ownership is attribut-
able to the BMW Group (finance leases). The principal
leases are held by BMW AG, have a carrying amount
of €70 million (2017: €78 million) and run for peri-
ods up to 2030 at the latest. The leases contain price
adjustment clauses in the form of index-linked rentals
as well as extension and purchase options.
As in the previous year, no financing costs were
recognised as a cost component of property, plant
and equipment in 2018.
No impairment losses were recognised in 2018, as in
the previous year.
Property, plant and equipment
22
Minimum lease payments of non-cancellable oper-
ating leases amounting to €18,880 million (2017:
€17,982 million) fall due as follows:
23
105
60
47
41
49
due between one and five years
due later than five years
110
9
in € million
31.12.2017
Impairment losses amounting to €235 million (2017:
€148 million) were recognised on leased products in
2018 as a consequence of changes in residual value
expectations. Income from the reversal of impairment
losses amounted to €92 million (2017: € - :
- 
million).
Contingent rents of €92 million (2017: €52 million),
based principally on the distance driven, were
recognised in income. The agreements have, in part,
extension and purchase options.
17,982
18,880
Minimum lease payments
13
31.12.2018
37
9,383
9,863
between one and five years
8,586
8,980
within one year
later than five years
37
9
Present value of future minimum lease
payments
due between one and five years
due later than five years
19
18
Total of future minimum lease payments
due within one year
31.12.2017
31.12.2018
75
in € million
As in the previous year, no financing costs were recog-
nised as a cost component of intangible assets in 2018.
As in the previous year, there was no requirement to
recognise impairment losses or reversals of impair-
ment losses on intangible assets in 2018.
Intangible assets amounting to €41 million (2017:
€41 million) are subject to restrictions on title.
Other intangible assets include a brand-name right
amounting to €41 million (2017: €41 million) which
is allocated to the Automotive segment and is not
subject to scheduled amortisation since its useful life is
deemed to be indefinite. Intangible assets also include
goodwill of €33 million (2017: €33 million) allocated
to the Automotive cash-generating unit (CGU) and
goodwill of €347 million (2017: €347 million) allocated
to the Financial Services CGU.
Intangible assets mainly comprise capitalised devel-
opment costs on vehicle, module and architecture
projects as well as subsidies for tool costs, licences,
purchased development projects, software and pur-
chased customer lists.
Intangible assets
Minimum lease payments are as follows:
due within one year
73
100
82
73
40
38
32
26
85
due between one and five years
due later than five years
9
due within one year
lease payments
Interest portion of the future minimum
192
178
10
Cost of sales comprises:
-5
-115
4,966
29
348
33
5,310
6,420
6,122
27,838
154
2,886
2,767
28,111
10,078
8,995
1,970
17
175
Plant and machinery
buildings on third party land
Land, titles to land, buildings, including
18,471
19,801
35,503
Intangible assets
2,975
200
34,774
2,525
2,3951
908
2,082
3,504
Other intangible assets
Development costs
Goodwill
9,464
9,976
5,014
956
1,414
4,556
31.12.2018 31.12.2017
8,409
31.12.2018
Interest income on loan financing includes interest
calculated on the basis of the effective interest method
totalling €3,623 million. This interest income is not
reported separately in the income statement as it is
not significant compared to total Group revenues.
08
Revenues
Revenues by activity comprise the following:
in € million
09
NOTES TO THE INCOME
STATEMENT
829 Other facilities, factory and office equipment
Advance payments made and
construction in progress
Property, plant and equipment
5
380
10,971
6,202
1,048
1,609
5
5,636
5
675
1,183
in € million
195
5
1,075
380
615
7,886
113
3,328
4,556
943
1,236
1,427
-16
5,196
8,409
191
928
4,263
5
31.12.2017 31.12.2016
31.12.2017
Disposals
Value
adjustments³
-16
Reclassi-
fications
7,221
380
4,786
Intangible assets
8,157
9,464
5,636
971
5
Other intangible assets
675
1,075
28
Goodwill
Development costs
364
572
337
Current year
1.1.20171
subsidiaries
249
253
191
189
Investments in non-consolidated
408
Investments accounted for using
the equity method
2,624
Leased products
36,257
38,572
7,771
3,556
2,769
Translation
differences
-1
480
Carrying amount
Depreciation and amortisation
Other investments
690
Non-current marketable securities
29
73
Participations
|སྒྱུ| |
739
671
74
596
1
412
Intangible assets
write-downs
Leased products
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
NOTES TO THE BALANCE SHEET
20
Analysis of changes in Group tangible, intangible and investment assets 2018
Acquisition and manufacturing cost
in € million
1.1.2018
Translation
differences
Additions
Reclassi-
fications
Disposals 31.12.2018
146
Development costs
145
Other comprehensive income arising from equity
accounted investments is reported in the State-
ment of Changes in Equity within currency trans-
lation differences with an amount of € - 24 million
-433
Other comprehensive income from equity accounted investments
Currency translation foreign operations
-157
33
-124
192
Other comprehensive income
-1,061
457
192
-604
-30
-1,171
1,445
-31
-61
-815
-1,171
630
(2017: € -152 million), within financial instruments
used for hedging purposes with an amount of €39 mil-
lion (2017: €91 million) and within costs of hedging
with an amount of € -139 million (2017: € - million).
Goodwill
Other intangible assets
12,965
277
372
82
11,730
Plant and machinery
36,833
201
2,888
1,119
2,852
38,189
Other facilities, factory and office equipment
2,799
20
294
75
11,088
buildings on third party land
Land, titles to land, buildings, including
385
1,750
12
161
15,100
12
3,145
187
2,984
14,990
385
125
1,798
1,084
17,173
Intangible assets
959
Property, plant and equipment
-620
Costs of hedging
-1,381
1,914
-333
2,017
-1,048
-103
-620
-973
353
-157
-30
674
-597
192
-1,171
-44
-29
83
-1
-217
-218
Items not expected to be reclassified to the income statement in the future
718
475
Marketable securities (at fair value through other comprehensive income)
-30
-1,322
39
thereof gains/losses arising in the period under report
thereof reclassifications to the income statement
Costs of hedging
thereof gains/losses arising in the period under report
thereof reclassifications to the income statement
Other comprehensive income from equity accounted investments
Deferred taxes
Currency translation foreign operations
Items that can be reclassified to the income statement in the future
thereof gains/losses arising in the period under report
thereof reclassifications to the income statement
Financial instruments used for hedging purposes
60
155
Deferred taxes on components of other comprehen-
sive income are as follows:
475
Marketable securities (at fair value through other comprehensive income)
-30
18
-12
39
2
41
Financial instruments used for hedging purposes
-1,381
436
-945
1,914
-568
1,346
-218
693
718
-217
in € million
-604
630
2018
2017
Before
tax
Deferred
Other comprehensive income for the period after tax
After
taxes
tax
tax
Deferred
taxes
After
tax
Remeasurement of the net defined benefit liability for pension plans
935
Before
183
2,990
Advance payments made and construction in progress
1,750
29
286
-37
1,530
385
-1
386
12,965
943
2,424
11,484
Disposals 31.12.2017
Reclassi-
fications
Additions
13,400
-38
2,710
972
36,833
1,560
1,027
2,123
-681
35,924
Plant and machinery
1.1.20171 differences
11,088
228
271
-299
10,940
buildings on third party land
Land, titles to land, buildings, including
15,100
52
Other facilities, factory and office equipment
Translation
Intangible assets
115
9
820
Participations
8
3
438
Investments in non-consolidated subsidiaries
2,624
692
547
2,769
the equity method
Investments accounted for using
46,343
56
|
444
938
Other intangible assets
Goodwill
Development costs
in € million
Analysis of changes in Group tangible, intangible and investment assets 2017
2 Including €74 million recognised through the income statement
1 Including assets under construction of €2,017 million.
Acquisition and manufacturing cost
Other investments
11
123
12
1,286
28
28
Non-current marketable securities
1,410
Deferred taxes
2,674
314
Carrying amount
Depreciation and amortisation
1,286
130
192
-15
1,239
28
28
820
|
118
-7
710
438
Translation
1.1.2018
differences Current year
Reclassi-
fications
2,525
18
1,409
-1,551
6
2,395
Property, plant and equipment
129
53,245
4,868
3,123
55,304
Leased products
44,143
735
Value
adjustments²
314
-91
74
501
1,782
4,402
-1,168
51,793
Property, plant and equipment
2,525
2
-1,325
1,694
-97
2,255
Advance payments made and construction in progress
2,799
168
70
53,245
Leased products
45,595
-3,047
2,769
418
639
2,548
3 Including €3 million recognised through the income statement and €76 million directly in equity.
2 Including assets under construction of €2,010 million.
1 Including first-time consolidation and changes in accordance with IFRS 15.
-8
Other investments
Participations
Investments in non-consolidated subsidiaries
the equity method
Investments accounted for using
44,143
16,686
18,281
Non-current marketable securities
693
17
Remeasurement of the net defined benefit liability for pension plans
decreased to €1,841 million (2017: €1,854 million) due
to currency factors. As in previous years, deferred tax
assets recognised on these tax losses - amounting to
€313 million at the end of the reporting period (2017:
€315 million) - were fully written down since they can
only be utilised against future capital gains.
Capital losses available for carryforward in the United
Kingdom which do not relate to ongoing operations
Tax loss carryforwards - for the most part usable
without restriction – amounted to €2,045 million
(2017: €928 million). This includes an amount of
€542 million (2017: €548 million), for which a valu-
ation allowance of €185 million (2017: €186 million)
was recognised on the related deferred tax asset. For
entities with tax losses available for carryforward,
a net surplus of deferred tax assets over deferred
tax liabilities is reported at 31 December 2018
amounting to €234 million (2017: €131 million).
Deferred tax assets are recognised on the basis of
management's assessment that there is material
evidence that the entities will generate future tax-
able profits, against which deductible temporary
differences can be offset.
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
164
2,157
1,806
216
Net
-10,137
-11,744
-10,137
1,993
1,590
Deferred taxes
-11,744
Netting
Netting relates to the offset of deferred tax assets
and liabilities within individual entities or tax
groups to the extent that they relate to the same
tax authorities.
-502
Deferred taxes recognised directly in equity amounted
to €1,457 million (2017: €1,000 million).
as follows:
591
-677
thereof relating to fair value gains and losses on financial instruments and marketable securities recognised directly in equity
thereof relating to the remeasurements of net liabilities for defined benefit pension plans
815
-457
Change in deferred taxes recognised directly in equity
-558
355
Deferred tax expense (+)/income (-) recognised through income statement
268
201
Deferred taxes at 1 January (assets (-)/ liabilities (+))
20172
2018¹
in € million
Changes in deferred tax assets and liabilities
during the reporting period can be summarised
-498
Valuation allowances on tax loss carryforwards and capital losses
12,294
1,185
10
20
3
3
4,655
5,210
9,938
487
195
359
88
171
2,593
3,077
613
3,254
3,629
891
13,550
12,632
13,832
706
981
3,222
3,180
222
428
2,415
2,570
78
29
5,192
5,323
608
620
18
181
-2
Personnel expenses
16
Basic/diluted earnings per share from continuing
operations amounted to €10.87 per share of common
stock and €10.89 per share of preferred stock.
Earnings per share of preferred stock are computed
on the basis of the number of preferred stock shares
entitled to receive a dividend in each of the relevant
financial years. As in the previous year, diluted earn-
ings per share correspond to basic earnings per share.
4.02
3.522
€
4.00
3.502
€
13.09
10.84
€
13.07
10.82
The income statement includes personnel expenses
as follows:
55,114,290
in € million
2018
Pension and welfare expenses
1,387
1,295
Social insurance expenses
843
819
Personnel expenses
12,479
12,052
* Distribution to wages and salaries and pension and welfare expenses adjusted in previous
year figures.
Personnel expenses include €45 million (2017:
€54 million) of costs relating to workforce measures.
The total pension expense for defined contribution
plans of the BMW Group amounted to €122 million
(2017: €105 million). Employer contributions paid to
state pension insurance schemes totalled €645 million
(2017: €630 million).
144
Group
Financial
Statements
2017*
Wages and salaries
601,995,196
601,995,196
55,605,380
number
number
Earnings per share
15
143
The tax returns of BMW Group entities are checked
regularly by German and foreign tax authorities. Taking
account of numerous factors - including interpretations,
commentaries and legal decisions relating to the various
tax jurisdictions as well as past experience - adequate
provision has been made, to the extent identifiable and
probable, for potential future tax obligations.
7
Deferred taxes are not recognised on retained profits
of €48.2 billion (2017: €42.8 billion) of foreign sub-
sidiaries, as it is intended to invest these profits to
maintain and expand the business volume of the
relevant companies. No computation was made of
the potential impact of income taxes on the grounds
of proportionality.
164
216
-361
117
² Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
1 The figures at 1.1.2018 adjusted due to first-time application of IFRS 9, see note 7.
Deferred taxes at 31 December (assets (-)/liabilities (+))
Exchange rate impact and other changes
43
2018
20171
Net profit attributable to the shareholders of BMW AG
€ million
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
2 Proposal by management.
Dividend per share of preferred stock
Dividend per share of common stock
Basic/diluted earnings per share of preferred stock
Basic/diluted earnings per share of common stock
Average number of preferred stock shares in circulation
Average number of common stock shares in circulation
thereof from currency translation
935
7,867.6
6,514.5
602.9
€ million
€ million
Profit attributable to common stock
Profit attributable to preferred stock
8,589.0
7,117.4
721.4
22
473
The average number of employees during the
Tax advisory services were performed particularly in
conjunction with tax compliance.
Other services include mainly IT consulting, bench-
mark analyses as well as advisory work relating to
production processes.
17
Fee expense for the Group auditor
The fee expense pursuant to § 314 (1) no. 9 HGB
recognised in the financial year 2018 for the Group
auditor and its network of audit firms amounted to
€24 million (2017: €25 million) and consists of the
following:
18
Government grants and government assistance
Income from asset-related and performance-related
grants, amounting to €29 million (2017: €30 million)
and €83 million (2017: €112 million) respectively, was
recognised in the income statement in 2018.
These amounts relate mainly to public sector grants
aimed at the promotion of regional structures as well
as to subsidies received for plant expansions.
in € million
Audit of financial statements
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Other attestation services
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Tax advisory services
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Other services
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
Other attestation services include mainly project-
related audits, comfort letters as well as legally
prescribed, contractually agreed or voluntarily
commissioned attestation work.
and, in accordance with current requirements, all
work related thereto, including the review of the
Group Interim Financial Statements.
The number of employees at the end of the reporting
period is disclosed in the Combined Management
Report.
127,524
year was:
proportionately-consolidated entities
2018
2017
123,337
119,611
182
Employees
Fee expense
thereof at
experience
8,228
7,913
thereof at
Average number of employees
proportionately-consolidated entities
1
131,565
Apprentices and students gaining work
Income
2018
2017*
2
2
1
24
25
thereof KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin
7
9
Services provided by KPMG AG Wirtschaftsprüfungs-
gesellschaft, Berlin, during the financial year 2018 on
behalf of BMW AG and subsidiaries under its control
relate to the audit of the financial statements, other
attestation services, tax advisory services and other
services.
The audit of financial statements comprises mainly the
audit of the Group financial statements and Company
financial statements of BMW AG and its subsidiaries,
NOTES TO THE STATEMENT
OF COMPREHENSIVE
INCOME
19
Disclosures relating to the statement of
comprehensive income
Other comprehensive income for the period after tax
comprises the following:
in € million
2018
2017
2
3
22
4
2018
2017*
2018
Deferred tax liabilities
Deferred tax assets
Eliminations
Liabilities
Provisions
270
Tax loss carryforwards and capital losses
Other investments
2017
Disposals
17
17
5
5
3
Sundry other assets
Comprehensive
10,249
→ Notes to the
Financial Statements
Notes to the
↑ ↑
Notes to the Group
Statement of
Income Statement
1,412
143
Allocated (+)/reversed (-)
in € million
31.12.2018
31.12.2017
6,122
13,772
in € million
specific
item basis
group basis
Total
6,811
15,480
Impairment allowances
at 1 January 2017
943
469
due between one and five years
Gross investment in finance leases
due within one year
450
Finance leases are analysed as follows:
-105
-1
4
1
-1
26
30
Other changes
-54
6,238
-24
15
-61
Impairment allowances at 31 December 2018
363
175
12
482
1,032
The impairment allowances according to IAS 39 in the
financial year 2017 developed as follows:
2
due within one year
2
446
59
Derecognition and origination of receivables
110
138
-23
-4
Reclassification to Stage 3
51
-10
-21
-7
Reclassification to Stage 2
-21
-4
-20
Changes in risk parameters
3
Reclassification to Stage 1
79
-17
33
at 31 December 2017
1,019
701
145
due later than five years
24
21
Utilised
-337
-8
-345
22,315
19,915
Exchange rate impact
and other changes
-48
Write off of receivables
-17
-65
Impairment allowances
Present value of future minimum
lease payments
1,147
-129
Receivables from sales financing
192
-344
1,217
1,311
Total comprehensive income
2
-7
-121
-250
Other comprehensive income
513
thereof from discontinued operations
-151
-337
1,338
1,561
thereof from continuing operations
-10
-15
-17
-6
362
-337
1,338
1,561
Profit/loss after tax
364
-6
-17
-15
1,906
1,763
5,910
6,714
Non-current assets
THE BALANCE SHEET
DISCLOSURES RELATING TO
2017
2018
2017
2018
2017
2
2018
2018
IONITY
DriveNow
THERE
BMW Brilliance
in € million
2 Revenues relate only to the month of January up to the time of loss of control of HERE.
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
258
384
Dividends received by the Group
-10
20171
3
454
535
DriveNow
THERE
BMW Brilliance
THE INCOME STATEMENT
DISCLOSURES RELATING TO
in € million
Balance Sheet
Financial information relating to equity accounted
investments is summarised in the following tables:
→ Notes to the
Financial Statements
Notes to the Group
Group
Financial
Statements
2018
150
Capital increases were made at the level of THERE in
June and November 2018, with BMW AG participating
with an amount of €31 million on each occasion. As a
result, BMW AG's stake in THERE increased in steps
by 0.2% to 29.6%.
In December 2017, BMW AG, Audi AG and Daimler AG
signed contracts for the sale of shares in THERE. Stakes
of 5.9% each were sold to Robert Bosch Investment
Nederland B.V., Boxtel, and Continental Automotive
Holding Netherlands B.V., Maastricht, whereby the
sale was executed in equal parts by BMW AG, Audi AG
and Daimler AG. Closure of these transactions did
not have a significant effect on earnings in the finan-
cial year 2018.
In December 2016, THERE signed contracts relating
to the sale of shares in HERE International B.V.,
Amsterdam (HERE). The sale of 15% of the shares to
Intel Holdings B.V., Schiphol-Rijk, was completed in
January 2017. The sale of the shares resulted in a loss
of control, as defined by IFRS 10, at the level of THERE.
Since THERE continues to have a significant influence
over HERE, the latter has been included since then
in THERE's consolidated financial statements as an
associated company using the equity method. The
loss of control and the subsequent deconsolidation of
HERE and its subsidiaries led to a positive earnings
effect at the level of THERE. The BMW Group portion
amounted to €183 million, which was recognised in
the result from equity accounted investments in the
financial
year 2017.
In the financial year 2015, BMW AG, Daimler AG and
AUDI AG, Ingolstadt (Audi AG) jointly acquired the
mapping and location-based services business (HERE
Group) of Nokia Corporation, Helsinki. HERE'S
digital maps are laying the foundations for the next
generation of mobility and location-based services,
providing the basis for new assistance systems and,
ultimately, fully automated driving.
electric vehicles in Europe. The plan is to build some
400 fast-charging stations by 2020 in order to support
electric mobility on long-haul routes and thereby
establish the market.
note 2
In the financial year 2017, the BMW Group,
Daimler AG, Stuttgart (Daimler AG), the Ford
Motor Company and the Volkswagen Group, each
with equal shareholdings, founded the joint venture
IONITY Holding GmbH & Co. KG. IONITY's business
model envisages the construction and operation of
high-performance charging stations for battery
The BMW Group previously maintained the joint
ventures DriveNow GmbH & Co. KG and DriveNow
Vewaltungs GmbH together with Sixt SE, Pullach.
DriveNow offers car-sharing services in major German
cities and abroad. Following approval by the antitrust
authorities and with effect from 9 March 2018, the
agreement with SIXT regarding the full acquisition
of shares in DriveNow by the BMW Group was com-
pleted. The total valuation for DriveNow amounts
to €418 million. Further information relating to this
transaction is provided in → note 2 to the Group → see
Financial Statements.
The BMW Group intends to increase its stake in
the BMW Brilliance joint venture from 50% to 75%.
On 11 October 2018, the BMW Group signed an
agreement with its joint venture partner, a wholly
owned subsidiary of Brilliance China Automotive
Holdings Ltd. (CBA), to acquire an additional 25%
shareholding in BMW Brilliance. The two partners
agreed on a purchase price of an equivalent of €3.6 bil-
lion. The contractual term of the joint venture, which
would currently expire in 2028, is to be extended
to 2040 as part of the agreement. The prerequisite
for the extension is the acquisition of the additional
shares as agreed. The agreement was approved at
the CBA shareholders' meeting on 18 January 2019
and remains subject to the approval of the relevant
authorities. The transaction is scheduled to close
in 2022. The closing will result in BMW Brilliance
being fully consolidated in the BMW Group Financial
Statements and is expected to result in the recognition
of a significant valuation gain in the financial year in
which the transaction closes.
BMW Brilliance produces mainly BMW brand models
for the Chinese market and also has engine manu-
facturing facilities, which supply the joint venture's
two plants with petrol engines.
Investments accounted for using the equity method
Investments accounted for using the equity method com-
prise the joint venture BMW Brilliance Automotive Ltd.
(BMW Brilliance), until 9 March 2018 the joint ven-
tures DriveNow GmbH & Co. KG and DriveNow
Verwaltungs GmbH (DriveNow), the joint venture
IONITY Holding GmbH & Co. KG (IONITY) and the
interest in the associated company THERE Holding
B.V. (THERE).
24
149
48
20171
2017
Income taxes
Interest expenses
46
62
-12
-18
-17
-6
1,620
1,922
Profit/loss before financial result
1
2018
637
Scheduled depreciation
71
14
712
14,627
17,766
Revenues
2017
2018
2017
IONITY
2018
636
4
Current assets
6,570
3 The share of the BMW Group on net assets at 31 December 2017 amounted to 52.8%. Due to the allocation of voting power within decision-making bodies of the two entities,
operations remain subject to joint control.
2 Corresponds to the consolidated equity capital provided by the shareholders of Drive Now GmbH & Co. KG and its subsidiaries.
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
10
37
2
732
522
2,025
2,065
Carrying amount
-
25
-666
Eliminations
10
37
23
732
522
2,691
2,963
Group's interest in net assets
40
149
4
-898
2,195
Receivables from sales financing comprise the fol-
lowing:
Credit financing for retail customers
365
Impairment allowances at 1 January 2018
Total
Simplified
General
Stage 3
Stage 2
Stage 1
7
80,434
86,783
18,033
in € million
20,262
66,521
in Mio. €
sales financing
Receivables from
Finance lease receivables
and dealerships
Impairment allowances on receivables from sales
financing in accordance with IFRS 9, which only arise
within the Financial Services segment, developed in
the financial year 2018 as follows:
has been adjusted.
* Prior year figure lion (2017: €1,240 million *).
Unguaranteed residual values amount to €1,392 mil-
31.12.2017
31.12.2018
62,401
12
1,764
5,926
1,193
Non-current provisions and liabilities
71
Non-current financial liabilities
40
149
42
2,195
1,764
5,382
5,926
Equity
960
45
9
289
2
2,617
2,937
thereof cash and cash equivalents
46
110
26
289
2
5,211
102
5,382
Current provisions and liabilities
4,779
Net assets
10
9
22
1
5,739
7,358
Provisions and liabilities
50
158
26
2,195
6,094
1,765
13,284
Assets
INFORMATION
AGGREGATED FINANCIAL
RECONCILIATION OF
6
81
thereof current financial liabilities
10
6
22
3
11,121
Interest income
in € million
-20
161,156
148,319
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
The equity ratio attributable to shareholders of
BMW AG increased during the financial year by
7.2%, primarily reflecting the increase in revenue
reserves.
155
156
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Notes to the
Balance Sheet
32
Pension provisions
In the case of defined benefit plans, the BMW Group
is required to pay the benefits it has granted to
present and past employees. Defined benefit plans
may be covered by provisions or pension assets. In
Germany, pension entitlements are mostly covered
by assets transferred to BMW Trust e. V., Munich, in
conjunction with a Contractual Trust Arrangement
(CTA). Funded plans also exist in the UK, the USA,
Switzerland, Belgium and Japan. In the meantime,
most of the defined benefit plans have been closed
to new entrants.
The assumptions stated below, which depend on
the economic situation in the relevant country, are
used to measure the defined benefit obligation
of each pension plan. In Germany, the so-called
“pension entitlement trend” (Festbetragstrend)
remained at 2.0%. The following weighted average
values have been used for Germany, the UK and
other countries:
Total capital
in %
63.8%
Proportion of total capital
Equity attributable to shareholders
of BMW AG
57,559
53,671
Proportion of total capital
35.7%
36.2%
Non-current financial liabilities
64,772
53,548
Current financial liabilities
38,825
41,100
Total financial liabilities
103,597
94,648
64.3%
31.12.2018 31.12.2017*
Discount rate
Weighted duration of all pension obligations in years
3.13
1.62
1.82
Gains (-) or losses (+) arising from settlements
Past service cost
Interest expense (+)/income (−)
Current service cost
EXPENSE/INCOME
1 January 2017
in € million
-17
-658
2,330
2,313
3
3.66
Pension level trend
2.34
1.79
The following mortality tables are applied in countries,
in which the BMW Group has significant defined
benefit plans:
Germany
United Kingdom
Based on the measurement principles contained in
IAS 19, the following balance sheet carrying amounts
apply to the Group's pension plans:
in € million
Germany
United Kingdom
Other
31.12.2018
31.12.2017
31.12.2018
31.12.2017
31.12.2018
31.12.2017
1.91
2.69
The capital structure at the end of the reporting period
was as follows:
notes 6 and 7
→ see
In the case of trade receivables, collateral is generally
held in the form of vehicle documents and bank guar-
antees so that the risk of bad debt loss is very limited.
Expenses for impairment losses and income from
the reversal of impairment losses is not significant in
relation to total Group expenses and is therefore not
reported separately in the income statement.
153
154
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Notes to the
31
Equity
Number of shares issued
Balance Sheet
Preferred stock
2018
* The difference between the closing balance at 31 December 2017 and the opening balance
at 1 January 2018 corresponds to the adjustment recorded in accordance with IFRS 9.
Shares issued/in circulation at 1 January
56
49
11
57
Allocated (+)/reversed (-)
Utilised
8
-2
6
-4
-1
-5
Exchange rate impact and
other changes
−1
−1
-2
Balance at 31 December*
7
Shares issued in conjunction with Employee Share Programme
55,605,404
Less: shares repurchased and re-issued
Revenue reserves
Revenue reserves comprise the non-distributed earn-
ings of companies consolidated in the Group Financial
Statements. In addition, remeasurements of the net
defined benefit obligation for pension plans are also
presented in revenue reserves.
It is proposed that the unappropriated profit of BMW AG
for the financial year 2018 amounting to €2,303 mil-
lion according to HGB be utilised as follows:
Distribution of a dividend of 3.52 per
preferred stock (€196 million)
share of
Distribution of a dividend of 3.50 per share of
common stock (€2,107 million)
The proposed distribution was not recognised as a
liability in the Group Financial Statements.
Accumulated other equity
Accumulated other equity comprises amounts recog-
nised directly in equity resulting from the translation
of the financial statements of foreign subsidiaries,
changes in the fair value of derivative financial instru-
ments and marketable securities, costs of hedging
recognised directly in equity as well the related
deferred taxes.
Further information regarding the transition effects
recognised directly in equity on the first-time application
of IFRS 15 and IFRS 9 is provided in → notes 6 and 7.
Capital management disclosures
The BMW Group's objectives with regard to capital
management are to safeguard over the long-term the
Group's ability to continue as a going concern and to
provide an adequate return to shareholders.
The capital structure is managed in order to meet
needs arising from changes in economic conditions
and the risks of the underlying assets.
The BMW Group is not subject to any unified external
minimum equity capital requirements. Within the
Financial Services segment, however, there are a
number of individual entities which are subject to
equity capital requirements of relevant regulatory
banking authorities.
In order to manage its capital structure, the BMW Group
uses various instruments, including the amount of
dividends paid to shareholders and share buybacks.
Moreover, the BMW Group actively manages debt
capital, carrying out funding activities with a target
debt structure in mind. A key aspect in the selection
of financial instruments is the objective to achieve
matching maturities for the Group's financing require-
ments. In order to reduce non-systematic risk, the
BMW Group uses a variety of financial instruments
available on the world's capital markets to achieve
diversification.
Capital reserves include premiums arising from the
issue of shares and totalled €2,118 million (2017:
€2,084 million). The change related to the share cap-
ital increase arising in conjunction with the issue of
shares of preferred stock to employees amounting
to €34 million.
Capital reserves
In addition, 24 previously issued shares of preferred
stock were acquired and re-issued to employees.
Issued share capital increased by €0.5 million as a
result of the issue to employees of 521,500 new shares
of non-voting preferred stock. BMW AG is authorised
up to 14 May 2019 to issue 5 million shares of non-
voting preferred stock amounting to nominal €5.0 mil-
lion. At the end of the reporting period, 3.1 million
of these amounting to nominal €3.1 million remained
available for issue.
Shares issued/in circulation at 31 December
Common stock
2017
2018
2017
521,524
24
2,310
55,114,404
491,114
114
601,995,196
56,126,904
55,605,404
601,995,196
601,995,196
All Company stock is issued to bearer and each share
has a par value of €1.00. Preferred stock, to which no
voting rights are attached, bear an additional dividend
of €0.02 per share.
In 2018, a total of 521,524 shares of preferred stock
was sold to employees at a reduced price of €46.26 per
share in conjunction with the Company's Employee
Share Programme. These shares are entitled to
receive dividends for the first time with effect from
the financial
year 2019.
601,995,196
46
-18,937
14
2,313
513
382
686
110
2,037
1,821
Carrying amounts at 31 December
3
3
3
3
Effect of limiting net defined benefit
asset to asset ceiling
19,477
18,937
3,236
22,710
thereof pension provision
2,037
Germany
The most significant of the BMW Group's pension
plans are described below.
Numerous defined benefit plans exist within the
BMW Group.
-16
-17
-16
-15
-2
thereof assets
3,252
2,330
513
382
702
125
1,823
Both employer- and employee-funded benefit plans
exist in Germany. Benefits paid in conjunction with
these plans comprise old-age retirement pensions as
well as invalidity and surviving dependents' benefits.
21,247
1,049
Total
Other
United Kingdom
Germany
S2PA tables and S2PA light tables with weightings
Mortality Table 2018 G issued by Prof. K. Heubeck (with invalidity rates reduced by 70%)
18.3
17.2
21.3
19.0
20.8
20.2
2.44
2.25
-3
31.12.2018
1,475
965
31.12.2017
31.12.2017
8,908
8,167
9,604
9,721
Fair value of plan assets
1,428
9,594
8,277
11,641
11,542
obligations
Present value of defined benefit
31.12.2018 31.12.2017
31.12.2017
31.12.2018
31.12.2018
The defined benefit plans have been closed to new
entrants. Defined contribution plans with a minimum
rate of return, comprising employer- and employee-
funded components, continue to exist. The fact that
the plan involves a minimum rate of return means that
the defined contribution entitlements are classified
in accordance with IAS 19 as defined benefit plans.
In the case of defined benefit plans involving the
payment of a pension, the amount of benefits to be
paid is determined by multiplying a fixed amount by
the number of years of service.
The assets of the German pension plans are invested
by BMW Trust e. V., Munich, in accordance with a
CTA. The representative bodies of this entity are
the Board of Directors and the Members' General
Meeting. BMW Trust e. V., Munich, currently has
seven members and three members of the Board of
Directors elected by the Members' General Meeting.
The Board of Directors is responsible for investments,
drawing up and deciding on investment guidelines as
well as monitoring compliance with those guidelines.
The members of the association can be BMW Group
employees, senior executives and members of the
Board of Management. An ordinary Members' General
Meeting takes place once every calendar year, and
deals with a range of matters, including receiving and
approving the association's annual report, ratifying
the activities of the Board of Directors and adopting
changes to the association's statutes.
United Kingdom
Defined benefit plans exist in the United Kingdom
which are closed for all plan participants. Vested
benefits remain in place. New benefits are covered
by contributions made to a defined contribution plan.
-264
Gains (-) or losses (+) arising from experience adjustments
Changes in the limitation of the net defined benefit asset to the
asset ceiling
-416
-416
-416
-1,274
-1,274
Gains (-) or losses (+) arising from changes in financial assumptions
Gains (-) or losses (+) arising from changes in demographic assumptions
999
999
999
-10
-10
-10
59
-264
59
-264
Employee contributions
14
8
57
57
689
-632
-73
73
-658
-658
thereof assets
thereof pension provision
31 December 2018
Translation differences and other changes
Pensions and other benefits paid
Transfers to fund
59
62
62
Past service cost
Interest expense (+)/income (−)
Current service cost
EXPENSE/INCOME
1 January 2018
in € million
plans can be derived as follows:
The change in the net defined benefit obligation for pension
Balance Sheet
→ Notes to the
Notes to the Group
Financial Statements
Group
Financial
Statements
158
157
The pension plans are administered by BMW Pension
Trustees Limited, Farnborough, and BMW (UK) Trustees
Limited, Farnborough, both trustee companies which
act independently of the BMW Group. BMW (UK)
Trustees Limited, Farnborough, is represented by
ten trustees and BMW Pension Trustees Limited,
Farnborough, by five trustees. A minimum of one
third of the trustees must be elected by plan partic-
ipants. The trustees represent the interests of plan
participants and decide on investment strategies.
Funding contributions to the funds are determined
in agreement with the BMW Group.
Gains (-) or losses (+) arising from settlements
REMEASUREMENTS
Gains (-) or losses (+) on plan assets, excluding amounts included
in interest income
Defined
benefit
obligation
-413
475
508
508
508
3,236
3
21,247
benefit liability
of the net defined
benefit asset to the
asset ceiling
Effect of limitation
3,233
-19,477
22,710
Total
Plan assets
Net defined
Balance at 1 January
-1,274
group basis
Gross carrying amount
Marketable securities and
31.12.2017
31.12.2018
in € million
31.12.2017
31.12.2018
the following:
Receivables relating to credit card business comprise
Allowances for impairment and credit risk
→ Notes to the
in € million
Balance Sheet
Financial Statements
Financial assets comprise:
Financial assets
26
23
20
20,262
18,033
Unrealised interest income
2,053
262
1,882
The estimated fair value of vehicles held as collateral
for credit-impaired receivables at the end of the
reporting period totalled €506 million. The carrying
amount of assets held as collateral and taken back as
a result of payment default amounted to €42 million
(2017: €45 million).
151
152
Group
Financial
Statements
Notes to the Group
Impairment allowances include €113 million (2017:
€105 million) on credit-impaired receivables relating
to finance leases.
12,358
258
5,316
Income tax assets
Marketable securities and investment funds relate to
available-for-sale financial assets and comprise:
7,965
6,675
2,369
1,010
thereof current
thereof non-current
27
10,334
7,685
Financial assets
184
128
Other
114
20
5,447
Allowance for impairment
-18
-10
Derivative instruments
1,977
investment funds
4,341
244
248
Credit card receivables
244
248
Loans to third parties
Net carrying amount
14,001
due between one and five years
due later than five years
5,655
Gains (-) or losses (+) arising from experience adjustments
-134
-134
-134
Changes in the limitation of the net defined benefit asset to the
asset ceiling
Transfers to fund
Employee contributions
Pensions and other benefits paid
Translation differences and other changes
31 December 2017
thereof pension provision
thereof assets
86
-1,165
-86
-1,165
-619
637
Total
-16
-1,165
3,252
3,236
3,233
-152
-19,477
-98
-98
450
-548
18
18
22,710
-152
-152
322
581
581
4,587
3
Net defined
benefit liability
of the net defined
benefit asset to the
asset ceiling
581
Effect of limitation
-18,315
22,899
Total
Plan assets
obligation
Defined
benefit
4,584
Income tax assets totalling €1,366 million (2017:
€1,566 million) include claims amounting to €222 mil-
lion (2017: €364 million), which are expected to
be settled after more than one year. Claims may be
settled earlier than this depending on the timing of
proceedings.
489
81
322
322
Gains (-) or losses (+) arising from changes in financial assumptions
Gains (-) or losses (+) arising from changes in demographic assumptions
-590
-590
-590
-408
Gains (-) or losses (+) on plan assets, excluding amounts included
in interest income
-212
-212
-212
-2
-2
81
REMEASUREMENTS
in € million
-2
Stocks and other equity
1,208
Work in progress, unbilled contracts
54
Balance at 31 December
10,436
10,592
Finished goods and goods for resale
Exchange rate impact and other changes
Utilised
31.12.2017
31.12.2018
in € million
-1
-26
21
60
2018
4,913
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
Prepayments relate mainly to prepaid interest, com-
mission paid to dealerships and amounts paid in
advance to contract manufacturers. Prepayments of
€1,227 million (2017: €1,136 million) have a maturity
of less than one year.
Collateral assets comprise mainly customary collateral
(banking deposits) arising on the sale of receivables.
Impairment allowances on trade receivables according
to IFRS 9 developed during the financial
as follows:
1,125
year 2018
Inventories
Inventories comprise the following:
in € million
Balance at 1 January*
Allocated (+)
Reversed (-)
29
Raw materials and supplies
1,247
1,146
-20
Allowances for impairment of stage 3
-34
Net carrying amount
2,546
2,667
simplified procedure
The impairment allowances according to IAS 39 in the
financial year 2017 developed as follows:
2017
Allowance for impairment
recognised on a
specific
Fixed income securities
item basis
in € million
5,316
Allowances for impairment of stage 2 -
2,600
* The difference between the closing balance at 31 December 2017 and the opening balance
at 1 January 2018 corresponds to the adjustment recorded in accordance with IFRS 9.
Inventories
13,047
12,707
Out of the total amount recognised for inventories
at 31 December 2018, inventories measured at net
realisable value amounted to €680 million (2017:
€673 million¹). Write-downs to net realisable value * Prior year figure
amounting to €54 million (2017: €36 million¹) were
recognised in 2018, reversal of impairment losses
amounted to €22 million (2017: €6 million).
The expense recorded in conjunction with inven-
tories during the financial year 2018 amounted to
€58,079 million (2017: €55,969 million).
2,723
-56
has been adjusted.
Trade receivables comprise the following:
in € million
31.12.2018
31.12.2017
Gross carrying amount
Allowance for impairment
Trade receivables
Debt securities
30
251
31.12.2017*
In 2017, stocks and other equity capital instruments
related entirely to investment funds. In accordance
with IFRS 9, these assets are required to be classified
as debt capital instruments and are therefore reported
as other debt securities with effect from the financial
year 2018.
The contracted maturities of debt securities are as
follows:
Return right assets for future
leased products
3,261
31.12.2018
1,962
2,167
2,018
Receivables from companies in which
an investment is held
1,916
1,334
Prepayments
Other taxes
in € million
Other assets comprise:
capital instruments
Other debt securities
due later than three months
Marketable securities and
investment funds
31.12.2018
5,447
31.12.2017
4,662
28
534
957
251
Other assets
4,359
1,747
5,316
Receivables from subsidiaries
31.12.2017
thereof non-current
2,026
1,630
thereof current
7,485
31.12.2018
Fixed income securities
due later than three months
787
3,572
628
4,034
1,537
Other debt securities
due within three months
due within three months
in € million
9,790
11,816
276
295
9,115
Collateral assets
293
316
933
Expected reimbursement claims
847
Sundry other assets
957
1,204
825
Other assets
-143
-13
684
Other (excluding interest payable)
151
114
44,880
127
Financial liabilities towards companies in which an
739
124
615
investment is held
4,461
12,658
16,855
88
13,572
Liabilities from finance lease contracts
604
Issuer
94,577
Balance Sheet
(in %)
BMW Finance N.V.
1
Weighted average
nominal interest rate
maturity period
(in years)
Weighted average
Issue volume
in relevant currency
(ISO-Code)
Interest
Bonds comprise:
→ Notes to the
Notes to the Group
Financial Statements
Statements
Group
Financial
164
163
93,883
-328
-4,541
151
4,023
Liabilities relating to financing activities
-344
15
3,852
in € million
101,976
26
-33
626
Statutory and non-statutory warranty
38
105
529
1.1.2017
1,063
93,883
Liabilities relating to financing activities
-31
604
Other (excluding interest payable)
-9
variable
Liabilities from finance lease contracts
114
7,037
Cash inflows/
outflows
Changes due to
the acquisition
or disposal of
companies
Changes due to
exchange rate
factors
Commercial paper
-655
-1,579
14,892
Liabilities to banks
-596
656
13,512
Liabilities from customer deposits (banking)
-957
1,338
16,474
Asset-backed financing transactions
-328
-1,901
2,687
44,421
Bonds
31.12.2017
Other changes
Changes in
fair values
953
EUR 6,100 million
HKD 334 million
0.0
2.0
3.0
fixed
1.0
7.6
EUR 2,500 million
fixed
2.7
5.7
fixed
USD 13,450 million
2.0
3.0
NZD 30 million
variable
0.0
3.0
EUR 500 million
variable
2.5
fixed
2.8
GBP 300 million
2.0
variable
-210
1.1
2.2
GBP 1,175 million
variable
Other
2.0
3.9
5.0
CAD 1,400 million
2.7
2.6
CAD 500 million
variable
BMW Canada Inc.
2.8
3.5
AUD 130 million
fixed
fixed
2.1
USD 3,608 million
BMW US Capital, LLC
1.8
3.8
NOK 2,400 million
fixed
0.4
5.8
JPY 19,100 million
fixed
1.0
fixed
6.3
fixed
1.2
2.0
GBP 20 million
variable
2.8
1.3
USD 130 million
variable
EUR 21,150 million
variable
CNY 2,300 million
4.3
3.3
6.9
AUD 290 million
fixed
2.5
4.0
USD 300 million
fixed
1.5
3.0
5.8
fixed
2.1
4.7
HKD 1,342 million
fixed
1.8
5.0
SEK 1,750 million
fixed
GBP 1,150 million
739
Income tax liabilities
Financial liabilities towards companies in which an
Total
Maturity later
than five years
Maturity between
one and five years
Maturity within
one year
in € million
31.12.2018
following:
Financial liabilities of the BMW Group comprise the
Financial liabilities
Bonds
35
→ Notes to the
Notes to the Group
Financial Statements
Group
Financial
Statements
162
161
Current income tax liabilities totalling €1,158 million
(2017: €1,124 million) include €96 million (2017:
€68 million) which are expected to be settled after
more than twelve months. Liabilities may be settled
earlier than this depending on the timing of pro-
ceedings.
34
Income from the reversal of other provisions amoun-
ting to €516 million (2017: €322 million) is recorded
in cost of sales and in selling and administrative
expenses.
Other obligations for ongoing operational expenses
include in particular expected payments for bonuses
and other price deductions.
Balance Sheet
Provisions for other obligations cover numerous
specific risks and uncertain obligations, in particular
for litigation and liability risks.
9,762
10,992
2,480
Financial liabilities
Other
Derivative instruments
Commercial paper
13,196
1,225
3,293
8,678
32,592
Liabilities to banks
109
3,289
10,961
Liabilities from customer deposits (banking)
17,335
11,603
5,732
Asset-backed financing transactions
53,346
14,359
2,480
Provisions for obligations for personnel and social
expenses comprise mainly performance-related
remuneration components, early retirement part-time
working arrangements and employee long-service
awards.
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
1,959
59
-2,019
5,158
1,367
Obligations for personnel and
social expenses
2,782
1
85
1,827
-30
2,819
1,861
Other obligations
2,523
-10
653
-454
SEK 500 million
-1,761
Depending on when claims occur, it is possible that the
BMW Group may be called upon to fulfil the warranty
or guarantee obligations over the whole period of
the warranty or guarantee. Expected reimbursement
claims at 31 December 2018 amounted to €933 million
(2017: €847 million).
5,074
-625
6,078
11,854
-732
-4,715
59
5,133
110
11,999
Other provisions
obligations, product guarantees
1,540
-77
-481
694
34
1,620
operational expenses
Other obligations for ongoing
1,310
2,087
1,790
investment is held
646
114
707
7,784
44,880
Bonds
31.12.2018
Other changes
fair values
Changes in
Changes due to
exchange rate
factors
-33
Changes due to
the acquisition
or disposal of
companies
Cash inflows/
1.1.2018
in € million
Liabilities related to financing activities can be rec-
onciled as follows:
94,648
9,683
43,865
41,100
1,132
outflows
469
Asset-backed financing transactions
288
2,480
13,196
14,359
3
17,335
53,346
8
40
-2,021
16,855
4,461
-141
679
12,658
Liabilities to banks
227
557
13,572
Liabilities from customer deposits (banking)
192
Commercial paper
915
150
1,090
7,861
25,887
11,132
Bonds
Total
Maturity later
than five years
Maturity between
one and five years
one year
in € million
44,880
Maturity within
103,597
12,921
51,851
38,825
1,206
481
159
566
1,675
31.12.2017
513
Asset-backed financing transactions
10,818
173
544
373
Financial liabilities
Other
Derivative instruments
4,461
4,461
Commercial paper
6,037
12,658
3,170
8,440
Liabilities to banks
13,572
132
3,296
10,144
Liabilities from customer deposits (banking)
16,855
1,048
3.0
Past service cost in the financial year 2018 results
mainly from the estimated effects of a court order
made in October 2018 in the UK. The court ruling
related to gender equality in state-guaranteed min-
imum pension (GMP) plans and requires existing
pension entitlements to be adjusted.
fixed
100.0
100.0
3.7
3.9
31.1
51.5
5.1
4.8
17.8
18.8
45.0
48.5
28.3
29.3
78.5
100.0
77.3
100.0
100.0
increase of 0.75%
decrease of 0.75%
in %
in € million
in %
31.12.2017
in € million
31.12.2018
Change in defined benefit obligation
Pension entitlement trend
Average life expectancy
Pension level trend
Discount rate
a non-linear pattern, estimates made on the basis
of the specified sensitivities are only possible with
this restriction. The calculation of sensitivities using
ranges other than those specified could result in
a disproportional change in the defined benefit
obligation.
It is only possible to aggregate sensitivities to a lim-
ited extent. Since the change in obligation follows
The sensitivity analysis provided below shows the
extent to which changes in individual factors at the
end of the reporting period influence the defined
benefit obligation.
100.0
23.9
66.6
65.9
159
procedures and for internal management purposes,
financial risks relating to the pension plans are reported
using a value-at-risk approach by reference to the
pension deficit. The investment strategy is also subject
to regular review together with external consultants,
with the aim of ensuring that investments are struc-
tured to match the timing of pension payments and
the expected development of pension obligations. In
this way, fluctuations in pension funding shortfalls
are reduced.
The BMW Group is exposed to risks arising both from
defined benefit plans and defined contribution plans
with a minimum return guarantee. The discount rates
used to calculate pension obligations are subject to
market fluctuation and therefore influence the level of
the obligations. Furthermore, changes in other actu-
arial parameters, such as expected rates of inflation,
also have an impact on pension obligations. In order
to reduce currency exposures, a substantial portion
of plan assets is either invested in the same cur-
rency as the underlying plan or hedged by means of
currency derivatives. As part of the internal reporting
Employer contributions to plan assets are expected to
amount to €526 million in the coming year.
19,477
18,937
966
1,049
8,908
8,167
9,603
9,721
31 December
4,222
4,487
160
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Notes to the
31.12.2017
31.12.2018
31.12.2017
31.12.2018
31.12.2017
31.12.2018
Other
-2,652
United Kingdom
Defined benefit obligation
Former employees with vested benefits
Pensioners
Current employees
in %
The defined benefit obligation relates to current
employees, pensioners and former employees with
vested benefits as follows:
Balance Sheet
Germany
135
-12.5
-13.5
92
an investment is held
Other
781
5,665
Total
118,129
1,675
*The carrying amounts of cash flow hedges and fair value hedges are categorised as at fair value through profit or loss for the sake of clarity. Receivables from sales financing are shown including finance leases.
thereof due
31.12.2018 within one year
Reversed
Utilised
Reversal of
discounting
Additions
Translation
differences
422
1.1.2017*
1,206
9,669
Payables to other companies in which
13,196
Liabilities from customer deposits (banking)
14,359
Commercial paper
2,480
Asset-backed financing transactions
17,335
Derivative instruments
Cash flow hedges
Fair value hedges
Other derivative instruments
Other
Trade payables
Other liabilities
Payables to subsidiaries
697
556
in € million
Other provisions changed during the year as follows:
Other provisions
770
increase of 1 year
-3.0
-672
-2.7
-567
3.1
712
2.8
597
increase of 0.25%
decrease of 0.25%
17.1
3,878
15.7
3,334
3.6
856
3.8
decrease of 1 year
33
In the UK, the sensitivity analysis for the pension
level trend also takes account of restrictions due to
caps and floors.
-0.7
-155
-0.7
-147
decrease of 0.25%
-3,055
0.7
0.7
156
increase of 0.25%
-3.8
-855
-3.7
-779
162
Liabilities to banks
581
86
35
34
620
550
2,437
2,202
thereof non-investment grade
(funds without a rating)
thereof mixed funds
9,399
9,144
434
518
5,734
5,224
2,786
3,231
3,092
93
Other
51
233
268
42
47
195
Absolute return funds
191
221
|י
Money market funds
93
93
93
Real estate funds
3,402
thereof investment grade
12,491
2017
2018
2017
2018
2017
2018
Total
Other
United Kingdom
Germany
in € million
Plan assets in Germany, the UK and other countries
comprised the following:
Depending on the cash flow profile and risk structure
of the pension obligations involved, pension plan
assets are invested in a diversified portfolio.
in the United Kingdom. The revision of German mor-
tality tables had an offsetting effect.
The gains arising from changes in demographic
assumptions relate mainly to revised mortality tables
2018
2017
COMPONENTS OF PLAN ASSETS
Equity instruments
11,930
469
552
6,354
5,774
5,668
5,604
15
Debt instruments
2,144
222
172
478
407
1,682
1,565
2,382
816
5
5
708
669
Absolute return funds
27
13
1
1
10
16
12
Cash and cash equivalents
902
1,039
36
662
605
678
617
47
67
67
170
1,834
1,765
2,253
2,552
Total without quoted market price
141
212
354
537
Other
1,372
1,339
65
240
325
Real estate
1
404
270
935
1,009
Debt instruments
15,255
14,450
831
879
7,074
6,402
7,350
7,169
Total with quoted market price
1,280
1,340
thereof investment grade
307
1
55
1
54
thereof non-investment grade
1,141
918
15
404
737
702
(funds without a rating)
thereof mixed funds
198
307
198
216
0.3
53,346
Financial liabilities
Maturity later
than five years
Total
Deferred income
Refund liabilities for future leased products
Bonuses and sales aides
2,284
3,954
428
6,666
2,807
2,807
3,097
3,097
Other taxes
934
Maturity between
one and five years
934
one year
31.12.2017*
102
Payables to subsidiaries
92
92
Sundry
1,905
87
8
2,000
Other liabilities
15,117
4,828
471
20,416
in € million
Maturity within
Advance payments from customers
934
122
2,101
Other liabilities
13,443
4,605
440
18,488
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
Sundry other liabilities include mainly commission
payable and credit balances on customers' accounts.
Other liabilities include contract liabilities relating to
contracts with customers amounting to €4,985 million
(31 December 2017: €4,820 million).
An amount of €2,134 million (2017: €2,294 million)
was released from contract liabilities in the financial
year and recognised as revenues from contracts with
customers.
165
Deferred income comprises the following items:
166
Group
Financial
Statements
Notes to the Group
7
160
1,934
Sundry
1,056
Deposits received
505
346
5
856
Payables to other companies in which an investment is held
26
744
Social security
75
23
98
Payables to subsidiaries
129
129
744
Financial Statements
Notes to the
76
781
The following details apply to commercial
Issuer
paper:
Issue volume
in relevant currency
(ISO-Code)
Weighted average
maturity period
(in days)
Weighted average
nominal interest rate
(in %)
BMW Finance N.V.
EUR 2,030 million
140
-0.3
BMW International Investment B.V.
GBP 350 million
59
1.6
0.9
4.6
fixed
KRW 120,000 million
3.0
2.6
fixed
CNY 8,000 million
3.0
4.4
fixed
INR 8,000 million
2.5
8.0
fixed
NOK 1,000 million
10.0
3.3
GBP 850 million
BMW India Financial Services Private Ltd.
INR 4,500 million
44
2,940
2,940
945
945
Advance payments from customers
736
175
911
Deposits received
560
280
10
850
Payables to other companies in which an investment is held
781
4,311
4,311
7,484
453
7.9
36
Other liabilities
Other liabilities comprise the following items:
in € million
31.12.2018
Maturity within
one year
Social security
Maturity between
one and five years
Total
Deferred income
Refund liabilities for future leased products
Bonuses and sales aides
Other taxes
2,771
4,260
Maturity later
than five years
Bonds
Balance Sheet
in € million
Statements
Notes to the Group
Financial Statements
→ Other Disclosures
39
Financial instruments
The carrying amounts of financial instruments are
assigned to IFRS 9 categories* in the following table.
in € million
ASSETS
Other investments
Receivables from sales financing
Financial assets
Derivative instruments
Cash flow hedges
Fair value hedges
Other derivative instruments
Marketable securities and investment funds
Group
Financial
Loans to third parties
168
1,804
1,310
1,179
916
849
2,694
2,474
In addition, the following commitments exist for the
BMW Group at the end of the reporting period:
in € million
31.12.2018
31.12.2017
Purchase commitments for
property, plant and equipment
3,486
4,137
Purchase commitments for
intangible assets
1,554
167
Credit card receivables
Other
Cash and cash equivalents
17
3
244
128
10,094
885
2,546
295
1,916
293
1,444
104,435
3,671
4,264
LIABILITIES
970
3,671
675
483
Trade receivables
Other assets
Receivables from subsidiaries
Receivables from companies in which
an investment is held
Collateral assets
Other
due between one and five years
due later than five years
Other financial obligations
Total
At fair value
through other com-
At amortised cost prehensive income
At fair value
through profit
or loss
86,783
429
840
654
31.12.2018
→ Other Disclosures
446
due within one year
27
28
Other deferred income
557
118
314
55
Deferred income
7,484
2,771
6,666
2,284
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
Deferred income relating to service contracts com-
prises service and repair work as well as telematics
services and roadside assistance agreed to be part of
the sale of a vehicle (in some cases multi-component
arrangements). Deferred income from lease financing
relates primarily to down payments on leases.
Grants comprise mainly public sector funds to
promote regional structures and which have been
invested in the production plants in Brazil, Mexico,
Leipzig and Berlin. The grants are partly subject to
holding periods for the assets concerned of up to five
years and/or minimum employment figures. Grant
income is recognised in the income statement over
the useful lives of the assets to which it relates.
337
37
973
1,092
31.12.2018
31.12.2017*
Total
thereof due
within one year
thereof due
Total
within one year
Deferred income relating to service contracts
Deferred income from lease financing
Grants
3,826
1,534
3,659
1,228
2,764
2,361
Trade payables
As in the previous year, trade payables are due within
one year.
OTHER DISCLOSURES
203
765
816
Other contingent liabilities comprise mainly risks
relating to taxes and customs duties.
The BMW Group determines its best estimate of
contingent liabilities on the basis of the information
available at the reporting date. This assessment may
change over time and is adjusted regularly on the basis
of new information and circumstances. A part of the
risks is covered by insurance.
In June 2016, Germany's Federal Cartel Agency con-
ducted searches at various carmakers and suppliers,
including BMW AG, in relation to the purchase of
steel. The respective investigations have not yet been
completed. More extensive disclosures pursuant to
IAS 37.86 cannot be provided at present.
In July 2017, cartel allegations against five German
car manufacturers appeared in the press. Internal
investigations were initiated by the BMW Group
and have not yet been completed. In October 2017,
the European Commission began an inspection at
the BMW Group, and in September of the current
financial 1 year opened formal proceedings pertaining
to specific matters. A number of class actions were
brought in the USA and Canada. Possible risks for
the BMW Group can neither be foreseen in detail nor
quantified at present. Further disclosures pursuant to
IAS 37.86 cannot be provided at present.
Regulatory authorities have ordered the BMW Group
to recall various vehicle models in conjunction with
airbags supplied by the Takata group of companies.
Provision for the costs involved has been recognised
within warranty provisions. In addition to the risks
already covered by warranty provisions, it cannot be
ruled out that further BMW Group vehicles will be
affected by future recall actions. Further disclosures
pursuant to IAS 37.86 cannot be provided at present.
Other financial commitments
In addition to liabilities, provisions and contingent
liabilities, other financial commitments consist in
particular of rental and leasing contracts for build-
ings, property, machinery, tools, offices and other
facilities. Contracts have terms of up to 121 years and
include in part renewal and purchase options or price
adjustments in the form of index-linked or graduated
rent, for example to compensate inflation.
In the financial year 2018, an expense of €483 million
(2017: €430 million) was recognised for payments on
operating leases.
Total minimum future lease payments from non-can-
cellable rental contracts by maturity is as follows:
in € million
31.12.2018
31.12.2017
351
10
14
399
204
38
Contingent liabilities and other financial
commitments
Contingent liabilities
The following contingent liabilities existed at the
balance sheet date:
in € million
468
Investment subsidies
Guarantees
Other
Contingent liabilities
31.12.2018
31.12.2017
275
125
Litigation
332
Credit card receivables
in € million
189
Gross carrying amount of financial assets
with poor credit ratings
187
605
37
987
1,816
592
Total
84,166
2,415
509
987
88,077
1,050
Further disclosures relating to credit risk – in particu-
lar with regard to the amounts of impairment losses
recognised - are provided in the explanatory notes
to the relevant categories of receivables in → notes 25, → see
26 and 30.
notes 25,
26 and 30
Liquidity risk
The following table shows the maturity structure of
expected contractual cash flows (undiscounted) for
financial liabilities:
31.12.2018
in € million
5,493
Maturity within
one year
52
1,059
187
43
19
25
75
349
Receivables from financial services (including credit
card business receivables) are allocated to internally
defined rating categories based on credit risk. The
related gross carrying amounts in accordance with
IFRS 9 were allocated at 31 December 2018 as follows:
in € million
Stage 1
Stage 2
General
Simplified
Stage 3
Total
Expected
credit loss
Gross carrying amount of financial assets
with good credit ratings
79,597
751
420
80,768
269
Gross carrying amount of financial assets
with medium credit ratings
4,382
52
31.12.2017
Maturity between
Maturity later
than five years
Other financial liabilities
Total
976
1,180
81
2,237
20
318
454
792
51,732
54,576
13,088
119,396
31.12.2017
Maturity within
in € million
one year
Maturity between
one and five years
Maturity later
than five years
Total
Bonds
11,735
Derivative instruments
one and five years
2,478
Commercial paper
Total
Bonds
10,789
34,196
11,546
56,531
Asset-backed financing transactions
6,942
11,710
18,652
Liabilities to banks
9,848
3,804
900
14,552
Liabilities from customer deposits (banking)
11,010
3,368
107
14,485
Trade payables
9,669
9,669
2,478
27,201
1-30 days overdue
31-60 days overdue
61-90 days overdue
91-120 days overdue
More than 120 days overdue
Balance at 31 December
At 31 December 2017 trade receivables existed that
were overdue but for which no impairment allowance
was recognised in accordance with IAS 39. The over-
due amounts can be grouped in the following ranges:
-913
-913
-835
-835
1,064
762
3,506
255
Gains and losses on financial instruments
The following table shows the net gains and losses
arising on financial instruments in the financial year
2018 pursuant to IFRS 9:
in € million
Financial instruments measured at fair value through profit or loss
Financial assets measured at amortised cost
Financial liabilities measured at amortised cost
2018
-150
203
155
Interest income from financial assets measured at
amortised cost relates mainly to interest income from
loan financing which is reported as revenues. Interest
income and interest expense from financial assets
at fair value through other comprehensive income
amounted to €58 million and €47 million respectively.
Interest expenses from financial liabilities measured
at amortised cost amounted to €1.8 billion.
The following table shows the net gains and losses
arising on financial instruments in the financial year
2017 pursuant to IAS 39:
in € million
Held for trading
1,090
Gains/losses from the use of derivative instruments
4,341
1,977
2
8
-6
105
105
8
3
3
-1
-7
2
109
Offsetting of financial instruments
Derivative financial instruments of the BMW Group
are subject to legally enforceable master netting agree-
ments or similar contracts. However, receivables and 7
payables relating to derivative financial instruments
are not netted due to non-fulfilment of the stipulated
criteria. Offsetting would have the following impact
on the carrying amounts of derivatives:
in € million
Balance sheet amounts as reported
Gross amount of derivatives which can be offset in case of insolvency
Net amount after offsetting
31.12.2018
31.12.2017
Reported on Reported on equity
assets side
and liabilities side
Reported on
assets side
Reported on equity
and liabilities side
1,675
in € million
Fair value option
Available-for-sale
Notwithstanding the existence of collateral accepted,
the carrying amount of financial assets (with the
exception of derivative financial instruments) generally
represents the maximum credit risk. In addition, the
credit risk is increased by additional unutilised loan
commitments for credit card business and dealership
financing. Total credit risk in these two lines of business
amounts to €1,148 million (2017: €1,217 million) and
€29,403 million (2017: €27,953 million) respectively.
173
174
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Other Disclosures
In the case of all relationships underlying non-deriva-
tive financial instruments, in order to minimise the
credit risk and depending on the nature and amount
of exposure, collateral is required, credit information
and references obtained or historical data based on the
existing business relationship, in particular payment
behaviour, reviewed.
In the case of trade receivables, customers are regularly
assessed with regard to their credit risk. Depending
on contractual status, necessary measures, such as
dunning procedures, are initiated in good time.
The credit risk relating to cash deposits and derivative
financial instruments is minimised by the fact that the
Group only enters into such contracts with parties of
first-class credit standing.
Within the financial services business, items financed
for retail customers and dealerships (such as vehicles,
facilities and property) serve as first-ranking collateral
with a recoverable value. Security is also put up by
customers in the form of collateral asset pledges, asset
assignment and first-ranking mortgages, supplemented
where appropriate by warranties and guarantees.
Items previously held as collateral that are subsequently
acquired relate mainly to vehicles. These assets can
usually be converted into cash at short notice through
the dealership organisation. Creditworthiness testing
is an important aspect of the BMW Group's credit
risk management. Every borrower's creditworthiness
is tested for all credit financing and lease contracts
entered into by the BMW Group. In the case of retail
customer financing, creditworthiness is assessed
using validated scoring systems integrated into the
acquisition process. In the area of dealership financing,
creditworthiness is assessed by means of ongoing
credit monitoring and an internal rating system that
takes account not only of the material credit standing
of the borrower, but also of qualitative factors such as
past reliability in business relations.
구
The credit risk on trade receivables is assessed main-
ly on the basis of information relating to overdue
amounts. The gross carrying amounts of these receiv-
ables are allocated at 31 December 2018 in accordance
with IFRS 9 to overdue ranges used for management
purposes as follows:
in € million
Not overdue
1-30 days overdue
31-60 days overdue
61-90 days overdue
More than 90 days overdue
Total
31.12.2018
2,066
375
34
29
96
2,600
The BMW Group is exposed to counterparty credit
risks if contractual partners, for example a retail
customer or a dealership, are unable or only partially
able to meet their contractual obligations. Information
on the management of credit risk for receivables
from financial services is provided in the Combined
Management Report (see section Report on Outlook,
Risks and Opportunities).
Gains/losses on investments measured at fair value through profit and loss
Credit risk
-94
Gains and losses on sale and fair value measurement of marketable securities held for sale
(including investments in subsidiaries and participations measured at cost)
Net income from participations and investments in subsidiaries
Accumulated other equity
Balance at 1 January
Total change during the year
thereof recognised in the income statement during the period under report
Balance at 31 December
Loans and receivables
Impairment losses/reversals of impairment losses
Other income/expenses
Other liabilities
Income/expenses
2017
961
3
48
14
52
41
-44
93
-162
162
8,285
For the financial year 2017, items are allocated by
category in accordance with the requirements of
IAS 39* as applied in that year:
Asset-backed financing transactions
hedging rates
Currency risks
17,159
9,097
Interest rate risks
4,619
24,295
12,027
Raw material price risks
1,526
2,109
32
Aluminium (EUR/t)
Lead (EUR/t)
Copper (EUR/t)
Nominal amounts of
hedging intruments
Palladium (EUR/oz)
23,304
35,501
12,059
Platinum (EUR/oz)
The average hedging rates of hedging instruments
used by the BMW Group at 31 December 2018 were
as follows:
in € million
Raw material price risks
Cash Flow Hedges
Average
Maturity
between one
and five years
178
Group
Financial
Statements
Disclosures on hedging measures
Currency risks
Average
hedging rates
Notes to the Group
Financial Statements
The following disclosures on hedging measures include
derivatives of fully consolidated companies before
offset of deferred tax.
EUR/CNY
EUR/USD
→ Other Disclosures
EUR/GBP
The nominal amounts of hedging instruments at
31 December 2018 were as follows:
EUR/KRW
EUR/JPY
8.26
1.17
0.79
1,288.91
125.29
in € million
Maturity within
one year
Maturity later
than five years
177
Currency risks
Fair Value Hedges
3,667
189
334
-453
52,580
654
556
Balances in accumulated other equity
Liabilities
Change in value
of hedged items
Continuing hedge
relationships
-119
941
453
-262
8,930
49,846
-33
27
24
Terminated hedge
relationships
121
Raw material price risks
363
26,256
Interest rate risks
The following table summarises key information on
hedged items for each risk category and shows the
balances of designated components within accumu-
lated other equity:
in € million
Cash Flow Hedges
Currency risks
Raw material price risks
Fair Value Hedges
Interest rate risks
The accumulated amount of hedge-related fair value
adjustments is €15 million for assets and €243 million
for liabilities.
7
1,797
1,784
5,279
745
945
The following table provides information on the nominal
amounts, carrying amounts and fair value changes of
contracts designated as hedging instruments:
Fair Values
Assets
Fair Values
Nominal amounts
Assets
Liabilities
Change in fair value
of designated
components
651
409
327
31.12.2017
451
752
46,004
9,748
109,115
The cash flows from non-derivative liabilities comprise
principal repayments and the related interest. The
amounts disclosed for derivative instruments com-
prise only cash flows relating to derivatives that have
a negative fair value at the balance sheet date. At
31 December 2018 credit commitments to dealerships
which had not been called upon at the end of the
reporting period amounted to €9,010 million (2017:
€8,812 million).
Solvency is assured at all times by managing and
monitoring the liquidity situation on the basis of
a rolling cash flow forecast. The resulting funding
requirements are covered by a variety of instruments
placed on the world's financial markets, with the aim
to minimise risk by matching maturities with financ-
ing requirements and in alignment with a dynamic
target debt structure.
As a further reduction of risk, a syndicated credit line
totalling €8 billion (2017: €8 billion) from a consortium
of international banks is available to the BMW Group.
Intragroup cash flow fluctuations are balanced out by
the use of daily cash pooling arrangements.
Further information is provided in the "Results of
Operations, Financial Position and Net Assets" section
and in the “Risks and Opportunities” section of the
Combined Management Report.
175
176
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Other Disclosures
Market risks
The principal market risks to which the BMW Group
is exposed are currency risk, interest rate risk and raw
materials price risk.
Protection against such risks is provided in the first
instance though natural hedging which arises when
the values or cash flows of non-derivative financial
instruments have matching maturities and amounts
(netting). Derivative financial instruments are used
to reduce the risk remaining after netting.
Currency, interest rate and raw materials price risks
of the BMW Group are managed at a corporate level.
Further information is provided in the "Report on
outlook, risks and opportunities" section of the Com-
bined Management Report.
Currency risks
As an enterprise with worldwide operations, the
BMW Group conducts business in a variety of cur-
rencies, from which currency risks arise. In order to
hedge currency risks, the BMW Group holds, as at
31 December 2018, derivative financial instruments
mostly in the form of forward currency contracts and
currency swaps.
As part of the implementation of the risk management
strategy, the extent to which risk exposures should
be hedged is decided at regular intervals and the
corresponding hedging ratio defined. The economic
relationship between the hedged item and the hedging
instrument is based essentially on the fact that they
are denominated in the same currency and have the
same maturities.
The BMW Group measures currency risk using a
cash-flow-at-risk model. The analysis of currency
risk in this model is based on the planned foreign
currency transactions or "exposures". At the end of
the reporting period, the currency exposure - in each
case for the following year – was as follows:
of probability distributions. Volatilities and correla-
tions serve as the main input factors to determine the
relevant probability distributions.
191
The potential negative impact on earnings is calcu-
lated at the reporting date for each currency for the
following financial year on the basis of current market
prices and exposures with a confidence level of 95%.
The risk mitigating effect of correlations between the
various currencies is taken into account when the
risks are aggregated.
110
53,363
111
7,087
10,901
17,988
Liabilities to banks
9,546
3,656
771
13,973
Liabilities from customer deposits (banking)
10,225
3,418
130
13,773
Trade payables
9,731
9,731
Commercial paper
4,463
4,463
Derivative instruments
Other financial liabilities
Total
466
637
1,214
The following table shows the potential negative
impact for the BMW Group for the following year
resulting from unfavourable changes in exchange
rates, measured on the basis of the cash-flow-at-risk
approach.
in € million
Cash flow at risk
31.12.2018
1,123
31.12.2017*
1,180
* Prior year figure adjusted due to the fact that the entire interest rate risk is considered, not just
the significant interest rate portfolios.
Raw materials price risk
The BMW Group is exposed to market price risks on
raw materials. In order to hedge these risks, the Group
mainly used forward commodity contracts. As part of
the implementation of the risk management strategy,
the extent to which risk exposures should be hedged
is decided at regular intervals and the corresponding
hedging ratio defined.
The economic relationship between the hedged item
and the hedging instrument is based essentially on
the fact that they have the same basis and term. The
BMW Group designates only the commodity price
index-linked raw material surcharge as a hedged item.
Other price components contained in the contract are
not designated as being part of the hedge relationship
as no effective hedging instruments exist for these
components.
The starting point for analysing raw materials price
risk is to identify planned purchases of raw materials
or components containing raw materials, the so-called
"exposure". At each reporting date, the exposure
the following financial year amounted to:
in € million
Raw material price exposures
This
for
31.12.2018
31.12.2017
4,174
3,969
exposure is compared to all hedges that are in
place. The net cash flow surplus represents an uncovered
risk position. The cash-flow-at-risk approach involves
showing the impact of potential raw materials market
price fluctuations on operating cash flows on the basis
of probability distributions. Volatilities and corre-
lations serve as input factors to assess the relevant
probability distributions.
The potential negative impact on earnings is calculated
at the reporting date for each raw materials category
for the following financial year on the basis of current
market prices and exposure with a confidence level of
95%. The risk mitigating effect of correlations between
the various categories of raw materials is taken into
account when the risks are aggregated.
The following table shows the potential negative impact
for the BMW Group resulting from fluctuations in
prices across all categories of raw materials, measured
on the basis of the cash-flow-at-risk approach. The
risk at each reporting date for the following financial
year was as follows:
in € million
Cash flow at risk
31.12.2018
Value at risk
in € million
The following table shows for interest-rate-sensitive
exposures of the BMW Group the potential fair value
fluctuation compared with the expected value, mea-
sured on the basis of the value-at-risk approach:
The BMW Group applies a value-at-risk approach
throughout the Group for internal reporting purposes
and to manage interest rate risk. This approach is
based on a historical simulation in which the potential
future fair value losses of the interest rate portfolios are
compared across the Group with expected amounts
on the basis of a holding period of 250 days and a
confidence level of 99.98%. The risk mitigating effect
of correlations between the various portfolios is taken
into account when the risks are aggregated.
31.12.2018 31.12.2017*
431
581
* Prior year figure adjusted, due to the fact that entire currency risk is considered, not just of
the significant currencies.
Interest rate risk
Interest rate risks arise when funds are borrowed and
invested with differing fixed-rate periods or differing
terms. At the BMW Group, all items subject to, or
bearing, interest are exposed to interest rate risk and
can therefore affect both the assets and liabilities side
of the balance sheet.
The fair values of the Group's interest rate portfolios
were as follows at the end of the reporting period:
in € million
Fair values of interest rate portfolios
31.12.2018
31.12.2017*
103
60,356
* Prior year figure adjusted, due to the fact that entire interest rate risk is shown, not just of
the significant interest rate portfolios.
in € million
Currency exposure
31.12.2018
31.12.2017*
28,407
29,203
* Prior year figure adjusted, due to the fact that entire currency risk is shown, not just of the
significant currencies.
This exposure is compared to all hedges that are in
place. The net cash flow surplus represents an uncov-
ered risk position. The cash-flow-at-risk approach
involves showing the impact of potential exchange
rate fluctuations on operating cash flows on the basis
Interest rate risk is managed through the use of inter-
est rate derivatives. As part of the implementation
of the risk management strategy, interest rate risks
are monitored and managed at regular intervals. The
interest rate contracts used for hedging purposes
comprise mainly swaps, which, if hedge accounting
is applied, are accounted for as fair value hedges. The
economic relationship between the hedged item and
the hedging instrument is based on the fact that the
main parameters of the hedged item and the related
hedging instrument, such as start date, term and
currency, are the same.
For selected fixed-interest assets, part of the interest
rate risk is hedged on a portfolio basis. In this case,
swaps are used as the hedging instrument. Hedge
relationships are terminated and redesignated on a
monthly basis at the end of each reporting period,
thereby taking account of the constantly changing
content of each portfolio.
60,790
ments Level 3
47,221
5,447
Gains (+)/losses (-) recognised in the income statement
Currency translation differences
31 December 2018
*Opening balance adjusted due to first-time application of IFRS 9.
in € million
1 January 2017
Additions
Disposals
Gains (+)/losses (-) recognised in accumulated other equity
Gains (+)/losses (-) recognised in the income statement
Currency translation differences
Gains (+)/losses (-) recognised in accumulated other equity
31 December 2017
Unquoted equity
instruments
Convertible bonds
unquoted equity
instruments
Financial Instru-
ments Level 3
111
2
103
3
-2
2
Options on
115
Disposals
1 January 2018*
Asset-backed financing transactions
Bonds
Receivables from sales financing
Carrying amount
Fair value
Carrying amount
Fair value
31.12.2018
31.12.2017
amounts differ from their fair value. For some balance
sheet items, fair value corresponds to the carrying
amount due to their short maturity.
in € million
Additions
The following table shows the fair values and carrying
amounts of financial assets and liabilities that are
measured at cost or amortised cost and whose carrying
Notes to the Group
Financial Statements
Group
Financial
Statements
170
169
171
172
The balance sheet carrying amount of Level 3 financial
instruments developed as follows:
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Other Disclosures
in € million
→ Other Disclosures
Liabilities from customer deposits (banking)
106
45
329
571
190
4,341
814
1,340
2,187
16,855
4,461
13,572
12,658
44,880
1,132
31
86,363
9,258
1,108
97
219
1,334
276
2,667
9,039
184
248
5,910
-6
9,731
Other liabilities
2
47
10
10
265
3
4
272
Options on
Unquoted equity
instruments
Convertible bonds
Trade payables
unquoted equity
instruments
*The carrying amounts of cash flow hedges and fair value hedges are categorised as held for trading for the sake of clarity. Receivables from sales financing are shown including finance leases.
1,090
110,111
Total
5,949
744
129
Other
an investment is held
Payables to other companies in which
Payables to subsidiaries
Financial Instru-
2
Liabilities to banks
86,783
Cash equivalents
Loans to third parties
Derivative instruments (assets)
Interest rate risks
Currency risks
Raw material market price risks
Other risks
Derivative instruments (liabilities)
Interest rate risks
Currency risks
Raw materials market price risks
284
Level 3
-
2
1,797
2,008
534
2
778
221
91
The allocation to measurement levels at 31 Decem-
ber 2018 takes account of the reclassifications of
financial instruments made in conjunction with the
first-time application of IFRS 9 see → note 7. There
were no reclassifications within the level hierarchy
either in the financial year 2017 or in the financial
year 2018.
→ see
105
note 7
5,544
Level 2
Raw materials market price risks
31.12.2018
Level hierarchy in accordance with IFRS 13
Level 1
Level 2
Level 3
4,641
164
265
885
3
Marketable securities, investment funds and collateral assets - available-for-sale
Other investments - available-for-sale/fair value option
1,069
191
4
923
409
343
The classification of financial assets and liabili-
ties measured at fair value according to IAS 39 to
measurement levels in accordance with IFRS 13 at
31 December 2017 was as follows:
in € million
31.12.2017
Level hierarchy in accordance with IFRS 13
Level 1
713
90,445
Where the fair value was required for a financial
instrument for disclosure purposes, the discounted ¬
in € million
Other investments
Marketable securities, investment funds and collateral assets
in € million
accordance with IFRS 13.
classified as follows in the measurement levels in
At 31 December 2018 the financial assets and liabil-
ities measured at fair value according to IFRS 9 are 7
12,658
12,724
13,196
13,277
13,572
Cash equivalents
13,588
14,374
16,855
17,005
17,335
17,443
44,880
45,566
53,346
53,831
80,434
83,853
14,359
cash flow method was used, taking account of the
BMW Group's own credit risk; for this reason, the fair
values calculated can be allocated to Level 2. Finan-
cial instruments recognised at fair value for which
no market price is available are allocated to Level 3.
Fair values are determined in accordance with the
following table:
Loans to third parties
Interest rate risks
Unquoted equity instruments
Convertible bonds
Fair value
31.12.2018
Valuation method
Input Parameter
265
Last financing round
Milestone analysis (quantitative and
Price per share
qualitative factors)
Company performance
Contractual rights by share class
3
Derivative instruments (assets)
Income-based approach
Options on unquoted equity instruments
4
Level 3 financial assets relate mainly to investments in
a venture capital fund. The private equity companies
are valued on the basis of their net asset value which
is determined using relevant information that is not
available in the public domain. The fund manager
assesses the underlying individual companies in
accordance with the guidelines for international
private equity and venture capital valuations (IPEV).
An increase in input parameters would normally also
lead to a similar increase in valuation.
interest rate
Last financing round
Milestone analysis (quantitative and
qualitative factors)
Consideration of exercise price
Price per share
Company performance
Contractual rights by share class
Exercise price
Derivative instruments (liabilities)
Other risks
Raw material market price risks
Currency risks
Expected Company performance
Risk adequate discounted
112
Interest rate risks
80,434
Collateral assets
an investment is held
Receivables from companies in which
Receivables from subsidiaries
Other assets
Trade receivables
Cash and cash equivalents
Loans to third parties
Other
Marketable securities and investment funds
Fair value hedges
Cash flow hedges
Derivative instruments
Financial assets
Receivables from sales financing
Other investments
ASSETS
Currency risks
Other derivative instruments
Total
Other
Financial liabilities
LIABILITIES
366
Held for trading
Other liabilities
Fair value option
Available for sale
Cash funds
31.12.2017
Other
Loans and
receivables
29
Bonds
Other derivative instruments
Liabilities from customer deposits (banking)
Commercial paper
Liabilities to banks
Derivative instruments
Cash flow hedges
Fair value hedges
Asset-backed financing transactions
553
10,382
795
829
-6
-2
Elimination of inter-segment items
-534
-6,174
9,815
10,675
Reconciliation of capital expenditure
on non-current assets
Total for reportable segments
32,608
32,121
Elimination of inter-segment items
8,473
Group profit before tax
Total for reportable segments
Financial result of Automotive segment
Financial result of Motorcycles segment
95,095
2018
-6,728
93,804
208,980
2,624
195,506
Segment assets
2,769
Investments accounted for using the equity method
187
188
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Segment Information
Write-downs on inventories to their net realisable value
amounting to €54 million (2017: €36 million¹) were
recognised by the Automotive segment in the financial
year 2018. The reversal of impairment losses increased
the segment result of the Automotive segment by an
amount of €22 million (2017: €6 million).
The result of the Financial Services segment was
negatively impacted by impairment losses totalling
€302 million (2017: €215 million) recognised on leased
products. Income from the reversal of impairment
losses on leased products amounted to €118 million
(2017: €11 million).
The Other Entities' segment result includes interest
and similar income amounting to €1,178 million (2017:
€1,110 million) and interest and similar expenses
amounting to €1,145 million (2017: €986 million).
The information disclosed for capital expenditure and
depreciation and amortisation relates to non-current
property, plant and equipment, intangible assets and
leased products.
1 Prior year figure
has been adjusted.
The total of the segment figures can be reconciled to
the corresponding Group figures as follows:
in € million
Reconciliation of segment result
2017*
Total Group capital expenditure
34,643
26,434
Liabilities of Motorcycles segment
not subject to interest
613
572
Total liabilities -
Financial Services segment
131,889
123,088
Non-operating assets -
Other Entities segment
7,084
7,829
Elimination of inter-segment items
-127,818
-120,147
Total Group assets
208,980
195,506
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
40
on non-current assets
45
34,489
25,393
Reconciliation of depreciation and
amortisation on non-current assets
Total for reportable segments
Elimination of inter-segment items
Total Group depreciation and
amortisation on non-current assets
15,041
14,779
-6,600
-6,324
8,441
8,455
in € million
31.12.2018
31.12.2017*
Reconciliation of segment assets
Total for reportable segments
113,885
101,702
Non-operating assets - Automotive
Liabilities of Automotive segment
not subject to interest
48,639
47,933
75,121
Non-operating assets - Motorcycles
84,512
-6,728
Result from equity accounted investments
Automotive
Motorcycles
Financial Services
31.12.2018
31.12.2017*
31.12.2018
31.12.2017
31.12.2018
31.12.2017
13,836
2,624
11,223
2,769
618
618
14,919
14,740
Other Entities
2018
2017
Reconciliation to Group figures
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
2018
Investments accounted for using the equity method
in € million
2,161
2,207
ALTANA AG
632
739
Capital expenditure on non-current assets
7,853
6,972
147
125
24,608
25,024
Depreciation and amortisation on non-current assets
4,982
4,699
97
88
9,962
9,992
Segment assets
Capital expenditure on non-current assets
Depreciation and amortisation on non-current assets
Group
2017*
26,434
739
25,393
-6,600
-6,324
8,441
8,455
Other Entities
Reconciliation to Group figures
31.12.2018
31.12.2017
31.12.2018
Group
31.12.2017*
31.12.2018
31.12.2017*
SEGMENT INFORMATION
BY OPERATING SEGMENT
External revenues
Inter-segment revenues
Total revenues
Segment result
-6,174
2017*
632
9,815
2018
2
3
97,480
98,282
4
4
-18,710
-17,306
6
7
-18,710
-17,306
97,480
98,282
-45
80
1,342
293
10,675
5
Result from equity accounted investments
in € million
-262
2,322
2,421
341
296
401
360
12
UnternehmerTUM GmbH
27
1,527
1,435
367
56
36
255
58
Entrust Datacard Corp.
Changes in fair value include additional effects from
the application of the modified closing rate method.
179
At 31 December 2017, the BMW Group held deriva-
tive financial instruments (mainly forward currency
contracts) in order to hedge currency risks attached
to future or existing transactions. These derivative
instruments were intended to hedge forecast sales
No effects were recognised in financial result in the
financial year 2017 in connection with forecasting
errors and resulting overhedging. Gains due to the
ineffective portion of cash flow hedges amounting
to €17 million were recognised in financial result.
No effects were recognised in financial result in the
financial year 2017 in connection with forecasting
errors relating to cash flow hedges for commodities.
Losses attributable to the ineffective portion of cash
flow hedges amounting to €1 million were recognised
in financial result.
1,515
-103
thereof reclassified to the income statement
Balance at 31 December
1,437
Total changes during the year
The following section shows disclosures relevant for
hedging instruments used in the financial year 2017
in accordance with IAS 39.
Balance at 1 January
2017
in € million
The impact of cash flow hedges on accumulated other
equity was as follows:
Cash flow hedges
Notes to the Group
Financial Statements
→ Other Disclosures
Group
Financial
Statements
180
78
denominated in a foreign currency over the coming
32 months. It was expected that €336 million of net
gains, recognised in equity at 31 December 2017,
would be reclassified to profit and loss in the financial
year 2018.
103
2
Further details on the remuneration of the Board
of Management are provided in the Compensation
Report for the financial
year 2018.
42
Declaration with respect to the Corporate
Governance Code
The Board of Management and the Supervisory Board
of Bayerische Motoren Werke Aktiengesellschaft have
issued the prescribed Declaration of Compliance pur-
suant to § 161 of the German Stock Corporation Act.
It is reproduced in the Annual Report 2018 of the
BMW Group and is also available to shareholders on
the BMW Group website at www.bmwgroup.com.
43
Compensation of members of the Board of
Management and Supervisory Board
The total compensation of the current members of
the Board of Management and the Supervisory Board
of BMW AG expensed for the financial year 2018 in
accordance with IFRS comprised the following:
The fair value of the programmes for Board of Man-
agement members and senior heads of department
at the date of grant of the share-based remuneration
components was €1,919,680 (2017: €2,311,946), based
on a total of 22,245 shares (2017: 25,694 shares) of
BMW AG common stock or a corresponding cash-
based settlement measured at the relevant market
share price prevailing on the grant date.
in € million
2017
the Supervisory Board of BMW AG or its subsidiaries,
nor were any contingent liabilities entered into on
their behalf.
Further details about the remuneration of current
members of the Board of Management and the
Supervisory Board can be found in the Compensation
Report, which is part of the Combined Management
Report.
Compensation to members of the
Board of Management
28.8
40.2
2018
106
The total expense recognised in 2018 for the share-
based remuneration component of current and former
Board of Management members and senior heads of
department was €609,890 (2017: €1,642,936).
The cash-settlement obligation for the share-based
remuneration component is measured at its fair value at
the balance sheet date (based on the closing price of
BMW AG common stock in Xetra trading at 31 Decem-
ber 2018).
15
Apart from vehicle leasing and financing contracts
at usual conditions, companies of the BMW Group
concluded no further transactions with members of
the Board of Management or Supervisory Board of
BMW AG. This also applies to close members of the
families of those persons.
BMW Trust e. V., Munich, administers assets on a
trustee basis to secure obligations relating to pen-
sions in Germany and is therefore a related party
of the BMW Group in accordance with IAS 24. This
entity has no assets of its own. It had no income or
expenses during the period under report. BMW AG
bears expenses on an immaterial scale and performs
services for BMW Trust e. V., Munich.
For disclosures relating to key management personnel,
please see → note 43 and the Compensation Report. → see
note 43
182
Group
Financial
Statements
The total carrying amount of the provision for the
share-based remuneration component of current
and former Board of Management members and
senior heads of department at 31 December 2018 was
€4,745,518 (2017: €6,301,785).
Notes to the Group
Financial Statements
→ Other Disclosures
Share-based remuneration
The BMW Group provides three share-based pro-
grammes: the Employee Share Programme for enti-
tled employees of the BMW Group, a share-based
remuneration programme for members of the Board
of Management and a share-based remuneration pro-
gramme for senior heads of department of BMW AG.
As part of the Employee Share Programme, non-voting
shares of preferred stock in BMW AG were granted in
2018 to qualifying employees at favourable conditions
(see note 31 for the number and price of issued
shares). The holding period for these shares is up
to 31 December 2021. In the financial year 2018,
the BMW Group recorded a personnel expense of
€10 million (2017: €10 million) for the Employee Share
Programme, corresponding to the difference between
the market price and the reduced price of the shares
of preferred stock purchased by employees. The Board
of Management reserves the right to decide anew each
year
with respect to an Employee Share Programme.
For financial years beginning after 1 January 2011,
BMW AG has added a share-based remuneration
component to the existing compensation system for
Board of Management members. This compensation
component was revised for financial years from 2018
onwards.
Members of the Board of Management continue to
receive a cash compensation for the specific purpose
of investment after tax and contributions in BMW AG
common stock. For financial years from 2018 onwards,
the investment component corresponds to 45% of the
gross bonus. Shares of common stock purchased in
this way by Board members are required to be held for
a period of four years. At the end of the holding period,
Board members receive from BMW AG, for every three
shares of common stock held, either one additional
share of common stock or the cash equivalent, to be
decided at BMW AG's discretion. In the event of death
or invalidity, special rules apply for early payment
of share-based remuneration components based on
the target amounts. Insofar the service contract is
prematurely terminated and the Company has an
extraordinary right of termination, or if the Board
member resigns without the Company's agreement,
entitlements to amounts as yet unpaid relating to
share-based remuneration are forfeited. With effect
from the financial year 2012, qualifying senior heads
of department are also entitled to select a share-based
remuneration component, which is largely comparable
to the share-based remuneration arrangements for
Board of Management members.
→ see
note 31
The share-based remuneration component is measured
at its fair value at each balance sheet date between
grant and settlement date, and on the settlement date.
The amounts are recognised as personnel expense
on a straight-line basis over the vesting period and
reported in the balance sheet as a provision.
41
Fixed remuneration
Furthermore, the BMW Group held no derivative
financial instruments at 31 December 2017 which
were designated as cash flow hedges to hedge against
interest rate risks.
Fair value hedges
Receivables
at 31 December
2018
2017
Supplies and services
received
2018
performed
Supplies and services
Payables
at 31 December
in € thousand
Seen from the perspective of BMW Group entities,
the volume of transactions with the above-mentioned
entities was as follows:
In addition, Susanne Klatten, Germany, and Stefan
Quandt, Germany, are indirectly sole shareholders of
Entrust Datacard Corp., Shakopee, Minnesota. Stefan
Quandt is also a member of the supervisory board of
this entity. In 2018, Entrust Datacard Corp., Shakopee,
Minnesota, acquired vehicles from the BMW Group
by way of leasing.
the BMW Group bought in services from Unter-
nehmerTUM GmbH, Garching, mainly in the form
of consultancy and workshop services.
Susanne Klatten, Germany, is also the sole share-
holder and Chairwoman of the Supervisory Board
of UnternehmerTUM GmbH, Garching. In 2018,
Susanne Klatten, Germany, is a shareholder and
member of the Supervisory Board of BMW AG and
also a shareholder and Deputy Chairwoman of the
Supervisory Board of ALTANA AG, Wesel. In 2018,
ALTANA AG, Wesel, acquired vehicles from the
BMW Group, mainly by way of leasing.
cooperation is on the provision of complete photo-
voltaic solutions for rooftop systems and carports
to BMWi customers. In 2018, SOLARWATT GmbH,
Dresden, acquired vehicles from the BMW Group by
way of leasing.
Stefan Quandt, Germany, is also the indirect major-
ity shareholder of SOLARWATT GmbH, Dresden.
Cooperation arrangements are in place between
BMW Group and SOLARWATT GmbH, Dresden,
within the field of electric mobility. The focus of this
181
its subsidiaries, performed logistic-related services for
the BMW Group during the financial year 2018. In
addition, the companies acquired vehicles from the
BMW Group, mainly by way of leasing.
2017
2017
1
1
36
22
SOLARWATT GmbH
2,235
4,464
2018
94
29,816
23,386
3,393
3,536
DELTON Health AG (formerly DELTON AG)
DELTON Logistics S.à r.l.
2017
2018
34
At 31 December 2017, the BMW Group held derivative
financial instruments, mainly commodity swaps, with
terms of up to 46 months to hedge raw materials price
risks. It was expected that €55 million of net gains,
recognised in equity at 31 December 2017 would be
reclassified to profit and loss in the financial year 2018.
Stefan Quandt, Germany, is a shareholder and Deputy
Chairman of the Supervisory Board of BMW AG.
He is also the sole shareholder and Chairman of
the Supervisory Board of DELTON Health AG,
Bad Homburg v.d.H., as well as sole shareholder of
DELTON Logistics S.à r.l., Grevenmacher, which, via
739
Supplies and services
A significant proportion of the BMW Group's transac-
tions with related parties relates to the joint venture
BMW Brilliance Automotive Ltd.
7
2018
Supplies and services
performed
Hedge relationships give rise to following effects:
Transactions of Group entities with related parties
were carried out without exception in the normal
course of business of each of the parties concerned
and at market conditions.
received
Related party relationships
-7
328
-335
31.12.2017
Gains/losses on hedging instruments designated as
part of a fair value hedge relationship
Gains/losses from hedged items
Ineffectiveness of fair value hedges
in € million
The following table shows gains and losses from fair
value hedge relationships on hedging instruments and
hedged items in the financial year 2017:
40
Business relationships of the BMW Group with other
associated companies and joint ventures as well as
with non-consolidated subsidiaries are small in scale.
2017
Receivables
772
1,333
1,829
63
99
5,946
7,691
2018
BMW Brilliance Automotive Ltd.
2018
2017
2018
2017
at 31 December
at 31 December
Payables
2017
8.2
in € million
Variable remuneration
185
186
Group
Financial
Statements
Notes to the Group
Financial Statements
→ Segment Information
Segment information by operating segment is as
follows:
in € million
Automotive
Motorcycles
2018
2017*
2018
Financial Services
2017*
2018
2017
SEGMENT INFORMATION
BY OPERATING SEGMENT
External revenues
68,947
70,152
2,176
2,270
26,355
25,857
Inter-segment revenues
16,899
The success of the Other Entities segment is assessed
on the basis of profit or loss before tax. The corre-
sponding measure of segment assets used to manage
the Other Entities segment is total assets less asset-
side income tax items and intragroup investments.
The success of the Financial Services segment is mea-
sured on the basis of return on equity (RoE). Profit
before tax therefore represents the relevant measure
of segment earnings. The measure of segment assets
in the Financial Services segment corresponds to net
assets, defined as total assets less total liabilities.
The Automotive and Motorcycles segments are
managed on the basis of return on capital employed
(ROCE). The relevant measure of segment results used
is therefore profit before financial result. Capital
employed is the corresponding measure of segment
assets used to determine how to allocate resources
and comprises all current and non-current operational
assets after deduction of liabilities used operationally
which are not subject to interest (e.g. trade payables).
The role of "chief operating decision maker" with
respect to resource allocation and performance
assessment of the reportable segment is embodied
in the full Board of Management. For this purpose,
different measures of segment performance as well as
segment assets are taken into account in the operating
segments.
Total expense
41.7
49.8
thereof due within one year
30.7
45.9
With effect from the financial year 2018, variable cash
compensation includes a multi-year and future-oriented
Performance Cash Plan.
The total remuneration of former members of the
Board of Management and their dependants amounted
to €9.2 million (2017: €6.7 million).
Pension obligations to current members of the Board
of Management are covered by provisions amounting
to €19.7 million (2017: €22.0 million), determined
in accordance with IAS 19. Pension obligations to
former members of the Board of Management and
their surviving dependants, also determined in
accordance with IAS 19, amounted to €91.0 million
(2017: €90.1 million).
The compensation arrangements applicable for
members of the Supervisory Board for the financial
year 2018 do not include any stock options, value
appreciation rights comparable to stock options or
any other stock-based compensation components.
Apart from vehicle lease and financing contracts at
customary conditions, no advances or loans were
granted to members of the Board of Management and
44
Events after the end of the reporting period
No events have occurred since the end of the financial
year which could have a major impact on the results
of operations, financial position and net assets of
BMW AG and the BMW Group.
183
15,590
184
Statements
Notes to the Group
Financial Statements
→ Segment Information
SEGMENT INFORMATION
45
Explanatory notes to segment information
Information on reportable segments
For the purposes of presenting segment information,
the activities of the BMW Group are divided into oper-
ating segments in accordance with IFRS 8 (Operating
Segments). The segmentation follows the internal
management and reporting system and takes account
of the organisational structure of the BMW Group
based on the various products and services of the
reportable segments.
The activities of the BMW Group are broken down
into the operating segments Automotive, Motorcycles,
Financial Services and Other Entities.
Within the Automotive segment the BMW Group devel-
ops, manufactures, assembles and sells automobiles
and off-road vehicles, under the brands BMW, MINI
and Rolls-Royce as well as spare parts, accessories
and mobility services. BMW and MINI brand products
are sold in Germany through branches of BMW AG
and by independent, authorised dealerships. Sales
outside Germany are handled mainly by subsidiary
companies and by independent import companies in
some markets. Rolls-Royce brand vehicles are sold in
the USA as well as in China, Korea, Italy and Russia via
subsidiary companies and elsewhere by independent,
authorised dealerships.
Activities relating to the development, manufacture,
assembly and sale of motorcycles as well as spare
parts and accessories are reported in the Motorcycles
segment.
Automobile leasing, fleet business, multi-brand
business, retail and dealership financing, customer
deposit business and insurance activities are the main
activities allocated to the Financial Services segment.
Holding and Group financing companies are reported in
the Other Entities segment. This segment also includes
the operating companies BMW (UK) Investments Ltd.
and Bavaria Lloyd Reisebüro GmbH, which are not
allocated to one of the other segments.
Internal management and reporting
Segment information is prepared as a general rule
in conformity with the accounting policies adopted
for preparing and presenting the Group Financial
Statements. Exceptions to this general principle are
the treatment of inter-segment guarantees, the earn-
ings impact of which is allocated to the Automotive
and Financial Services segments on the basis used
internally to manage the business, and cross-segment
receivables and investments in subsidiaries for which
no impairment losses have been recognised. A further
exception is the treatment of intragroup buyback
arrangements between the Automotive and Financial
Services segments. Inter-segment receivables and
payables, provisions, income, expenses and profits
are eliminated upon consolidation. Inter-segment
revenues are based on market prices. Centralised
functions are included in the segments concerned.
Expenses for centralised administrative functions
allocated to the Financial Services segment are not
settled in cash.
Group
Financial
-3
2
1,810
1,875
Opening balance at 1 January 2018
of hedging
Costs
Designated
component
Costs
of hedging
Costs
of hedging
Designated
component
in € million
Raw materials price risk
Interest rate risk
Currency risks
-6
-19
6
12
-931
-497
recognised in
income statement
ineffectiveness
Hedge
hedging in other
comprehensive
income
Costs of
Change of
designated com-
ponents in other
comprehensive
income
Designated components and costs of hedging within
accumulated other equity changed as follows:
Interest rate risks
Fair Value Hedges
Raw material price risks
Currency risks
Cash Flow Hedges
7.7
-614
3.6
Change in fair value during the reporting period
-966
1,710
Total revenues
Segment result
85,742
2,173
2,272
28,165
27,567
6,182
7,888
175
207
-13
-614
120
940
-51
7
Closing balance at 31 December 2018
Reclassification to acquisition costs for inventories
33
-68
for terminated hedge relationships
319
-987
for continuing hedge relationships
Reclassification to profit or loss
14
235
-453
-20
-2
3.6
85,846
2.0
Variable compensation
20.3
31.7
thereof Performance Cash Plan
5.3
Share-based remuneration component
0.8
Allocation to pension provisions
3.4
3.1
0.3
termination of board activity
Benefits in conjunction with the
Fixed compensation and attendance fees
5.6
5.6
Supervisory Board
2.0
0.9
3.9
Compensation to members of the
The Audit Committee continued to make preparations for the change in external auditor for the
financial year 2019 in line with plan. It also regularly examined the non-audit services provided
by the current auditor. An independent auditor engaged to conduct the mandatory audit of
over-the-counter derivative transactions confirmed the effectiveness of the system that BMW AG
currently employs to ensure compliance with regulatory requirements.
11
12
→ Report of the
Supervisory Board
The meeting of the Audit Committee held in February 2018 focused primarily on preparing for
the Supervisory Board meeting at which the financial statements were to be examined. Before
recommending to the full Supervisory Board that KPMG AG Wirtschaftsprüfungsgesellschaft
(KPMG) be re-elected as Company and Group auditor at the Annual General Meeting 2018,
the Audit Committee obtained a Declaration of Independence from KPMG and, in this context,
also considered the scope of non-audit services provided by KPMG entities to the BMW Group.
There were no indications of conflicts of interest, grounds for exclusion or lack of independence
on the part of the auditor.
The fees proposed by KPMG for the audits of the year-end Company and Group Financial
Statements 2018 and for the review of the Half-Year Financial Report were deemed appropriate.
Subsequent to the Annual General Meeting held in May 2018, the Audit Committee therefore
appointed KPMG for the relevant engagements and specified audit focus areas.
During the year under report, the Audit Committee again dealt intensively with the topic
of compliance in the BMW Group. In his regular report, the Chairman of the Compliance
Committee provided us with a summary of ongoing compliance-related proceedings. He also
explained the results of a voluntary external audit of the BMW Group's compliance management
system in the context of antitrust law with the aim of verifying its appropriateness. On this
basis, the Compliance Committee submitted a concept to develop the Compliance Management
System, which was confirmed by the Board of Management. The Audit Committee discussed
the concept at length and supports the corresponding further development of the Compliance
Management System.
The Committee received continuous and detailed information on the status of the internal
investigations and the EU Commission's investigation into the antitrust allegations in connection
with the former working groups of several German automobile manufacturers. A representative
of the law firm engaged by the company also regularly took part in the discussions.
The Board of Management reported to the Audit Committee on engine control software for certain
earlier model versions of two vehicle types, which, in the BMW Group's opinion, was originally
developed correctly, but later fitted with a software module not intended for this type of vehicle.
The BMW Group attributes the software error to a manual, human error in an update and not
to a deliberate manipulation of the engine control and exhaust gas cleaning systems. The Board
of Management also explained this process at the Annual General Meeting in 2018. The Public
Prosecution Office Munich delivered a decision on 25 February 2019 regarding notice of a fine
of €8.5 million due to a minor offence. The investigation of the Public Prosecution Office found
no evidence of use of a deactivation device in emissions testing, fraud, or deliberate statutory
violations. The Company has accepted the penalty.
Furthermore, the Audit Committee dealt with the main results of the audits conducted by
Group Internal Audit and with further audit planning. The Audit Committee also discussed risk
management and the assessment of current risks. Other topics included the internal control
system, export control and the report on major legal disputes.
The Audit Committee concurred with the decision of the Board of Management to raise the Com-
pany's share capital in accordance with Article 4 (5) of the Articles of Incorporation (Authorised
Capital 2014) by €521,500 and, in conjunction with the Employee Share Programme, to issue a
corresponding number of new non-voting bearer shares of preferred stock.
13
The Nomination Committee convened twice during the financial year 2018. At those meetings, we
deliberated on succession planning for shareholder representatives and made recommendations
for proposed nominations of candidates for election to the Supervisory Board at the Annual
General Meetings 2018 and 2019, taking into account the composition targets previously decided
upon by the Supervisory Board.
The Mediation Committee, which is prescribed by law, did not need to convene during the
financial year 2018.
Composition of the Board of Management
Pieter Nota was appointed to the Board of Management with effect from 1 January 2018. He
succeeded Dr Ian Robertson as member of the Board of Management responsible for Sales and
Brand BMW, Aftersales BMW Group.
On 24 July 2018, the Supervisory Board resolved to revoke the appointment of Markus Duesmann
as a member of the Board of Management and release him from his duties for the remaining
term of his contract. Mr Duesmann had previously informed the Chairman of the Supervisory
Board of his intention to move to the management board of a competitor. The Purchasing and
Supplier Network headed by Mr Duesmann was temporarily taken over by Oliver Zipse, member
of the Board of Management responsible for Production. With effect from 1 October 2018, the
Supervisory Board appointed Dr Andreas Wendt to the Board of Management as member with
responsibility for Purchasing and Supplier Network. Previously, he was head of the largest
German BMW Group plant in Dingolfing.
Composition of the Supervisory Board,
the Presiding Board and the Supervisory Board's committees
Dr Robert Lane resigned from the Supervisory Board with effect from the end of the Annual
General Meeting 2018. He resigned his mandate in mutual agreement with the Company. We
wish to thank Dr Lane for his valuable contributions and steadfast cooperation during his nine
years on the Supervisory Board. The Annual General Meeting elected the former Chairman of
the Board of Management of BASF SE, Dr Kurt Bock, as new member of the Supervisory Board.
The Supervisory Board members Professor Reinhard Hüttl, Dr Karl-Ludwig Kley and Professor
Dr Renate Köcher were re-elected as members of the Supervisory Board.
The composition of the Presiding Board and the committees of the Supervisory Board remained
unchanged during the financial year. The Corporate Governance Report contains a summary
of the composition of the Supervisory Board and its committees.
The Audit Committee held five meetings and three telephone conference calls during the financial
year 2018. In the course of those conference calls, together with the Board of Management we
examined and discussed the Quarterly Financial Reports prior to their publication. Representatives
of the external auditors were present when discussing the Half-Year Financial Report.
14
To Our
Shareholders
The Personnel Committee convened four times during the financial year 2018 and held two
telephone conferences. In particular, it dealt with the change in the Board of Management for
the Purchasing and Supplier Network and prepared the relevant decisions of the Supervisory
Board. The Personnel Committee also discussed issues relating to the compensation of the
Board of Management and gave members of the Board of Management their approval to accept
mandates outside the Group in a number of cases.
The Presiding Board convened four times during the year under report. Assuming no committee
was responsible, the focus of our activities was on preparing the detailed agenda for the meetings
of the full Supervisory Board. Together with the Board of Management and senior heads of
department, we prepared the various items on the agenda for Supervisory Board meetings in a
thorough manner and made suggestions for reports to be submitted to the full Supervisory Board.
The Supervisory Board held lengthy discussions with the Board of Management regarding
the current status of the Strategy NUMBER ONE > NEXT and the decisions taken in previous
months to implement it. In particular, the Board of Management discussed recent changes in
the market environment (such as customs duty increases, restrictive trade policies and Brexit
scenarios) and explained how the current strategy enables the BMW Group to respond to the
respective challenges. Among other matters, strategies regarding the electrification of the product
range, drivetrain technology and digitalisation as well as autonomous driving were presented
in detail. The Supervisory Board emphatically supports the continued implementation of the
Strategy NUMBER ONE > NEXT.
Description of Presiding Board activities and committee work
Dear Shareholders,
In the course of 2018, our company had to tackle a variety of challenges within its business
environment. However, we were able to master them and achieve a good result, despite the adversities.
At the same time, the Group is systematically laying the foundations for long-term success going
forward. The continuous expansion of our range of electrified vehicles is one good example of this
strategy. Particularly in these times of fundamental change, the BMW Group maintains a leading
position in the automotive industry, shaping technological transformation with determination,
passion and professional excellence.
Monitoring and advisory activities of the Supervisory Board
In our capacity as Supervisory Board, we provided the Board of Management with in-depth advice
on matters relating to the management and further development of the BMW Group and monitored
the Board of Management's running of the business, both continuously and thoroughly. The full
Supervisory Board met five times in the course of the year, including one two-day meeting, and on
each occasion deliberated in detail with the Board of Management on the Group's performance. In
addition to these meetings, the Board of Management provided us with information on matters of
particular significance. Furthermore, the Chairman of the Supervisory Board was in frequent contact
with the Chairman of the Board of Management, as was the Chairman of the Audit Committee with
the Chief Financial Officer, in order to deal with current topics as they arose.
The Chairman of the Supervisory Board also held individual discussions with representatives of
various investors as well as with a shareholders' association. Topics of these consultations included
the treatment of strategy by the Supervisory Board, the involvement of the Supervisory Board in
sustainability issues and the new compensation system for the Board of Management.
The work of the Supervisory Board focused in particular on the strategic development of the
BMW Group's business models against the backdrop of digitalisation, drivetrain electrification
and other key trends. We also debated exhaustively on the challenges posed by trade conflicts,
the imminent Brexit crisis and supply distortions resulting from the difficulties encountered by
some of our competitors in converting to the new European WLTP testing cycle.
In its regular reports on the BMW Group's current situation, the Board of Management provided us
with information about new vehicle models, delivery volume trends and market developments in the
Automotive and Motorcycles segments as well as new and total business volumes in the Financial
Services segment, in each case highlighting any planning variances. The Board of Management
also presented us with the latest workforce figures and reported on economic developments in
key markets.
The status reports also included information on other current transactions and projects of key
importance, which the Supervisory Board considered in detail. These topics included important
cooperation projects such as the joint venture with Great Wall Motor, in particular regarding the
production of all-electric MINI vehicles in China, the joint venture with Daimler in the field of
mobility services and collaboration in the field of autonomous driving. The Supervisory Board also
discussed the possible introduction of driving bans for certain diesel-powered vehicles in individual
cities in Europe and the future prospects of diesel engines in general. Furthermore, the Board of
Management reported on the temporary market disruptions caused by discount campaigns initiated
by competitors in the run-up to the introduction of the new WLTP measurement procedures.
It informed the Supervisory Board about the increased extent of statutory and non-statutory warranty
measures as well as major vehicle recalls. International trade conflicts, trade risks and their impact
on the BMW Group were repeatedly the subject of the status reports provided.
9
10
To Our
Shareholders
→ Report of the
Supervisory Board
In addition to the status reports, the Supervisory Board focused on a number of specific areas
in greater detail. For example, the Board of Management reported on the current status and
strategy of Group financing. Further topics focused on were market developments and business
performance in North America, in the course of which trade risks and financial challenges in
the region were also addressed. Moreover, the Board of Management reported in detail on the
current status of and the overall strategy regarding the BMW brand.
The Supervisory Board discussed the current situation and strategy regarding the Group's
direct operations and joint ventures in China. In particular, the Board of Management
described its plans to expand local production through the BMW Brilliance Automotive Ltd.
joint venture (BBA) and its intention to increase its stake in BBA. The Supervisory Board
supports the Board of Management's strategically significant plan to increase the BMW Group's
stake in BBA's share capital by 25 percentage points to 75% by 2022 and gave its approval
for the transaction.
The Board of Management explained the current status of the customer ecosystem to the
Supervisory Board and provided an outlook on the further development of the Digital Services
and Mobility Services business fields. In the process, questions of data sovereignty and data
security regarding data collected within the Group's vehicles were also a topic of debate.
Furthermore, the Supervisory Board discussed the Group's global added value strategy across
the production network and the criteria influencing the decision to locate the planned new
production site in Eastern Europe.
→ Report of the
We also deliberated intensively on the BMW Group's forecasts for the period from 2019 to 2024.
In this context, the Board of Management addressed the volatile nature of global economic
and political conditions and their influence on planning. Risk scenarios and their possible
effects on long-term planning were also presented. After thorough review, the Supervisory
Board approved the BMW Group's long-term corporate plan. Based on this plan, the Board of
Management presented the annual budget for the financial year 2019, which we also discussed
at great length.
We also gave lengthy consideration to the business performance, risk situation and strategy of
the Financial Services segment. The strategy for the further development of the MINI brand and
cooperation with the Chinese company Great Wall Motor in this respect were also the subject
of our deliberations. In addition, the Board of Management reported on the current status of
diversity concepts for the Company.
The Supervisory Board examined the structure and the level of compensation paid to the
members of the Board of Management. In this context, we took into account trends in business
performance, executive manager compensation and the remuneration of the workforce in
Germany over time. Based on comparative studies conducted by an external compensation
consultant, we concluded that the compensation of the members of the Board of Management
is commensurate. Detailed information on the compensation of Board of Management members
is provided in the Compensation Report.
The new compensation system in place since the beginning of 2018 was approved by the
Annual General Meeting in May 2018. The structure of compensation systems for members of
the Board of Management and reporting thereon is currently the subject of draft amendments
to the German Stock Corporation Act and the German Corporate Governance Code. For
this reason, we have decided not to make any changes to the compensation system for the
BMW Group's Board of Management decided on as recently as 2017, but to await the results of
the above-mentioned reforms.
We also discussed corporate governance within the BMW Group and the application of the
recommendations contained in the German Corporate Governance Code. In December, the
Board of Management and the Supervisory Board issued their Declaration of Compliance with
the German Corporate Governance Code. We comply with all of the recommendations of
the current version of the Code with only one exception (the use of model tables for Board of
Management compensation). The wording of the Declaration of Compliance is shown in the
Corporate Governance Report.
We also reviewed existing targets for the composition of the Supervisory Board and the competence
profile set out for its members. We concluded that the composition of the Supervisory Board at
31 December 2018 was in line with the targets stipulated in the diversity concept, the competency
profile and other composition targets. We have decided to continue using the competency profile
and the targets for the composition of the Supervisory Board for the financial
year 2019.
No conflicts of interest arose on the part of members of the Supervisory Board during the year
under report. Significant transactions with Supervisory Board members and other related
parties as defined by IAS 24, including close relatives and intermediary entities, are examined
on a quarterly basis.
We reviewed the efficiency of our work in the Supervisory Board, having prepared the related
discussion at the full Supervisory Board meeting on the basis of a questionnaire. Overall, the work
of the Supervisory Board was deemed efficient. No significant need for change was identified.
Average attendance at the five Supervisory Board meetings was 94%. An individualised overview
of attendance at meetings of the Supervisory Board and its committees for the financial year
2018 has been published on the BMW Group's website. All members of the Supervisory Board
attended more than half of the meetings of the Supervisory Board and those committees to
which they belonged during their term of office in the financial year 2018.
The Supervisory Board has established a Presiding Board and four committees. Committee
chairpersons reported in detail on Presiding Board and committee work at the subsequent
meetings of the full Supervisory Board. A detailed description of the duties, composition and
working procedures of the Presiding Board and the committees is provided in the Corporate
Governance Report.
Supervisory Board
To Our
Shareholders
The Audit Committee carefully examined and discussed these documents at its meeting held
on 27 February 2019. The Audit Committee reviewed in detail the key audit matters raised in
the auditor's report of the Company and Group Financial Statements and the related audit
procedures performed by the independent auditor.
We are creating new mobility offerings and digital services that will enable customers to bring
their digital world into the car. Combining our mobility services in a joint venture with the
Daimler Group will allow us to offer customers a single source for all their mobility needs with
a single touch.
Uncertainty is part of our business
2018 was a challenging year for our industry, due to trade conflicts and the uncertainty
surrounding Brexit: vehicle sales declined across the globe for the first time since the global
economic and financial crisis.
Volatile markets, tough competition and various operating conditions in different countries
are all part of our business. The BMW Group has had to overcome difficult hurdles many
times in its history. In such moments, we have always stayed the course with a steady hand
at the wheel.
WLTP systematically implemented
A current example of this is the switch to the new WLTP test procedure in Germany and Europe.
We implemented the new requirements in our vehicles systematically and early. That is how we
operate as a company. We will also continue to meet ambitious targets to reduce CO2 emissions
in Europe and the rest of the world.
17
18
To Our
Shareholders
→ Statement of the
Chairman
of the Board of
Management
Eighth consecutive sales record
Because customers around the world value our cars and motorcycles so much, the BMW Group
was able to post record sales for the eighth consecutive year. The BMW Group has been number
one in the global premium segment for the past 15 years. Our brands BMW, Rolls-Royce and
BMW Motorrad achieved new all-time highs, while MINI reported its second-highest sales
result ever.
Despite tough headwinds, second-best result in our history
Group earnings before tax and annual net profit were both the second-highest in our history. As
previously announced, earnings before tax were moderately lower than last year's record figure.
With an EBIT margin of 7.2 percent in the Automotive segment, we exceeded our adjusted target.
This figure only partially includes our China business, as is usual. The Group EBT margin of
10.1 percent was above our 10 percent target for the eighth consecutive year. Once again, our
financial services business made a significant contribution to the Group result.
Dear Shareholders, your company is on a very solid footing and possesses considerable financial
strength. This means we can continue to invest in new technologies, services and our locations
as our springboard to the future.
Systematic electrification for emissions-free driving
The future belongs to electric mobility - there is no doubt in my mind about that. But it's certainly
not a sprint, it's a marathon. By late 2019, we aim to have half a million electrified BMW Group
vehicles on the roads.
The trend is clear: in Europe, no other manufacturer sells more electrified vehicles than the
BMW Group. Between 2015 and 2018, sales of our electric models and plug-in hybrids increased
more than fourfold.
We are also number one worldwide in registrations of plug-in hybrid vehicles. This technology
not only gives our customers access to electric driving, it is also a quick and pragmatic way to
improve air quality in cities. Studies show that plug-in hybrids with an electric range of at least
60 km are driven in electric mode just as often as pure-electric models.
And there's more coming on the electric side: 2019 will bring plug-in hybrid variants of the
new BMW 3 Series, X5 and 7 Series. The X3 will also be available for the first time with a hybrid
drive train. These will be joined by the first fully electric MINI and, in 2020, by the first fully
electric BMW - the iX3.
By the end of 2020, we will have more than ten new and revised models with an electrified
drive train. Thanks to flexible vehicle architectures, our plants will be able to build different
drive types.
The heart of an electric vehicle is the electric motor and the battery. We produce both the
electric drive and the high-voltage battery in-house. In the summer, we will open the new
BMW Group Battery Cell Competence Centre in Munich, where we will develop so-called
build-to-print prototypes. For production of base cells, we will be working with the world's
largest manufacturer of automotive battery cells, CATL, from China, and with Northvolt in
a European consortium.
Examination of financial statements and the profit distribution proposal
The Company and Group Financial Statements of the Company for the financial year 2018 were
audited by KPMG AG Wirtschaftsprüfungsgesellschaft. KPMG also conducted a review of the
abridged Interim Group Financial Statements and Interim Group Management Report for the
six-month period ended 30 June 2018. The results of the review were presented to the Audit
Committee by representatives of KPMG AG. No issues were identified that might indicate that
the abridged Interim Group Financial Statements and Interim Group Management Report had
not been prepared in all material respects in accordance with the applicable provisions.
The Group and Company Financial Statements for the year ended 31 December 2018 and the
Combined Management Report - as authorised for issue by the Board of Management on
19 February 2019 – were audited by KPMG AG and given an unqualified audit opinion.
The Auditor's Report has been signed since the financial year 2016 by Christian Sailer, as
independent auditor (Wirtschaftsprüfer), and since the financial year 2014 by Andreas Feege,
as independent auditor (Wirtschaftsprüfer) responsible for the performance of the engagement.
The financial statements for the financial year 2018, the Combined Management Report, the
reports of the external auditors and the Board of Management's profit distribution proposal
were made available to all members of the Supervisory Board in a timely manner.
Mobility services from a single source
We are moving autonomous driving forward with a combination of enthusiasm and sound
judgement. Safety is for us an absolute priority in this area. In 2021, we will release the
BMW iNEXT, a vehicle that brings together several future technologies: a futuristic interior, full
connectivity and an electric range of up to 700 km. This marks the beginning of highly automated
driving. At the same time, we are also testing autonomous driving with a fleet of 500 iNEXT
vehicles in urban settings.
For the first time, BMW M GmbH broke through the 100,000 unit sales mark with its M and
M Performance models.
-
At its meeting held on 15 March 2019, the full Supervisory Board discussed in depth the draft
of the Company and Group Financial Statements submitted by the Board of Management. In
both meetings, the Board of Management gave a detailed explanation of the financial reports it
had prepared. Representatives of the external auditor were also present at both meetings. They
reported on the main findings of their audit, explained the key audit matters in the audits of
the Company and Group Financial Statements and answered additional questions of members
of the Supervisory Board.
The representatives of the external auditor confirmed that the risk management system estab-
lished by the Board of Management is capable of identifying at an early stage any developments
that might threaten the Company's going-concern status. They confirmed that no material
weaknesses in the internal control system and risk management system with regard to the
financial reporting process were identified. Similarly, they did not identify in the course of their
audit work any facts that were inconsistent with the contents of the Declaration of Compliance
pursuant to Section 161 of the German Stock Corporation Act (AktG) issued by the Board of
Management and the Supervisory Board.
iNEXT ' – a building block for the future
Based on a thorough examination conducted by the Audit Committee and the full Supervisory
Board, we concurred with the results of the external audit. In accordance with the conclusion
reached after the examination by the Audit Committee and the Supervisory Board, no objections
were raised. The Group and Company Financial Statements of BMW AG for the financial year
2018 prepared by the Board of Management were approved at the Supervisory Board meeting
held on 15 March 2019. The financial statements have therefore been adopted.
The Supervisory Board also examined the proposal of the Board of Management to use the
unappropriated profit to pay a dividend of €3.50 per share of common stock and €3.52 per
share of non-voting preferred stock. We consider the proposal appropriate and have therefore
approved it.
Furthermore, in conjunction with the presentation of the Sustainable Value Report, the
Audit Committee and the Supervisory Board reviewed the separate non-financial report of
BMW AG (Company and Group) at 31 December 2018, which has been drawn up by the Board
of Management. The audit firm PricewaterhouseCoopers GmbH has performed a “limited
assurance" review of these reports and issued an unqualified statement thereon. The documents
were carefully examined by the Audit Committee at its meeting on 27 February 2019 and by the
Supervisory Board at its meeting on 15 March 2019. The Board of Management provided an
in-depth explanation of the reports at both meetings. Representatives of the auditors attended
both meetings, reported on significant findings and answered additional questions raised by
members of the Supervisory Board. The Supervisory Board acknowledged and approved the
separate non-financial report (Company and Group) drawn up by the Management Board.
Expression of appreciation by the Supervisory Board
Munich, 15 March 2019
On behalf of the Supervisory Board
Yours
Norbert Reithofer
Chairman of the Supervisory Board
15
We wish to express our appreciation to the members of the Board of Management and the entire
workforce of the BMW Group worldwide for their dedication, their ideas and their achievements
during the financial year 2018, which form the bedrock of the enduring success and sustainability
of our Company - both now and in the future.
To Our
Digitalisation is changing every industry and every aspect of our lives. We have set ourselves a
clear goal: to be a leading tech company for premium mobility by 2025 - and we are developing
our business model in this direction. Our Strategy NUMBER ONE > NEXT has three main
approaches: profitability, growth and future all of them geared towards our customers'
ever-evolving needs and desires.
16
Tech company in the premium mobility sector
On behalf of the Board of Management and our nearly 135,000 associates worldwide, I would
like to thank you for joining the BMW Group on its journey into the future.
Harald Krüger
Chairman of the Board of Management
Dear Shareholders,
Management
of the Board of
→ Statement of the
Chairman
Shareholders
Individual mobility, in all its facets, remains our core competence. We are reminded, time and
again, that long-term success demands fresh thinking and bold action.
BMW Finance N.V., The Hague
100
19
205
195
Rolls-Royce Motor Cars Ltd., Farnborough
BMW Iberica S.A., Madrid
BMW i Ventures SCS SICAV-RAIF, Senningerberg
19
213
100
43
71
218
100
100
22
BMW Austria Leasing GmbH, Salzburg
129
100
29
100
20
100
75
156
157
BMW Malta Ltd., Floriana
APD Industries plc, Birmingham
Alphabet Belgium Long Term Rental NV, Aartselaar
BMW Vertriebs GmbH, Salzburg
BMW Austria Bank GmbH, Salzburg
Alphabet Nederland B.V., Breda 10
BMW Russland Trading O00, Moscow
11
191
BMW Financial Services Scandinavia AB, Sollentuna
100
BMW Italia S.p.A., San Donato Milanese
100
57
476
BMW Finance S.N.C., Guyancourt
100
105
561
BMW (UK) Manufacturing Ltd., Farnborough
100
9
588
100
BMW International Investment B.V., The Hague
388
222
61
BMW Belgium Luxembourg S.A./N.V., Bornem
100
27
225
BMW France S.A.S., Montigny-le-Bretonneux
100
64
284
ALPHABET (GB) Ltd., Farnborough
100
84
304
BMW (UK) Ltd., Farnborough
100
16
316
100
128
100
123
100
100
100
100
100
100
100
100
100
100
BMW Den Haag B.V., The Hague
BMW Danmark A/S, Copenhagen
BMW Roma S.r.I., Rome
BMW Czech Republic s.r.o., Prague¹¹
100
100
100
100
100
55
100
100
100
100
100
100
100
100
100
100
100
100
100
BMW Services Belgium N.V., Bornem
Oy BMW Suomi AB, Helsinki
Alphabet France S.A.S., Rueil-Malmaison
BMW Renting (Portugal) Lda., Porto Salvo
BMW Financial Services Belgium S.A./N.V., Bornem
BMW Finanzdienstleistungen (Schweiz) AG, Dielsdorf
BMW Bank 000, Moscow
Bavaria Reinsurance Malta Ltd., Floriana
BMW Austria GmbH, Salzburg
100
Alphabet UK Ltd., Glasgow
100
100
100
2
101
100
100
69
19
BMW Northern Europe AB, Stockholm
16
Alphabet España Fleet Management S.A.U., Madrid
BMW Financial Services B.V., Rijswijk
Park Lane Ltd., Farnborough
BMW Distribution S.A.S., Vélizy-Villacoublay
BMW Automotive (Ireland) Ltd., Dublin
BMW Amsterdam B.V., Amsterdam
BMW Nederland B.V., Rijswijk
BMW Financial Services Denmark A/S, Copenhagen
BMW Portugal Lda., Porto Salvo
BMW Financial Services (Ireland) DAC, Dublin
Alphabet Fuhrparkmanagement (Schweiz) AG, Dielsdorf
BMW Hellas Trade of Cars A.E., Kifissia
BMW Retail Nederland B.V., The Hague
Alphabet Italia Fleet Management S.p.A., Rome
Alphabet Austria Fuhrparkmanagement GmbH, Salzburg
Alphabet France Fleet Management S.N.C., Rueil-Malmaison
BMW Financial Services Polska Sp. z o.o., Warsaw
BMW Services Ltd., Farnborough
Swindon Pressings Ltd., Farnborough
BMW Norge AS, Fornebu
895
34,883
100
98,282
97,480
Group
-8,028
-7,855
355
69,344
396
2,696
2,941
3,435
3,689
3,606
1,588
2,975
64,192
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6.
189
BMW INTEC Beteiligungs GmbH, Munich 3, 6
BMW Bank GmbH, Munich³
BMW Beteiligungs GmbH & Co. KG, Munich6
DOMESTIC¹
Companies
→ 76
Affiliated companies (subsidiaries) of BMW AG at 31 December 2018
if they are of "minor significance" for the results of
operations, financial position and net assets of
BMW AG pursuant to § 286 (3) sentence 1 no. 1 HGB
and § 313 (3) sentence 4 HGB. It is also shown in the list
which subsidiaries apply the exemptions available in
§ 264 (3) and § 264 b HGB with regard to the publication
of annual financial statements and the drawing up of
a management report and/or notes to the financial
statements (footnotes 5 and 6). The Group Financial
Statements of BMW AG serve as exempting consoli-
dated financial statements for these companies.
The List of Investments of BMW AG pursuant to § 285
and § 313 HGB is presented below. Disclosures for
equity and earnings and for investments are not made
List of investments at 31 December 2018
46
LIST OF INVESTMENTS AT
31 DECEMBER 2018
→ List of Investments
at 31 December 2018
Notes to the Group
Financial Statements
Group
Financial
Statements
190
1,508
11,400
11,071
14,807
14,299
13,596
Germany
2017*
2018
2017*
Non-current assets
2018
External revenues
in € million
Information by region
In the information by region, external sales are based
on the location of the customer. Revenues with major
customers were not material overall. The information
disclosed for non-current assets relates to property,
plant and equipment, intangible assets and leased
products. Eliminations disclosed for non-current
assets relate to leased products.
In the reconciliation of segment assets to Group assets,
eliminations relate mainly to intragroup financing
balances.
The reconciliation of segment figures to the corre-
sponding total Group figures shows the elimination
of inter-segment items. Revenues with other segments
result mainly from the sale of vehicles, for which the
Financial Services segment has concluded a financing
or lease contract. Eliminations of inter-segment items
in the reconciliation to the Group profit before tax,
capital expenditure, depreciation and amortization
mainly result from the sale of vehicles in the Automo-
tive segment, which are subsequently accounted for
as leased vehicles in the Financial Services segment. 7
100
31,678
BMW Finanz Verwaltungs GmbH, Munich
China
18,268
15,526
30,925
31,415
20,766
21,361
16,726
16,088
Eliminations
Other regions
Rest of the Americas
Rest of Asia
Rest of Europe
USA
85
90
19,008
BMW Verwaltungs GmbH, Munich³,6
Parkhaus Oberwiesenfeld GmbH, Munich
Alphabet Fuhrparkmanagement GmbH, Munich 4
100
58
7,971
100
2,106
17,761
BMW International Holding B.V., Rijswijk 10
BMW Holding B.V., The Hague
Europe 12
100
100
100
100
100
100
BMW Österreich Holding GmbH, Steyr
100
BMW (UK) Holdings Ltd., Farnborough
838
176
963
BMW Motoren GmbH, Steyr
100
269
1,014
BMW Financial Services (GB) Ltd., Farnborough
100
22
1,020
BMW España Finance S. L., Madrid
100
385
1,889
100
3,064
BMW (Schweiz) AG, Dielsdorf
100
100
Profit/loss
in € million
in € million
Equity
FOREIGN²
LARGUS Grundstücks-Verwaltungsgesellschaft mbH, Munich
DriveNow Verwaltungs GmbH, Munich 11
BMW M GmbH Gesellschaft für individuelle Automobile, Munich 3, 5, 6
BMW Vertriebszentren Verwaltungs GmbH, Munich
BMW Vermögensverwaltungs GmbH, Munich
BMW Anlagen Verwaltungs GmbH, Munich 3,6
Bürohaus Petuelring GmbH, Munich
Bavaria Wirtschaftsagentur GmbH, Munich 3, 5, 6
BAVARIA-LLOYD Reisebüro GmbH, Munich
Rolls-Royce Motor Cars GmbH, Munich 4, 5, 6
BMW Fahrzeugtechnik GmbH, Eisenach 3, 5, 6
BMW Hams Hall Motoren GmbH, Munich 4, 5, 6
DriveNow GmbH & Co. KG, Munich¹¹
BMW High Power Charging Beteiligungs GmbH, Munich 4,6
Alphabet International GmbH, Munich 4, 5, 6
Capital invest-
ment in %
100
5,497
100
100
100
100
100
100
100
100
100
153
100
326
100
1,988
100
3,558
-13
100
100
100
179
28
27
100
53
100
100
100
100
100
0
0
Equity
in € million
Profit/loss
in € million
Capital invest-
ment in %
100
100
100
100
100
403
0
0
0
Alphabet Insurance Services Polska Sp. z o.o., Warsaw
BMW (GB) Ltd., Farnborough
BMW (UK) Pensions Services Ltd., Hams Hall
BMW Bulgaria EOOD, Sofia
BMW Car Club Ltd., Farnborough
BMW Drivers Club Ltd., Farnborough
BMW Group Benefit Trust Ltd., Farnborough
100
0
0
100
0
0
0
0
0
0
0
0
100
0
0
0
100
100
100
Parkmobile Hellas S.A., Athens
Parkmobile International B.V., Amsterdam
Parkmobile International Holding B.V., Amsterdam
Parkmobile Licenses B.V., Amsterdam
Parkmobile Ltd., Basingstoke
Parkmobile Software B.V., Amsterdam
ParkNow Austria GmbH, Vienna
ParkNow France S.A.S., Versailles
ParkNow Suisse S.A., Bulle
RingGo (GB) Ltd., Basingstoke
Parkmobile Group Holding B.V., Amsterdam
U.T.E. Alphabet España-Bujarkay, Sevilla
217-07 Northern Boulevard Corp., Wilmington, Delaware
BMW Experience Centre Inc., Richmond Hill, Ontario
BMW i Ventures Inc., Wilmington, Delaware
BMW i Ventures LLC, Wilmington, Delaware
BMW Leasing de Argentina S.A., Buenos Aires
BMW Operations Corp., Wilmington, Delaware
BMW Technology Corp., Wilmington, Delaware
Designworks/USA Inc., Newbury Park, California
Digital Charging Solution Corp., Atlanta, Georgia
MINI Business Innovation LLC, Wilmington, Delaware
Mini Urban X Accelerator SPV LLC, Wilmington, Delaware
Parkmobile Electronic Parking Solutions Canada Inc., Vancouver
Parkmobile Montgomery County LLC, Baltimore, Maryland
Parkmobile USA Inc., Atlanta, Georgia
Parkmobile LLC, Wilmington, Delaware
The Americas
Europe
Parkmobile Group B.V., Amsterdam
Parkmobile Belgium BvBa, Antwerp
100
100
100
100
100
100
BMW i Ventures B.V., The Hague
BMW Manufacturing Hungary Kft., Vecsés
BMW Merger S.R.L., Bukarest
BMW Merger, distribucija motornih vozil, d.o.o., Ljubljana
Parkmobile Benelux B.V., Amsterdam
BMW Motorsport Ltd., Farnborough
Cobalt Holdings Ltd., Basingstoke
Cobalt Telephone Technologies Ltd., Basingstoke
Content4all B.V., Amsterdam
John Cooper Garages Ltd., Farnborough
John Cooper Works Ltd., Farnborough
000 BMW Leasing, Moscow
Park-line Aqua B.V., The Hague
Park-line B.V., The Hague
Park-line Holding B.V., The Hague
Park-Mobile (UK) Ltd., Basingstoke
BMW Russland Automotive 000, Kaliningrad
ParkNow LLC, Wilmington, Delaware
FOREIGN7
ParkNow GmbH, Munich
27
100
BMW India Financial Services Private Ltd., Gurgaon, Haryana
123
7
100
BMW (Thailand) Co. Ltd., Bangkok
108
87
100
BMW Manufacturing (Thailand) Co. Ltd., Rayong
100
BMW Malaysia Sdn Bhd, Kuala Lumpur
51
BMW Leasing (Thailand) Co. Ltd., Bangkok
74
BMW China Services Ltd., Beijing
100
BMW Holding Malaysia Sdn Bhd, Kuala Lumpur
BMW India Private Ltd., Gurgaon
BMW Asia Technology Centre Sdn Bhd, Kuala Lumpur
173
BMW Korea Co. Ltd., Seoul
58
13
BMW Automotive Finance (China) Co. Ltd., Beijing
BMW China Automotive Trading Ltd., Beijing
2,107
248
58
557
480
100
BMW Financial Services Korea Co. Ltd., Seoul
530
BMW Asia Pte. Ltd., Singapore
47
BMW Japan Finance Corp., Tokyo
482
62
100
BMW Japan Corp., Tokyo
337
93
100
Herald International Financial Leasing Co., Ltd., Tianjin
197
100
PT BMW Indonesia, Jakarta
BMW Asia Pacific Capital Pte Ltd., Singapore
BMW Credit (Malaysia) Sdn Bhd, Kuala Lumpur
Bavarian Sky China 2018-1, Beijing 13
Bavarian Sky China 2018-2, Beijing 13
Oceania
BMW Australia Finance Ltd., Mulgrave
BMW Australia Ltd., Melbourne
BMW Financial Services New Zealand Ltd., Auckland
BMW New Zealand Ltd., Auckland
BMW Sydney Pty. Ltd., Sydney
BMW Melbourne Pty. Ltd., Melbourne
BMW Australia Trust 2011-2, Mulgrave 13
Bavarian Sky China 2017-3, Beijing 13
Bavarian Sky Australia Trust A, Mulgrave 13
→ 77
Companies
DOMESTIC
Alphabet Fleetservices GmbH, Munich
Automag GmbH, Munich
Blitz 18-353 GmbH, Munich
Blitz 18-354 GmbH, Munich
BMW Car IT GmbH, Munich4
BMW i Ventures GmbH, Munich
Digital Charging Solutions GmbH, Munich
BMW AG's non-consolidated companies at 31 December 2018
PM Parking Ventures GmbH, Munich
Bavarian Sky China 2017-2, Beijing 13
2018-3 ABL, Tokyo 13
BMW Lease (Malaysia) Sdn Bhd, Kuala Lumpur
100
100
100
100
100
100
100
100
194
Bavarian Sky Korea 2nd Asset Securitization Speciality Company, Seoul 13
Bavarian Sky Korea 3rd Asset Securitization Speciality Company, Seoul 13
Group
Financial
Statements
at 31 December 2018
BMW Tokyo Corp., Tokyo
2015-1 ABL, Tokyo 13
2015-2 ABL, Tokyo 13
2016-1 ABL, Tokyo 13
2016-2 ABL, Tokyo 13
2017-1 ABL, Tokyo 13
2017-2 ABL, Tokyo 13
2017-3 ABL, Tokyo 13
2018-1 ABL, Tokyo 13
2018-2 ABL, Tokyo 13
Notes to the Group
Financial Statements
→ List of Investments
Asia
ReachNow LLC, Wilmington, Delaware
Africa
50
50
50
20
20
40
40
50
51
252223
20
20
30
BMW AG's participations at 31 December 2018
→ 79
Companies
DOMESTIC
Deutsches Forschungszentrum für Künstliche Intelligenz GmbH, Kaiserslautern
GSB Sonderabfall-Entsorgung Bayern GmbH, Baar-Ebenhausen
Hubject GmbH, Berlin
IVM Industrie-Verband Motorrad GmbH & Co. Dienstleistungs KG, Essen
29.6
-337
1,764
50
in € million
in € million
49
100
70
100
100
100
100
100
Joblinge gemeinnützige AG Berlin, Berlin
100
100
51
100
Capital invest-
ment in %
149
-15
25
5,926
1,561
100
Joblinge gemeinnützige AG Leipzig, Leipzig
Joblinge gemeinnützige AG München, Munich
Racer Benchmark Group GmbH, Landsberg am Lech
IFRS rules. Equity not denominated in euro is translated into euro using the closing exchange rate at the balance sheet date, earnings are translated using the average rate.
⁹ Including power to appoint representative bodies.
1º Exemption pursuant to Article 2:403 of the Civil Code of the Netherlands (Burgerlijk Wetboek).
11 First-time consolidation.
12 Deconsolidation in the financial year 2018: BMW Malta Finance Ltd., St. Julians.
13 Control on basis of economic dependence.
197
198
Group
Financial
Statements
Notes to the Group
Financial Statements
8 The amounts shown for entities accounted for using the equity method and for proportionately consolidated entities correspond to the annual financial statements drawn up in accordance with uniform
→ List of Investments
Munich, 19 February 2019
Bayerische Motoren Werke
Aktiengesellschaft
The Board of Management
Harald Krüger
Milagros Caiña Carreiro-Andree Klaus Fröhlich
Pieter Nota
Dr. Nicolas Peter
Peter Schwarzenbauer
Dr.-Ing. Andreas Wendt
Oliver Zipse
at 31 December 2018
Profit/loss
7 These entities are neither consolidated nor accounted for using the equity method due to their overall immateriality for the Group Financial Statements.
5 Exemption from drawing up a management report applied in accordance with § 264 (3) and § 264 b HGB.
SGL Carbon SE, Wiesbaden
Equity
Profit/loss
in € million
in € million
4.6
3.1
17.8
18.9
9.8
6 Exemption from publication of financial statements applied in accordance with § 264 (3) and § 264b HGB.
16.7
9.1
18.3
FOREIGN7
Gios Holding B.V., Oss
SGL Composites LLC, Dover, Delaware
1 The amounts shown for the German subsidiaries correspond to the annual financial statements drawn up in accordance with German accounting requirements (HGB).
12.0
49.0
2 The amounts shown for the foreign subsidiaries correspond to the annual financial statements drawn up in accordance with uniform IFRS rules. Equity and earnings not denominated in euro are translated into
euro using the closing exchange rate at the balance sheet date.
3 Profit and Loss Transfer Agreement with BMW AG.
4 Profit and Loss Transfer Agreement with a subsidiary of BMW AG.
6.2
Toluca Planta de Automoviles S.A. de C.V., Mexico City
Equity
Rever Moto Inc., Wilmington, Delaware
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
100
BMW Automobile Distributors (Pty) Ltd., Midrand
BPF Midrand Property Holdings (Pty) Ltd., Midrand
Multisource Properties (Pty) Ltd., Midrand
195
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Associated companies - equity accounted
DOMESTIC
IONITY Holding GmbH & Co. KG, Munich
FOREIGN
BMW Brilliance Automotive Ltd., Shenyang
Joint operations - proportionately consolidated entities
FOREIGN
THERE Holding B.V., Amsterdam
Not equity accounted or proportionately consolidated entities
DOMESTIC
Companies
Encory GmbH, Unterschleißheim
The Retail Performance Company GmbH, Munich
PDB - Partnership for Dummy Technology and Biomechanics GbR, Gaimersheim
FOREIGN7
Bavarian & Co. Ltd., Incheon
BMW Albatha Finance PSC, Dubai
BMW Albatha Leasing LLC, Dubai
BMW AVTOTOR Holding B.V., Amsterdam
Critical TW S.A., Porto
DSP Concepts Inc., Dover, Delaware
IP Mobile N.V., Brussels
Digital Energy Solutions GmbH & Co. KG, Munich
Stadspasparkeren B.V., Deurne
→ 78
Parkmobile International (Australia) Pty. Ltd., Sydney
100
100
100
100
196
Group
Financial
Statements
Notes to the Group
Financial Statements
→ List of Investments
at 31 December 2018
Asia
THEPSATRI Co. Ltd., Bangkok⁹
BMW AG's associated companies, joint ventures
and joint operations at 31 December 2018
BMW Financial Services Singapore Pte Ltd., Singapore
BMW India Foundation, Gurgaon
BMW Hong Kong Services Ltd., Hongkong
BMW Insurance Services Korea Co. Ltd., Seoul
BMW Mobility Services Ltd., Sichuan Tianfu New Area (Chengdu Section)
BMW Finance (United Arab Emirates) Ltd., Dubai
BMW Middle East Retail Competency Centre DWC-LLC, Dubai
BMW India Leasing Private Ltd., Gurgaon
Herald Hezhong (Beijing) Automotive Trading Co. Ltd., Beijing
BMW Financial Services Hong Kong Ltd., Hongkong
Oceania
BMW Philippines Corp., Manila
0
Capital invest-
ment in %
4
0
0
0
0
Bavarian Sky UK B Ltd., London 13
Bavarian Sky UK A Ltd., London 13
Bavarian Sky UK 2 plc, London 13
Bavarian Sky UK 1 plc, London 13
0
Bavarian Sky FTC, Compartment French Auto Leases 3, Paris 13
Bavarian Sky Europe S.A. Compartment A, Luxembourg 13
Bavarian Sky S.A., Compartment B, Luxembourg 13
100
100
192
Group
Financial
Statements
Notes to the Group
Financial Statements
→ List of Investments
Bavarian Sky FTC, Compartment French Auto Leases 2, Paris 13
at 31 December 2018
0
0
164
1,445
100
340
1,530
100
270
1,817
0
100
4,991
BMW US Capital LLC, Wilmington, Delaware
BMW Canada Inc., Richmond Hill, Ontario
BMW (US) Holding Corp., Wilmington, Delaware
BMW Manufacturing Co. LLC, Wilmington, Delaware
Financial Services Vehicle Trust, Wilmington, Delaware
BMW Bank of North America Inc., Salt Lake City, Utah
The Americas
0
0
0
2,599
100
BMW Madrid S.L., Madrid
BMW Slovenská republika s.r.o., Bratislava11
100
100
100
100
100
100
100
100
100
100
100
100
Bavarian Sky S.A., Compartment German Auto Loans 4, Luxembourg 13
Bavarian Sky S.A., Compartment German Auto Loans 5, Luxembourg 13
Bavarian Sky S.A., Compartment German Auto Loans 6, Luxembourg 13
Bavarian Sky S.A., Compartment German Auto Loans 7, Luxembourg 13
Bavarian Sky S.A., Compartment German Auto Loans 8, Luxembourg 13
Bavarian Sky S.A., Compartment A, Luxembourg 13
DriveNow UK Ltd., London 11
DriveNow Italy S.r.I., Milan¹¹
DriveNow Belgium S.p.r.l., Brussels¹¹
BLMC Ltd., Farnborough
Triumph Motor Company Ltd., Farnborough
100
Alphabet Polska Fleet Management Sp. z o.o., Warsaw
100
100
Société Nouvelle WATT Automobiles S.A.R.L., Rueil-Malmaison
BMW Milano S.r.I., Milan
Alphabet Luxembourg S.A., Leudelange
BMW (UK) Investments Ltd., Farnborough
DriveNow Sverige AB, Sollentuna¹¹
DriveNow Austria GmbH, Vienna¹¹
BMW Coordination Center V.o.F., Bornem
BiV Carry ISCS, Senningerberg
100
BMW (UK) Capital plc, Farnborough
BMW Central Pension Trustees Ltd., Farnborough
0
0
0
0
100
100
100
Riley Motors Ltd., Farnborough
513
Bavarian Sky Europe S.A., Compartment Swiss Auto Leases 2, Luxembourg 13
100
719
63
100
BMW Financial Services (South Africa) (Pty) Ltd., Midrand
SuperDrive Investments (RF) Ltd., Cape Town 13
149
134
100
100
BMW (South Africa) (Pty) Ltd., Pretoria
100
100
100
193
BMW Canada Auto Trust 2017-1, Richmond Hill, Ontario 13
BMW Canada Auto Trust 2018-1, Richmond Hill, Ontario 13
BMW Canada Auto Trust 2016, Richmond Hill, Ontario 13
BMW Canada 2018-A, Richmond Hill, Ontario 13
BMW Canada 2015-A, Richmond Hill, Ontario 13
BMW Floorplan Master Owner Trust Series 2018-1, Wilmington, Delaware 13
100
BMW Receivables Ltd. Partnership, Richmond Hill, Ontario
BMW Receivables 2 Inc., Richmond Hill, Ontario
BMW Extended Service Corp., Wilmington, Delaware
BMW Vehicle Lease Trust 2016-2, Wilmington, Delaware 13
BMW Vehicle Lease Trust 2017-1, Wilmington, Delaware 13
BMW Vehicle Lease Trust 2017-2, Wilmington, Delaware 13
BMW Vehicle Lease Trust 2018-1, Wilmington, Delaware 13
BMW Vehicle Lease Trust 2017-A, Wilmington, Delaware 13
BMW Vehicle Owner Trust 2016-A, Wilmington, Delaware13
BMW Vehicle Owner Trust 2018-A, Wilmington, Delaware 13
Africa
0
100
100
100
100
100
0
0
0
100
0
0
0
0
0
0
0
ooo
0
0
BMW Receivables 1 Inc., Richmond Hill, Ontario
100
BMW Facility Partners LLC, Wilmington, Delaware
BMW Insurance Agency Inc., Wilmington, Delaware
BMW de Argentina S.A., Buenos Aires
100
BMW SLP, S.A. de C.V., Villa de Reyes
100
BMW of Manhattan, Inc., Wilmington, Delaware
100
BMW Financial Services de Mexico S.A. de C.V. SOFOM, Mexico City
100
BMW de Mexico S.A. de C.V., Mexico City
100
BMW Financeira S.A. Credito, Financiamento e Investimento, São Paulo
100
2,670
-116
BMW of North America LLC, Wilmington, Delaware
100
-24
175
BMW do Brasil Ltda., Joinville
100
85
190
BMW Financial Services NA LLC, Wilmington, Delaware
100
-35
228
BMW Leasing de Mexico S.A. de C.V., Mexico City
BMW Leasing do Brasil S.A., São Paulo
BMW FS Securities LLC, Wilmington, Delaware
BMW FS Funding Corp., Wilmington, Delaware
BMW Manufacturing LP, Woodcliff Lake, New Jersey
BMW FS Receivables Corp., Wilmington, Delaware
100
BMW Auto Leasing LLC, Wilmington, Delaware
SB Acquisitions LLC, Wilmington, Delaware
BMW Manufacturing Indústria de Motos da Amazônia Ltda., Manaus
BMW Acquisitions Ltda., São Paulo
BMW Consolidation Services Co. LLC, Wilmington, Delaware
100
100
100
100
100
Rolls-Royce Motor Cars NA LLC, Wilmington, Delaware
SGL Carbon SE (Chairman)
UnternehmerTUM GmbH (Chairman)
Russell Reynolds Associates Inc.
(since 7 March 2018)
Johnson Controls International plc
ALTANA AG (Deputy Chairman)
(since 23 April 2018)
Deutsche Post AG
Mandates
Member of supervisory boards
Member since 2015
Simone Menne (*1960)
Robert Bosch GmbH
Nestlé Deutschland AG
Infineon Technologies AG
Mandates
Allensbach Gesellschaft zum Studium der
öffentlichen Meinung mbH
Director of Institut für Demoskopie
Member since 1997
Prof. Dr. rer. pol. Renate Köcher (*1952)
Member since 2008
Entrepreneur
Springer Nature AG & Co. KGaA
Mandates
Former Chairman of the Board of Management
of thyssenkrupp AG
Chairman of the Works Council, Landshut
→ Members of the
Supervisory Board
204
203
Membership of equivalent national or foreign boards of business enterprises.
Membership of other statutory supervisory boards.
3 Employee representatives (members of senior management).
2 Employee representatives (union representatives).
1 Employee representatives (company employees).
Head of Purchasing Indirect Goods and Services,
Raw Material, Production Partner
Member since 2017
Ralf Hattler³ (*1968)
Chairman of the Works Council, Dingolfing
Deputy Chairman
Member since 2007
Stefan Schmid¹ (*1965)
TBG AG
Heraeus Holding GmbH
(Deputy Chairman, until 31 December 2018)
Franz Haniel & Cie. GmbH (Chairman)
(since 19 January 2019)
Dr.-Ing. Heinrich Hiesinger (*1960)
Member since 2017
Mandates
thyssenkrupp Elevator AG
(Chairman, until 6 July 2018)
thyssenkrupp Steel Europe AG
Member since 1999
Willibald Löw¹ (*1956)
Deutsches GeoForschungsZentrum - GFZ
University Professor
of Helmholtz-Zentrum Potsdam
Chairman of the Executive Board
Member since 2008
Prof. Dr. rer. nat. Dr. h.c. Reinhard Hüttl (*1957)
Städtisches Klinikum München GmbH
MAN Truck & Bus AG
Susanne Klatten (*1962)
KraussMaffei Group GmbH
General Representative of IG Metall Munich
Member since 2009
Horst Lischka² (*1963)
Former Chairman and Chief Executive Officer of
Deere & Company
Member since 2009 until 17 May 2018
Dr. h.c. Robert W. Lane (*1949)
(Chairman, until 6 July 2018)
thyssenkrupp (China) Ltd.
(Chairman, until 6 July 2018)
Mandates
Employee representatives (company employees).
and its Committees
³ Employee representatives (members of senior management).
At the request of the Chairman, decisions can also be
taken outside of Board meetings if none of the Board
members object to this procedure. A meeting is quorate
if all Board of Management members are invited to the
meeting in good time. Members unable to attend any
particular meeting are entitled to vote in writing, by fax
or by telephone. Votes cast by telephone must be sub-
sequently confirmed in writing. Except in urgent cases,
matters relating to a division for which the responsible
Board member is not present will only be discussed and
decided
with that member's consent.
upon
Unless stipulated otherwise by law or in BMW AG's
statutes, the Board of Management makes decisions
based on a simple majority of votes cast at meetings.
Outside of Board meetings, decisions are taken on
the basis of a simple majority of Board members. In
the event of a tied vote, the Chairman of the Board
of Management has the casting vote. Any changes
to the Board's terms of procedure must be passed
unanimously. A Board meeting may only be held if
more than half of the Board members are present.
In the event that the Chairman of the Board of
Management is not present or is unable to attend
a meeting, the member of the Board responsible for
Finance will represent him.
Minutes are taken of all meetings and of the Board of
Management's resolutions and signed by the Chair-
man. Decisions taken by the Board of Management
are binding for all employees.
The rules relating to meetings and resolutions taken
by the full Board of Management are also applicable
for its committees.
Members of the Board of Management not represented
in a committee are provided with the agendas and
minutes of committee meetings. Committee matters
are dealt with in full Board meetings if the committee
considers it necessary or at the request of a member
of the Board of Management.
A secretariat for Board of Management matters has
been established to assist the Chairman and other
Board members with the preparation and follow-up
work connected with Board meetings.
The Operations Committee generally meets every
two weeks. At these meetings, decisions are reached
concerning automobile product projects, based on the
strategic orientation and decision-making framework
stipulated at Board of Management meetings. The
Operations Committee has three members who are
entitled to vote at meetings, namely the Board member
for Development (who also chairs the meetings), the
Board member for Production and the Board member
responsible for Purchasing and the Supplier Network.
Up to 28 February 2018, the Board member for Sales
and Brand BMW and Aftersales BMW Group as well
as the Board member for MINI, Rolls-Royce, BMW
Motorrad, Customer Engagement and Digital Business
Innovation BMW were also members of the Operations
Committee. If the committee chairman is not present
or unable to attend, meetings are chaired by the Board
member for Production. The Head of Corporate Qual-
ity as well as the Head of Maturity Management, Sign
Off and Product Validation participate in Operations
Committee meetings in an advisory capacity.
The full Board usually convenes up to twice a year
in its function as Sustainability Board in order to
define strategy and use of resources with regard to
sustainability and decide upon measures to imple-
ment that strategy. The Head of Corporate Affairs
and the Representative for Sustainability and Envi-
ronmental Protection participate in these meetings
in an advisory capacity.
The Board's Committee for Executive Management
Matters deals with corporate issues affecting executive
managers of the BMW Group, either in their entirety or
individually (such as potential candidates for executive
management or nominations for senior management
positions). This committee has, firstly, an advisory and
preparatory role (e.g. in connection with fundamen-
tal issues relating to human resources policies, such
as compensation systems and planning, personnel
development and tools for assessing performance)
and secondly the function of a decision-making body
(e.g. the appointment of senior executives).
The Committee has two members who are entitled to
vote at meetings, namely the Chairman of the Board
of Management (who also chairs the meetings) and
the Board member for Human Resources. The Head
of Human Resources Management and Services as
well as the Head of Human Resources Executive
Management also participate in these meetings in
an advisory function. In addition, further participants
can be invited when needed for special topics. At
the request of the Chairman, resolutions may also
be passed outside of committee meetings by casting
votes in writing, by fax or by telephone if the other
member entitled to vote does not object immediately.
Normally, the Committee for Executive Management
Matters convenes between five and ten times a year.
The Board of Management is represented by its Chair-
man in its dealings with the Supervisory Board. The
Chairman of the Board of Management maintains regu-
lar contact with the Chairman of the Supervisory Board
and keeps him informed of all important matters. The
Supervisory Board has passed a resolution specifying
the information and reporting duties of the Board of
Management. As a general rule, in the case of reports
required by law, the Board of Management submits
its reports to the Supervisory Board in writing. To the
greatest extent possible, documents required as a basis
for taking decisions are sent to the members of the
Supervisory Board in good time prior to the relevant
meeting. Regarding transactions of fundamental
importance, the Supervisory Board has resolved that
its specific approval is required. Whenever necessary,
the Chairman of the Board of Management obtains
the approval of the Supervisory Board and ensures
that reporting duties to the Supervisory Board are
complied with. The Chairman is supported by all
members of the Board of Management in the ful-
filment of these tasks. The fundamental principle
followed when reporting to the Supervisory Board
is that the information should be provided regularly,
comprehensively and without delay regarding all
significant matters relating to planning, business
performance, risk exposures, risk management and
compliance, as well as any major variances between
actual business development and plans and targets,
and the relevant reasons.
207
208
Statement on
Corporate
Governance
→ Composition and
All members of the Supervisory Board of BMW AG take
care to ensure that they have sufficient time to perform
their mandate. If members of the Supervisory Board of
BMW AG are also members of the management board of
a listed company, they may not accept more than three
mandates on non-BMW Group supervisory boards of
listed companies or in other bodies with comparable
requirements.
Following the election of a new Supervisory Board
member, the Corporate Governance Officer informs
the new member of the main framework for performing
duties, in particular the BMW Group Corporate Gov-
ernance Code and individual contributions required in
circumstances which trigger reporting obligations or are
subject to Supervisory Board approval.
Following its meetings, the Supervisory Board is generally
shown information on new vehicle models in the form
of a short presentation.
In practice, resolutions are regularly passed by the
Supervisory Board and its committees at meetings.
Supervisory Board members who are not present can
submit their vote via another Supervisory Board member
in written, fax or electronic form. This rule also applies
for the second vote of the Chairman of the Supervisory
Board. The Chairman of the Supervisory Board can also
grant a period of time in which all members not present
at a meeting may retrospectively vote. In special cases,
resolutions may also be passed outside of meetings, in
particular in writing, by fax or by electronic means.
Resolutions and meetings are recorded in minutes,
which are signed by the relevant Chairman.
Resolutions of the Supervisory Board are generally
passed by a simple majority. The German Co-determi-
nation Act contains specific legal requirements with
regard to majorities and technical procedures, particu-
larly with regard to the appointment and removal of
members of the Board of Management and the election
of Chairman or Deputy Chairman of the Supervisory
Board. In the event of a tied vote in the Supervisory
Board, the Chairman of the Supervisory Board has two
votes in a renewed vote if it also results in a tie.
The Supervisory Board is quorate if all members have
been invited to the meeting and at least half the mem-
bers of whom it is required to comprise participate
in the vote. A resolution relating to an agenda item
not included in the invitation is only valid if none
of the members of the Supervisory Board who were
present at the meeting object to the resolution and if
a minimum of two-thirds of the members are present.
The Board of Management makes its decisions at meet-
ings which are convened, coordinated and headed by
the Chairman of the Board of Management. Generally,
two to three Board meetings were held per month
during the financial year 2018.
The Chairman of the Supervisory Board coordinates
work within the Supervisory Board, convenes and
chairs its meetings, handles the external affairs of the
Supervisory Board and represents it before the Board
of Management.
reasons.
BMW AG's Supervisory Board is composed of ten share-
holder representatives (elected by the Annual General
Meeting) and ten employee representatives (elected in
accordance with the Co-Determination Act). The ten
Supervisory Board members representing employees
comprise seven Company employees, including one
executive staff representative, and three members elect-
ed following nomination by unions. The Supervisory
Board has the task of advising and supervising the Board
of Management in its management of the BMW Group.
It is involved in all decisions of fundamental importance
for the BMW Group. The Supervisory Board appoints
the members of the Board of Management and decides
upon the level of compensation they receive. The Super-
visory Board can revoke appointments for important
COMPOSITION AND WORK
PROCEDURES OF THE
SUPERVISORY BOARD OF
BMW AG AND ITS
COMMITTEES
-
the Supervisory
Board of BMWAG
Work Procedures of
The Supervisory Board holds a minimum of two meet-
ings per calendar half-year. Normally, five plenary
meetings are held per calendar year. One meeting each
year is planned to extend to several days and is used,
among other things, to enable an in-depth exchange on
strategic and technological matters. The main topics of
meetings in the period under report are summarised
in the Report of the Supervisory Board. Shareholder
representatives and employee representatives generally
prepare Supervisory Board meetings separately and
occasionally with members of the Board of Manage-
ment. Members of the Supervisory Board are specif-
ically legally bound to maintain secrecy with respect
to confidential reports they receive and confidential
discussions in which they partake.
Terms of procedure approved by the Board of Manage-
ment contain a plan for the allocation of divisional
responsibilities among the individual Board members.
These terms of procedure also incorporate the prin-
ciple that the full Board of Management bears joint
responsibility for all matters of particular importance
and scope. In addition, members of the Board of
Management manage the relevant portfolio of duties
under their responsibility, whereby case-by-case
rules can be put in place for cross-divisional projects.
Board members continually provide the Chairman
of the Board of Management with all the required
information pertaining to major transactions and
developments within their sphere of responsibility.
The Chairman of the Board of Management coordi-
nates cross-divisional matters with the overall targets
and plans of the BMW Group, involving other Board
members to the extent that divisions within their area
of responsibility are affected.
At its meetings, the Board of Management defines the
overall framework for developing business strategies
and the use of resources, takes decisions regarding
the implementation of strategies and deals with issues
of particular importance to the BMW Group. The full
Board also takes decisions at basic policy level relating
to the Group's automobile product strategies and
product projects, inasmuch as these are relevant for
all of the Group's brands. The Board of Management
and its committees may, as required and depending on
the subject matters being discussed, invite non-voting
advisers to participate at meetings.
The Board of Management consults and takes decisions as
a collegiate body in meetings of the Board of Management,
the Sustainability Board, the Operations Committee and
the Committee for Executive Management Matters.
Werner Zierer¹ (*1959)
Siemens Healthcare GmbH (Deputy Chairman)
Schaeffler AG (Deputy Chairman)
Mandates
Former Regional Head of IG Metall Bavaria
Member since 2011
Member since 2001
Jürgen Wechsler² (*1955)
Member since 2013
Brigitte Rödig¹ (*1963)
Member of the Works Council, Munich
Dr. Dominique Mohabeer¹ (*1963)
Member since 2012
Membership of equivalent national or foreign boards of business enterprises.
Membership of other statutory supervisory boards.
Member of the Works Council, Dingolfing
2 Employee representatives (union representatives).
Chairman of the Works Council, Regensburg
2 Employee representatives (union representatives).
When a new member is appointed to the Board of Manage-
ment, the BMW Corporate Governance Officer is required
to inform that new member of the framework conditions
under which their duties are to be carried out in
par-
ticular those enshrined in the BMW Group's Corporate
Governance Code - as well as the duty to cooperate when
a transaction or event triggers reporting requirements or
requires the approval of the Supervisory Board.
-
During their period of employment for BMW AG, mem-
bers of the Board of Management are bound by a com-
prehensive non-competition clause. They are required to
act in the enterprise's best interests and may not pursue
personal interests in their decisions or take advantage
of business opportunities intended for the benefit of
the enterprise. They may undertake ancillary activi-
ties, particularly supervisory board mandates outside
the BMW Group, only with the prior approval of the
Supervisory Board's Personnel Committee. Individual
members of the Board of Management of BMW AG
are required to disclose any conflicts of interest to the
Supervisory Board without delay and inform the other
members of the Board of Management accordingly.
The Board of Management determines the strategic
orientation of the enterprise, agrees upon it with the
Supervisory Board and ensures its implementation.
The Board of Management is also responsible for
ensuring that all provisions of law and internal regula-
tions are complied with. Further details on compliance
within the BMW Group are available in the Corporate
Governance section of the Annual Report. The Board
of Management is also responsible for ensuring that
appropriate risk management and risk controlling
systems are in place throughout the Group.
The Board of Management manages the enterprise
under its own responsibility, acting in the best inter-
ests of the BMW Group with the aim of achieving
sustainable growth in value. The interests of share-
holders, employees and other stakeholders are also
taken into account in the pursuit of this aim.
COMPOSITION AND WORK
PROCEDURES OF THE
BOARD OF MANAGEMENT
OF BMW AG AND ITS
COMMITTEES
1 Employee representatives (company employees).
Management of
BMW AG and its
Committees
Statement on
Corporate
Governance
206
205
Membership of equivalent national or foreign boards of business enterprises.
Membership of other statutory supervisory boards.
3 Employee representatives (members of senior management).
→Composition and
Work Procedures
of the Board of
- DELTON Health AG
Statement on
Corporate
Governance
Entrepreneur
On behalf of the
Board of Management
CORPORATE
GOVERNANCE
→Page 200 Statement on Corporate Governance
(Part of the Combined Management Report)
→ Page 200 Information on the Company's Governing Constitution
→Page 201 Declaration of the Board of Management and
of the Supervisory Board Pursuant to § 161 AktG
Members of the Board of Management
→ Page 202
→ Page 203
Harald Krüger
Members of the Supervisory Board
→ Page 206
Composition and Work Procedures of the Board of Management
of BMW AG and its Committees
of BMW AG and its Committees
→Page 215 Disclosures Pursuant to the Act on Equal Gender Participation
→Page 216 Information on Corporate Governance
Practices Applied beyond Mandatory Requirements
→Page 218 Compliance in the BMW Group
Dr.-Ing. Dr.-Ing. E. h.
Norbert Reithofer
Chairman
Chairman
201
202
Deutsche Telekom AG (since 17 May 2018)
Mandates
Harald Krüger (*1965)
Chairman
(Deputy Chairman)
BMW Brilliance Automotive Ltd.
Mandates
Finance
Dr. Nicolas Peter (*1962)
BOARD OF MANAGEMENT
MEMBERS OF THE
Supervisory Board
→ Members of the
Board of
Management
→Members of the
Statement on
Corporate
Governance
→Page 223 Compensation Report
Peter Schwarzenbauer (*1959)
(Part of the Combined Management Report)
→ Page 240 Independent Auditor's Report
The designation BMW Group comprises Bayerische
Motoren Werke Aktiengesellschaft (BMW AG) and
group entities. BMW AG is a stock corporation
(Aktiengesellschaft) within the meaning of the
German Stock Corporation Act (Aktiengesetz) and
has its registered office in Munich, Germany. It has
three representative bodies: the Annual General
Meeting, the Supervisory Board and the Board of
Management. The duties and powers of those bodies
derive from the Stock Corporation Act and the
Articles of Incorporation of BMW AG. Shareholders,
as the owners of the business, exercise their rights at
the Annual General Meeting. The Annual General
Meeting decides in particular on the utilisation of
unappropriated profit, the ratification of the acts of
the members of the Board of Management and the
Supervisory Board, the appointment of the external
auditor, changes to the Articles of Incorporation and
certain capital measures, and elects the shareholders'
representatives to the Supervisory Board. The Board of
Management is responsible for managing the Company
and is monitored and advised by the Supervisory
Board. The Supervisory Board appoints the members
of the Board of Management and can, for an important
reason, revoke an appointment at any time. The Board
of Management informs the Supervisory Board and
reports to it regularly, promptly and comprehensively,
in line with the principles of conscientious and faithful
accountability and in accordance with the law and the
reporting duties determined by the Supervisory Board.
The Board of Management requires the approval of
the Supervisory Board for certain major business
proceedings. The Supervisory Board is not, however,
authorised to undertake management measures itself.
The close interaction between Board of Management
and Supervisory Board in the interests of the Company
as described above is also known as a "two-tier board
structure".
Declaration of the Board of Management and the
Supervisory Board of Bayerische Motoren Werke
Aktiengesellschaft regarding the recommenda-
tions of the "Government Commission on the
German Corporate Governance Code" Pursuant
to § 161 German Stock Corporation Act
The Board of Management and the Supervisory Board
of Bayerische Motoren Werke Aktiengesellschaft
("BMW AG") declare the following regarding the
recommendations of the "Government Commission
on the German Corporate Governance Code":
1. Since the last Declaration was issued in De-
cember 2017, BMW AG has complied with all the
recommendations published officially in the
Federal Gazette on 24 April 2017 (Code version
dated 7 February 2017) with the exception - as
previously reported - of section 4.2.3 sentence 9
and section 4.2.5 sentences 5 and 6.
2. In future, BMW AG will comply with all the recom-
mendations published officially in the Federal
Gazette on 24 April 2017 (Code version dated
7 February 2017), with the exception of section
4.2.5 sentences 5 and 6.
its
3. It is recommended in section 4.2.3 sentence 9 of
the Code that subsequent amendments to per-
formance targets or comparison parameters for
variable remuneration components relating to
the Board of Management shall be excluded. As
previously reported, this recommendation was
deviated from on a one-time basis in order to im-
plement the new compensation system with
effect from the financial year 2018, rather than
with effect from the financial year 2020. Accor-
dingly, it was necessary to cancel the targets
previously set for the variable remuneration com-
ponents for the financial years 2018 and 2019
and replace them for the financial year 2018 on-
wards with targets based on the new compen-
sation system. The recommendation will, however,
be complied with again in the future.
Furthermore, in its draft revision of the Code
dated 25 October 2018 (published on 6 Novem-
ber 2018), the Government Commission on the
German Corporate Governance Code has now
proposed to delete the aforementioned recom-
mendation, as the planned amendment to the
German Stock Corporation Act to implement the
second EU Shareholder Rights Directive con-
tains comprehensive and detailed requirements
for compensation reports, thus obviating the
need for recommendations in the Code. The cor-
responding amendments to the Code are due
to be made in the course of the financial year
2019. Continuity of reporting is therefore a fur-
ther argument for not using the model tables as
a one-off solution in the BMW Group's Compen-
sation Report for the financial year 2018 prior
to the new statutory reporting requirements
coming into force.
Munich, December 2018
Bayerische Motoren Werke
Aktiengesellschaft
On behalf of the
Supervisory Board
Mandates
4. It is recommended in section 4.2.5 sentences 5
and 6 of the Code that specified information
pertaining to management board compensation
be disclosed in a Compensation Report. These
recommendations have not been and will not be
complied with, due to uncertainties as to whether
the additional disclosure of this information and
the use of model tables would add to the de-
sired transparency and understandability of the
BMW Group's Compensation Report in accord-
ance with generally applicable financial report-
ing requirements (see section 4.2.5 sentence 3
of the Code).
Governing Constitution
Information on the Company's
Good corporate governance - acting in accordance
with the principles of responsible management aimed
at increasing the value of the business on a sustainable
basis - is an essential requirement for the BMW Group
embracing all areas of the business. Corporate culture
within the BMW Group is founded on transparent
reporting and communication, corporate governance
in the interest of all stakeholders, trustful cooperation
both of the Board of Management and the Supervisory
Board as well as among employees, and compliance
with applicable law. The Board of Management and
Supervisory Board report in this statement on impor-
tant aspects of corporate governance pursuant to
§§ 289 f, § 315 d HGB and section 3.10 of the German
Corporate Governance Code (GCGC).
4
4
Corporate
Governance
Company's Govern-
ing Constitution
Board of
Management
Supervisory Board
Compliance
Compensation
Report
200
Statement on
Corporate
Governance
→Information on the
Company's
Governing
Constitution
STATEMENT ON
CORPORATE
GOVERNANCE
→ Page 239 Responsibility Statement by the Company's
Legal Representatives
MINI, Rolls-Royce, BMW Motorrad,
→ Page 208 Composition and Work Procedures of the Supervisory Board
Mandates
Member since 1988
Manfred Schoch¹ (*1955)
(Deputy Chairman, since 1 March 2018)
― Continental AG
Mandates
Second Chairman of IG Metall
Member since 2014
Christiane Benner² (*1968)
Deputy Chairman
Deutsche Lufthansa Aktiengesellschaft (Chairman)
Verizon Communications Inc. (until 3 May 2018)
Mandates
Chairman of the Supervisory Board of E.ON SE
and of the Deutsche Lufthansa Aktiengesellschaft
Deputy Chairman
Member since 2008
Dr. jur. Karl-Ludwig Kley (*1951)
Henkel AG & Co. KGaA (Shareholders' Committee)
Siemens Aktiengesellschaft
Mandates
― E.ON SE (Chairman)
Chairman of the European
and General Works Council
Industrial Engineer
Member since 2004
Franz Haniel (*1955)
Entrust Datacard Corp.
AQTON SE (Chairman)
Customer Engagement and Digital Business
Innovation BMW Group
DELTON Technology SE
DELTON Health AG (Chairman)
Mandates
Entrepreneur
Deputy Chairman
Member since 1997
Stefan Quandt (*1966)
Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft (since 25 April 2018)
Fresenius Management SE
Mandates
Management of BASF SE
Former Chairman of the Board of
Member since 17 May 2018
Dr. rer. pol. Kurt Bock (*1958)
Management of BMW AG
Former Chairman of the Board of
(Chairman, since 19 November 2018)
Member since 2015
Pieter Nota (*1964)
BMW (South Africa) (Pty) Ltd. (Chairman)
BMW Motoren GmbH (Chairman)
Mandates
Production
Oliver Zipse (*1964)
HERE International B.V. (until 28 February 2018)
E.ON SE (since 9 May 2018)
Mandates
Development
Klaus Fröhlich (*1960)
Pöttinger Landtechnik GmbH
(Chairman, until 29 October 2018)
Dr.-Ing. Andreas Wendt (*1958)
Purchasing and Supplier Network
(since 1 October 2018)
(until 24 July 2018)
Markus Duesmann (*1969)
Purchasing and Supplier Network
Human Resources, Industrial Relations Director
Milagros Caiña Carreiro-Andree (*1962)
Rolls-Royce Motor Cars Limited (Chairman)
Scout24 AG
Chairman
Sales and Brand BMW, Aftersales BMW Group
Membership of other statutory supervisory boards.
Mandates
MEMBERS OF THE
SUPERVISORY BOARD
General Counsel:
Dr. Jürgen Reul
Membership of equivalent national or foreign boards of business enterprises.
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer (*1956)
Board of Management succession planning,
diversity concept
-
MEDIATION COMMITTEE
(In line with the recommendations of the German Corporate Governance
Code, the Nomination Committee comprises only shareholder
representatives.)
Norbert Reithofer¹
Susanne Klatten
Karl-Ludwig Kley
Stefan Quandt
Norbert Reithofer
Manfred Schoch
Stefan Quandt
Stefan Schmid
The Board of Management keeps track of and analyses
compliance-related developments and trends on
the basis of the Group's compliance reporting and
input from the BMW Group Compliance Committee.
Measures to improve the Compliance Management
System are initiated on the basis of identified
requirements.
Karl-Ludwig Kley 1,2
― establishment in accordance with the recommendation contained in the German Corpo-
rate Governance Code, activities based on terms of procedure
― identification of suitable candidates (male/female) as shareholder representatives on the
Supervisory Board to be put forward for inclusion in the Supervisory Board's proposals for
election at the Annual General Meeting
NOMINATION COMMITTEE
― establishment in accordance with the recommendation contained in the
German Corporate Governance Code, activities based on terms of procedure
- amendments to Articles of Incorporation only affecting wording
-
― supervision of internal audit system and compliance as well as the audit and supervision of
any needs for action related to possible violations of duties by members of the Board of
Management in preparation of a resolution in the Supervisory Board
decision on approval for utilisation of Authorised Capital 2014
- discussion of interim reports with Board of Management prior to publication
preparation of the Supervisory Board's audit of the non-financial reporting, preparation of
the selection of the auditor for non-financial reporting and engagement of the auditor
Group Financial Statements
preparation of Supervisory Board's resolution on Company and
preparation of proposals for election of external auditor at Annual General Meeting,
engagement (recommendation) of external auditor and compliance of audit
engagement, determination of additional areas of audit emphasis and fee agreements
with external auditor
supervision of external audit, in particular auditor independence and additional work
performed by external auditor
proposal to Supervisory Board if resolution for appointment of Board of Management
member has not been carried by the necessary two-thirds majority of Supervisory Board
members' votes
- committee required by law
(In accordance with statutory requirements, the Mediation Committee
comprises the Chairman and Deputy Chairman of the Supervisory Board
and one member each selected by shareholder representatives and
employee representatives.)
Work Procedures of
the Supervisory
Board of BMWAG
and its Committees
The Supervisory Board, in collaboration with the
Personnel Committee and the Board of Management,
ensures long-term succession planning. In their
assessment of candidates for Board of Management
positions, the underlying suitability criteria applied
by the Supervisory Board are expertise in the relevant
function, outstanding leadership qualities, proven
track record and knowledge of the Company. The
Supervisory Board has adopted a diversity concept
for the composition of the Board of Management
which is also aligned with recommendations of the
German Corporate Governance Code. In considering
which individuals would best complement the Board
of Management, the Supervisory Board also takes
diversity into account. The criteria diversity is taken
by the Supervisory Board to encompass in particular
different, mutually complementary profiles, profes-
sional and life experiences also at the international
level and an appropriate gender representation. In
reaching its decisions, the Supervisory Board also
considers the following:
→ Composition and
-
-
-
The members of the Board of Management should
have a long-standing track record of manage-
ment experience, ideally with experience in
different professional fields.
At least two members should have international
management experience.
At least two members of the Board of Manage-
ment should have a technical background.
The Board of Management should collectively
have extensive experience in the fields of devel-
opment, production, sales and marketing, fi-
nances and human resources.
The Supervisory Board has stipulated a target
for the proportion of women on the Board of
Management. This is outlined in the section
"Disclosures pursuant to the Act on Equal
Gender Participation". The Board of Management
reports to the Personnel Committee and the
Supervisory Board at regular intervals on the
proportion and development of women in
senior management positions, in particular at
executive levels.
In accordance with the recommendation of the
German Corporate Governance Code, the
Supervisory Board has set a standard age limit
for Board of Management membership. This
aims at a retirement age of 60. Consideration is
also given to achieving an appropriate age mix
within the Board of Management.
When selecting an individual for a particular Board of
Management position, the Supervisory Board decides
in the best interests of the Group and after due con-
sideration of all relevant circumstances. The Personnel
Committee takes into account the diversity concept
described above when selecting candidates, in order
to ensure that the Board of Management has a diverse
composition. In the Supervisory Board's opinion,
the composition of the Board of Management as at
31 December 2018 is in line with the defined diversity
concept. In particular, the Board of Management has
one female member and the various work, educational
and life experiences of the members of the Board of
Management complement each other. For ease of
comparison with the diversity concept, the curricula
vitae of members of the Board of Management are
available on the Internet.
supervision of the financial reporting process, the effectiveness of the internal control
system, the risk management system, as well as the performance of Supervisory
Board duties in connection with audits pursuant to § 32 of the German Securities Trading
Act (WPHG)
Composition objectives of the Supervisory Board,
competency profile, diversity concept
The Supervisory Board is to be composed in such a way
that its members collectively possess the knowledge,
skills and experience required to properly perform
its tasks.
The Chairman of the BMW Group Compliance
Committee keeps the Audit Committee (which is
part of the Supervisory Board) informed on the
current status of compliance activities within the
BMW Group as well as relevant proceedings both on
a regular and a case-by-case basis as the need arises.
Statement on
Corporate
Governance
212
211
2 (Independent) financial expert within the meaning of §§ 100 (5) and 107 (4) AktG, no. 5.3.2 GCGC.
1 Chair.
Norbert Reithofer
Manfred Schoch
Stefan Quandt
Stefan Schmid
-
preparation of Supervisory Board meetings to the extent that the subject matter to be
discussed does not fall within the remit of a committee
-
In accordance with rules of procedure, the Presiding
Board comprises the Chairman of the Supervisory Board
and Deputies. The Presiding Board prepares Superviso-
ry Board meetings to the extent that the subject matter
does not fall within the remit of a committee. This
includes, for example, preparing the annual Declaration
of Compliance with the German Corporate Governance
Code and assessment of Supervisory Board efficiency.
coordination work.
BMW AG ensures that the Supervisory Board and its
committees are appropriately equipped to carry out
their duties. This includes providing a central Supervi-
sory Board office to support the chairpersons in their
The Supervisory Board regularly assesses the efficiency
of its activities. To this end, shared discussion is con-
ducted within the Supervisory Board and individual
meetings held with the Chairman, prepared on the basis
of a questionnaire sent in advance, which is drawn up
by the Supervisory Board.
Members of the Supervisory Board of BMW AG are
obliged to act in the best interest of the organisation as
a whole. They may not pursue personal interests in their
decisions or take advantage of business opportunities
intended to benefit the BMW Group.
Members of the Supervisory Board are obliged to inform
the Supervisory Board of any conflicts of interest, in
particular those resulting from a consulting or executive
role with clients, suppliers, lenders or other business
partners, so that the Supervisory Board can report to
the shareholders at the Annual General Meeting on
its treatment of the issue. Material and non-temporary
conflicts of interest of a Supervisory Board member
result in a termination of mandate.
In proposing candidates for election as members of the
Supervisory Board, care is taken that the Supervisory
Board collectively has the required knowledge, skills and
expertise to perform its tasks appropriately.
→ see Report of
the Supervisory
Board for the
number of
meetings during
the year 2018
→ The Supervisory Board has stated specific targets → see section
for its composition, agreed to a diversity concept and
determined a competency profile.
Members of the Supervisory Board are responsible for
undertaking any training required for the performance
of their duties. The Company provides them with appro-
priate assistance therein.
→ Taking into account the specific circumstances of
the BMW Group and the number of Board members,
the Supervisory Board has set up a Presiding Board
and four committees: the Personnel Committee, the
Audit Committee, the Nomination Committee and the
Mediation Committee. These serve to raise the efficiency
of the Supervisory Board's work and facilitate handling
of complex issues. Establishment and function of a
mediation committee is prescribed by law. Committee
chairpersons report in detail on committee work at each
plenary meeting of the Supervisory Board.
Composition of the Presiding Board and the committees
is based on legal requirements, the Articles of Incor-
poration, rules of procedure and corporate governance
principles, while taking into particular account the
expertise of Board members.
"Composition
targets for the
Supervisory
Board"
→ see "Overview
of Supervisory
Board commit-
tees and their
composition"
According to the rules of procedure, the Chairman of the
Supervisory Board is, by virtue of this function, member
and Chairman of the Presiding Board, the Personnel
Committee and the Nomination Committee.
→ The number of meetings held by the Presiding Board
and committees depends on requirements. The Pre-
siding Board, the Personnel Committee and the Audit
Committee generally hold several meetings in the course
of the year.
In line with the rules of procedure for the activities of
the plenum, the Supervisory Board has set out proce-
dural rules for the Presiding Board and committees.
Committees are quorate only when all members par-
ticipate. Committee resolutions are passed by a simple
majority, unless otherwise stipulated by law.
Members of the Supervisory Board may not delegate
their duties to others. However, the Supervisory Board,
the Presiding Board and the committees may call on
experts and informed persons to attend meetings and
advise on specific matters.
The Supervisory Board, the Presiding Board and com-
mittees also meet without the Board of Management
when necessary.
Compliance Communication
209
-
210
→ Composition and
Work Procedures of
the Supervisory
Board of BMWAG
and its Committees
AUDIT COMMITTEE
Norbert Reithofer¹
Manfred Schoch
Stefan Quandt
Stefan Schmid
Karl-Ludwig Kley
― set up in accordance with the recommendation contained in the German Corporate
Governance Code, activities based on terms of procedure
members, including acceptance of non-BMW Group supervisory mandates as well as the
approval of transactions requiring Supervisory Board approval by dint of law (e.g. loans
to Board of Management or Supervisory Board members)
conclusion, amendment and revocation of employment contracts (in conjunction with
the resolutions taken by the Supervisory Board regarding the compensation of the Board
of Management) and other contracts with members of the Board of Management
― decisions relating to the approval of ancillary activities of Board of Management
preparation of decisions relating to the appointment and revocation of appointment of
members of the Board of Management, the compensation and the regular review of the
Board of Management's compensation system
-
PERSONNEL COMMITTEE
Norbert Reithofer¹
Manfred Schoch
Stefan Quandt
Stefan Schmid
Karl-Ludwig Kley
Members
― activities based on terms of procedure
-
PRESIDING BOARD
Principal duties, basis for activities
and their composition
Overview of Supervisory Board committees
The establishment and composition of a mediation com-
mittee are prescribed by the German Co-determination
Act. The Mediation Committee has the task of making
proposals to the Supervisory Board if a resolution for the
appointment of a member of the Board of Management
has not been carried by the necessary two-thirds major-
ity of members' votes. In accordance with statutory
requirements, the Mediation Committee comprises the
Chairman and the Deputy Chairman of the Supervisory
Board, one member selected by shareholder represent-
atives and one by employee representatives.
The Nomination Committee is charged with the task of
finding suitable candidates for election to the Super-
visory Board as shareholder representatives and to
propose them to the Supervisory Board for election at
the Annual General Meeting. In line with the recom-
mendations of the German Corporate Governance Code,
the Nomination Committee is exclusively composed of
shareholder representatives.
In line with the recommendations of the German Cor-
porate Governance Code, the Chairman of the Audit
Committee is independent, and not a former Chairman
of the Board of Management, and has special knowledge
and experience in the application of financial reporting
standards and internal control procedures. He also
fulfils the requirement of being a financial expert as
defined by § 100 (5) and § 107 (4) AktG.
The Audit Committee deals in particular with the super-
vision of the financial reporting process, effectiveness
of the internal control system, the risk management
system, as well as the performance of Supervisory Board
duties in connection with audits pursuant to § 32 of the
German Securities Trading Act (WPHG). It also oversees
the audit of financial statements, auditor independence
and any additional work performed by the auditor. It
prepares the proposal for the election of the auditor at
the Annual General Meeting, makes a relevant recom-
mendation, issues the audit engagement and agrees on
additional areas of audit focus as well as the auditor's fee.
The Audit Committee prepares the Supervisory Board's
resolution relating to the Company and Group Financial
Statements and discusses interim reports with the Board
of Management prior to publication. Additionally, the
Audit Committee deals with the non-financial report-
ing, prepares the audit of the Supervisory Board and
the engagement of an external auditor and issues the
audit engagement. Furthermore, the Audit Committee
deals with the supervision of the internal audit system
and compliance as well as the audit and supervision
of any needs for action related to possible violations
of duties by members of the Board of Management in
preparation of a resolution in the Supervisory Board.
The Audit Committee also decides on the Supervisory
Board's agreement on the use of Authorised Capital
2014 (Article 4 no. 5 of the Articles of Incorporation)
and on amendments to the Articles of Incorporation
which only affect its wording.
The Personnel Committee prepares decisions of the
Supervisory Board with regard to the appointment and,
where applicable, removal of members of the Board of
Management and, together with the full Supervisory
Board and the Board of Management, ensures long-
term succession planning. The Personnel Committee
also
prepares s decisions of the Supervisory Board with
regard to Board of Management compensation and the
regular review of the compensation system for the Board
of Management. In conjunction with resolutions taken
by the Supervisory Board regarding the compensation
of the Board of Management, the Personnel Committee
is responsible for drawing up, amending and revoking
employment contracts or, when necessary, to prepare
and conclude other relevant contracts with members
of the Board of Management. In certain cases, the
Personnel Committee is also authorised to grant the
necessary approval of a business transaction on behalf of
the Supervisory Board. This includes cases of providing
loans to members of the Board of Management or Super-
visory Board, certain contractual arrangements with
members of the Supervisory Board, taking into account
related parties, as well as ancillary activities of members
of the Board of Management, in particular acceptance
of non-BMW Group supervisory board mandates.
Statement on
Corporate
Governance
Internal Rules
and Regulations
The Act on Equal Participation of Women and Men
in Executive Positions in the Private and the Public
Sector ("Act on Equal Gender Participation") was
passed into German law in 2015.
Compliance
-
-
Four members of the Supervisory Board should
if possible have international experience or
specialist knowledge of one or more non-German
markets important to the BMW Group.
To this end, the Supervisory Board of BMW AG has
approved the following objectives for its composition,
including a competency profile. These objectives also
describe the concept for achieving diversity in the com-
position of the Supervisory Board (diversity concept):
8.0
7.8
In accordance with this legislation, the Supervisory
Board of BMW AG is required to set a target for the
proportion of women on its Board of Management
and a time frame for meeting this target. Likewise,
the Board of Management of BMW AG is required to
establish targets for the two executive management
levels below the Board of Management. As its target
for the Board of Management for the time frame from
1 January 2017 to 31 December 2020, the Supervisory
Board has stipulated that the Board of Management
should continue to have at least one female member.
Assuming that the Board of Management continues
to comprise eight members, this would correspond to
a proportion of at least 12.5%. At 31 December 2018,
the Board of Management had one female member
(12.5%). The Supervisory Board considers it desirable
to increase the proportion of women on the Board of
Management and fully supports the Board of Man-
agement's endeavours to increase the proportion of
women at the highest executive management levels
within the BMW Group.
For the time frame from 1 January 2017 to 31 Decem-
ber 2020, the Board of Management has set a target
range of 10.2% to 12.0% for the first level of execu-
tive management and 8% to 10% for the second. At
31 December 2018, the proportion of women within
the first executive management level stood at 8.0%
and at 7.8% within the second.
Function levell
Function level II
Diversity contributes to greater competitiveness and
innovation at the BMW Group. Working together in
mixed, complementary teams raises performance
levels and increases customer focus. Promoting an
appropriate gender ratio is seen as an essential com-
ponent of the BMW Group's diversity concept. Further
increasing the proportion of women therefore remains
an objective of the Board of Management.
The proportion of women in the workforce as a whole
increased again during the financial year under report,
as a result of long-term measures, dialogue and infor-
mation events. Further information on the topic of
diversity within the BMW Group can be found in the
section "Workforce".
215
216
Statement on
Corporate
Governance
→Information on Cor-
porate Governance
Practices Applied
Risks and
Preventive Efforts
INFORMATION ON
CORPORATE GOVERNANCE
PRACTICES APPLIED
BEYOND MANDATORY
REQUIREMENTS
-
Core values and Principles of Action
Within the BMW Group, the Board of Management,
the Supervisory Board and the employees base their
actions on five core values which are the cornerstone
of the success of the BMW Group:
The Supervisory Board should include if possible
seven members who have acquired in-depth
knowledge and experience within the
BMW Group, though no more than two former
members of the Board of Management.
Three members of the Supervisory Board should
if possible be persons from the fields of business,
science or research who have experience in areas
relevant to the BMW Group, for example chem-
istry, energy supply, information technology, or
who have specialist knowledge in fields relevant
for the future of the BMW Group, for example
customer requirements, mobility, resources or
sustainability.
As a general rule, members of the Supervisory
Board should not hold office for longer than
until the end of the Annual General Meeting at
which the resolution is passed ratifying the
member's activities for the 14th financial year
after the beginning of the member's first period
of office. This excludes the financial year in which
the first period of office began. This rule does
not apply to natural persons who either directly
or indirectly hold significant investments in the
Company. In the Company's interest, deviation
from the general maximum period is possible,
for instance in order to work towards another
composition target, in particular diversity of
gender and technical, professional and personal
backgrounds.
213
214
Statement on
Corporate
Governance
Composition and
Work Procedures of
the Supervisory
Board of BMWAG
and its Committees
→ Disclosures Pursuant
to the Act on Equal
Gender Participation-
Targets for the
Proportion of Women
on the Board of
Management and at
Executive Manage-
ment Levels I and II
The time schedule set by the Supervisory Board for
achieving the above-mentioned composition targets is
the period up to 31 December 2019. The nomination
committee of the Supervisory Board already takes
into account the composition targets in its selection
of potential candidates as representatives of the share-
holders. This enables diversity in the composition of
the Supervisory Board and ensures that the Super-
visory Board collectively possesses the knowledge,
skills and experience required to properly perform
its duties. Proposals for nomination made by the
Supervisory Board to the Annual General Meeting -
insofar as they apply to shareholder Supervisory Board
members should take account of these objectives in
such a way that they can be achieved with the support
of the appropriate resolutions of the Annual General
Meeting. The Annual General Meeting is not bound
by proposed nominations for election. The voting
freedom of employees in the vote for the employee
members of the Supervisory Board is also protected.
Under the rules stipulated by the German Co-Determi-
nation Act, the Supervisory Board does not have
the right to nominate employee representatives for
election. The objectives which the Supervisory Board
has set itself with regard to its composition are there-
fore not intended to be instructions to those entitled
to vote or restrictions on their voting freedom.
-
In the Supervisory Board's opinion, its composition
as at 31 December 2018 fulfilled the composition
objectives detailed above. For ease of comparison
with composition targets, brief curricula vitae of
the current members of the Supervisory Board are
available on the Company's website at → www.bmwgroup.com.
Information relating to members' practised profes-
sions and mandates in other statutory supervisory
boards and equivalent national or foreign company
boards, including the length of periods of service on
the Supervisory Board, is provided in the section
Statement on Corporate Governance. Based on this
information, it is evident that the Supervisory Board of
BMW AG is highly diversified, with significantly more
than the targeted four members having international
experience or specialist knowledge with regard to one
or more of the non-German markets important to the
BMW Group. In-depth knowledge and experience
from within the Company are provided by seven
employee representatives, as well as the Chairman
of the Supervisory Board. Only one previous Board of
Management member holds office in the Supervisory
Board. At least four members of the Supervisory Board
have experience in managing another company. The
Supervisory Board also has three entrepreneurs as
members. Most of the members of the Supervisory
Board - including employee representatives - have
experience in supervising another medium-sized or
large company. Moreover, more than three members of
the Supervisory Board have experience and specialist
knowledge in subjects relevant for the future of the
BMW Group, such as customer requirements, mobility,
resources, sustainability and information technology.
For the purpose of assessing the independence of its
members, the Supervisory Board follows the recom-
mendations of the German Corporate Governance
Code. In the opinion of the Supervisory Board, nei-
ther ownership of a substantial shareholding in the
Company, or office as an employee representative, or
previous membership of the Board of Management,
rules out independence of a Supervisory Board mem-
ber. A substantial and not merely temporary conflict
of interests within the meaning of section 5.4.2 of
the German Corporate Governance Code does not
apply to any of the Supervisory Board members.
Employees holding office in the Supervisory Board
are protected by applicable law when performing their
duties. All other Supervisory Board members have a
sufficient degree of economic independence from the
Company. Business with entities in which the mem-
bers of the Supervisory Board carry out a significant
function is conducted on an arm's length basis. The
Supervisory Board has therefore concluded that all
of its members are independent. At the end of the
reporting period these are: Dr.-Ing. Norbert Reithofer,
Manfred Schoch, Stefan Quandt, Stefan Schmid,
Dr. Karl-Ludwig Kley, Christiane Benner, Dr. Kurt
Bock, Franz Haniel, Ralf Hattler, Dr.-Ing. Heinrich
Hiesinger, Prof. Dr. Reinhard Hüttl, Susanne Klatten,
Prof. Dr. Renate Köcher, Horst Lischka, Willibald Löw,
Simone Menne, Dr. Dominique Mohabeer, Brigitte
Rödig, Jürgen Wechsler and Werner Zierer. At least
three members meet the requirements of an inde-
pendent financial expert. These are Dr. Kurt Bock,
Dr. Karl-Ludwig Kley and Simone Menne. At the end
of the reporting period, the Supervisory Board had six
female members (30%), comprising three shareholder
representatives and three employee representatives.
The Supervisory Board has 14 male members (70%),
comprising seven shareholder representatives and
seven employee representatives. The Company there-
fore complies with the statutory gender quota of at
least 30% female members applicable in Germany
since 1 January 2016. At present, no member of the
Supervisory Board is older than 70 years.
DISCLOSURES PURSUANT
TO THE ACT ON EQUAL
GENDER PARTICIPATION -
TARGETS FOR THE PROPOR-
TION OF WOMEN ON THE
BOARD OF MANAGEMENT
AND AT EXECUTIVE MAN-
AGEMENT LEVELS I AND II
Management level is defined in terms of functional
level and follows a comprehensive job evaluation
system based on Mercer.
Proportion of female executives within
management/function levels I and II
at BMW AG
→ 80
in %
.......................
10
An age limit for membership of the Supervisory
Board of 70 years is generally to be applied. In
exceptional cases, members may remain on the
Board until the end of the next Annual General
Meeting after reaching the age of 73, in order to
fulfil legal requirements or to facilitate smooth
succession in the case of key roles or specialist
qualifications.
No persons carrying out directorship functions
or advisory tasks for important competitors of
the BMW Group may belong to the Supervisory
Board. In compliance with applicable law, mem-
bers of the Supervisory Board are to take care
that no persons will be nominated for election
for whom a significant, non-temporary conflict
of interests could arise due to other activities
and functions carried out by them outside the
BMW Group, in particular advisory activities
or directorships with customers, suppliers, credi-
tors or other business partners.
Two independent members of the Supervisory
Board should have expert knowledge of account-
ing or auditing.
Of the 20 members of the Supervisory Board at
least 12 should be independent members within
the meaning of section 5.4.2 of the German
Corporate Governance Code, including at least
six as representatives of the Company's share-
holders.
When seeking qualified individuals for the Super-
visory Board whose specialist skills and leader-
ship qualities are most likely to strengthen the
Board as a whole, consideration is also to be
given to diversity. When preparing nominations,
the extent to which the work of the Supervisory
Board benefits from diversified professional and
personal backgrounds (including international
aspects) and from an appropriate gender repre-
sentation is also to be taken into account. It is
the joint responsibility of all those participating
in the nomination and election process to ensure
that qualified women are considered for Super-
visory Board membership.
Three of the shareholder representatives in the
Supervisory Board should if possible be entrepre-
neurs or persons who have previous experience in
the management or supervision of another
medium or large-sized company.
Responsibility
Beyond Mandatory
Requirements
Appreciation
The BMW Group Compliance Management System
consists of a coordinated set of instruments and topics
designed to ensure that the BMW Group, its repre-
sentative bodies, its managers and staff act in a lawful
manner. Particular emphasis is placed on measures to
ensure compliance with antitrust legislation and avoid
the risk of corruption or money laundering.
The BMW Group Compliance Committee comprises
the heads of the following departments: Legal Affairs,
Corporate and Governmental Affairs, Corporate
Audit, Group Reporting, Organisational Development
and Corporate Human Resources. It manages and
monitors activities necessary to avoid non-compliance
with the law, including, for example, legal monitoring,
internal compliance regulations, communications and
training activities, complaint and case management,
compliance reporting, compliance controls and follow-
ing through with sanctions in cases of non-compliance.
The BMW Group Compliance Committee reports
regularly to the Board of Management on all compli-
ance-related issues, including the progress made in
refining the BMW Group Compliance Management
System, details of investigations performed, known
infringements of the law, sanctions imposed and cor-
rective/preventative measures implemented. This also
ensures that the Board of Management is immediately
notified of any cases of particular significance.
We take consistent decisions and commit to them
personally. This allows us to work freely and more
effectively.
Annual
Report
Board of Management BMW AG
Annual
Report
BMW Group Compliance Committee
Compliance Controls
BMW Group Compliance Committee ←
Office
Compliance Reporting
Compliance Case
Management
Compliance Processes
and IT Systems
Company-wide Compliance
Network
Compliance Instruments
of the BMW Group
Compliance Academy and Culture
Annual
Compliance
Reporting Run
Compliance Strategy
Legal Compliance
Monitoring and Trends
In order to protect itself systematically against legal
and reputational risks, the Board of Management
created a Compliance Committee several years ago,
mandated to establish a Compliance Management
System throughout the BMW Group.
Responsible and lawful conduct is fundamental to the
success of the BMW Group. It is an integral part of
our corporate culture and the reason why customers,
shareholders, business partners and the general public
place their trust in us. The Board of Management and
the employees of the BMW Group are obliged to act
responsibly and in compliance with applicable laws and
regulations. The BMW Group also expects its business
partners to conduct themselves in the same manner.
Supervisory Board BMW AG
BMW Group Compliance Management System
We reflect on our actions, respect each other, offer
clear feedback and celebrate success.
Transparency
We acknowledge concerns and identify inconsisten-
cies in a constructive way. We act with integrity.
Trust
→ 81
Openness
We are excited by change and open to new opportu-
nities. We learn from our mistakes.
Social responsibility towards employees and
along the supplier chain
The BMW Group stands by its social responsibilities.
Our corporate culture combines the drive for success
with openness, trust and transparency. We are well
aware of our responsibility towards society. Socially
sustainable human resource policies and compliance
with social standards are based on various interna-
tionally recognised guidelines. The BMW Group is
committed to the OECD's guidelines for multinational
companies and the contents of the ICC Business
Charter for Sustainable Development. Details of the
contents of these guidelines and other relevant infor-
mation can be found at www.oecd.org and → www.iccwbo.org
and → www.ohchr.org. The Board of Management signed
the United Nations Global Compact in 2001 and, in
2005, together with employee representatives, issued
a Joint Declaration on Human Rights and Working
Conditions in the BMW Group. This Joint Declaration
was reconfirmed in 2010. With the signature of these
documents, we have given our commitment to abide
worldwide by internationally recognised human rights
and the fundamental working standards of the Inter-
national Labour Organization (ILO). These include
in particular freedom of employment, the principle
of non-discrimination, freedom of association and
the right to collective bargaining, the prohibition of
child labour, appropriate remuneration, regulated
working times and compliance with work and safety
regulations. In 2018 we published the BMW Codex
on Human Rights and Working Conditions, which
supplements the Declaration on Human Rights and
Working Conditions from 2010. The Codex is based
on a diligence process, which allows the BMW Group
to identify relevant aspects and define measures. It
reinforces attention to the consideration of human
rights and clarifies how the BMW Group promotes
human rights and implements the ILO Core Labour
Conventions globally in its business activity.
The complete text of the UN Global Compact and
the recommendations of the ILO and other relevant
information can be found at www.unglobalcompact.org and
→ www.ilo.org. The Joint Declaration on Human Rights
and Working Conditions in the BMW Group can
be found at www.bmwgroup.com under the menu items
"Downloads" and "Responsibility".
We trust and rely on each other. This is essential if we
are to act swiftly and achieve our goals.
Further information on social responsibility towards
employees can be found in the section "Workforce".
Sustainable business management can only be
effective, however, if it covers the entire value-added
chain. That is why the BMW Group not only sets high
standards for itself, but also expects its suppliers and
partners to meet the ecological and social standards it
sets and strives continually to improve the efficiency
of processes, measures and activities. For instance,
we consistently require our dealers and importers
to comply with ecological and social standards on a
contractual basis. Moreover, corresponding criteria
are embedded throughout the entire purchasing
system – including in enquiries to suppliers, in the
sector-wide OEM Sustainability Questionnaire, in our
purchasing terms and in our evaluation of suppli-
ers in order to promote sustainability aspects in
line with the BMW Group Sustainability Standard.
The BMW Group expects suppliers to ensure that
the BMW Group's sustainability criteria are also
adhered to by their sub-suppliers. A spot check of
supplier facilities is conducted with sustainability
audits and assessments. In 2017, the Human Rights
Contact Supply Chain was established for reporting of
sustainability infringements in the supply chain. Pur-
chasing terms and conditions and other information
relating to purchasing can be found in the publicly
available section of the BMW Group Partner Portal
at https://b2b.bmw.com.
We also work in close partnership with our suppliers
and promote their commitment to sustainability.
217
218
Statement on
Corporate
Governance
→ Compliance in the
BMW Group
COMPLIANCE IN THE
BMW GROUP
For the BMW Group, worldwide compliance of these
fundamental principles and rights is self-evident.
Since 2005 employees' awareness of this issue has
therefore been raised by means of regular internal
communications and training on recent developments
in this area. The "Compliance Contact" helpline
and the BMW Group SpeakUP Line are available to
employees wishing to raise queries or complaints
relating to human rights issues. With effect from 2016,
human rights have been incorporated as an integral
component of the BMW Group's worldwide Compli-
ance Management System, representing a further step
in the systematic implementation of the UN Guiding
Principles on Business and Human Rights.
Base amount p.a. (70% target amount per bonus):
€0.595 million (1st period of office)
€0.70 million (from 2nd period of office or 4th year of mandate)
€1.26 million (Chairman of the Board of Management)
Primarily qualitative, non-financial criteria, expressed in terms of a performance factor
aimed at measuring the Board member's contribution to the sustainable and long-term
development and the future viability of the Company over a period of at least three finan-
cial years
Criteria for the performance factor include: innovation (economic and ecological, for
example in the reduction of carbon dioxide emissions), the Group's market position
compared to its competitors, customer focus, ability to adapt, leadership, corporate
culture, promotion of compliance and integrity, contribution to the Group's attractiveness
as an employer, progress in implementing the diversity concept, and activities that
foster corporate social responsibility
€2.268 million (Chairman of the Board of Management)
Maximum amount of performance-related bonus p.a.:
€1.071 million (1st period of office)
€1.26 million (from 2nd period of office or 4th year of mandate)
Formula: 70% target amount x performance factor
Performance factor may not exceed 1.8
- €0.972 million (Chairman of the Board of Management)
€0.95 million (from 2nd period of office or 4th year of mandate)
€0.459 million (1st period of office)
Performance
Base salary
approx. 27
approx. 14
remuneration
Share-based
Pension contribution
approx. 8
in %
→ 82
Overview of compensation system for financial
year 2018: simplified depiction of allocation to
cash benefits (target compensation) and pension
contribution¹
Compensation system, compensation components
Board of Management compensation comprises fixed
and variable cash elements as well as a share-based
component. The compensation components are
described in more detail below. Retirement benefits
remained unchanged in the revised compensation
system applicable from 1 January 2018.
approx. 24
→ Compensation
Report
224
223
Revised Board of Management compensation
system for financial years from 2018 onwards
In December 2017, the Supervisory Board resolved
to revise the compensation system for financial years
from 2018 onwards. A focus was to align the remu-
neration structure even more strongly on sustainable
corporate development. The base salary, which had
remained at the same level since 1 January 2012, was
raised. The bonus was revised, both in terms of its
structure and the target setting. Target values for the
parameters Group net profit and post-tax return on
sales used to determine the earnings-related bonus
were adjusted in line with the Group's current business
plan and revised. A new multi-year and future-ori-
ented component was introduced in the form of a
performance cash plan, in order to further strengthen
the long-term orientation of the compensation system.
The overall upper limits are unchanged. The changes
apply to all members of the Board of Management
for financial years with effect from 1 January 2018.
compensation. It also ensures that variable compo-
nents based on multi-year criteria take account of
both positive and negative developments and that
the overall incentive is on the long term. As a general
rule, targets and comparative parameters may not
be changed retrospectively. In connection with the
revised compensation system for the Board of Manage-
ment (see the section Revised Board of Management
compensation system for financial years from 2018
onwards), the targets originally set for the variable
compensation components for the financial years 2018
and 2019 were revoked exceptionally and replaced
by the more ambitious targets stipulated in the new
compensation system applicable from 2018 onwards.
The Supervisory Board reviews the appropriateness
of the compensation system annually. In preparation,
the Personnel Committee also consults remuneration
studies. In order to check that the compensation sys-
tem is in line with peers, the Supervisory Board com-
pares compensation paid by other DAX companies.
For a vertical view, it compares Board compensation
with the salaries of executive managers and with the
average salaries of employees of BMW AG based in
Germany, also with regard to the development over
time. Recommendations made by an independent
external remuneration expert and suggestions made
by investors and analysts are also considered in the
consultative process.
The compensation of members of the Board of Man-
agement is determined by the full Supervisory Board
on the basis of performance criteria and after taking
into account any remuneration received from Group
companies. The principal performance criteria are
the tasks and exercise of mandate of the member of
the Board of Management, the economic situation as
well as the performance and future prospects of the
BMW Group. The Supervisory Board sets ambitious
and relevant parameters as the basis for variable
The compensation system for the Board of Management
at BMW AG is designed to encourage a management
approach focused on the sustainable development of
the BMW Group. A further principle of the compen-
sation system at the BMW Group is that of consistency.
This means that compensation systems for the Board
of Management, senior management and employees
of BMW AG are composed of similar elements. The
Supervisory Board performs an annual review to
ensure that all Board of Management compensation
components are appropriate, individually and in total,
and do not encourage the Board of Management to take
inappropriate risks for the BMW Group. At the same
time, the compensation model used for the Board of
Management needs to be attractive for highly qualified
executives in a competitive environment.
Principles of compensation
The full Supervisory Board is responsible for deter-
mining and regularly reviewing Board of Management
compensation. The preparation for these tasks is
undertaken by the Supervisory Board's Personnel
Committee.
Responsibilities
1. Board of Management compensation
Statement on
Corporate
Governance
The following section describes the principles governing
the compensation of the Board of Management for
financial years from 2018 onwards. A description of the
stipulations set out in the statutes relating to the com-
pensation of the Supervisory Board is also provided.
In addition to explaining the system of compensation,
details of components of compensation are also pro-
vided with figures. Furthermore, the compensation of
each individual member of the Board of Management
and the Supervisory Board for the financial year 2018
is disclosed with its component parts.
Earn-
ings-based
component of
the bonus
approx. 8
Fixed remuneration consists of a base salary, which is
paid monthly, and fringe benefits (other remuneration
elements such as the use of Company cars, insurance
premiums and contributions towards security sys-
tems). With effect from the financial year 2018, the
base salary is €0.8 million p.a. for a Board member
during the first period of office, €0.95 million p.a. for
a Board member from the second period of office or
the fourth year of mandate and €1.8 million p.a. for
the Chairman of the Board of Management.
An earnings factor of 1.0 would give rise to a earnings-
related component of €0.255 million for a Board member
in the first period of office, €0.3 million from the
second period of office or the fourth year of mandate
and €0.54 million for the Chairman of the Board of
Management. The earnings factor is 1.0, for instance,
in the event of a Group net profit of €5.3 billion and a
post-tax return on sales of 5.6%. If the Group net profit
In order to calculate the earnings-related component,
an earnings factor is determined on the basis of the
target parameters and multiplied by 30% of the target
bonus amount. The level of the earnings-related com-
ponent depends on the degree to which the targets
set by the Supervisory Board for Group net profit and
post-tax return on sales are achieved. The degree of
achievement is expressed in an earnings factor. The
underlying measurement values are determined in
advance for a period of three financial years and may
not be changed retrospectively. The earnings factor is
capped at a maximum of 1.8.
In the case of 100% target achievement, the bonus
comprises an earnings-related component of 30% and
performance-related component of 70%. The target
bonus (100%) is €0.85 million p.a. for a Board member
during the first period of office, €1.0 million p.a.
from the second period of office or the fourth year
of mandate and €1.8 million p.a. for the Chairman
of the Board of Management. For all Board members,
the upper limit of the bonus is set at 180% of the
relevant target bonus.
Bonus
2 Simplified depiction of target amounts for the variable cash remuneration of the Chairman
of the Board of Management. Excludes basic salary, other remuneration and pension
contribution. Based on the assumption that the share price remains unchanged for the
calculation of the matching component.
approx. 29
Performance
component
of the bonus
Earnings-based
component
of the bonus
approx. 12
approx. 37
Performance
Cash Plan
Fixed remuneration
Share-based remuneration
approx. 22
→ 83
Overview of compensation system: simplified
depiction of variable remuneration (target
compensation)²
1 Simplified depiction of target amounts for the variable cash remuneration of the Chairman
of the Board of Management. Excludes other remuneration. Based on the assumption that
the share price remains unchanged for the calculation of the matching component.
Performance component
of the bonus approx. 19
Payment of a discretionary additional bonus is not fore-
seen. An upper limit has been set for each component of
variable remuneration (see Overview of compensation
system and compensation components).
share-based remuneration
Performance Cash Plan and
bonus
The variable remuneration of the Board of Manage-
ment comprises three components:
Variable remuneration
in %
COMPENSATION REPORT
(PART OF THE COMBINED
MANAGEMENT REPORT)
Under the terms of the Employee Share Programme,
in 2017 employees were entitled to acquire packages
of 7, 12 or 17 shares of non-voting preferred stock
with a discount of €20.00 (2017: €20.00) per share
compared to the market price (average closing price
in Xetra trading during the period from 5 to 8 Novem-
ber 2018: €66.26). All employees of BMW AG and
its (directly or indirectly) wholly owned German
subsidiaries (if agreed to by the directors of those
entities) were entitled to participate in the programme.
Employees were required to have been in an uninter-
rupted employment relationship with BMW AG or the
relevant subsidiary for at least one year at the date
on which the allocation for the year was announced.
Shares of preferred stock acquired in conjunction
with the Employee Share Programme are subject to
a blocking period of four years, starting from 1 Janu-
ary of the year in which the employees acquired the
shares. A total of 521,524 (2017: 491,114) shares of
preferred stock were acquired by employees under the
programme in 2018; 521,500 (2017: 491,000) of these
shares were drawn from Authorised Capital 2014, the
remainder were acquired via the stock exchange or as
a result of cancelled employee purchases relating to
the previous year. Every year the Board of Mana-
gement of BMW AG decides whether the scheme is
to be continued. Further information is provided in
→ notes 31 and 41 to the Group Financial Statements.
31 and 41
More than 44,000 managers and staff worldwide have
so far received training in the basic principles of
compliance and are in possession of a valid training
certificate. Successful completion of the training pro-
gramme is mandatory for all BMW Group managers.
Appropriate processes are in place to ensure that
all newly recruited managers and promoted staff
undergo compliance training and repeat it every two
years. In this way, the BMW Group ensures nearly
full training coverage for its managers in compliance
matters.
Online training in antitrust compliance was restruc-
tured in 2018. This training is also mandatory for
managers and staff whose functions or assignments
expose them to antitrust risks. A total of 22,000 man-
agers and associates worldwide have so far completed
antitrust compliance training and currently hold a
valid certificate.
Additional classroom training was also offered for key
compliance topics. The main emphasis here was on
providing training in antitrust law for employees who
participate in meetings with competitors or work with
suppliers or sales partners.
219
220
Statement on
Corporate
Governance
→ Compliance in the
BMW Group
Additional compliance coaching was also imple-
mented for international sales and financial ser-
vice companies in local markets. These multi-day
classroom seminars strengthen the understanding
of compliance in selected organisational units
and enhance cooperation between the central
BMW Group Compliance Committee Office and
decentralised compliance functions. In 2018, market
coaching was conducted in Australia, Austria, Brazil,
Canada, China, Denmark, France, Germany, Italy,
the Netherlands, New Zealand, Russia, Singapore,
Sweden, Switzerland, Thailand and the US.
Any member of staff with questions or concerns
relating to compliance is expected to discuss these
matters with their managers and with the relevant
departments within the BMW Group: in particular
with Legal Affairs, Corporate Audit and Corporate
Security. The BMW Group Compliance Contact serves
as a further point of contact for both employees and
non-employees for any questions regarding compli-
ance. Non-employees may also use this reporting
system. This communication may remain anonymous,
if preferred.
Training plays an important role in reinforcing com-
pliance in the corporate culture. In 2018, training
management for online training in Compliance
Essentials and Antitrust Compliance, both available
in German and English, was switched to a central
training platform. These training modules must be
repeated by the required target groups every two
years and include a final test. Successful completion
of the test is confirmed by a certificate.
Employees also have the opportunity to submit infor-
mation about possible breaches of the law within the
Company anonymously and confidentially - via
the BMW Group SpeakUP Line. The BMW Group
SpeakUP Line is available in a total of 34 languages
and can be reached via local toll-free numbers in all
countries where BMW Group employees are engaged
All compliance-related queries and concerns are
documented and followed up by the BMW Group
Compliance Committee Office using an electronic
Case Management System. If necessary, Corporate
Audit, Corporate Security, the legal departments or
the Works Council may be called upon to assist in
the investigation process.
Various internal channels and means of communi-
cation, including newsletters, employee newspapers
and intranet portals, are used to keep BMW Group
employees fully up-to-date with the instruments
and measures used by the Compliance Management
System. The central communications channel is
the compliance website within the BMW Group's
intranet, where employees can find compliance-
related information and training materials in both
German and English. The website contains a special
service area where various practical tools are made
available to employees to help them deal with typical
compliance-related situations. A group-wide com-
munications campaign was implemented in 2018
to boost employee awareness of the importance
of creating a culture of transparency and trust.
Managers were the main focus of additional training
on the topic of compliance culture, including how to
be a good role model, management style and dealing
with contradictions and crises.
In addition to these communication measures, appro-
priate IT systems also support BMW Group employees
with the assessment, approval and documentation of
compliance-relevant matters.
For example, since 2017, all exchange activities with
competitors must be documented and approved
in a special compliance IT system. All employees
have access to IT tools to help them verify the legal
admissibility of and document benefits, especially in
connection with corporate hospitality.
The BMW Group also uses an IT-based Business Rela-
tions Compliance programme aimed at ensuring the
reliability of its business relations. Relevant business
partners are checked and evaluated with a view to
identifying potential compliance risks. These proce-
dures are particularly relevant for relations with sales
partners and service providers, such as agencies and
consultants. Depending on the results of the evalua-
tion, appropriate measures - such as communication
measures, training and possible monitoring – are
implemented to manage compliance risks.
The IT system used to verify customer integrity has
been expanded and has so far been introduced in
56 organisational units under enhanced anti-money
laundering measures.
Through the group-wide reporting system, compli-
ance responsibles across all organisational units
of the BMW Group report on compliance-relevant
issues to the Compliance Committee on a regular
basis, and, if necessary, also on an ad hoc basis. This
includes reporting on the compliance status of the
relevant organisational units, on identified legal
risks and incidences of non-compliance, as well as
on sanctions and corrective/preventative measures
implemented.
Compliance with and implementation of the com-
pliance rules and processes are audited regularly
by Corporate Audit and subjected to control checks
by Corporate Security and the BMW Group Compli-
ance Committee Office. As part of its regular activi-
ties, Corporate Audit carries out on-site audits. The
BMW Group Compliance Committee also engages
Corporate Audit to perform compliance-specific
checks. In addition, a BMW Group Compliance Spot
Check, a sample test specifically designed to identify
potential corruption risks, was carried out in 2018.
Antitrust Compliance Validation was another new
measure introduced in 2018 to identify and audit
possible antitrust risks at the Company. Compliance
control activities are coordinated by the BMW Group
Panel Compliance Controls. Any necessary follow-up
measures are organised by the BMW Group Compli-
ance Committee Office.
Managers, in particular, bear a high degree of respon-
sibility and must set a good example with regard to
preventing infringements. Managers throughout the
BMW Group acknowledge this principle by signing
a written declaration, in which they also undertake
to inform staff working for them of the content and
significance of the Legal Compliance Code, to convey
the values it embodies and make employees aware
of legal risks. Managers must, at regular intervals
and on their own initiative, verify compliance with
the law and communicate with staff on this issue. It
is important to signal to employees that they take
compliance risks seriously and that relevant infor-
mation is extremely valuable. In their dealings with
staff members, managers remain open to discussion
and listen to differing opinions. Any indication of
non-compliance with the law must be rigorously
investigated.
in activities.
Compliance measures are determined and priori-
tised on the basis of a group-wide compliance risk
assessment that is updated annually. In 2018, this was
further refined to create a Compliance Risk and Per-
formance Management Concept, which supports the
recognition of compliance risks and the identification
of appropriate preventative IT measures. Through the
function Compliance Coordination in the Financial
Services segment the specific Compliance risks of
the segment are taken into consideration. Measures
are realised with the aid of a regionally structured
compliance management team covering all parts
of the BMW Group, which oversees a network of
around 240 compliance responsibles with 77 local
compliance functions.
The BMW Group Legal Compliance Code is supple-
mented by a whole range of internal policies,
guidelines and instructions, which in part reflect
applicable legislation. The BMW Group Policy "Cor-
ruption Prevention" and the BMW Group Instruc-
tion "Corporate Hospitality and Gifts" deserve
particular mention: these documents deal with
lawful handling of gifts and benefits and define
appropriate assessment criteria and approval pro-
cedures. The BMW Group Policy "Antitrust Com-
pliance" establishes binding rules of conduct for
all employees across the BMW Group to prevent
unlawful restriction of competition.
The various elements of the BMW Group Compli-
ance Management System are shown in the dia-
gram on the previous page and are applicable to all
BMW Group organisational units worldwide. The
BMW Group Legal Compliance Code forms the core
of the Group's Compliance Management System,
spelling out the Board of Management's commitment
to compliance as a joint responsibility ("tone from
the top"). The Code also explains the significance
of legal compliance and provides an overview of
the various areas of relevance for the BMW Group.
It is available both as a printed brochure in German
and English and for download. In addition, trans-
lations into 11 other languages are available in the
BMW Group intranet.
→ see
notes
→ see
note 41
Under the terms of the programme, participants give
a commitment to invest an amount equivalent to 20%
of their performance-based bonus in BMW common
stock and to hold the shares so acquired for a mini-
mum of four years. In return for this commitment,
BMW AG pays 100% of the investment amount as a net
subsidy. Once the four-year holding period require-
ment has been fulfilled, the participants receive - for
each three common stock shares held and at the
Company's option - one further share of common
stock or the equivalent amount in cash.
The share-based remuneration programme for qual-
ifying heads of department, introduced with effect
for financial years beginning after 1 January 2012, is
closely based on the programme for Board of Manage-
ment members and is aimed at rewarding a long-term,
entrepreneurial approach to running the business on
a sustainable basis.
in place at BMW AG during the year under report,
namely the Employee Share Programme (under which
entitled employees of BMW AG have been able to
participate in the enterprise's success since 1989 in
the form of non-voting shares of preferred stock), a
share-based remuneration programme for Board of
Management members, and a share-based remuner-
ation programme for senior heads of department
(relating in both cases to shares of common stock).
The share-based remuneration programme for Board
of Management members is described in detail in
the Compensation Report (see also the "Share-based
remuneration" section in the Compensation Report
and → note 41 to the Group Financial Statements).
Three share-based remuneration schemes were
Share-based compensation programmes for
employees and members of the Board of
Management
Report
→ Compensation
BMW Group
→ Compliance in the
Statement on
Corporate
Governance
222
221
To ensure that the BMW Group complies with regu-
lations relating to insider information, the Board
of Management appointed an Ad-hoc Committee
back in 1994, consisting of representatives of various
specialist departments, whose members determine
whether information displays the characteristics
of publishable insider information and handle the
publication and legal notices required by law. All
persons who perform duties on behalf of BMW AG
and have access to insider information are included
in an insider list and informed of the duties arising
from insider rules.
Compliance is also an important factor in safeguard-
ing the future of the BMW Group workforce. With
this in mind, the Board of Management and the
national and international employee representative
bodies of the BMW Group have agreed on a binding
set of Joint Principles for Lawful Conduct. In doing
so, all parties involved made a commitment to the
principles contained in the BMW Group Legal Com-
pliance Code and to trustful cooperation in all matters
relating to compliance. Employee representatives are
therefore regularly involved in the process of refining
compliance measures within the BMW Group.
was updated in 2010. This was followed by systematic
introduction and continuous upgrading of measures
to protect human rights. These measures, which were
already firmly established within the organisation,
were integrated into the BMW Group's group-wide
Compliance Management System in 2016. A group-
wide human rights compliance assessment was
conducted in 2017. In the year under review, the
BMW Group published its Code on Human Rights
and Working Conditions, which clarifies how the
Joint Declaration on Human Rights and Working
Conditions at the BMW Group from 2010 should be
implemented. The Code confirms the BMW Group's
commitment to human rights and outlines how the
Company promotes human rights and implements
the core labour standards of the ILO.
The BMW Group stated its position clearly back in
2005, with the Joint Declaration on Human Rights
and Working Conditions at the BMW Group, which
The BMW Group is committed to respecting interna-
tionally recognised human rights, as set out in the
ten principles of the UN Global Compact and the
ILO Core Labour Conventions. The Company's due
diligence process is geared towards the UN Guiding
Principles on Business and Human Rights, focusing
on topics and areas of activity where it can leverage
its influence as a commercial enterprise.
It is essential for compliance in the BMW Group that
employees are aware of and comply with applicable
legal regulations. The BMW Group does not toler-
ate violations of the law by its employees. Culpable
violations of the law result in employment-contract
sanctions and may involve personal liability conse-
quences for the employee involved.
€0.54 million (from 2nd period of office or 4th year of mandate)
The decisions taken by the BMW Group Compliance
Committee are drafted in concept and implemented
operationally by the BMW Group Compliance Com-
mittee Office. The BMW Group Compliance Commit-
tee Office comprises 19 employees and is allocated in
organisational terms to the Chairman of the Board of
Management.
The BMW Group Compliance Committee Office is
supported by local compliance functions, especially
in connection with operational implementation of
compliance topics. Installation of 77 local compliance
functions was completed in 2018. Their activities
follow a standardised management process with
clearly defined tasks and responsibilities. The heads
of these functions serve as the Compliance Officer
for the respective organisational unit.
were below €3 billion or the post-tax return on sales
below 3%, the earnings factor would be zero. In this
case, an earnings-related component would not be paid.
The maximum value of the earnings factor is reached
in the event of a Group net profit of €11 billion and a
post-tax return on sales of 9%. In exceptional circum-
stances, for instance major acquisitions or disposals,
the Supervisory Board may adjust the earnings factor.
The performance-related component is calculated
using a performance factor which the Supervisory
Board sets for each member of the Board of Manage-
ment and which is multiplied by 70% of the target
bonus amount. The Supervisory Board sets the perfor-
mance factor on the basis of a detailed evaluation of
the contribution made by Board members to sustainable
and long-term business development over a period of
at least three financial years. The evaluation by the
Supervisory Board is based on predefined criteria that
take into account the Group's long-term success, the
interests of shareholders, the interests of employees
and social responsibility.
Cash Plan
Performance Cash Plan
→ 86
PCP factor overview
TARGET AMOUNT
Performance Cash Plan overview
→ 85
In addition to the multi-year earnings factor, the
Supervisory Board also determines a multi-year
performance factor after the end of the evaluation
period. To this end, the Supervisory Board takes
account of in particular the business development
during the evaluation period, the forecast trend in the
business development for subsequent years, the Board
member's individual contribution to profitability and
the status of compliance within the Board member's
area of responsibility. The multi-year performance
factor can be between 0.9 and 1.1.
In order to determine the multi-year earnings factor,
an earnings factor is calculated for each year of the
three-year evaluation period and an average is then
calculated for the evaluation period. As for the earn-
ings-related component of the bonus, the earnings
factor for each individual year within the evaluation
period is determined on the basis of Group net profit
and post-tax return on sales for the relevant year.
The maximum earnings factor is 1.8. The underlying
measurement values are determined in advance for
a period of three financial years and may not be
changed retrospectively.
구
of 1.8.
In order to determine the PCP factor, a multi-year
earnings factor is multiplied by a multi-year perfor-
mance factor. The PCP factor is capped at a maximum
The PCP evaluation period comprises three years, the
grant year and the two subsequent years. The PCP is
paid out after the end of the three-year evaluation period.
Chairman of the Board of Management:
With effect from the financial year 2018, variable cash
compensation includes a multi-year and future-oriented
Performance Cash Plan (PCP). The PCP is calculated at
the end of a three-year evaluation period, by multi-
plying a predefined target amount by a factor that
is based on multi-year target achievement (the PCP
factor). PCP entitlements are paid in cash. The PCP
target amount (100%) amounts to €0.85 million p.a.
for a Board member in the first period of office,
€0.95 million p.a. from the second period of office
or the fourth year of mandate and €1.6 million p.a.
for the Chairman of the Board of Management. The
maximum amount that can be paid to a Board member
is capped at 180% of the PCP target amount p.a.
Report
→ Compensation
PCP FACTOR
Statement on
Corporate
Governance
of target amount
· Capped at 180%
Cash payment
TOTAL
Qualitative, mainly non-financial parameters
Value between 0 and 1.8
at least three financial years
Contribution to sustainable and long-term
business development over a period of
Basis for performance factor:
x 0.7 of target amount
Performance factor
PERFORMANCE COMPONENT
Value between 0 and 1.8
Group post-tax return on sales
Group net profit
226
MULTI-YEAR EARNINGS FACTOR
Average earnings factor
Based on Group net profit and
Parameter/measurement base
BASE SALARY P.A.
Component
→ Compensation
Report
components
Overview of compensation system and compensation
Statement on
Corporate
Governance
228
227
A one-year post-contractual non-competition clause
has been agreed with Board members under specified
circumstances. During that one-year period, the for-
mer Board member is entitled to receive monthly
compensation equivalent to 60% of his or her
vious monthly basic remuneration, reduced by any
amount of other income exceeding 40% of the basic
remuneration. The Company may unilaterally waive
the requirement to comply with the post-contractual
non-competition clause.
pre-
In the event of death or invalidity, special rules apply for
early payment of performance cash plans and share-
based remuneration components based on the target
amounts. Insofar the service contract is prematurely
terminated and the Company has an extraordinary
right of termination, or if the Board member resigns
without the Company's agreement, entitlements to
amounts as yet unpaid relating to performance cash
plans and share-based remuneration are forfeited.
Other
At the end of the holding period, Board members receive
from the Company, as previously, for every three shares
of common stock held, either one additional share of
common stock or the cash equivalent, to be decided
at the Company's discretion (matching component).
Upper limits have been defined for both the invest-
ment component and the matching component (see
Overview of compensation system and compensation
components).
Members of the Board of Management receive a cash
compensation (investment component) for the specific
purpose of investment after tax and contributions in
BMW AG common stock. For financial years from 2018
onwards, the investment component corresponds to
45% of the gross bonus. Shares of common stock pur-
chased in this way by Board members are required to
be held for a period of four years.
Share-based remuneration
Members of the Board of Management receive advance
payments out of the Performance Cash Plan 2018 and
the Performance Cash Plan 2019 in the years 2019
and 2020. At the end of evaluation period, the advance
payment will be set off or refunded, depending on the
amount then determined. The advance payment for
each year is €0.5 million for a Board member in the
first period of office and €0.6 million from the second
period of office or the fourth year of mandate. For the
Chairman of the Board of Management the amount
is €0.9 million p.a.
Group post-tax return on sales
- Value between 0 and 1.8
MULTI-YEAR PERFORMANCE FACTOR
Measurement based on
multi-year performance factor:
Trend in business development
- Status of compliance in each Board member's
-
Basis for earnings factor:
-
Individual contribution to profitability
Forecast trend in business development
Value between 0.9 and 1.1
CASH PAYMENT
Cash payment at end of evaluation period
- Capped at 180% of target amount
PCP FACTOR
area of responsibility
Member of the Board of Management:
x 0.3 of target amount
EARNINGS COMPONENT BONUS
Earnings factor
The criteria include in particular innovation (economic
and ecological, for example in the reduction of carbon
dioxide emissions), the Group's market position
compared to its competitors, customer focus, ability
to adapt, leadership, corporate culture, promotion of
compliance and integrity, contribution to the Group's
attractiveness as an employer, progress in implement-
ing the diversity concept, and activities that foster
corporate social responsibility. The individual perfor-
mance factor lies between zero and a maximum of 1.8.
Maximum amount of earnings-related bonus p.a.:
Earnings factor may not exceed 1.8
The earnings factor is 1.0 in the event of a Group net profit of €5.3 billion and a post-tax
return on sales of 5.6%
Earnings factor is derived from Group net profit and Group post-tax return on sales
Quantitative criteria fixed in advance for a period of three financial years
€0.30 million (from 2nd period of office or 4th year of mandate)
€0.54 million (Chairman of the Board of Management)
€0.255 million (1st period of office)
Base amount p.a. (30% target amount per bonus):
Capped at 180% of target amount, see section Remuneration caps
-
-
-
-
Formula: 30% target amount x earnings factor
-
→ 84
€1.8 million (Chairman of the Board of Management)
225
€1.80 million
VARIABLE REMUNERATION
Bonus
(sum of earnings-related bonus and performance-related bonus)
a) Earnings-related bonus
Bonus overview
b) Performance-related bonus
(at 100% target achievement corresponds to 30% of target amount)
€1.0 million (from 2nd period of office or 4th year of mandate)
€0.85 million (1st period of office)
€0.80 million (1st period of office)
(at 100% target achievement corresponds to 70% of target amount)
Target amount p.a. (at 100% target achievement):
(1,893,252)
2,754,201
(3,136,302)
Total³
(353,536)
(-)
(-)
356,550
353,289
1,886,766
1,886,766
2,298,444
(357,339) (2,071,748) (2,071,560)
2,775,150 19,703,788 19,703,287
(3,059,645) (21,987,289) (21,072,823)
132,500
Andreas Wendt²
(1,893,216)
(357,918)
Oliver Zipse
132,500
Responsibilities, provisions of Articles of
Incorporation
Markus Duesmann4
The compensation of the Supervisory Board is specified
either by a resolution of the shareholders at the Annual
General Meeting or in the Articles of Incorporation.
The compensation provisions valid for the financial
year under report were resolved by shareholders at
the Annual General Meeting on 14 May 2013 and are
set out in Article 15 of BMW AG's Articles of Incor-
poration, which are available at → www.bmwgroup.com within
the section "Company" (menu items "Company
Portrait" and "Corporate Governance") as well as in
"BMW Group Download Centre”.
Compensation principles,
2. Supervisory Board compensation
Report
→ Compensation
Statement on
Corporate
Governance
236
2,298,405
235
² Member of the Board of Management since 1 October 2018.
'Service cost differs due to the different valuation bases used to measure pension obligations for HGB purposes (expected settlement amount) and for IFRS purposes
(present value of the performance-based pension obligation).
(1,018,857)
1,521,192
1,521,226
(1,020,053)
620,741
(359,521)
617,548
(355,840)
3 Disclosures for the previous year include amounts relating to a member of the Board of Management who left office with effect from the end of the financial year 2017.
* Member of the Board of Management until 24 July 2018.
compensation components
Share-based component of the individual members
The fixed and earnings-related components in combi-
nation are intended to ensure that the compensation of
Supervisory Board members is appropriate in relation
to the tasks of Supervisory Board members and the
Company's financial condition and also takes account
of the Company's performance over several years.
2017
Amount
Proportion in %
Amount
Proportion in %
2.0
35.7
2018
2.0
3.6
64.3
3.6
64.3
5.6
100.0
5.6
35.7
compensation or benefits from the BMW Group for
advisory or agency services personally rendered.
any further
Supervisory Board members did not receive
(354,117)
Report
In accordance with the Articles of Incorporation, each
member of BMW AG's Supervisory Board receives, in
addition to the reimbursement of reasonable expenses,
a fixed amount of €70,000, payable at the end of the
year, as well as earnings-related compensation of €170
for each full €0.01 by which the average amount of
(undiluted) earnings per share (EPS) of common stock
reported in the Group Financial Statements for the
remuneration year and the two preceding financial
years exceed a minimum amount of €2.00, pay-
able after the Annual General Meeting held in the
following year. An upper limit corresponding to
twice the amount of the fixed compensation is in
place for the earnings-related compensation. The
limit for a member of the Supervisory Board with
no additional compensation-relevant function is
therefore set at €140,000.
With fixed compensation elements and an earnings-
related compensation component oriented toward
sustainable growth, the compensation structure in
place for BMW AG's Supervisory Board complies with
the recommendation on supervisory board compensa-
tion contained in section 5.4.6 paragraph 2 sentence 2
of the German Corporate Governance Code, in the
version dated 7 February 2017.
The German Corporate Governance Code also recom-
mends in section 5.4.6 paragraph 1 sentence 2 that
the exercising of chair and deputy chair positions in
the Supervisory Board as well the chair and member-
ship of committees should also be considered in the
compensation.
Accordingly, the Articles of Incorporation of BMW AG
stipulate that the Chairman of the Supervisory Board
shall receive three times the amount and each Deputy
Chairman shall receive twice the amount of the remu-
neration of a Supervisory Board member. Each chairman
of the Supervisory Board's committees receives twice
the amount and each member of a committee receives
one-and-a-half times the amount of the remuneration of
a Supervisory Board member, provided the relevant
committee convened for meetings on at least three
days during the financial year. If a member of the
Supervisory Board exercises more than one of the
functions referred to above, the compensation is
measured only on the basis of the function that is
remunerated with the highest amount.
In addition, each member of the Supervisory Board
receives an attendance fee of €2,000 for each full
meeting of the Supervisory Board (Plenum) which
the member has attended, payable at the end of the
financial year. Attendance at more than one meeting
on the same day is not remunerated separately.
The Company also reimburses to each member of the
Supervisory Board reasonable expenses and any value-
added tax arising on the member's remuneration. The
amounts disclosed below are net amounts.
In order to perform his duties, the Chairman of the
Supervisory Board has the use of an office, with
administrative support, as well as access to the BMW
car service.
Total compensation of the Supervisory Board for the
financial year 2018
In accordance with Article 15 of the Articles of Incor-
poration, the compensation of the Supervisory Board
for activities during the financial year 2018 totalled
€5.6 million (2017: €5.6 million). This includes fixed
compensation of €2.0 million (2017: €2.0 million)
and variable compensation of €3.6 million (2017:
€3.6 million). The earnings-related compensation for
the financial year 2018 was capped at the maximum
amount stipulated in the Articles of Incorporation.
237
in € million
Fixed compensation
Variable compensation
Total compensation
The Supervisory Board of BMW AG receives a fixed
compensation component as well as an earnings-related
compensation component, which is oriented toward
sustainable growth. The earnings-related component
is based on average earnings per share of common
stock for the remuneration year and the two preceding
financial years.
2,188,159
Defined Benefit
Obligation HGB
356,382
(41,001)
(43,131)
-19,0974
254,591
(162,436)
(273,688)
23,661
23,661
(-)
(-)
51,812
80,987
(29,175)
(29,175)
32,264
354,125
(186,278)
(382,640)
1,632
1,632
(-)
29,002
222,771
121,745
(122,484)
78,614
(63,120)
of the Board of Management for the
financial year 2018 (2017)¹
in €
Harald Krüger
Milagros Caiña Carreiro-Andree
Markus Duesmann³
Klaus Fröhlich
Pieter Nota
Nicolas Peter
Peter Schwarzenbauer
Andreas Wendt5
Oliver Zipse
Total6
Expense in 2018
in accordance with
HGB and IFRS
Provision at
31.12.2018 in
accordance with
HGB and IFRS2
30,821
458,341
(54,038)
(515,677)
46,218
268,257
(303,169)
2,188,161
(193,769)
1,786,110
2,660,630
2,660,630
(353,136)
(356,949)
(2,373,842)
(2,373,842)
Pieter Nota
350,000
350,000
350,276
350,041
(-)
Nicolas Peter
353,119
356,382
2,004,567
2,004,567
(350,000)
(350,000)
(1,757,459)
(1,757,454)
Peter Schwarzenbauer
353,119
356,382
274,927
353,119
(2,346,906)
(800,435)
(2,215,688)
1 The share-based remuneration component (matching component) for the financial year 2017 was calculated in accordance with the compensation system applicable for that year.
Provisional number or provisional monetary value calculated on the basis of the closing price of BMW common stock in the Xetra trading system on 28 December 2018 (€70.70) (fair value at reporting date).
3 Member of the Board of Management until 24 July 2018.
4 Amount based on the revaluation of share price at balance sheet date.
5 Member of the Board of Management since 1 October 2018.
* Disclosures for the previous year include amounts relating to a member of the Board of Management who left office with effect from the end of the financial year 2017.
Pension entitlements
in €
100.0
Service cost in
accordance with
IFRS for the
Service cost in
accordance with
HGB for the
financial year 2018' financial year 2018¹
Defined Benefit
Obligation IFRS
Harald Krüger
Milagros Caiña Carreiro-Andree
504,831
(505,281)
354,224
(355,527)
509,486 5,753,913
(510,702) (5,558,607)
357,468
(359,275) (2,347,166)
(5,558,200)
2,561,031
2,560,943
Klaus Fröhlich
238
(220,000)
Governance
140,000
220,000
(70,000)
(10,000)
(140,000)
(220,000)
Willibald Löw¹
70,000
10,000
140,000
220,000
(70,000)
(10,000)
(140,000)
(220,000)
Simone Menne
70,000
8,000
140,000
218,000
(70,000)
(8,000)
(140,000)
10,000
(218,000)
70,000
(218,000)
140,000
218,000
(70,000)
(10,000)
(140,000)
(220,000)
Renate Köcher
70,000
10,000
140,000
220,000
(70,000)
(10,000)
(140,000)
(220,000)
Robert W. Lane³
26,532
2,000
53,065
81,597
(70,000)
(8,000)
(140,000)
Horst Lischka¹
8,000
Dominique Mohabeer¹
10,000
140,000
220,000
(70,000)
(10,000)
(140,000)
(220,000)
Total5
1,820,188
188,000
3,620,377
5,628,565
(1,820,188)
(188,000)
(3,610,156)
(5,618,344)
1 These employee representatives have - in line with the guidelines of the Deutscher Gewerkschaftsbund - requested that their remuneration be paid into the Hans Böckler-Stiftung.
2 Member of the Supervisory Board since 17 May 2018.
3 Member of the Supervisory Board until 17 May 2018.
* Due to the requirements of his employer, Prof. Dr. Hüttl has waived his Supervisory Board compensation until further notice, to the extent that such compensation exceeds the amount of €200,000
(excluding value added tax) p.a.
5 Disclosures for the previous year include amounts relating to a member of the Supervisory Board who left office during the financial year 2017.
3. Other
Apart from vehicle lease and financing contracts
entered into on customary market conditions, no
advances or loans were granted to members of the
Board of Management and the Supervisory Board by
BMW AG or its subsidiaries, nor were any contingent
liabilities entered into on their behalf.
10,000
70,000
70,000
(218,000)
140,000
220,000
(70,000)
(10,000)
(140,000)
(220,000)
Brigitte Rödig¹
70,000
10,000
140,000
220,000
(70,000)
(10,000)
(140,000)
(220,000)
Jürgen Wechsler¹
70,000
8,000
140,000
218,000
(70,000)
(8,000)
(140,000)
Werner Zierer¹
Statement on
Corporate
70,000
(189,780)
(430,000)
Stefan Quandt (Deputy Chairman)
140,000
10,000
280,000
430,000
(140,000)
(10,000)
(280,000)
(430,000)
Stefan Schmid (Deputy Chairman)¹
140,000
8,000
280,000
428,000
(140,000)
(10,000)
(280,000)
(430,000)
Karl-Ludwig Kley (Deputy Chairman)
140,000
10,000
280,000
(280,000)
430,000
(10,000)
430,000
→Compensation
Report
→ Responsibility
Statement by the
Company's Legal
Representatives
Compensation of the individual members of the Supervisory Board for the financial year 2018 (2017)
Fixed
Variable
in €
compensation
Attendance fee
compensation
Total
Norbert Reithofer (Chairman)
210,000
10,000
420,000
640,000
(210,000)
(10,000)
(420,000)
(640,000)
Manfred Schoch (Deputy Chairman)¹
140,000
10,000
280,000
(140,000)
Susanne Klatten
(140,000)
(280,000)
10,000
140,000
220,000
(70,000)
(10,000)
(140,000)
Heinrich Hiesinger
70,000
10,000
140,000
220,000
(44,785)
(6,000)
(89,570)
(140,355)
Reinhard Hüttl
70,000
10,000
120,0004
200,000
(70,000)
(10,000)
(109,780)
70,000
(10,000)
Ralf Hattler
(140,000)
(430,000)
Christiane Benner¹
70,000
8,000
140,000
218,000
(70,000)
(6,000)
(140,000)
(216,000)
Kurt Bock2
43,656
8,000
87,312
138,968
(-)
Franz Haniel
70,000
8,000
140,000
218,000
(70,000)
(10,000)
(220,000)
→ Compensation
5,753,776
234
34.2
7.7
19.1
15.0
62.5
31.7
78.7
Share-based compensation component*
0.8
3.3
0.9
2.2
Total compensation
24.0
100.0
40.3
100.0
*Matching component; provisional number or provisional monetary value calculated at grant date (date on which the entitlement became binding in law). The final number of matching shares is determined in
each case when the requirement to invest in BMW AG common stock has been fulfilled.
232
8.2
Statement on
Corporate
Governance
Variable cash compensation
Proportion in %
The annual contribution paid by the Company is
€350,000 for a Board member and €500,000 for the
Chairman of the Board of Management. The guaran-
teed minimum rate of return p.a. corresponds to the
maximum interest rate used to calculate insurance
reserves for life insurance policies (guaranteed interest
on life insurance policies). When granting pension
entitlements, the Supervisory Board considers the
targeted level of pension provision in each case as well
as the resulting expense for the BMW Group.
Contributions falling due under the defined con-
tribution model are paid into an external fund in
conjunction with a trust model that is also used to
fund pension obligations to employees.
Income earned on an employed or a self-employed
basis
up to the age of 63 may be offset against instal-
ment payments. In addition, certain circumstances
have been specified, in the event of which the Com-
pany no longer has any obligation to pay benefits.
Transitional payments are not provided.
In the event of the death of a member of the Board
of Management during the service contract term,
the base remuneration for the month of death and a
maximum of three further calendar months are paid
to entitled surviving dependants.
Board of Management members who retire imme-
diately after their service on the Board are entitled
to acquire vehicles and other BMW Group products
and services at conditions that also apply to BMW
pensioners and to lease BMW Group vehicles in
accordance with the guidelines applicable to senior
heads of departments. Retired Chairmen of the Board
of Management are entitled to use a BMW Group
vehicle as a company car on a similar basis to senior
heads of departments, and depending on availability
and against payment, use BMW chauffeur services.
Termination benefits on premature termination of
Board activities, benefits paid by third parties
Mr Duesmann left the Board of Management Board
at the end of 24 July 2018 and was released from his
duties for the remaining term of his service contract
(until the end of 30 September 2019), with remunera-
tion continuing to be paid until that date. For the
period from 25 July 2018 to 31 December 2018, he
received a base remuneration of €0.348 million and
other remuneration of €0.015 million. The bonus for
this period amounts to €0.324 million, the proportion-
ate cash remuneration component of the share-based
remuneration programme (investment component)
amounts to €0.146 million. The proportionate share-
based remuneration component of the share-based
remuneration programme (matching component)
has a provisional monetary value of €0.025 million;
the provisional number of matching shares is 295
(calculated in each case at the grant date). The final
number of matching shares is determined when the
requirement to invest in BMW AG common stock has
been fulfilled. The Company paid a proportionate pen-
sion contribution of €0.152 million. The base remu-
neration from 1 January 2019 to 30 September 2019
amounts to €0.6 million. The pension contribution for
this period amounts to €0.263 million. The expense
for these and other entitlements relating to the service 7
contract for the financial years 2019 and 2020 amounts
to €3.0 million.
In accordance with the recommendation of the German
Corporate Governance Code, Board of Management
service contracts provide for severance pay to be paid
to the Board member in the event of premature ter-
mination by the Company without important reason,
the amount of which is limited to a maximum of two
years' compensation (severance payment cap). If the
remaining term of the contract is less than two years,
the severance payment is reduced proportionately.
For these purposes, annual compensation comprises
the basic remuneration, the target bonus amount and
the target PCP amount for the last full financial year
before termination.
No commitments or agreements exist for payment of
compensation in the event of early termination of a
Board member's mandate due to a change of control or
a takeover offer. No members of the Board of Manage-
ment received any payments or relevant commitment
from third parties in 2018 on account of their activities
as members of the Board of Management.
Remuneration caps
The Supervisory Board has stipulated upper limits
for all variable remuneration components and for the
remuneration of Board of Management members in
total. The upper limits are shown in the table Over-
view of compensation system and compensation
components. The overall upper limits (caps) have not
changed in conjunction with the revised compensa-
tion system for financial years from 2018 onwards.
Total compensation of the Board of Management for
the financial year 2018 (2017)
The total compensation of the current members of the
Board of Management of BMW AG for the financial
year 2018 amounted to €24.0 million (2017: €40.3 mil-
lion), of which €8.2 million (2017: €7.7 million) relates
to fixed components including other remuneration.
Variable components amounted to €15.0 million (2017:
€31.7 million) and the share-based remuneration com-
ponent amounted to €0.8 million (2017: €0.9 million).
2018
2017
in € million
Amount
Proportion in %
Amount
Fixed compensation
In the case of death or invalidity, a minimum benefit
is payable based on the number of contributions
possible up to the age of 60 (subject to maximum of
ten contributions).
→ Compensation
Compensation of the individual members
of the Board of Management for the
(5,566,500)
(1,113,276)
(6,679,776)
Milagros Caiña Carreiro-Andree
950,000
74,964
1,024,964
1,296,000
583,200
1,879,200
(900,000)
(75,775)
(975,775)
(3,247,125)
(649,440)
(3,896,565)
Markus Duesmann5
451,613
41,039
(1,521,464)
Report
(21,464)
3,382,560
financial year 2018 (2017)¹
Fixed compensation
in € or
number of matching shares
Base salary
Other
compensation
Total
Bonus
Variable cash compensation
Share-based
compensation
component (invest-
ment component)
Performance
Cash Plan
2018-2020²
Total
Harald Krüger
1,800,000
22,392
1,822,392
2,332,800
1,049,760
(1,500,000)
492,652
depending on their age and education - are entitled
to receive benefits as surviving dependants.
The amount of the benefits to be paid is determined
on the basis of the amount accrued in each Board
member's individual pension savings account. The
amount on this account results from annual contri-
butions paid in, plus interest earned depending on
the type of investment.
and Group post-tax return on sale
Earnings factor for each year may not exceed 1.8
Average for evaluation period calculated
Determined by Supervisory Board at end of evaluation period
Criteria include in particular the trend in business development during the evaluation
period, the forecast trend in business development, individual contribution to profitability
and the status of compliance within the Board member's area of responsibility
Multi-year performance factor can be between 0.9 and 1.1
Requirement for Board of Management members to invest an amount of 45% of the
gross bonus after tax and contributions in BMW AG common stock
Requirement for Board of Management members to hold the acquired shares of common
stock for four years
Earmarked cash remuneration amounting to 45% of the gross bonus
Cash remuneration p.a. at 100% target achievement of the bonus:
€0.3825 million (1st period of office)
€0.45 million (from 2nd period of office or 4th year of mandate)
€0.81 million (Chairman of the Board of Management)
Maximum remuneration, see section Remuneration caps
Once the four-year holding period requirement is fulfilled, Board of Management mem-
bers receive for each three common stock shares held either - at the Company's option -
one further share of common stock or the equivalent amount in cash
Maximum remuneration, see section Remuneration caps
OTHER REMUNERATION
Contractual agreement, main points: non-cash benefits from use of Company car, insurance
premiums, contributions towards security systems
Earnings factor for each year of three-year evaluation period derived from Group net profit
229
PCP factor may not exceed 1.8
Formula: PCP factor xtarget amount
Statement on
Corporate
Governance
Component
Parameter/measurement base
VARIABLE REMUNERATION
Performance Cash Plan
a) Multi-year earnings factor
b) Multi-year performance factor
Share-based remuneration programme
a) Cash remuneration component
(investment component)
b) Share-based remuneration component
(matching component)
Target amount p.a. (at 100% target achievement):
-
| | | |
-
| ||
-
€0.85 million (1st period of office)
€0.95 million (from 2nd period of office or 4th year of mandate)
€1.6 million (Chairman of the Board of Management)
3-year evaluation period
Capped at 180% of target amount, see section Remuneration caps
PCP factor: multi-year earnings factor x multi-year performance factor
If a member of the Board of Management with a vested
entitlement dies prior to the commencement of benefit
payments, a surviving spouse or registered partner,
or otherwise surviving children - in the latter case
230
→ Compensation
1,530,000
1,530,000
688,500
344,500
4,925,000
1,800,000
1,710,000
810,000
405,000
5,500,000
3,240,000
2,880,000
1,458,000
729,000
9,850,000
*Including base salary, other fixed remuneration elements and pension contribution. The overall cap is lower than the sum of the maximum amounts for each of the individual components.
Retirement benefits
With effect from 1 January 2010, the provision of retire-
ment benefits for members of the Board of Management
was changed to a defined contribution system with
a guaranteed minimum return. Retirement benefits
remain unchanged as part of the new compensation
system applicable for financial years from 2018 onwards,
as they are appropriate and in line with customary
market practice.
If a mandate is terminated, the defined contribution
system provides, in the case of death or invalidity, for
amounts accumulated on individual pension accounts
to be paid out as a one-off amount or in instalments.
Former members of the Board of Management are
entitled to receive the retirement benefit at the earliest
upon reaching the age of 60, or in the case of entitle-
ments awarded after 1 January 2012, upon reaching
the age of 62.
Total*
Statement on
Corporate
Governance
of matching
component
Share-based compensation programme
Report
Overview of compensation system and compensation
components onwards
RETIREMENT AND SURVIVING DEPENDANTS' BENEFITS
Model
Defined contribution system with guaranteed minimum rate of return
Principal features
Pension based on amounts credited to individual savings accounts for contributions paid
and interest earned, various forms of disbursement
Pension contributions p. a.:
Member of the Board of Management: €350,000
Chairman of the Board of Management: €500,000
REMUNERATION CAPS (MAXIMUM REMUNERATION)
in € p.a.
Member of the Board of Management
in the first period of office
Member of the Board of Management
in the second period of office or from fourth year of mandate
Chairman of the Board of Management
Bonus
Performance
Cash Plan
Cash compen-
sation for share
acquisition
Monetary value
420,338
231
609,490
(8,295,070)
1,181
102,038
3,006,202
2,985,294
(1,263)
(113,645)
(4,985,985)
(4,915,446)
383
33,091
1,135,233
1,102,142
(1,083)
(97,448)
(4,289,829)
(4,192,381)
1,100
95,040
(8,382,730)
2,988,273
(181,490)
5,376,110
2 New variable remuneration components from the financial year 2018. Payment to be made for the first time after the end of the first three-year evaluation period 2018 to 2020.
3 Provisional number or provisional monetary value calculated at grant date (date on which the entitlement became binding in law). The final number of matching shares is determined in each case when the
requirement to invest in BMW AG common stock has been fulfilled. See note 41 to the Group Financial Statements for a description of the accounting treatment of the share-based remuneration component.
4 Value of benefits granted for work performed on the Board of Management during the financial year 2018 plus the amount falling due for payment in conjunction with a share-based remuneration component
granted in a previous year and for which the holding period requirements were met.
5 Member of the Board of Management until 24 July 2018.
6 Member of the Board of Management since 1 October 2018.
7 Disclosures for the previous year include amounts relating to a member of the Board of Management who left office with effect from the end of the financial year 2017.
For financial years from 2018 onwards, a new variable
compensation component was introduced in the form
of the Performance Cash Plan. The PCP is paid out
after the end of the relevant three-year evaluation
period. In the case of PCP for the financial year 2018,
this covers the financial years 2018 to 2020. Due to
the fact that the criteria for the evaluation period 2018
to 2020 have not yet been fully met, it is not included
in variable compensation for the financial year 2018.
The expense of the PCP for the financial year 2018
recognised in accordance with IAS 19 amounted to
€5.3 million.
An expense of €3.4 million (2017: €3.1 million) was
recognised in the financial year 2018 for current mem-
bers of the Board of Management for the period after
the end of their service relationship. This relates to
the expense for allocations to pension provisions in
accordance with IAS 19.
Total benefits paid to former members of the Board of
Management and their surviving dependants for the
financial year 2018 amounted to €9.2 million (2017:
€6.7 million). This includes the above-mentioned
payments to Mr Duesmann.
Pension obligations to former members of the Board
of Management and their surviving dependants
are covered by pension provisions amounting to
€91.0 million (2017: €90.1 million), recognised in
accordance with IAS 19.
Share-based
compensation component
(matching component)³
Compensation
Total
Total value of
benefits allocated
in financial year¹
Number
Monetary value
1,981
(2,017)
171,158
5,293,109
1 Remuneration for the financial year 2017 was paid in accordance with the compensation system applicable for that year, at which stage arrangements for base remuneration, variable remuneration and target
amounts were structured differently.
2,893,233
(90,700) (4,246,471)
(4,837,519)
634,004
612,359
(-)
1,045
(1,008)
9,087
(9,913)
189,152
2,710,234
(4,115,640)
Harald Krüger
Milagros Caiña Carreiro-Andree
Markus Duesmann5
Klaus Fröhlich
Pieter Nota
Nicolas Peter
Peter Schwarzenbauer
Andreas Wendt6
Oliver Zipse
Total7
233
2,941,756
(1,008)
2,983,015
(4,951,164)
277
(4,155,771)
1,004
86,746
2,574,435
2,487,689
(-)
(-)
(-)
(-)
935
80,784
2,516,716
2,435,932
(1,008)
(90,700)
(4,272,838) (4,182,138)
1,181
102,038
(1,263)
(113,645)
21,645
(31,729,048)
90,288 2,800,522
(90,700) (4,206,340)
782,828 24,014,510 23,461,748
(891,973) (40,262,725) (39,608,356)
(3,339,888)
495,720
1,597,320
(-)
(-)
(-)
(-)
(-)
Nicolas Peter
800,000
38,612
838,612
1,101,600
495,720
(750,000)
(92,250)
(842,250)
(2,783,250)
(556,638)
1,597,320
(3,339,888)
1,101,600
890,369
90,369
800,000
15,008,860
(750,000)
(102,468)
(852,468)
(2,783,250)
(556,663)
(3,339,913)
Klaus Fröhlich
64,033
Peter Schwarzenbauer
1,014,033
583,200
1,879,200
(750,000)
(65,883)
(815,883)
(2,783,250)
(556,638)
(3,339,888)
Pieter Nota
1,296,000
950,000
950,000
1,001,777
1,231,200
554,040
(750,000)
(25,752)
(775,752)
(2,783,250)
(556,638)
Total'
924,994
7,801,613
(7,200,000)
(441,704)
10,350,938
4,657,922
(26,440,875)
51,777
(5,288,173)
1,785,240
421,209
24,994
8,222,822
(7,641,704)
Oliver Zipse
583,200
900,000
(900,000)
(40,954)
(3,247,125)
(649,440)
(-)
(3,896,565)
Andreas Wendt6
(940,954)
1,296,000
(-)
(-)
200,000
399,330
123,930
1,879,200
275,400
213,029
13,029
evaluate the consistency of the group manage-
ment report with the consolidated financial
statements, its conformity with [German] law,
and the view of the Group's position it provides.
- perform audit procedures on the prospective in-
formation presented by management in the
group management report. On the basis of suf-
ficient appropriate audit evidence we evaluate,
in particular, the significant assumptions used
by management as a basis for the prospective
information, and evaluate the proper derivation
of the prospective information from these as-
sumptions. We do not express a separate opin-
ion on the prospective information and on the
assumptions used as a basis. There is a substan-
tial unavoidable risk that future events will dif-
fer materially from the prospective information.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal con-
trol that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with the relevant
independence requirements, and communicate with
them all relationships and other matters that may
reasonably be thought to bear on our independence,
and where applicable, the related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the consoli-
dated financial statements of the current period and
are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation
precludes public disclosure about the matter.
245
246
Munich, 27 February 2019
Statement on
Corporate
Governance
→ Independent
Auditor's Report
Other Legal and Regulatory
Requirements
The German Public Auditor responsible for the
engagement is Mr Andreas Feege.
We were elected as group auditor for the financial year
from 1 January to 31 December 2018 at the annual
general meeting on 17 May 2018. We were engaged
by the Audit Committee of the Supervisory Board
on 7 June 2018. Taking into account the transitional
provisions of Article 41 (2) of the EU Audit Regula-
tion, we have been the group auditor of Bayerische
Motoren Werke Aktiengesellschaft for more than 30
consecutive years.
We declare that the opinions expressed in this audi-
tor's report are consistent with the additional report
to the Audit Committee pursuant to Article 11 of the
EU Audit Regulation (long-form audit report).
German Public Auditor Responsible
for the Engagement
Further Information pursuant to Article 10 of the
EU Audit Regulation
Our objectives are to obtain reasonable assurance
about whether the consolidated financial statements
as a whole are free from material misstatement,
whether due to fraud or error, and whether the
group management report as a whole provides an
appropriate view of the Group's position and, in all
material respects, is consistent with the consolidated
financial statements and the knowledge obtained in
the audit, complies with the German legal require-
ments and appropriately presents the opportunities
and risks of future development, as well as to issue
an auditor's report that includes our opinions on the
consolidated financial statements and on the group
management report.
evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the con-
solidated financial statements present the under-
lying transactions and events in a manner that
the consolidated financial statements give a true
and fair view of the assets, liabilities, financial
position and financial performance of the Group
in compliance with IFRSS as adopted by the EU
and the additional requirements of German com-
mercial law pursuant to Section 315e (1) HGB.
243
244
Statement on
Corporate
Governance
KPMG AG
→ Independent
Auditor's Report
Responsibilities of Management and the
Supervisory Board for the Consolidated Financial
Statements and the Group Management Report
Management is responsible for the preparation of
consolidated financial statements that comply, in
all material respects, with IFRSS as adopted by the
EU and the additional requirements of German
commercial law pursuant to Section 315e (1) HGB
and that the consolidated financial statements, in
compliance with these requirements, give a true and
fair view of the assets, liabilities, financial position,
and financial performance of the Group. In addition,
management is responsible for such internal control
as they have determined necessary to enable the
preparation of consolidated financial statements
that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidated financial statements,
management is responsible for assessing the Group's
ability to continue as a going concern. They also
have the responsibility for disclosing, as applicable,
matters related to going concern. In addition, they
are responsible for financial reporting based on the
going concern basis of accounting unless there is an
intention to liquidate the Group or to cease operations,
or there is no realistic alternative but to do so.
Furthermore, management is responsible for the
preparation of the group management report that,
as a whole, provides an appropriate view of the
Group's position and is, in all material respects, con-
sistent with the consolidated financial statements,
complies with German legal requirements, and
appropriately presents the opportunities and risks
of future development. In addition, management is
responsible for such arrangements and measures
(systems) as they have considered necessary to ena-
ble the preparation of a group management report
that is in accordance with the applicable German
legal requirements, and to be able to provide suffi-
cient appropriate evidence for the assertions in the
group management report.
The Supervisory Board is responsible for overseeing
the Group's financial reporting process for the prepa-
ration of the consolidated financial statements and of
the group management report.
Auditor's Responsibilities for the Audit of the
Consolidated Financial Statements and of the
Group Management Report
Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in
accordance with Section 317 HGB and the EU Audit
Regulation and in compliance with German Generally
Accepted Standards for Financial Statement Audits
promulgated by the Institut der Wirtschaftsprüfer
(IDW) will always detect a material misstatement.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these consolidated financial statements and this group
management report.
We exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
identify and assess the risks of material misstate-
ment of the consolidated financial statements
and of the group management report, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropri-
ate to provide a basis for our opinions. The risk
of not detecting a material misstatement result-
ing from fraud is higher than for one resulting
from error, as fraud may involve collusion, for-
gery, intentional omissions, misrepresentations,
or the override of internal controls.
obtain an understanding of internal control
relevant to the audit of the consolidated finan-
cial statements and of arrangements and meas-
ures (systems) relevant to the audit of the group
management report in order to design audit
procedures that are appropriate in the circum-
stances, but not for the purpose of expressing
an opinion on the effectiveness of these systems.
evaluate the appropriateness of accounting poli-
cies used by management and the reason-
ableness of estimates made by management and
related disclosures.
conclude on the appropriateness of manage-
ment's use of the going concern basis of account-
ing and, based on the audit evidence obtained,
whether a material uncertainty exists related to
events or conditions that may cast significant
doubt on the Group's ability to continue as a go-
ing concern. If we conclude that a material un-
certainty exists, we are required to draw attention
in the auditor's report to the related disclosures
in the consolidated financial statements and in
the group management report or, if such disclo-
sures are inadequate, to modify our respective
opinions. Our conclusions are based on the au-
dit evidence obtained up to the date of our audi-
tor's report. However, future events or condi-
tions may cause the Group to cease to be able to
continue as a going concern.
obtain sufficient appropriate audit evidence re-
garding the financial information of the entities
or business activities within the Group to express
opinions on the consolidated financial state-
ments and on the group management report. We
are responsible for the direction, supervision
and performance of the group audit. We remain
solely responsible for our opinions.
Wirtschaftsprüfungsgesellschaft
Index of Graphs
Wirtschaftsprüfer
→ BMW Group
Ten-year
Comparison
BMW GROUP
TEN-YEAR COMPARISON
DELIVERIES
Automobiles
Motorcycles²
Other
Information
PRODUCTION VOLUME
Motorcycles²
2018
20171
2016
otherwise appears to be materially misstated.
units
units
2015
Automobiles
Sailer
248
Index
[German Public Auditor]
Feege
Wirtschaftsprüfer
[German Public Auditor]
OTHER
INFORMATION
→Page 248 BMW Group Ten-year Comparison
→Page 250 Glossary - Explanation of Key Figures
→Page 252 Index
Statement pursuant to § 117 No. 1 of the
Securities Trading Act (WpHG) in conjunction
with § 297 (2) sentence 4 and § 315 (1) sentence
5 of the German Commercial Code (HGB)
"To the best of our knowledge, and in accordance with
the applicable reporting principles, the Consolidated
Financial Statements give a true and fair view of the
assets, liabilities, financial position and profit of the
Group, and the Group Management Report includes
a fair review of the development and performance of
the business and the position of the Group, together
with a description of the principal opportunities and
risks associated with the expected development of
the Group."
→ Page 254 Index of Graphs
→Page 256 Contacts
5
5
Other
Information
Ten-year
Comparison
Glossary-
Explanation
of Key Figures
→ Page 255 Financial Calendar
is materially inconsistent with the consolidated
financial statements, with the group manage-
ment report or our knowledge obtained in the
audit, or
The estimation of future residual values is subject to
judgement and is complex due to the large number
of assumptions to be made and the amount of data
incorporated in the determination. For the residual
value forecasts, BMW Group uses internally avail-
able data on historical values, current market data
as well as forecasts from external market research
institutes.
Our opinions on the consolidated financial statements
and on the group management report do not cover
the other information, and consequently we do not
express an opinion or any other form of assurance
conclusion thereon.
We have audited the consolidated financial statements
of Bayerische Motoren Werke Aktiengesellschaft,
Munich, and its subsidiaries (the Group or BMW Group),
which comprise the consolidated balance sheet as
at 31 December 2018, and the consolidated income
statement, consolidated statement of comprehensive
income, consolidated statement of changes in equity
and consolidated statement of cash flows for the finan-
cial year from 1 January to 31 December 2018, and
notes to the consolidated financial statements, includ-
ing a summary of significant accounting policies. In
addition, we have audited the combined management
report of Bayerische Motoren Werke Aktiengesellschaft
(hereinafter referred to as the "group management
report”) for the financial year from 1 January to
31 December 2018. In accordance with German legal
requirements we have not audited the content of the
corporate governance statement which is included
in the section “Corporate Governance Statement
(Section 289f HGB)" of the group management report.
In our opinion, on the basis of the knowledge obtained
in the audit,
the accompanying consolidated financial state-
ments comply, in all material respects, with the
IFRSS as adopted by the EU, and the additional
requirements of German commercial law pursu-
ant to Section 315e (1) HGB [Handelsgesetz-
buch: German Commercial Code] and, in com-
pliance with these requirements, give a true
and fair view of the assets, liabilities, and finan-
cial position of the Group as at 31 December
2018, and of its financial performance for the
financial year from 1 January to 31 Decem-
ber 2018, and
the accompanying group management report as
a whole provides an appropriate view of the
Group's position. In all material respects, this
group management report is consistent with
the consolidated financial statements, complies
with German legal requirements and appro-
priately presents the opportunities and risks of
future development. Our opinion on the group
management report does not cover the content
of the corporate governance statement men-
tioned above.
Pursuant to Section 322 (3) sentence 1 HGB, we declare
that our audit has not led to any reservations relating
to the legal compliance of the consolidated financial
statements and of the group management report.
Basis for the Opinions
We conducted our audit of the consolidated financial
statements and of the group management report in
accordance with Section 317 HGB and EU Audit
Regulation No 537/2014 (referred to subsequently
as "EU Audit Regulation") and in compliance with
German Generally Accepted Standards for Financial
Statement Audits promulgated by the Institut der
Wirtschaftsprüfer (IDW) [Institute of Public Audi-
tors in Germany]. Our responsibilities under those
requirements and principles are further described
in the "Auditor's Responsibilities for the Audit of
the Consolidated Financial Statements and of the
Group Management Report" section of our auditor's
report. We are independent of the group entities in
accordance with the requirements of European law
and German commercial and professional law, and we
have fulfilled our other German professional respon-
sibilities in accordance with these requirements. In
addition, in accordance with Article 10 (2) (f) of
the EU Audit Regulation, we declare that we have
not provided non-audit services prohibited under
Article 5 (1) of the EU Audit Regulation. We believe
that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinions on the
consolidated financial statements and on the group
management report.
Opinions
Key Audit Matters in the Audit of the Consolidated
Financial Statements
Valuation of residual values of leased products
Please refer to note 4 "accounting policies as well as
assumptions, judgements and estimates" in the notes
to the consolidated financial statements, for "Leased
products" please refer to note 23.
The financial statement risk
BMW Group leases vehicles to end customers as part
of operating leases. As at the reporting date, the value
of leased products amounted to EUR 38,572 million.
The key estimated value for the purposes of subse-
quent measurement is the expected residual value
at the end of the lease term.
There is a risk for the financial statements that the
residual values expected for the end of the lease terms
are not appropriately assessed and the impairment
losses or reversal of impairment losses required for
the leased products are not recognised in sufficient
amounts.
Our audit approach
Key audit matters are those matters that, in our pro-
fessional judgement, were of most significance in our
audit of the consolidated financial statements for the
financial year from 1 January to 31 December 2018.
These matters were addressed in the context of our
audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, we do not
provide a separate opinion on these matters.
By means of inquiries, inspecting internal calcula-
tion methods and analysing the disposal proceeds
of vehicles, among other methods, we obtained an
understanding of the development of leased products,
the underlying residual value risks and business pro-
cesses for the identification, management, monitoring
and measurement of residual value risks.
Report on the Audit of the Consoli-
dated Financial Statements and of
the Group Management Report
AUDITOR'S REPORT
2,490,664 2,463,526 2,367,603 2,247,485
165,566 164,153 145,032 136,963
Munich, 19 February 2019
Bayerische Motoren Werke
Aktiengesellschaft
The Board of Management
Harald Krüger
Milagros Caiña Carreiro-Andree Klaus Fröhlich
Pieter Nota
To Bayerische Motoren Werke
Aktiengesellschaft, Munich
Dr. Nicolas Peter
Dr.-Ing. Andreas Wendt
Oliver Zipse
239
240
Statement on
Corporate
Governance
→ Independent
Auditor's Report
INDEPENDENT
Peter Schwarzenbauer
In connection with our audit, our responsibility is
to read the other information and, in so doing, to
consider whether the other information
We reviewed the appropriateness and effectiveness of
the internal control system, particularly in relation to
the determination of expected residual values. This
included the audit of the compliance of the relevant IT
systems as well as the interfaces implemented therein
by our IT specialists.
research institutes. We ensured the computational
accuracy of the forecast values by verifying key cal-
culation steps.
Please refer to note 4 "accounting policies as well as
assumptions, judgements and estimates" in the notes
to the consolidated financial statements, for "Other
provisions" please refer to note 33.
The financial statement risk
Provisions for statutory and non-statutory warranty
obligations and product guarantees are included in
the consolidated financial statements of BMW Group
as a significant component in ‘Other provisions'. The
provisions for statutory and non-statutory warranty
obligations and product guarantees amounted to
EUR 5,158 million as at 31 December 2018.
BMW Group is responsible for the legally prescribed
product liability and the warranty in the respective
sales market. Moreover, additional warranties are
granted to differing extents. In order to assess the
liabilities arising from warranty, guarantee and
goodwill for vehicles sold, information on the type
and volume of damages arising and on remedial
measures is recorded and evaluated at vehicle model
level. The expected amount of obligations arising
from warranty claims is extrapolated from costs of
the past and provided for. For specific or anticipated
individual circumstances, for example recalls, addi-
tional provisions are set aside provided they have not
already been taken into account. The determination of
provisions is associated with unavoidable estimation
uncertainties, is complex and is subject to a high
degree of risk of change, depending on factors such
as detected deficiencies becoming known and claims
made by vehicle owners.
There is a risk for the financial statements that the
valuation of provisions for statutory and non-statutory
warranty obligations and product guarantees is not
appropriate.
Our audit approach
In order to evaluate the appropriateness of the
valuation method used for the determination of the
provisions for statutory and non-statutory warranty
obligations and product guarantees including the
assumptions and parameters, through discussions
with the departments responsible, we primarily
obtained an understanding of the process for deter-
mining the assumptions and parameters. We audited
the appropriateness and effectiveness of controls to
determine the assumptions and parameters. With
the involvement of our IT specialists, we reviewed
the IT systems utilised to verify their appropriateness.
Valuation of provisions for statutory and non-statutory
warranty obligations and product guarantees
We compared the amount of provisions from the prior
year with expenses selected according to risk and
which actually arose for damage claims, as well as with
technical measures, in order to arrive at a conclusion
on the forecast accuracy.
Our observations
The method for the valuation of provisions for
statutory and non-statutory warranty obligations
and product guarantees is appropriate and has been
applied consistently. The measurement parameters
and assumptions applied are appropriate as a whole.
Other Information
Management is responsible for the other information.
The other information comprises:
-
the corporate governance statement and
the remaining parts of the annual report, with
the exception of the audited consolidated finan-
cial statements and group management report
and our auditor's report.
Based on a deliberate sample of vehicle models,
the computational accuracy of the valuation model
used across the Group including a tool for rate-
based planning was verified with the support of our
actuaries. The measurement parameters included
therein, such as cost components, were reconciled
with actual costs. We evaluated the assumptions
concerning the extent to which the historical values
are representative for the expected damage sus-
ceptibility, for the expected value of damage per
vehicle in terms of material and labour cost and for
the anticipated claim.
In addition, we evaluated the appropriateness of the
forecasting methods, the model assumptions as well
as the parameters used for the determination of the
residual values based on the validations carried out
by BMW Group. For this purpose, we inquired with
BMW Group's experts responsible for the management
and monitoring of residual value risks and inspected
the internal analysis on residual value developments
and residual value forecasts as well as the validation
results. Furthermore, we evaluated the processes
for processing external forecast values from market
The risk provisioning methodology, internal processes
and the assumptions and risk parameters used for the
determination of receivables from sales financing are
suitable for the early identification of credit risks and
determining impairment losses in accordance with the
applicable financial reporting standards.
A key component of our audit was to assess the
appropriateness of the risk classification procedures,
transfer between stages and the risk provisioning
parameters used, which are derived based on histori-
cal default probabilities and loss given default by
taking account of the anticipated effects of future
trends in relevant macroeconomic criteria. We also
analysed the validations of parameters that are reg-
ularly conducted. To assess the default risk, we also
used purposive sampling of individual cases to verify
that the attributes for assignment to the respective
risk categories were suitably available and the impair-
ment losses had been calculated using the parameters
defined for these risk categories. In addition we
assessed loans for correct risk classification based
on random samples.
Our observations
The methods and processes for determining the
expected residual values of the leased products under-
lying the valuation are appropriate. The assumptions
and parameters incorporated in the forecast model for
the residual value are appropriate as a whole.
Valuation of receivables from sales financing
Please refer to note 4 "accounting policies as well
as assumptions, judgements and estimates" in the
notes to the consolidated financial statements, for
"Receivables from sales financing" please refer to
note 25.
The financial statement risk
BMW Group offers end customers, dealerships and
importers various financing models for vehicles
and other assets. In this regard, current and non-
current receivables from sales financing totalling
EUR 86,783 million were recognised as at the reporting
date. Impairment losses amounting to EUR 1,032 mil-
lion were recognised on these receivables as at the
reporting date.
Impairment losses have been determined on the basis
of expected credit losses since financial year 2018.
This method takes into account probabilities of default
and loss given default, estimates of the amount receiv-
able in the event of default, setting criteria for the
transfer between stages for determining a significant
change in the default risk of borrowers, assumptions
on future cash flows and macroeconomic scenarios,
the determination of which is subject to considerable
judgement and estimation uncertainties in each case.
Our observations
There is a risk for the financial statements that the
creditworthiness of dealerships, importers and end
customers is assessed incorrectly, the risk provisioning
parameters are derived incorrectly and an impairment
loss required on receivables from sales financing is not
recognised or not recognised in a sufficient amount.
242
Statement on
Corporate
Governance
→ Independent
Auditor's Report
Our audit approach
By means of inquiries, inspecting internal calculation
methods and analysis, among other methods, we
obtained a comprehensive understanding of the
development of credit portfolios, the associated
counterparty-related risks and the business processes
for the identification, management, monitoring and
measurement of counterparty credit risks.
We also assessed the methodology for determining the
expected loss on a yearly basis or for the remaining
term to maturity, default rates and the credit expo-
sure in the event of default and for determining and
presenting the 'transfer between stages' of receivables
based on significant changes in the credit risk of a
borrower.
We also audited the appropriateness and effectiveness
of the internal control system in relation to the risk
classification procedures as well as the derivation of
the significant rise in credit risk from changes in risk
classification. In addition, we evaluated the relevant
IT systems and internal processes. The audit included
a review by our IT specialists of the appropriateness
of the systems concerned and associated interfaces to
ensure the completeness of data as well as the audit
of automated controls for data processing.
241
units
units
Financial Calendar
Contacts
2,505,741
185,682
25.1
24.8
€ million
79,983
69,634
73,183
63,819
€ million
70,909
71,765
67,989
65,591
€ million
208,980
195,506
27.7
188,535
27.8
42,764
61,831
€ million
5,029
4,688
3,731
3,826
%
5.2
4.8
4.0
4.2
€ million
58,088
54,107
47,363
%
172,174
CASH FLOW STATEMENT
Cash and cash equivalents at balance sheet date
2,541,534
162,687
134,682
101,178
129,932
100,760
124,729
99,575
122,244
97,136
€ million
€
2,303
3.504/3.524
2,630
4.00/4.02
2,300
3.50/3.52
2,102
3.20/3.22
3 Figures exclude dormant employment contracts, employees in the non-work phases of pre-retirement part-time arrangements and low wage earners.
4 Proposal by management.
€
² Excluding Husqvarna, deliveries up to 2013: 59,776 units; production up to 2013: 59,426 units.
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
Dividend per share of common stock/preferred stock
€ million
10,979
9,039
7,880
6,122
Free cash flow Automotive segment
€ million
66,864
2,713
5,792
5,404
PERSONNEL
Workforce at year-end³
Personnel cost per employee
DIVIDEND
Dividend total
4,459
73,542
RESPONSIBILITY
STATEMENT BY THE
COMPANY'S LEGAL
REPRESENTATIVES
€ million
19.0
20.3
19.9
19.7
Earnings before financial result
€ million
9,121
9,899
9,593
Earnings before tax
€ million
9,815
10,675
9,665
9,224
%
Gross profit margin
92,175
94,163
83,538
98,282
€ million
Revenues
INCOME STATEMENT
5,114,906 4,718,970
111,191
123,394
Return on sales (earnings before tax/revenues)
5,380,785
124,719
€ million
Business volume (based on balance sheet carrying amounts)
contracts
Contract portfolio
FINANCIAL SERVICES
2,359,756 2,279,503
145,555 151,004
97,480
5,235,207
133,210
%
9,386
10.9
6,396
10.1
Non-current assets
Current assets
Capital expenditure (excluding capitalised development costs)
Capital expenditure ratio (capital expenditure/revenues)
Equity
6,910
Equity ratio
Current provisions and liabilities
Balance sheet total
€ million
125,442
121,964
121,671
110,343
Non-current provisions and liabilities
8,675
BALANCE SHEET
€ million
10.3
10.0
Income taxes
€ million
7,207
2,000
2,755
2,828
Effective tax rate
%
2,575
18.7
28.5
30.7
Net profit for the year
26.2
→ 223 et seq.
Corporate Governance
Consolidated companies
Consolidation principles
Contingent liabilities
→ 28
→ 48 et seq.
Compliance → 218 et seq.
Connected Drive
CO2 fleet emissions → 4, 31 et seq., 46, 63 et seq., 88
Compensation Report
Capital expenditure 5, 67 et seq.
Cash and cash equivalents
Cash flow → 5, 71 et seq., 114 et seq.
C
Group tangible, intangible and investment
assets → 146 et seq.
Bonds →74, 164
→ 76
G
→ 129 et seq.
→ 54 et seq.
B
Balance sheet structure
→ 119 et seq.
→ 70 et seq., 114 et seq.
→ 119 et seq.
→ 201
→ 200 et seq.
Financial Services segment
→ 27,59
Dealer organisation/dealerships
Declaration with respect to the
Corporate Governance Code
Digitalisation → 28, 59 et seq.
Dividend → 22, 143 et seq.
D
List of investments → 190 et seq.
Locations → 34 et seq.
→ 148
→ 54 et seq.
Leased products
Lease business
→167
→23
L
Key data
K
Investments accounted for using the equity method
and other investments → 149 et seq.
Inventories → 76, 83, 153
Intangible assets → 123, 148
Income taxes → 67, 141 et seq., 161
→65, 81, 110 et seq., 139 et seq.
Income statement
Cost of materials → 78 et seq.
Cost of sales → 66, 139
per share
→ 67,81
ROCE in the Automotive and Motorcycles segments
is measured on the basis of relevant segment profit
before financial result and the average amount of
capital employed in the segment concerned. Capital
employed corresponds to the sum of all current and
non-current operational assets, less liabilities that do
not incur interest.
Financial reporting rules
Gross profit as a percentage of Group revenues.
Gross margin
A measure of the potential maximum loss in value of
an item during a set time period, based on a specified
probability.
Value at risk
Goodwill corresponds to the consideration paid to
acquire an entity, less the fair value of the separate
assets acquired and liabilities assumed. The buyer
is willing to pay the additional amount in return for
future expected earnings.
Goodwill
RoE in the Financial Services segment is calculated as
segment profit before taxes, divided by the average
amount of equity capital attributable to the Financial
Services segment.
Return on equity (ROE)
Dow Jones Sustainability Index World
Return on capital employed (ROCE)
A hedge against exposures to fluctuations in the fair
value of a balance sheet item.
Fair value hedge
The amount for which an asset could be exchanged,
or a liability settled, between knowledgeable, willing
parties in an arm's length transaction.
Fair value
total.
Equity capital as a percentage of the balance sheet
Equity ratio
The effective tax rate is calculated by dividing the
income tax expense by the Group profit before tax.
Effective tax rate
A hedge against exposures to the variability in fore-
casted cash flows, particularly in connection with
exchange rate fluctuations.
Cash flow hedge
Liquidity
Financial result
Cash and cash equivalents as well as marketable secu-
rities and investment funds.
Group net profit as a percentage of Group revenues.
→ 168 et seq.
→74, 77, 162 et seq.
Financial liabilities
Financial instruments
→ 76, 83, 152 et seq.
→ 122 et seq.
Automotive segment
Accounting policies
Apprentices → 61
A
Financial assets
F
INDEX
→ Index
Other
Information
252
251
Research and development expenditure ratio
Research and development expenditure as a percent-
age of Group revenues.
The sum of research and non-capitalised development
cost and capitalised development cost (not including
the associated scheduled amortisation).
Research and development expenditure
revenues.
Group profit/loss before tax as a percentage of Group
Pre-tax return on sales
Post-tax return on sales
E
→148
→ 29
BMW Group in figures
Finances
INDEX OF GRAPHS
Financial Calendar
↑ ↑
→ Index of Graphs
Other
Information
254
253
→166
→153
Trade receivables
Trade payables
→ 146 et seq.
Tangible, intangible and investment assets
T
→ 110, 145
→ 67,140
Sustainability → 30 et seq., 63 et seq.
Segment information → 184 et seq.
Selling and administrative expenses
Statement of Comprehensive Income
Stock → 20 et seq.
→ 4, 46 et seq., 48 et seq., 53, 88 et seq.
Sales volume
→ 6
S
Development of BMW AG stock
BMW Group value drivers → 36
Contract portfolio of Financial Services segment
2,117,965
123,495
2009
2010
2011
2012
2013
2014
→ 90
Risk management in the BMW Group
→ 79
→ 76
→ 74
→ 74
BMW Group composition financial liabilities
BMW Group financial liabilities by maturity
Balance sheet structure - Group → 76
Balance sheet structure - Automotive segment
BMW Group value added 2018
BMW Group change in cash and cash equivalents
→ 71
→ 55
→ 58
2018
Contract portfolio retail customer financing of
Financial Services segment 2018 → 55
Development of credit loss ratio
Regional mix of BMW Group purchase volumes
BMW Group new vehicles financed or leased by
Financial Services segment → 54
→ 54
→ 20,21
→ 5,37 et seq., 47, 88
ROE
ROCE → 5, 37 et seq., 46 et seq., 88
P
Outlook → 84 et seq.
Other provisions → 161
Other operating income and expenses
Other investments → 146 et seq.
→ 140
Other financial result
0
→ 71, 125
→ 53
Net profit 5,81
N
Marketable securities
Motorcycles segment
→ 203 et seq.
Mandates of members of the Supervisory Board
Mandates of members of the Board of Management
→ 202
M
→ 41 et seq., 86 et seq., 99, 121, 176 et seq.
→ 5, 37, 45 et seq., 88 et seq.
→ 63
→ 77, 154 et seq.
EBIT margin/return on sales
Efficient Dynamics
Employees 4, 45, 61 et seq., 87
Equity
Exchange rates
→ 140 et seq.
Pension provisions
Performance indicators
87 et seq.
→ 90 et seq.
Risks and opportunities
Revenues → 5, 45 et seq., 65 et seq., 68 et seq., 81, 139
→ 28 et seq., 57
→ 8 et seq.
Revenue reserves → 154
Report of the Supervisory Board
Research and development
Related party relationships → 180 et seq.
Remuneration system → 224 et seq.
Refinancing →73 et seq.
→ 151
Earnings per share → 5,143
Receivables from sales financing
R
revenues.
Property, plant and equipment
Purchasing → 58
Profit before tax → 5 et seq., 45, 65, 66, 87, 89
Production network → 32 et seq., 51 et seq.
Profit before financial result → 5 et seq., 67
→ 143
→ 4 et seq., 36 et seq., 45 et seq.,
77,83, 156 et seq.
Production → 51 et seq.
Personnel expenses
Rating → 22
Profit/loss before financial result as a percentage of
Information
Abbreviation for "Earnings Before Interest and Taxes",
equivalent in the BMW Group income statement to
"Profit/loss before financial result”.
210
3,243
4,907
5,111
5,329
5,817
49.2
33.1
33.5
34.5
97,959
32.5
203
1,610
2,476
2,692
2,564
2,890
0.8
8.0
10.7
10.2
33.2
86,193
81,305
74,425
30,606
35,600
37,437
4.7
3.8
4.0
5.4
6.5
5.7
2,383
2,312
2,720
4,151
4,967
4,601
39,944
43,151
49,004
50,530
52,184
56,844
62,009
67,013
10.4
10.8
413
4,853
75,245
80,974
84,347
96,390
Contract portfolio
3,085,946
3,190,353
3,592,093
3,846,364
4,130,002
4,359,572
FINANCIAL SERVICES
Motorcycles²
Automobiles
PRODUCTION VOLUME
Motorcycles²
Automobiles
DELIVERIES
1,258,417
82,631
1,481,253
99,236
1,738,160
110,360
2,006,366 1,861,826
110,127 113,811
2,165,566
133,615
66,233
27,103
61,202
INCOME STATEMENT
7,383
7,803
7,893
8,707
289
5,111
8,018
8,275
7,978
9,118
10.5
18.1
21.1
20.2
20.1
21.2
50,681
60,477
68,821
76,848
76,059
80,401
Revenues
Business volume (based on balance sheet carrying amounts)
EBIT margin
23,930
24.2
→ Glossary-
Explanation
Other
250
249
Dividend per share of common stock/preferred stock
DIVIDEND
Dividend total
Personnel cost per employee
Workforce at year-end³
PERSONNEL
Cash and cash equivalents at balance sheet date
Free cash flow Automotive segment
of Key Figures
CASH FLOW STATEMENT
Current provisions and liabilities
Non-current provisions and liabilities
Equity
Equity ratio
Capital expenditure ratio (capital expenditure/revenues)
Capital expenditure (excluding capitalised development costs)
BALANCE SHEET
Non-current assets
Current assets
Net profit for the year
Income taxes
Effective tax rate
Return on sales (earnings before tax/revenues)
Earnings before tax
Balance sheet total
-
GLOSSARY EXPLANATION
OF KEY FIGURES
Commercial paper
EBIT
Basic earnings per share are calculated for common
and preferred stock by dividing the net profit after
minority interests, as attributable to each category of
stock, by the average number of shares in circulation.
Earnings per share of preferred stock are computed
on the basis of the number of preferred stock shares
entitled to receive a dividend in each of the relevant
financial years.
Earnings per share (EPS)
Financial swap agreements, under which creditors of
securities (usually bonds) pay premiums to the seller
of the CDS to hedge against the risk that the issuer of
the bond will default. As with credit default insurance
agreements, the party receiving the premiums gives
a commitment to compensate the bond creditor in
the event of default.
Credit default swap (CDS)
Similar to "value at risk" (see definition below).
Cash flow at risk
Liquid funds generated (cash inflows) or used (cash
outflows) during a reporting period.
Cash flow
Capitalised development costs as a percentage of
research and development expenditure.
Capitalisation rate
revenues.
Investments in property, plant and equipment and
other intangible assets (excluding capitalised
development costs) as a percentage of Group
Capital expenditure ratio
The sum of the balance sheet line items “Leased prod-
ucts” and “Receivables from sales financing" (current
and non-current), as reported in the balance sheet for
the Financial Services segment.
Business volume in balance sheet terms
A securitised debt instrument in which the issuer
certifies its obligation to repay the nominal amount
at the end of a fixed term and to pay a fixed or variable
rate of interest.
Bond
The process of combining separate financial state-
ments of Group entities into Group Financial State-
ments, depicting the financial position, net assets
and results of operations of the Group as a single
economic entity.
Consolidation
A form of corporate financing involving the sale of
receivables to a financing company.
Asset-backed financing transactions
Short-term debt instruments with a term of less than
one year which are usually sold at a discount to their
face value.
Earnings before financial result
Gross profit margin
0.30/0.32
1.30/1.32
101,953
110,164
123,429
131,835
138,377
154,803
36,919
40,134
47,213
48,395
51,134
59,078
45,119
46,100
49,113
52,834
51,643
58,288
19.5
21.7
22.0
23.2
25.7
7,688
19,915
7,671
7,776
197
852
1,508
2.30/2.32
1,640
2.50/2.52
1,707
2.60/2.62
1,904
2.90/2.92
72,349
83,141
84,887
96,230
95,453
100,306
105,876
89,161
92,337
116,324
1,456
4,471
3,166
3,809
3,003
3,481
7,767
7,432
8,370
110,351
89,869
1,286,310
87,306
19 March 2020
255
Quarterly Report to 30 September 2020
4 November 2020
Quarterly Report to 30 June 2020
5 August 2020
Annual General Meeting
14 May 2020
Quarterly Report to 31 March 2020
6 May 2020
Analyst and Investor Conference
256
FSC® C002727
18 March 2020
Annual Report 2019
18 March 2020
2020
Quarterly Report to 30 September 2019
6 November 2019
Quarterly Report to 30 June 2019
1 August 2019
Annual General Meeting
16 May 2019
Annual Accounts Press Conference
Quarterly Report to 31 March 2019
Other
Information
CONTACTS
FSC
www.fsc.org
The corresponding CO₂ emissions were compensated by additional environmental and climate
protection measures as part of a reforestation project in collaboration with Bergwaldprojekt e. V.
(certificate number: DE-141-436949).
The BMW Annual Report was printed on paper produced in accordance with the international
FSC® Standard: the pulp is sourced from sustainably managed forests.
towards preserving resources
A further contribution
and → www.rolls-roycemotorcars.com
Information about the various BMW Group brands
is available at www.bmw.com, www.mini.com
at → www.bmwgroup.com/ir.
Investor Relations information is available directly
Further information about the BMW Group is
available online at www.bmwgroup.com.
→ Contacts
The BMW Group on the Internet
+49 89 382-1 46 61
E-mail
Fax
Telephone +49 89 382-2 53 87
Investor Relations
presse@bmwgroup.com
+49 89 382-2 44 18
Fax
E-mail
+49 89 382-2 41 18
Business and Finance Press
Telephone +49 89 382-2 45 44
ir@bmwgroup.com
MIX
7 May 2019
21 March 2019
BMW Group key automobile markets 2018
BMW Group deliveries of motorcycles → 53
BMW Group - key motorcycle markets 2018
-
BMW Group locations → 34 et seq.
Sales volume and locations
Analyst and Investor Conference
natureOffice.com | DE-141-436949
print production
This version of the Annual Report is a translation
from the German version. Only the original German
version is binding.
PUBLISHED BY
Bayerische Motoren Werke
Aktiengesellschaft
80788 Munich
Germany
Telephone +49 89 382-0
1,963,798 1,845,186 1,668,982 1,461,166
115,215 106,358 104,286
98,047
→ 48
→ 53
carbon neutral
BMW Group apprentices at 31 December
Employee attrition rate at BMW AG → 62
Proportion of female employees in management
functions at BMW AG/BMW Group → 62
Proportion of female executives within manage-
ment/function levels I and II at BMW AG
Annual Accounts Press Conference
20 March 2019
Workforce
FINANCIAL CALENDAR
Overview of compensation system of the Board
of Management: variable remuneration → 224
Overview of compensation system of the Board
of Management: cash benefits and pension
contribution → 224
→218
BMW Group Compliance Management System
2019
→ 42
→ 61
→ 41
→ 215
Further information
Paper from
responsible sources
→ 42
Oil price trend
Precious metals price trend
Steel price trend → 43
Exchange rates compared to the euro
Shareholders
To Our
3 Weighted average number of shares for the year.
19
19
Chairman of the Board of Management
Harald Krüger
H. 35"
Yours
We aim to ensure that your Company remains an attractive investment as we move towards
the future.
Above all, we are committed to focusing all our efforts on bringing the EBIT margin in the
Automotive segment back within our target range of 8 to 10 percent.
→ BMW AG Stock and
20
20
Capital Markets
→ 10
BMW AG development of stock
Negative impact on capital markets in 2018
At the beginning of the 2018 stock exchange year,
markets benefited initially from the prospect of robust
global growth and an easing of political tensions on
the Korean peninsula. Accordingly, the German stock
index (DAX) recorded an all-time high of 13,560 points
in January 2018. Subsequently, however, stock market
developments were negatively affected by the results
of parliamentary elections in Italy and the intensifi-
cation of the trade dispute between China and the
USA. Initial fears were confirmed at the beginning of
the third quarter when higher tariffs were introduced
in July on goods traded between China and the USA.
Uncertain prospects of a rapprochement in the trade
dispute caused prices to fluctuate more widely as
the year progressed, resulting in a generally volatile
market environment. Alongside the US-China trade
conflict, American import duties on steel and alumini-
um coming from the European Union (EU) also caused
uncertainty as from the end of the second quarter.
Moreover, there were discussions regarding a potential
increase in US import duties on European automobile
imports which had a dampening effect on stock mar-
kets. A meeting between US President Trump and
mobile
DAX
Prime
Auto-
BMW
BMW
preferred common
stock
stock
60
83.0
88.1
At the BMW Group, we continue to navigate our own course. Our aim remains to be both a
driving force and an innovator, able to lead individual mobility into a new era for our customers:
one that is sustainable, connected and autonomous.
100.0
110.5
in %
Development of BMW AG stock compared to
stock market indices since 30 December 2013
→ 09
Numerous political uncertainties unsettled capital mar-
kets over the course of 2018 and dampened the mood
on stock markets. In particular, global trade disputes
and political uncertainties in Europe dominated stock
market developments and negatively impacted investor
sentiment. Since the introduction of higher customs
tariffs on goods traded between China and the USA on
6 July 2018, the American-Chinese trade dispute had a
particularly negative effect on global stock exchanges
and therefore also on auto stocks worldwide.
→ www.bmwgroup.com/ir
Ratings remain at top level
BMW AG stock outperforms sector
Political uncertainties unsettle
capital markets
BMW AG STOCK
AND CAPITAL
MARKETS
IN 2018
in 2018
120
The current business and political environment remains complex and challenging, overshadowed
by uncertainty. That is not going to change any time soon. But we do not shy away from such
challenges. This is what spurs us to give our best and search for new and innovative solutions.
It also applies in our competition with both new and established companies.
Your Company is innovative, profitable and versatile. This year, the Board of Management
and Supervisory Board will propose a dividend of 3.50 euros per share of common stock and
3.52 euros per share of preferred stock. This is the second-highest dividend the company has
ever paid in its history. BMW AG associates in Germany will also benefit from the company's
positive performance through our profit-sharing programme.
Dear Shareholders,
Preferred stock
Common stock
Dividend
KEY DATA PER SHARE IN €
59.08
58.96
56.53
67.29
60.70
74.60
92.19
74.15
78.89
Earnings per share of common stock³
82.50
77.41
72.70
74.64
62.10
Low
High
Year-end closing price
Stock exchange price in €1
54,500
54,809
55,114
55,605
56,127
67.84
Earnings per share of preferred stock4
Free cash flow Automotive segment
Equity
1 Xetra closing prices.
72.08
82.305
88.26
5.30
8.23
8.81
6.78
4.12
8.85
9.72
10.47
13.095
10.84
8.83
9.70
10.45
13.075
10.82
2.92
3.22
3.52
4.02
3.522
2.90
3.20
3.50
4.00
3.50²
2 Proposed by management.
Number of shares in 1,000
Index: December 2013 = 100
PREFERRED STOCK
75.68
tion of IFRS 15,
see note 6 to the
Group Financial
Statements.
first-time applica-
adjusted due to
* Prior year figures 32.0% (2017: 30.3 %*).
The Board of Management and the Supervisory Board
are proposing to the Annual General Meeting to use
BMW AG's unappropriated profit of €2,303 million
(2017: €2,630 million) for the payment of a dividend
of €3.50 per share of common stock (2017: €4.00) and
a dividend of €3.52 per share of preferred stock (2017:
€4.02). The payout ratio for 2018 therefore stands at
Dividend below previous year
In this context, and with the approval of the Super-
visory Board, in 2018 the Board of Management
increased BMW AG's share capital by €521,500 from
€657,600,600 to €658,122,100 by issuing 521,500 new
non-voting shares of preferred stock. This increase
was implemented on the basis of Authorised Capital
2014 contained in Article 4 (5) of the Articles of Incor-
poration. The new shares of preferred stock carry the
same rights as existing shares of preferred stock. The
newly issued shares of preferred stock for employees
are entitled to receive dividends with effect from the
financial year 2019. In addition, 24 shares of preferred
stock were repurchased via the stock market or were
acquired as a result of cancelled employee purchases
relating to the previous year.
For more than 40 years, BMW AG has enabled its
employees to participate in its success. Since 1989,
this participation has taken the form of an Employee
Share Programme. In 2018, a total of 521,524 shares
of preferred stock were issued to employees under
the terms of this programme.
Employee Share Programme
The assessment of both rating agencies reflects
the attractive product launches that are part of the
current model offensive, the excellent positioning
of the BMW Group with respect to the challenges
faced by the automobile industry and a strong
operating performance. BMW AG's solid capital
structure and prudent financial approach also under-
pins the dependable financial profile and excellent
creditworthiness of the BMW Group as a whole.
Consequently, the Company not only has good access
to international capital markets, but also benefits
from attractive refinancing conditions.
Since December 2013, BMW AG has had a long-term
rating of A+ (stable outlook) and a short-term rating
of A-1 from the rating agency Standard & Poor's.
This represents the highest rating currently given by
Standard & Poor's to a European car manufacturer.
In January 2017, Moody's raised its long-term rating
for BMW AG from A2 (positive outlook) to A1 (stable
outlook). The P-1 short-term rating was confirmed.
stable
stable
22
A+
A-1
A1
Non-current financial liabilities
Current financial liabilities
Outlook
Standard &
Poor's
Moody's
Company rating
The BMW Group continues to be the best-rated car-
maker in Europe.
Ratings remain at top level
At the end of 2018, with a market capitalisation of
some €46 billion, the BMW Group remained among
the ten most valuable German enterprises listed on
the stock market.
→BMWAG Stock and
Capital Markets
in 2018
Shareholders
To Our
Although affected by the generally unfavourable mar-
ket environment, BMW stock held its value relatively
well, particularly in comparison with the sector index.
BMW stock initially bucked the downward trend in
the first quarter of 2018. Since the second quarter,
however, BMW stock partially succumbed to the
general sector trend and also registered price losses.
Despite the challenging conditions currently facing
the automobile industry, which also resulted in the
BMW Group adjusting its outlook for the year in
September, BMW stock nevertheless outperformed
the market as a whole in the third quarter. Uncer-
tainties in the fourth quarter, exacerbated by fears
of a disorderly Brexit and an escalation in the trade
disputes between the USA and China and the USA
and Europe, exerted downward pressure on share
prices. Accordingly, BMW stock closed the year
with a performance similar to that of the DAX. BMW
common stock finished the year at €70.70, down by
18.6% since the beginning of the year. BMW preferred
stock performed similarly to BMW common stock,
finishing the year at €62.10, 16.8% lower than the
closing price recorded one year earlier.
P-1
22
BMW AG stock
→ 11
65.10
77.71
69.86
95.51
122.60
92.25
90.83
96.26
89.77
97.63
88.75
86.83
70.70
Low
High
Year-end closing price
Stock exchange price in €¹
601,995
601,995
601,995
601,995
601,995
Number of shares in 1,000
COMMON STOCK
2014
2015
2016
2017
2018
77.41
200
150
100
In 2016, the BMW Group presented its Strategy
NUMBER ONE > NEXT. At the heart of Strat-
egy NUMBER ONE > NEXT is a commitment to
future-oriented activity with the development of
products, brands and services in the premium seg-
ment for individual mobility. New technologies such
as alternative drivetrains, digitalisation and connec-
tivity are further key areas of focus. Furthermore,
the strategy emphasises the increasing importance
of a customer-oriented approach.
27
27
The BMW Group is one of the most successful mak-
ers of automobiles and motorcycles worldwide and
among
the largest industrial companies in Germany.
It is the only manufacturer that focuses exclusively on
the premium segment with all its brands. With BMW,
MINI and Rolls-Royce, the BMW Group owns three of
the best-known premium brands in the automotive
industry. In addition to its strong market position
in the premium segment of the global motorcycles
sector, the BMW Group is also successful in the
financial services business. Moreover, in recent years
the BMW Group has evolved into one of the leading
providers of premium services for individual mobility.
Founded in 1916 as Bayerische Flugzeugwerke AG
(BFW), Bayerische Motoren Werke G.m.b.H. came
into being in 1917 before finally becoming Bayerische
Motoren Werke Aktiengesellschaft (BMW AG) in 1918.
The BMW Group comprises BMW AG itself and all
subsidiaries over which BMW AG has either direct
or indirect control. BMW AG is also responsible for
managing the BMW Group as a whole.
Bayerische Motoren Werke Aktiengesellschaft
(BMW AG), based in Munich, Germany, is the parent
company of the BMW Group. The general purpose of
the Company is the production and sale of engines,
engine-equipped vehicles, related accessories and
products of the machinery and metal-working
industry as well as the rendering of services related
to the aforementioned items. The BMW Group is
sub-divided into the Automotive, Motorcycles and
Financial Services operating segments. The seg-
ment Other Entities primarily comprises holding
companies and Group financing companies. The
BMW Group operates on a global scale and is rep-
resented in more than 140 countries worldwide. At
the end of the reporting period, the BMW Group
employed a workforce of 134,682 people.
General information on the BMW Group is provided
below. There have been no significant changes com-
pared to the previous year.
This Combined Management Report incorporates the
management reports of Bayerische Motoren Werke
Aktiengesellschaft (BMW AG) and the BMW Group.
→ www.bmwgroup.com/company
ORGANISATION AND
BUSINESS MODEL
High investments in the flexibility of
the production network
Customer in focus with innovative
offerings
Presentation of segments
Increasing R&D expenditure
secures future business
GENERAL
INFORMATION
AND GROUP
PROFILE
→ Organisation and
Business Model
General Information
and Group Profile
Management
Report
Combined
26
and Group Profile
Economic Position
Outlook, Risks and
Opportunities
General Information
Combined
Management
Report
2
2
→ Page 104 Disclosures Relevant for Takeovers and Explanatory Comments
Over 140,000 electrified vehicles
delivered
→ Page 103 Internal Control System Relevant for Accounting
and Financial Reporting Processes
In order to provide a better insight into the Group,
this report also includes a presentation of the
operating segments Automotive, Motorcycles and
Financial Services.
The core BMW brand caters to a very broad array of
customer requirements, ranging from fuel-efficient
and innovative models fitted with Efficient Dynamics
to outstanding high-performance BMW M vehicles. A
wide
range of plug-in hybrid vehicles is also available
and being continuously expanded. At the same time,
the BMW Group continues to redefine the meaning
of premium with its BMW i models. With an even
greater focus on innovation and sustainability, BMWi
embodies the vehicle of the future, with electric
drivetrains, connectivity, intelligent lightweight con-
struction, exceptional design and newly developed
mobility services.
65.11
Autonomous driving, electrification and ever-
greater connectivity will open up opportunities
for completely new experiences and ways to
shape travel in the future. At the same time,
however, those opportunities will also change
people's wishes and lifestyles. Precisely this
development is supported by the BMW Group's
intelligent platform, which will enable drivers
to switch seamlessly and without restrictions from
one vehicle to the next with just one customer
profile, across each vehicle's life cycle. Moreover,
in future all products and services relating to
individual mobility will be bundled here and grad-
ually developed to form a comprehensive digital
ecosystem.
For customers, the experience begins before pur-
chasing the vehicle, for example through virtual
reality options that offer new ways to configure
the vehicle and explore products interactively.
The customer can also be kept in the loop while
waiting for the new vehicle to be manufactured,
thus ensuring greater involvement in the produc-
tion process from an early stage. The BMW Con-
nectedDrive Store enables customers to reserve
new services at any time for a specified period.
The BMW Intelligent Personal Assistant has been
available in BMW vehicles since March 2019.
The option of using BMW Group services almost
anywhere and at any time is the basic prerequi-
site for offering a range of digital services geared
solely to customers and their personal needs.
These include, for example, the availability of
personalised and context-based information
within the vehicle.
Digital change is of great significance for the au-
tomobile industry. One of the most important
effects of digitalisation is that the vehicle itself
becomes the focal point of the customer's digital
experience. The BMW Group recognised cus-
tomer trends at an early stage and, with BMW
Connected and a growing range of digital of-
ferings, it is well prepared to meet demand aris-
ing in this field. This is not merely developing
and integrating new technologies and services
for the vehicle. The focus is very much on cus-
tomers and their aspirations for modern-day mo-
bility. Digital services that the customer is used
to should be available seamlessly and without
restriction - both inside and outside the vehicle.
3. Connected
Since 2018, the BMW Group has pooled its con-
siderable development expertise in the fields of
state-of-the-art driver assistance systems and
highly or fully autonomous driving at its own de-
velopment centre. During the final phase of de-
velopment, some 1,800 people will be working
there. The clear aim is to create an open plat-
form for highly and fully automated driving that
will serve as an industry standard going forward.
Today already, the BMW Group offers driver assis-
tant systems for partially automated driving.
With the BMW iNEXT, the Group will offer highly
automated driving for the first time from 2021.
2. Autonomous
The BMW Group sees design as the characteristic
combination of aesthetics and technology. Out-
standing design involves focusing keenly on the
requirements of customers and anticipating
their wishes, enabling the BMW Group to con-
tinue finding ideal solutions for the (mobility)
needs of its customers. As a premium provider,
the BMW Group not only aspires to meeting its
customers' requirements, but also to exceeding
their expectations in every respect. A ground-
breaking design underlines the distinctive charac-
ter of each new vehicle and thus strengthens all
of the Group's brands.
1. Design
Accordingly, the BMW Group's R&D activities include
the following five key topics:
As part of its Strategy NUMBER ONE > NEXT, the
BMW Group is focusing on the topics of electric
mobility, digitalisation and autonomous driving.
When developing new technologies, the emphasis
is always on creating added benefit for customers.
Anticipating the needs and wishes of customers in all
fields of technology and implementing developments
in a way that adds value for the customer are also
key prerequisites for the Group's success going for-
ward. The BMW Group summarises the major trends
of individual mobility in the term D+ACES (Design,
Autonomous, Connected, Electrified, Services).
Automotive segment
A major factor in the success of the BMW Group is
its consistent focus on the future. A long tradition
of innovation is an integral part of its corporate phi-
losophy. Shaping individual mobility and finding
innovative solutions today for the needs of tomorrow
is a key driving force. Research and development
(R&D) are therefore of key importance for the
BMW Group as a premium supplier and ensure its
long-term economic success.
→ Research and
Development
General Information
and Group Profile
Organisation and
Business Model
Management
Report
Combined
28
The segment also supports the BMW Group's dealer-
ship organisation, for example by financing dealer-
ship vehicle inventories.
The BMW Group is also a leading provider of financial
services in the automobile sector, operating more
than 50 entities and cooperation arrangements with
local financial services providers and importers
worldwide. The segment's main business is credit
financing and the leasing of BMW Group brand cars
and motorcycles to retail customers. Customers can
also choose from an attractive array of insurance
and banking products. Operating under the brand
name Alphabet, the BMW Group's international
multi-brand fleet business provides financing and
comprehensive management services for corporate
car fleets in 19 countries. In addition, international
customers are serviced by Alphabet cooperation
partners in numerous other countries. Through
its multi-brand business Alphera, the BMW Group
provides credit financing, leasing and other services
to retail customers.
Financial Services segment
The Motorcycles business is also clearly focused on
the premium segment. The model range currently
comprises motorcycles for the Sport, Tour, Roadster,
Heritage, Adventure and Urban Mobility (with
scooter models) segments. BMW Motorrad also offers
a broad range of equipment options to enhance rider
safety and comfort. The motorcycles business sales
network is organised similarly to that of the auto-
mobiles business. Currently, BMW motorcycles are
sold by more than 1,200 dealerships and importers
in over 90 countries.
Motorcycles segment
The global sales network of the automobile business
currently comprises around 3,500 BMW, 1,600 MINI
and 140 Rolls-Royce dealerships. Within Germany,
sales are conducted through branches of the
BMW Group and independent authorised dealer-
ships. Sales outside Germany are handled primarily
by subsidiary companies and by independent import
companies in some markets.
The MINI brand is an icon that promises superior
driving fun in the premium small car segment.
Rolls-Royce is the ultimate marque in the ultra-luxury
segment with a tradition stretching back over more
than 100 years. Rolls-Royce Motor Cars specialises in
bespoke customer experiences and offers the highest
level of both quality and service.
Research and Development
→Page 90 Risks and Opportunities
57.03
Page 84
23
5 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
Stock weighted according to dividend entitlements.
standard (Worldwide Harmonised Light Vehicle Test
Procedure, WLTP) led to delivery bottlenecks for some
automobile manufacturers. These developments were
also reflected in the prices of auto stocks. As a result,
the sector index fell by 27.2% over the course of the
year, closing at 1,228 points.
From May onwards, the Prime Automobile Index was
significantly weaker on account of the factors referred
to above. Higher upfront expenditure by automotive
companies for future technologies and possible trade
conflicts between the USA and China on the one hand
and the USA and Europe on the other dampened
market sentiment. The transition to a new emissions
The EURO STOXX 50 fared slightly better than the
DAX, finishing the year 14.3% lower at 3,001 points.
The DAX closed the stock exchange year at
10,559 points, down 18.3% compared to the end of
2017 (12,918 points). Compared to its high for the
year (13,560 points), the DAX lost 22.1% in value by
the end of the year.
European Commission President Juncker at the end
of July, which raised hopes of a possible rapproche-
ment in the trade dispute, seemed to ease the situ-
ation and helped drive up share prices temporarily.
However, renewed rumours of tariff hikes between
the EU and the US in November again caused market
unease. In addition to trade policy issues, the budget
debate in Italy as well as discussions regarding the
potential repercussions of Brexit darkened the mood
on capital markets during the fourth quarter. Towards
the end of the year, market sentiment was influenced
by the US Federal Reserve's (Fed) monetary policies.
A further rise in the key interest rate prior to the
year-end caused share prices to fall once again.
24
21
Source: Reuters.
2019
24
2018
2015
2014
50
50
BMW common stock
Prime Automobile
100
BMW preferred stock
DAX
150
200
Outlook
2017
14
2016
Shareholders
→Page 80 Comments on Financial Statements of BMW AG
→ Page 84 Report on Outlook, Risks and Opportunities
To Our
→Page 65 Results of Operations, Financial Position and Net Assets
→Page 63 Sustainability
→Page 61 Workforce
→ Page 59 Sales and Marketing
→Page 57 Research and Development
→ Page 54 Financial Services Segment
→ Page 53 Motorcycles Segment
→Page 48 Automotive Segment
→Page 48 Review of Operations
→Page 45 Comparison of Forecasts for 2018 with Actual Results in 2018
→Page 58 Purchasing and Supplier Network
The BMW Group continued to inform investors, ana-
lysts and rating agencies throughout 2018 with regular
quarterly and year-end financial reports. The com-
prehensive information package provided for capital
market participants included numerous one-on-one
and group meetings, dedicated socially responsible
investment (SRI) roadshows for investors using sus-
tainability criteria in their investment decisions, and
roadshows as well as conferences for debt investors
and credit analysts. Topics discussed included busi-
ness model developments, digitalisation and other
technological trends in the automobile industry as
well as the relevance of alternative drivetrain systems.
Apart from participating in various conferences and
roadshows, product presentations and a technology
workshop were held for analysts and investors in
Munich during the course of the year. Further infor-
mation on the BMW Group's capital market commu-
nications is available at www.bmwgroup.com/ir.
→Page 40 General and Sector-specific Environment
→Page 40 Report on Economic Position
→Page 36 Management System
→Page 26 Organisation and Business Model
→Page 26 General Information and Group Profile
REPORT
COMBINED MANAGEMENT
Capital Markets
Intensive communication with capital markets
continued
→ BMW AG Stock and
in 2018
→Page 44 Overall Assessment by Management
In 1959, Herbert Quandt secured the independence of
BMW AG, thus laying the foundation for the successful
development of the BMW Group. In recognition of
his entrepreneurial achievements, in 1970 BMW AG
established the "BMW Stiftung Herbert Quandt”,
which has meanwhile been renamed the "BMW Foun-
dation Herbert Quandt" with expanded endowment
capital. With its Responsible Leadership programmes,
a global network and impact-oriented investments,
the BMW Foundation Herbert Quandt supports the
sustainable development goals of the United Nations'
Agenda 2030.
Since 1995, the BMW Group has cut the CO2 emis-
sions of its new vehicles sold in Europe¹ by more
than 42%. Average CO2 emissions in Europe¹ in
2018 amounted to 128 g CO2/km (adjusted value for
2 Value according 2017: 128 g CO2/km)². In 2018, more than 140,000
electrified vehicles were sold within one year for
the first time.
31
32
Further information on the topics of sustainability
and human resources within the BMW Group is
available in the sections Sustainability and Workforce,
respectively, of the Group Management Report and
in the Sustainable Value Report 2018 published on
the Company's website at www.bmwgroup.com/svr.
BMW Foundation Herbert Quandt
With effect from September 2018, all vehicles in the
EU are required to be approved in accordance with
the new WLTP testing cycle. However, the calculation
of CO2 fleet emissions by the EU Commission will
not be converted to WLTP until 2021. Therefore, for
reporting purposes up to and including 2020, WLTP
fleet emissions must be translated back to the previ-
ously applicable values calculated in accordance with
the outgoing New European Driving Cycle (NEDC).
Due to the changed test conditions used for WLTP
purposes, values for emissions are higher when trans-
lated back to a NEDC basis (NEDC-correlated). In
order to ensure comparability, CO₂ fleet emissions for
2017 (122 g CO2/km according to NEDC) were con-
verted to a correlated NEDC value of 128 g CO2/km
under WLTP test conditions and published in the
Quarterly Report to 30 June 2018. The conversion
to WLTP at the BMW Group went according to plan.
Social engagement is also an integral part of the
BMW Group's understanding of its corporate respon-
sibility. For several years now, the BMW Group has
firmly supported intercultural exchange. In part-
nership with the UN Alliance of Civilizations, the
BMW Group presents the Intercultural Innovation
Award for exemplary projects in this field. Since 2011,
the Company has presented the "BMW Group Award
for Social Commitment" every year to employees who
have made an exceptional contribution through their
outstanding volunteer work.
The BMW Group attaches great importance to training
and developing its workforce. In 2018, investment in
training and development programmes across the
Group amounted to €373 million (2017: €349 million).
In addition, 1,656 trainees were hired worldwide.
A total of 4,964 young people are currently under-
going vocational training or participating in internal
programmes to develop young talent.
The BMW Group has set itself the goal of being a
leader in the use of renewable energy in production
and the value chain. In 2018, 79% (2017: 81%) of
the BMW Group's bought-in electricity worldwide
came from renewable sources. In view of increasingly
complex supplier relationships, it is important for
the BMW Group to work together with suppliers to
increase transparency and resource efficiency along
the supply chain. The BMW Group requires suppliers
to comply with environmental and social standards
across the value chain.
WLTP
to planned
conversion to
32
The Group addresses current social challenges, pri-
marily where its strengths make it the most effective.
The main focus here is on problem-solving approaches
that are internationally applicable and have a tangi-
ble long-term impact according to the principle of
"helping people to help themselves”. For this purpose,
the BMW Group works together with the BMW Foun-
dation Herbert Quandt.
Combined
Management
Report
Chennai
Organisation and
Business Model
The BMW Group takes a holistic approach to sustaina-
bility management that encompasses the entire value
chain. Apart from the reduction of CO2 emissions,
key components of the Group's sustainability strategy
include operational environmental protection, sus-
tainability in the supply chain, employee orientation
and social commitment.
Landshut
Leipzig
Hams Hall
Eisenach
Dingolfing
Berlin
General Information
and Group Profile
BMW GROUP PLANTS
Araquari
Country
Locations
BMW Brilliance Automotive joint venture in China.
Eight production sites are operated by partners or
contract manufacturers. The same standards of
quality, safety and sustainability apply at all loca-
tions within the BMW Group's production network
worldwide.
The production network comprises a total of 31 loca-
tions in 15 countries, whereby 20 of the 31 locations
are BMW Group plants. Three locations belong to the
Production Network
→ Production Network
Products
The principles and importance of managing the busi-
ness on a sustainable basis are emphasised in the
new Strategy NUMBER ONE > NEXT, which includes
a clear commitment to preserving resources. The
BMW Group remains fully committed to ecological
and social sustainability along the entire value chain
as well as to comprehensive product responsibility.
As an important pillar of the BMW brand, vehi-
cles equipped with plug-in hybrid drivetrains
represent a good alternative product offering for
customers. All plug-in models are equipped with
a smart energy management system that ensures
ideal interaction between the combustion engine
and the electric motor. The option to drive fully
electrically, added efficiency gained through elec-
tric assistance features, and the spontaneous re-
sponse characteristics provided by the additional
electric drivetrain lead to a new harmony of dri-
ving pleasure and sustainability. The flexibility of
the technologies used makes it possible to extend
the broad range of models fitted with plug-in
hybrid drivetrains as required.
Sustainability
At 31 December 2018, over 15,000 people at 16 locations
in five countries were working in the BMW Group's
global research and innovations network.
The BMW Group aims to be the leading provider
of premium mobility services going forward.
To achieve this goal, it is essential to have a clear
understanding of the needs of customers world-
wide. This knowledge is the basis for providing
an attractive, comprehensive range of services.
These include easy-to-use, digitally supported
mobility services that also feature bring-and-
collect services or help customers find free park-
ing spaces in urban environments.
5. Services
The Vision 100 study presented for the Rolls-Royce
brand in 2016 gave customers a first glimpse into
the future of automobile luxury powered by elec-
tric drivetrains.
at the IAA Cars in the same year. The series
launch of all-electric MINI vehicles is scheduled
to begin in 2019.
With its MINI Electric, MINI is reinterpreting the
urban tradition of the brand for the electric age
and reinventing individual mobility for the city.
The market launch of the MINI* brand's first
plug-in hybrid in 2017 was followed by the pre-
sentation of the all-electric MINI Electric Concept
Year-on-year, research and development expenditure
rose significantly to €6,890 million (2017: €6,108 mil-
lion; +12.8%). The R&D expenditure ratio stood at
7.1% (2017: 6.2%). The ratio of capitalised development
costs to total research and development expenditure
(capitalisation ratio) stood at 43.3% for the period
under report (2017: 39.7%). Amortisation of capitali-
sed development costs totalled €1,414 million (2017:
€1,236 million; 14.4%). Further information on R&D
expenditure is provided in the "Report on Economic
→see Position (Results of Operations)" and in → note 9 to
the Group Financial Statements.
Manaus
Another topic of strategic importance for the
BMW Group is the continuous optimisation of
the energy efficiency of its automobiles and
motorcycles, including the electrified vehicles
manufactured for the BMW, MINI, Rolls Royce
and BMW Motorrad brands. Under the term
Efficient Dynamics, the BMW Group has been
successfully working for years on reducing fuel
consumption and vehicle emissions through the
development of highly efficient combustion
engines, the electrification of drivetrains, intelli-
gent lightweight construction, improved aero-
dynamics and coordinated energy management
in vehicles.
4. Electrified
NUMBER ONE > NEXT.
Alongside automated driving, systematically
enhancing the scope of connectivity on the road
to a digital, emission-free future is one of the
key areas in which the BMW Group is helping
transform the mobility sector with its Strategy
29
29
The BMW i brand reflects Efficient Dynamics in
its most systematic form. Vehicle architectures
customised for electric mobility, innovative elec-
tric and plug-in hybrid drivetrains, and the use
of new types of materials are the results of an inte-
grated approach that is also reflected in a re-
source-efficient selection of materials and the
intensive use of renewable energy in the pro-
duction process. This strategy contributes to a
very favourable environmental footprint made
by BMW i vehicles over their entire product life
cycle.
The BMW Group is a pioneer of sustainability not only
within the automotive industry, but across other sec-
tors, too. Long-term thinking and responsible action
have long been the foundations of the BMW Group's
distinct identity and its economic success. As early as
1973, the BMW Group was among the first to appoint
an environmental officer in the automobile sector.
Today, the Sustainability Board, comprising all mem-
bers of the Board of Management, sets the strategic
direction along with binding targets. Since 2001,
the BMW Group has been committed to the United
Nations Environment Programme, the UN Global
Compact and the Cleaner Production Declaration.
note 9
and CO₂ emis-
sions informa-
tion are available
on page 108.
1 EU-28
Additionally, the BMW Group signed an agreement
with the Chinese manufacturer Great Wall Motor
Company Limited for the production of electric MINI
vehicles in China in a 50-50 joint venture. In addition
to electric MINI Vehicles, the joint venture, Spotlight
Automotive Limited, will also produce electric vehicles
for Great Wall Motor. The formal establishment of
the new company remains subject to approval from
the relevant Chinese authorities. Together with the
planned increase of share in BBA, the BMW Group
is significantly expanding its presence in China and
underscoring its local engagement.
To coincide with the 15th anniversary of BBA, the
joint venture announced extensive investments in
new and existing plant structures in order to cover
future market requirements. The BMW Group intends
to increase its stake in BBA from 50 to 75%. During
an anniversary celebration, the BMW Group signed
an agreement to that effect with its partner Brilliance
China Automotive Holdings Ltd. (CBA). The contrac-
tual term of the joint venture, which is due to end in
2028, is to be extended up to 2040. After approval
by the Annual General Meeting of CBA on 18 Janu-
ary 2019, the agreement is also subject to regulatory
approvals.
The BMW Group and Daimler AG are merging their
mobility services in a new joint venture in order
to achieve dynamic growth in a highly competitive
environment. In this way, both companies are pro-
moting the vision of pure electric and autonomous on-
demand mobility simultaneously. The aim is to further
expand existing offerings in the areas of car-sharing,
ride-hailing, parking, charging und multimodality
and to interlock even more closely with one another
in the long term. The new mobility offering is to be
accessible, intuitive and aligned towards the needs
of the user. The newly founded company seeks to
increase the quality of urban life and to prepare the
way for a world with autonomous vehicles.
In order to secure the success of the business in the long
term, the BMW Group enters into specific cooperation
agreements and partnerships with companies both
from the automotive sector but also with technology
leaders in other industries. Against a backdrop of
rapid technological change, the aim of collaborating
with external partners is to combine expertise in order
to bring innovations to customers within the shortest
time possible.
Cooperation Agreements and
Partnerships
* Fuel
consumption
→ Sustainability
Organisation and
Business Model
General Information
and Group Profile
Management
Report
Combined
30
In 2018, numerous awards and prizes once again
underscored the BMW Group's high level of innovative
expertise, particularly in design, the use of innovative
technologies as well as the intelligent connectivity of
drivers, vehicles and environment.
→ Cooperation
Agreements and
Partnerships
Munich
BMW 3 Series, BMW 5 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X4, BMW X5
Motorcycles
Rayong
Locations
manufactured in Jakarta (Indonesia), Cairo (Egypt),
Kaliningrad (Russia) and Kulim (Malaysia).
The main function of the BMW Group's four partner
plants is to serve regional markets. During the year
under report, BMW and MINI vehicles were also
BMW 1 Series, BMW 2 Series, BMW 3 Series, BMW X1
Petrol engines, production of core engine parts
BMW 5 Series, BMW X3
Products
PARTNER PLANTS
China
China
Tiexi (Shenyang)
China
Dadong (Shenyang)
JOINT VENTURE BMW BRILLIANCE
AUTOMOTIVE HOLDINGS LTD.
Country
Tiexi (Shenyang)
Locations
Jakarta
Kaliningrad
Kulim
Country
Hosur
Graz
Chongqing
Born
CONTRACT PRODUCTION
Cairo
Locations
The BMW Group also awards production contracts to
external partners for specific types of vehicle as well as
motorcycles. During the period under report, Magna
Steyr Fahrzeugtechnik produced the BMW 5 Series
Sedan and BMW Z4 in Graz (Austria). Moreover, ¬
BMW 3 Series, BMW 5 Series, BMW 7 Series, BMW X1, BMW X3, BMW X5, BMW X6
Russia BMW 3 Series, BMW 5 Series, BMW 7 Series, BMW X1, BMW X3, BMW X4, BMW X5, BMW X6
Malaysia
BMW 1 Series, BMW 3 Series, BMW 5 Series, BMW 6 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X4, BMW X5, MINI Countryman
BMW 3 Series, BMW 5 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X5, MINI Countryman
Egypt
Indonesia
Country
various MINI models and the BMW X1 were assembled
at VDL Nedcar in Born (Netherlands). BMW motor-
cycles and scooters were also manufactured by the part-
ner companies TVS Motor Company in Hosur (India)
and Loncin Motor Co., Ltd in Chongqing (China).
Oxford
automobile plants. Tiexi also has an engine plant with
a foundry and a battery factory.
2 Fuel consumption and CO2 emissions information are available on page 108.
Germany
Thailand
United Kingdom
Germany
Germany
Brazil
Germany
Germany
United Kingdom
Germany
South Africa
Brazil
Germany
India
Swindon
Steyr
Spartanburg
San Luis Potosí¹
Rosslyn
Regensburg
Wackersdorf
The plants in Shenyang (China) are operated by the
joint venture BMW Brilliance Automotive (BBA).
The Shenyang site comprises the Dadong and Tiexi ¬
Mexico
United Kingdom
Germany
1 2018 only pre-series production, plant opens in 2019.
Rolls-Royce Manufacturing Plant Goodwood
Pressed parts and bodywork components
Distribution centre for parts and components
Cockpit assembly
Processing of carbon fibre components
Rolls-Royce Phantom², Ghost, Wraith, Dawn, Cullinan²
High-performance engines for M models
BMW X3, BMW X4, BMW X5, BMW X6, BMW X7, BMW M
Petrol and diesel engines for BMW and MINI
Core engine parts
BMW 1 Series, BMW 2 Series, BMW 3 Series, BMW 4 Series,
BMW X1, BMW X2, BMW M
BMW 3 Series, BMW X3
BMW 3 Series
USA
Austria
MINI Hatch, MINI Clubman
BMW 3 Series, BMW 4 Series, BMW M
Lightweight construction components, electric drivetrain systems and special engines
BMW 1 Series, BMW 2 Series, BMW i, BMW M
Motorcycles
Petrol engines for BMW, MINI
BMW i8 plug-in hybrid engines
Core engine parts
Toolmaking, outer body parts for Rolls-Royce, aluminium tanks for BMW Motorrad
BMW 3 Series, BMW X1, BMW X3, BMW X4
BMW motorcycles, Maxi-Scooters, car brake discs
BMW 3 Series, BMW 5 Series, BMW 6 Series, BMW 7 Series,
BMW X1, BMW X3, BMW X4, BMW X5, MINI Countryman
BMW 3 Series, BMW 4 Series, BMW 5 Series, BMW 6 Series,
BMW 7 Series, BMW 8 Series, BMW M
Chassis and drivetrain components
Components for electric mobility
Rolls-Royce bodywork, pressed parts
United Kingdom
Petrol and diesel engines, high-performance engines for M models
Core engine parts
Products
175
Netherlands
Automotive segment
The most comprehensive key performance indica-
tor used for the Automotive segment is RoCE. This
indicator provides information on the profitability of
capital employed and the operational business. ROCE
is measured on the basis of segment profit before
financial result and the average capital employed in
the segment. The strategic target for the Automotive
segment's RoCE is 26%.
Profit before
financial result
ROCE Automotive
=
Average capital
employed
Average
Profit before financial result in € million
capital employed in € million
Return on capital employed in %
2018
2017
2018
2017
2018
2017
Automotive
6,182
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
7,888
12,420
10,147
49.8
77.7
Capital employed corresponds to the sum of all
current and non-current operational assets, less
liabilities that do not incur interest (e.g. trade payables
and other provisions).
and return on equity (ROE) for the Financial Services
segment. These indicators combine a wide range of
relevant economic information, such as profitabil-
ity (return on sales) and capital efficiency (capital
turnover) to provide a measurement of segment
performance and the development of enterprise value.
→ 15
Return on capital employed*
Operating performance at segment level is managed at
an aggregated level on the basis of returns on capital.
Depending on the business model, the segments are
measured on the basis of return on total capital or
equity. Specifically, return on capital employed (ROCE)
is used for the Automotive and Motorcycles segments
35
36
Combined
Management
Report
General Information
and Group Profile
→ Management System
MANAGEMENT SYSTEM
The business management system applied by the
BMW Group follows a value-based approach that
focuses on profitability, consistent growth, value
enhancement for capital providers and job security.
Capital is considered to be employed profitably when
the amount of profit generated sustainably exceeds
the cost of equity and debt capital. In this way, the
desired degree of corporate autonomy is also secured
in the long term.
7
The BMW Group's internal management system is
based on a multi-layered structure. Operating manage-
ment occurs primarily at segment level. In order to
manage long-term corporate performance and assess
strategic issues, additional key performance indicators
are taken into account within the management system
at Group level. In this context, value added serves as
one of several indicators for the contribution made
to enterprise value during the financial year. This
approach is made operational at both Group and
segment level through key financial and non-finan-
cial performance indicators (value drivers). The link
between value added and the relevant value drivers
is shown in a simplified form below.
BMW Group - value drivers
Due to its key importance for the Group as a whole,
the Automotive segment is managed on the basis of
additional key performance indicators which have a
significant impact on RoCE and hence on segment
performance. These value drivers are the number of
vehicle deliveries and the operating return on sales
(EBIT margin: segment-related profit/loss before
financial result as a percentage of segment revenues)
as the key performance indicator for segment prof-
itability. The management system also takes into
account average CO2 emissions for the fleet, which,
through their influence on ongoing development
costs and due to regulatory requirements, can have
→ 14
Return on capital
(ROCE or RoE)
×
Return on sales
Capital turnover
Cost of capital
Profit
Capital employed
Average weighted
cost of capital rate
Expenses
Revenues
Due to the high level of aggregation, it is impractical
to manage the business on the basis of value added.
This key indicator therefore only serves for reporting
purposes. Relevant value drivers having a significant
impact on business performance and therefore on
enterprise value are defined for each controlling
level. The financial and non-financial value drivers
are reflected in the key performance indicators used
to manage the business. In the case of project-related
decisions, the system follows a project-oriented
management logic that is based on value added and/or
profitability, thereby providing a fundamental basis
for decision-making.
Management of operating performance
at segment level
Value added
35
a significant long-term impact on Group performance.
Fleet emissions correspond to average CO2 emissions
of new cars sold in the EU-28 countries.
36
2017
2018
2017
2018
2017
2018
Return on equity in %
Average equity capital in € million
Profit before tax in € million
Financial Services
Average equity capital
RoE Financial
Services
Profit before tax
of return on equity. RoE is defined as segment profit
before tax, divided by the average amount of equity
capital in the Financial Services segment. In view
of generally increasing regulatory requirements, a
greater volume of equity capital will be allocated to
the segment in future, which will result in a lower
RoE. In this context, the long-term target return was
changed with effect from the 2018 financial year from
at least 18% to at least of 14%.
→ 17
Return on equity
As is common practice in the banking sector, the
Financial Services segment is managed on the basis
Financial Services segment
In view of its increasing strategic importance, the
Motorcycles segment adopted the operating return
on sales (EBIT margin: segment-related profit/loss
before financial result as a percentage of segment
revenues) as a key performance indicator with effect
from the financial year 2017. The long-term target
range is between 8 and 10%. Used in combination
with the number of motorcycle deliveries as a non-
financial value driver, the segment can exert a greater
influence on the development of RoCE.
34.0
28.4
609
616
207
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
2,161
2,207
14,630
12,167
37
88
38
Combined
Management
Report
General Information
and Group Profile
→Management System
Motorcycles segment
As with the Automotive segment, the Motorcycles
segment is managed on the basis of RoCE. Capital
employed is determined on the same basis as in the
Automotive segment. The strategic RoCE target for
the Motorcycles segment is 26%.
Return on capital employed*
→ 16
Profit before
financial result
By managing the business on the basis of key value
drivers, it is possible to gain a better understanding
of the causes of changes in the RoCE and to define
suitable measures to influence it.
ROCE
Motorcycles
Average capital
employed
Profit before financial result in € million
Average
capital employed in € million
Return on capital employed in %
2018
2017
2018
2017
2018
2017
18.1
14.8
7
Greece
Bulgaria¹
Romania¹
Brazil
Argentina¹
South Africa
New Zealand
☐
Production
outside Europe
BMW Group plant Chennai, India
BMW Group plant Manaus, Brazil
BMW Group plant Rayong, Thailand
BMW Group plant Rosslyn, South Africa
BMW Group plant San Luis Potosí²,
Mexico
BMW Group plant Spartanburg, USA
BMW Brilliance Automotive, China
(joint venture-3 plants)
Partner plants
outside Europe
Partner plant, Chongqing, China
Partner plant, Hosur, India
Partner plant, Jakarta, Indonesia
Partner plant, Cairo, Egypt
Partner plant, Kaliningrad, Russia
Partner plant, Kulim, Malaysia
▲ Research and development
network outside Europe
BMW Group Designworks, Newbury
Park, USA
BMW Group Technology Office USA,
Mountain View, USA
BMW Group Engineering and
Emission Test Center,
Oxnard, USA
BMW Group ConnectedDrive Lab
China, Shanghai, China, and
BMW Group Designworks Studio
Shanghai, China
BMW Group Technology Office,
Shanghai, China
BMW Group Engineering China,
Beijing, China
BMW Group Engineering Japan,
Tokyo, Japan
BMW Group Engineering USA,
Woodcliff Lake, USA
BMW Technology, Chicago, USA
Sales subsidiaries and
Financial Services
locations worldwide
1 Sales locations only.
United Arab
Emirates
Mexico
USA
Canada
China
Austria
India
Products
MINI Hatch, MINI Convertible, MINI Countryman, BMW X1
Scooter
BMW 5 Series, BMW Z4
Motorcycles
33
33
34
Combined
Management
Report
² 2018 only pre-series production, plant opens in 2019.
General Information
→ Organisation and
Business Model
BMW Group locations worldwide
→ 12
43
7 Sales subsidiaries and
Financial Services
locations worldwide
31
Production and
assembly plants
16
Research and
development
locations
Headquarters
and Group Profile
Russia
India
China
BMW Group plant Regensburg
BMW Group plant Wackersdorf
BMW Group plant Steyr, Austria
BMW Group plant Hams Hall, UK
BMW Group plant Oxford, UK
BMW Group plant Swindon, UK
Rolls-Royce Manufacturing Plant,
Goodwood, UK
Partner plants
in Europe
Partner plant, Born,
Netherlands
Partner plant, Graz,
Austria
▲ Research and development
network in Europe
BMW Group Research and Innovation
Centre (FIZ), Munich, Germany
BMW Group Research and
Technology, Munich, Germany
BMW Group Autonomous Driving
Campus, Unterschleißheim, Germany
BMW Group Designworks, Munich,
Germany
BMW Group plant Munich
BMW Car IT, Munich, Germany
Construction and Technology Center,
Landshut, Germany
BMW Group Diesel Competence
Centre, Steyr, Austria
Sales subsidiaries and
Financial Services
locations Europe
Sweden
Finland¹
Denmark
Czech
Republic¹
Poland
Austria
Slovakia¹
Hungary¹
BMW Group Lightweight
Motorcycles
BMW Group plant Leipzig
BMW Group plant Eisenach
South Korea
Japan
Hong Kong
Thailand
Malaysia
Singapore¹
Indonesia¹
Australia
BMW Group locations in Europe
→ 13
Norway
Germany
BMW Group plant Landshut
Netherlands
Ireland
Belgium
France
Switzerland
Spain
Portugal
Italy
Slovenia¹
Malta
■ Production in Europe
BMW Group plant Berlin
BMW Group plant Dingolfing
UK
■BMW Group plant Araquari, Brazil
Report on
-
g CO2/km
units
slight decrease
slight increase
slight increase
€ million
Q3: moderate decrease
in line with last year's level
during the year
in 2017 Annual Report
Forecast revision
Forecast for 2018
Return on capital employed
EBIT margin
Deliveries to customers
MOTORCYCLES SEGMENT
Return on capital employed
EBIT margin
Revenues
Fleet emissions³
Deliveries to customers²
slight increase
AUTOMOTIVE SEGMENT
Q3: slight decrease
Actual outcome
between 8 and 10
year's level
in line with last
165,566 (+0.9%)
units
Q1: slight increase
solid increase
49.8 (-27.9%pts)
significant decrease
%
%
Q3: at least 7
between 8 and 10
significant decrease
7.2 (-2.0%pts)
in line with last
year's level
85,846 (+0.1%)
in line with last
year's level
128 (0.0%)
2,490,664 (+1.1%)
slight increase
134,682 (+3.7%)
slight increase
9,815(-8.1%)
moderate decrease
in 2018
€ million
%
Workforce at year-end
GROUP
3 Prior year figures with the previous year's level (2017: €85,742³ million;
+0.1%), whereby the translation of foreign currencies
the first-time
had a negative impact, particularly in the first quarter.
application of
IFRS 15, see The various adverse factors described above also held
down revenues.
At €85,846 million, segment revenues were in line
Revenues: in line with previous year's level
adjusted due to
have been
Deliveries to customers: slight increase
Automotive segment
Forecasts for 2018
with Actual Results
in 2018
Economic Position
→ Comparison of
Report on
Management
Report
Combined
46
45
45
As foreseen in the outlook for the financial year 2018,
there was a slight increase in the size of the workforce,
which was thus in line with expectations.
In the period under report, the size of the workforce
increased slightly by 3.7% to 134,682 employees (2017:
129,932 employees). Projects relating to vehicle elec-
trification and autonomous driving were the main
reason for the workforce increase. Operating growth
at segment level and the expansion of financial and
mobility services also contributed to the higher
headcount.
Workforce at year-end: slight increase
Group profit before tax fell moderately and was thus
in line with adjusted expectations, as revised in the
Quarterly Report to 30 September 2018.
have been
adjusted due to
the first-time
application of
IFRS 15, see
note 6 to the
Group Financial
At €9,815 million, Group profit before tax in 2018
was the second-best figure in the company's history
and moderately down on the previous year's record
*Prior year figures level (2017: €10,675* million; -8.1%). In the Annu-
al Report 2017 it was expected that profit before
tax would remain at the previous year's level. The
factors described above had a dampening effect on
the BMW Group's earnings performance during the
Statements. twelve-month period under report.
note 6 to the
Group Financial
Statements.
Profit before tax
In 2018, the BMW Group delivered a record num-
ber of vehicles to customers for the eighth year in
succession. Despite significant ongoing political
and economic uncertainties due to trade disputes,
regulatory requirements and the unclear outcome of
the Brexit negotiations, deliveries of BMW, MINI and
Rolls-Royce brand vehicles worldwide increased slight-
ly by 1.1% to 2,490,664¹ units (2017: 2,463,526¹ units). 'Including the
Favourable market conditions in Asia had a positive
impact on automobile deliveries. In Europe, volume
figures matched the previous year's high level despite
fewer deliveries in the UK and Italy. In the Americas
region, the BMW Group recorded a slight increase in
the number of deliveries.
As foreseen in the outlook for the financial
year 2018,
Automotive segment deliveries increased slightly and
were therefore in line with expectations.
→ 23
BMW Group comparison of 2018 forecasts with actual outcomes 2018
The key performance indicators of the BMW Group
and its segments can be summarised as below.
Return on equity slightly below previous year's level
As expected in the Annual Report 2017, the return on
equity generated by the Financial Services segment in
2018 was slightly lower than one year earlier at 14.8%
(2017: 18.1%; -3.3 percentage points). The decrease
was due to more stringent regulatory requirements for
equity capital. Nevertheless, the internal RoE target
of at least 14% was achieved.
Financial Services segment
on the previous year's level (2017: 34.01%; -5.6 per-
centage points). In the original forecast in the Annual
Report 2017, a slight increase was expected. The most
recent forecast in the Quarterly Report to 30 Septem-
ber 2018 still assumed that ROCE would be in line with
the previous year's level. The shortfall was attributable
to the ramp-up situation in the segment due to various
model changes. The long-term target RoCE of 26% for
the Motorcycles segment was surpassed.
Return on capital employed: moderate decrease
The return on capital employed (RoCE) for the Motor-
cycles segment in 2018 was 28.4%, moderately down ¬
EBIT margin in target range of between 8 and 10%
The EBIT margin in the Motorcycles segment (profit
before financial result divided by revenues) came in
at 8.1% (2017: 9.11%; -1.0 percentage points). As
foreseen for the financial year 2018, the EBIT margin
was within the target range of between 8 and 10% and
therefore in line with expectations.
In the Quarterly Report to 31 March 2018, a slight
increase was forecast for the full twelve-month period.
Due to the limited availability of products in conjunc-
tion with various model changes, deliveries in 2018
were only in line with the previous year's level. The
original forecast in the Annual Report 2017 expected
a solid increase in deliveries of motorcycles.
Deliveries to customers: in line with previous year's level
In 2018, deliveries of motorcycles reached a new record
level of 165,566 units (2017: 164,153 units; +0.9%).
Motorcycles segment
As foreseen in the outlook for the financial
year
2018, the RoCE decreased significantly, in line with
expectations.
Return on capital employed: significant decrease
The Automobile segment's RoCE in 2018 fell to 49.8%
(2017: 77.73%; -27.9 percentage points), mainly
reflecting earnings developments. The main reasons
for the decrease were higher investments in the
electrification of the BMW Group's vehicle fleet,
digitalisation and the expansion and rejuvenation of
the model portfolio as well as the expansion of the
production network. However, the long-term target
ROCE for the Automotive segment was well above the
minimum target of 26%.
The EBIT margin (profit before financial result divided
by revenues) came in at 7.2% (2017: 9.23%; −2.0 per-
centage points). As forecast in the Quarterly Report
to 30 September 2018, the EBIT margin exceeded 7%
and was therefore in line with revised expectations. In
the Annual Report 2017 an EBIT margin in the range
of 8 to 10% was originally expected.
EBIT margin: at least 7%
Going forward, the BMW Group intends to place
greater emphasis on the quality of earnings in its
management of the business. Given that the EBIT
margin already takes account of revenues, segment
revenues will no longer be reported as one of the key
performance indicators going forward.
In the Quarterly Report to 30 September 2018, the
original forecast for segment revenues was revised
from a slight increase to a slight decrease. Thanks
to the slightly higher number of vehicles delivered,
actual revenues were in line with the previous year's
level and therefore exceeded the most recent forecast.
2 EU-28.
joint venture
BMW Brilliance
Automotive Ltd.,
Shenyang
(2018: 459,581
units, 2017:
384,124 units).
CO2 emissions from fleet vehicles delivered in Europe
in 2018 amounted to 128 g CO2/km (adjusted value
for 2017: 128 g CO2/km; 0.0%) and were therefore in
line with the previous year. This was achieved despite
a further decline in the share of diesel vehicles and
also thanks to the significant growth in deliveries of
electrified models. The original forecast had foreseen
a slight decrease.
Fleet carbon dioxide (CO2) emissions²:
in line with previous year's level
Deliveries of the core BMW brand in 2018 totalled
2,125,026¹ units (2017: 2,088,283¹ units; +1.8%),
thereby setting a new volume record. MINI remained
slightly below the previous year's record figure and,
with 361,531 units, achieved its second highest num-
ber of deliveries to date (2017: 371,881 units; -2.8%).
Rolls-Royce Motor Cars achieved a new record level
of 4,107 units (2017: 3,362 units; +22.2%).
8.1 (-1.0%pts)
slight increase
Q1: in line with last
366.5
353.8
356.0
thereof USA
482.3
495.9
460.4
451.1
457.7
205.1
231.0
241.7
238.3
272.3
286.1
298.9
295.8
310.4
914.6
1,000.4
1,092.2
405.7
1,101.8
397.0
876.6
2,247.5
2,367.6
2,463.5
2,490.7
Total*
62.7
65.4
67.7
61.8
57.9
Other markets
456.7
464.1
516.8
595.0
640.8
thereof China*
658.4
685.8
747.3
848.8
Asia*
1,098.5
Americas
thereof UK
Automotive Segment
REVIEW OF OPERATIONS
→ Automotive Segment
→ Review of Operations
Economic Position
Combined
Management
Report
48
47
slight decrease
14.8 (-3.3%pts)
%
3 EU-28.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2018: 459,581 units).
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
slight decrease
Return on equity
FINANCIAL SERVICES SEGMENT
moderate decrease
%
year's level
28.4 (-5.6%pts)
Deliveries rise to new record level
The BMW Group delivered 2,490,664* BMW, MINI and
Rolls-Royce brand vehicles worldwide in 2018, thereby
setting a new record for the eighth year in succession
(2017: 2,463,526* units; +1.1%), comprising 2,125,026*
BMW (2017: 2,088,283* units; +1.8%), 361,531 MINI
(2017: 371,881 units; -2.8%) and 4,107 Rolls-Royce
(2017: 3,362 units; +22.2%) brand vehicles.
Asia and Americas slightly up, Europe at
previous year's level
The BMW Group continued to grow its business in
Asia in 2018, recording a 3.3% increase in deliveries
of BMW, MINI and Rolls-Royce brand vehicles to a
total of 876,614* units (2017: 848,826* units). In China,
sales figures developed positively, mainly due to a
strong second half-year, rising to 640,803* units (2017:
595,020 units; +7.7%).
thereof Germany
Europe
2014
2015
2016
2017
2018
in 1,000 units
→ 25
BMW Group deliveries of vehicles by region and market
Profit before tax: moderate decrease
12.5 Germany
25.7 China
UK 9.6
Japan 3.1
Italy 3.1
France 3.5
Other 28.3
as a percentage of deliveries
→ 24
BMW Group - key automobile markets 2018
On the American continent, market conditions were
characterised by intense competition and fluctuations
in demand, in some cases on a high scale. Nevertheless,
the BMW Group increased deliveries in the region by
1.5% to 457,715 units (2017: 451,136 units). Business
in the USA remained at the previous year's level, with
355,993 units delivered (2017: 353,819 units; +0.6%).
high level (2017: 1,101,760 units; -0.3%). Deliveries in
Germany increased by 4.9% to 310,441 units (2017:
295,805 units). In the UK, volumes fell slightly year-
on-year to 238,308 units (2017: 241,674 units; -1.4%),
not least due to the ongoing uncertainty about the
outcome of the Brexit negotiations.
In Europe, the BMW Group's sales performance
was dampened by various factors, including the
diesel debate in some countries. Nevertheless, with
deliveries of 1,098,523 units of its three brands, the
BMW Group came very close to the previous year's &
14.2 USA
Group
The BMW Group remains fully committed to its goal
of spearheading the transformation of the industry. It
continues to strive for sustained high profitability as
the cornerstone of its Strategy NUMBER ONE > NEXT.
In addition to continuing the current product roll-
out, ongoing cost and efficiency measures will also
be intensified.
These circumstances had a significant impact on
Group profit before tax and the EBIT margin of the
Automotive segment both in the third quarter and in
the fourth quarter.
200
Russian Rouble
- 100
150
200
Index: December 2013=100
The US dollar/euro exchange rate fluctuated between
1.13 and 1.25 US dollars to the euro during 2018, fin-
ishing the twelve-month period at an average rate of
1.18 US dollars to the euro. As previously announced,
the US Federal Reserve continued to raise key interest
rates during the period under report. With effect
from the end of the year, the ECB discontinued its
purchases of securities, sending out the first clear
signals that its highly expansionary monetary policy
is coming to an end.
Currency markets
Emerging markets remained on a stable growth course
with GDP up overall against the previous year, includ-
ing rises in Russia (+2.3%), Brazil (+1.3%) and India
(+7.3%). The upward trend in Russia was driven
by a number of sectors. Investment and industrial
production increased markedly. Domestic consumer
spending was at a similar level to the previous year.
The positive trend benefited from a further drop
in unemployment. Economic recovery in Brazil
remained sluggish. Although private consumer
spending developed positively in 2018, the country's
high unemployment rate was only reduced slightly.
Government spending also increased. The Indian
economy grew at a steady rate. Apart from strong
growth in private spending, the manufacturing sector
also made a positive contribution.
with the growth rate almost halved compared to one
year earlier. The export sector slowed down in 2018
after a strong previous year.
→ 19
Exchange rates compared to the euro
In Japan, the growth rate for 2018 fell sharply to 0.8%,
mainly due to a significant decline in private consumer
spending. In addition, various natural catastrophes
temporarily curtailed production. Furthermore,
demand for capital goods only increased moderately,
Economic growth in China came in at 6.6% in 2018,
slightly down on the previous year. Demand from
private households remained at a similarly high
level to previous years. By contrast, the willingness
of companies to invest fell significantly, reflected in
a growth rate of only 5.9% in 2018. This outcome
was a desired development and in line with the
gov-
ernment's intended transformation of the Chinese
economy to one of sustainable economic growth and
greater financial market stability. Over the course of
the year, however, tariff increases imposed by the USA
on Chinese products exacerbated the factors holding
down the domestic economy, causing the Chinese
government to undertake fiscal measures to prevent
the economy from slowing too quickly.
GDP in the USA rose for the ninth consecutive year in
2018, growing by 2.9% on the back of strong domestic
demand. Alongside increased household spending
encouraged by the tax reform, government-related
demand also increased considerably. Consumer
sentiment within private households was shored
up by a historically low unemployment rate of less
than 4% and rising wages. Corporate investments
and industrial production also grew robustly. Strong
economic growth combined with an inflation rate of
2.4% provided impetus for the Fed to raise interest
rates over the course of 2018.
Economic performance in the United Kingdom was
dominated by continuing uncertainty regarding the
terms of Brexit and hence the country's future relation-
ship with the EU. Despite a further slight decline in
the unemployment rate, private consumer sentiment
declined further. Similarly, the public sector had only
a limited degree of leverage to counter the overall
slowdown in market momentum. As a consequence,
economic growth in the reporting period slowed for
the fourth year in succession to stand at 1.3%. The
situation was exacerbated by the Bank of England
raising its benchmark interest rates in an attempt to
hold down price inflation.
The eurozone economy continued to grow. At around
1.9%, however, the increase was below the previous
year's rate. Key economies in the region remained
on growth course, with economic output up in
Germany (+1.5%), France (+1.6%), Italy (+1.0%) and
Spain (+2.5%). Increased investment activity, rising
exports and robust domestic demand from both
private consumers and the state contributed to the
positive economic development. Within this favoura-
ble environment, the unemployment rate continued to
fall and is now at its lowest level since 2008. As a result
of the related rise in inflation, the European Central
Bank (ECB) decided to phase out its securities purchase
programme by December 2018 and to reinvest only
principal repayments from maturing securities.
The global economy grew by 3.7% in 2018, similar to
the previous year. Despite political uncertainties, all
regions saw economic growth, albeit with varying
degrees of strength. While momentum slowed in
Europe and China, economic output in the USA grew
at a significantly faster pace than in 2017, thereby bol-
stering the growth of global gross domestic product.
General economic environment
SECTOR-SPECIFIC
ENVIRONMENT
GENERAL AND
150
✓ -8.1%
British Pound
Chinese Renminbi
The currencies of major emerging economies fell
during 2018. The Russian rouble and the Brazilian
real lost 12% and 20% respectively against the euro.
The Indian rupee depreciated by 10% against the euro.
twelve-month period. The Japanese yen also continued
to depreciate year-on-year with an average exchange
rate of 130 yen to the euro during the year under
report.
The Chinese renminbi continued to lose value com-
pared to the previous year, recording an average
exchange rate of 7.81 renminbi to the euro for the
The British pound's fluctuations against the euro
reflected the progress of difficult negotiations towards
an orderly Brexit. The value of the British currency fell
temporarily to 0.91 pounds to the euro before finishing
the year at an average rate of 0.89 pounds to the euro.
Economic Position
→ General and Sector-
specific Environment
Report on
Combined
Management
Report
42
42
41
Source: Reuters.
2019
2018
2017
2016
2015
2014
50
50
US Dollar
Japanese Yen
100
€9,815 million
Group profit before tax
down moderately
Business performance impacted by
various factors
2018
2017
2018
2017
2018
Value added Group
Cost of capital (equity + debt capital)
Earnings amount
in € million
→ 18
Value added Group*
= earnings amount
(cost of capital rate x
capital employed)
-
-
earnings amount
cost of capital
=
Value added
Group
return on sales and value added. Value added, as
a highly aggregated performance indicator, also
provides an insight into capital efficiency and the
(opportunity) cost of capital required to generate
Group profit. A positive value added means that
a company is generating more value than the cost
of capital.
The information provided by these two key perfor-
mance indicators is further complemented by pre-tax
Strategic management and quantification of financial
implications for long-term corporate planning are
performed primarily at Group level. The key perfor-
mance indicators are Group profit before tax and the
size of the Group's workforce at the year-end. Group
profit before tax provides a comprehensive measure
of the Group's overall performance after consolida-
tion effects and a transparent basis for comparing
performance, particularly over time. The size of the
Group's workforce is monitored as an additional key
non-financial performance indicator.
Strategic management at Group level
2017
10,978
7,298
6,804
Automobile and motorcycle deliveries
reach record levels
ON ECONOMIC
POSITION
REPORT
specific Environment
→ General and Sector-
Economic Position
Report on
Management
Report
Combined
40
Oil price trend
10
For all project decisions, the project criteria and
long-term periodic results impact are measured and
incorporated in the long-term Group forecast. This
approach enables an analysis of the impact of project
decisions on periodic earnings and rates of return for
each year during the term of the project. The overall
result is a cohesive management model.
The net present value of a project indicates the extent
to which a project will be able to generate a positive
contribution to earnings over and above the cost of
capital. A project with a positive net present value
enhances value added and therefore results in an
increase in enterprise value. The internal rate of return
of the project corresponds to the average return on
capital employed in the project. It is equivalent to the
multi-year average RoCE for an individual project. It is
therefore consistent with one of the key performance
indicators.
Project decisions are based on calculations derived
from expected cash flows of the individual project.
Calculations are made for the full term of a project,
incorporating future years in which the project is
expected to generate cash flows. Project decisions
are taken on the basis of net present value and the
internal rate of return calculated for the project.
Value-based project management
Operational business in the Automotive and Motor-
cycles segments is largely shaped by its life-cycle-
dependent project character. Projects have a substantial
influence on future business performance. Project
decisions are therefore a crucial component of financial
management in the BMW Group.
Capital employed comprises the average amount
of Group equity employed during the year as a
whole, the financial liabilities of the Automotive
and Motorcycles segments, and pension provisions.
The earnings amount corresponds to Group profit
before tax, adjusted for interest expense incurred in
conjunction with the pension provision and on the
financial liabilities of the Automotive and Motor-
cycles segments (earnings before interest expense
and taxes). The cost of capital is the minimum rate of
return expected by capital providers in return for the
capital employed. Since capital employed comprises
an equity capital (e.g. share capital) and a debt capital
element (e.g. bonds), the overall cost of capital rate
is determined on the basis of the weighted average
rates for equity and debt capital, measured using
standard market procedures. The pre-tax average
weighted cost of capital for the BMW Group in 2018
was 12%, unchanged from the previous year.
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
10,086
BMW Group
4,174
2,788
39
2,118.0
→ 20
150
Forecasts for 2018
with Actual Results
Comparison of
→ Overall Assessment
by Management
↑ ↑ ↑
Economic Position
→ General and Sector-
specific Environment
Report on
Report
Management
Combined
44
43
33
Source: Working Group for the Iron and Metal Processing Industry.
2019
2018
2017
2016
2015
2014
60
Motorcycle markets in the 250 cc plus class generally
performed well during 2018. The number of new
registrations worldwide increased 3.1 % year-on-year.
European markets in particular developed well, grow-
ing at an overall rate of 7.4%. Germany registered
growth of 8.6%. Increases in new registrations were
also recorded in Italy (+6.3%) and Spain (+16.3%).
The French motorcycle market was 6.0% up on the
previous year. The US market continued to perform
weakly and contracted by 4.5%.
in 2018
International motorcycle markets
International interest rate environment and
development of pre-owned vehicle prices
The global economy continued to grow robustly in
2018. With the exception of the Fed, major central
banks supported this development with their con-
tinued expansionary approach.
After a weak first six-month period, the UK economy
recorded stronger-than-expected growth during the
second half of 2018. In August, the Bank of England
(BOE) decided to raise key interest rates in view of solid
growth figures and to counter inflationary pressures.
Group profit before tax is expected to show a
moderate year-on-year decrease (previously:
in line with the previous year).
The EBIT margin in the Automotive segment is
expected to be at least 7% (previously: 8 to
10%).
In the Automotive segment, revenues are fore-
cast to be slightly lower than the previous year
(previously: slight year-on-year increase).
Against this background, the BMW Group adjusted its
outlook for the financial year 2018 as follows:
markets.
In addition, continuing international trade con-
flicts were aggravating the market situation and
feeding uncertainty. These circumstances resulted
in greater-than-expected distortions in demand
and unexpected pressure on pricing in several
Increased goodwill and warranty measures re-
sulted in significantly higher additions to provi-
sions in the Automotive segment.
The BMW Group implemented the requirements
of the WLTP regulations at an early stage. How-
ever, the industry-wide shift to the new WLTP
test cycle resulted in significant supply distor-
tions on several European markets and unexpect-
edly intense competition. In line with its flexible
production and sales strategy, the BMW Group
responded to these circumstances by reducing
its volume planning with a clear focus on earn-
ings quality.
-
In an ad hoc announcement issued on 25 Septem-
ber 2018, the BMW Group reported on its decision to
revise its forecast for the financial year 2018 in light
of a new assessment. The main reasons given for the
revision are stated below:
As part of the analysis of operations and the financial
condition of the BMW Group, forecasts made the pre-
vious year for the financial year 2018 are compared
with the actual outcomes in 2018.
The following section provides information on the key
financial and non-financial performance indicators
for the Group and its segments, which is used as the
basis for the internal management of the BMW Group.
COMPARISON OF
FORECASTS FOR 2018
WITH ACTUAL RESULTS
IN 2018
Overall assessment of business performance
Despite challenging conditions and volatility on
international markets, the BMW Group can look
back on an overall positive business performance
in 2018. Despite some downward trends in figures
in the past financial year, the BMW Group's results
of operations, financial position and net assets are all
indicative of the enterprise's solid financial condition.
Overall, despite the various economic challenges,
business developed in line with management's
revised expectations. This assessment also takes into
account events after the end of the reporting period.
BY MANAGEMENT
OVERALL ASSESSMENT
In the UK, the market for pre-owned premium vehicles
was slightly down on previous years. North American
markets developed positively. So far, markets in Asia
have been largely unaffected by discussions about
types of engine.
In some European countries, in particular Germany
and to some extent in Southern Europe, diesel
engines were the subject of political debate in 2018.
In Germany, the first driving bans were imposed on
older diesel vehicles. Although markets for pre-owned
cars in the premium segment reacted across the board
with price decreases for diesels, only a small number
of the affected vehicles remain in the BMW Group's
portfolio. By contrast, prices for petrol vehicles in the
premium segment remained stable.
The pace of economic growth in Japan slowed during
2018, partly due to the numerous natural disasters.
With inflation well below the target rate of 2%, the
Japanese central bank decided to retain its highly
expansionary monetary policy.
The Chinese economy lost a certain amount of
momentum in 2018. Despite the trade dispute with
the USA, the People's Bank of China (PBOC) retained
its interest rate policy and left the benchmark interest
rate unchanged.
Despite the trade dispute with China, the US Federal
Reserve maintained its strategy of normalising mon-
etary policy during 2018. Over the course of the year,
it resolved on four occasions to raise the benchmark
interest rate, in each case by 0.25%, taking it to a
range of 2.25 -2.50%.
The ECB's policy of monetary expansion remained
largely unchanged. The volume of bond purchases
was reduced from €30 billion to €15 billion in Octo-
ber 2018 and the purchase programme definitively
ended with effect from the end of the year.
Vehicle registrations in major emerging markets rose
for the second year in succession in 2018. Russia
recorded growth of 10.3% to 1.6 million units. New
registrations in Brazil went up by 12.1% (2.1 million
units).
Overall, European automobile markets finished at
the previous year's level (15.6 million units; 0.0%). A
look at individual markets, however, shows a mixed
picture for registrations. While Spain (1.3 million
units; +7.0%) and France (2.2 million units; +3.0%)
again saw year-on-year growth, new registrations were
down in Italy (1.9 million units; -3.3%) and Germany
(3.4 million units; -0.2%). The automobile market in
the UK continues to suffer from uncertainties related
to the progress of Brexit, with registrations down by
6.8% to 2.4 million units.
The upward trend of the previous years on inter-
national automotive markets failed to continue in
2018, with registration figures for passenger cars and
light commercial vehicles falling worldwide by 2.2%
to 85.8 million vehicles. New registration figures
fell for the first time in years in China (23.1 mil-
lion units; -6.3%) and were flat in both the USA
(17.3 million units; +0.3%) and Japan (5.1 million
units; +0.7%).
Gold
1,800
600
1,200
1,800
Price in US Dollar
→ 21
Precious metals price trend
2019
2018
2017
2016
2015
2014
50
Price in US Dollar
Price in €
100
150
Source: Reuters.
50
100
1,200
Palladium
Platinum
600
International automobile markets
........
100
140
Index: January 2014=100
→ 22
Steel price trend
On oil markets, concerns regarding a state bank-
ruptcy in Venezuela and the reintroduction of export
sanctions against Iran fuelled fears of a possible
under-supply. Overall, the average price per barrel
rose significantly from 54 US dollars to 72 US dollars
year-on-year. WTI, the benchmark for crude oil in the
USA, followed a similar trend, with an average price of
around 65 US dollars per barrel for the year as a whole.
Prices for lithium and cobalt, which are used as raw
materials in batteries, were highly volatile during 2018.
Whereas multi-year highs were still being recorded in
the first half of the year, prices fell sharply during the
second six-month period.
increase.
Price per barrel of Brent Crude
Prices for precious and non-ferrous metals fell mar-
kedly overall towards the end of 2018. Only palladium,
which is mainly used in petrol engines, saw a price
Energy and raw materials prices
Source: Reuters.
2019
2018
2017
2016
2015
2014
100
100
Steel markets experienced some sharp price rises
during 2018, especially in the USA. The US Admin-
istration increased tariffs on steel by 25%, making
this particular raw material more expensive for the
domestic market. In addition, the price of coking coal
went up by around 10%. Moreover, both the USA and
the EU continued to apply protectionist measures on
steel products from various countries.
* Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2018: 459,581 units, 2017: 384,124 units, 2016: 316,200 units, 2015: 282,000 units, 2014: 275,891 units).
252.2
286,743
Financial Services Segment
Continued growth for Financial Services
As in the previous year, the Financial Services segment
continued to perform very well within a highly com-
petitive market environment and therefore remained
firmly on growth course. In balance sheet terms, busi-
ness volume grew by 6.8% to stand at €133,210 mil-
lion (2017: €124,719 million). The contract portfolio
under management at 31 December 2018 comprised
5,708,032 contracts and therefore grew solidly by 6.1%
year-on-year (2017: 5,380,785 contracts).
Contract portfolio of
Financial Services segment
→ 33
in 1,000 units
6,000
5,708
5,115
5,381
4,719
4,360
3,000
Segment
Slight growth in new business
The proportion of new BMW Group vehicles either
leased or financed by the Financial Services segment
in the financial year 2018 amounted to 50.0%, 3.2 per-
*The calculation centage points up on the previous year (2017: 46.8%)*,
mainly due to growth in credit financing in China.
only includes
automobile mar-
kets in which the
Financial Services
solidated entity.
segment is repre- In the pre-owned financing and leasing business
sented by a con- for BMW and MINI, the segment recorded a slight
increase in the number of new contracts signed in the
period under report, up by 2.2% to 396,610 contracts
(2017: 387,937 contracts).
The total volume of new credit financing and leasing
contracts concluded with retail customers during
the twelve-month period under report amounted to
€55,817 million, slightly higher than one year earlier
(2017: €55,049 million; +1.4%) and despite negative
exchange rate effects.
2014
2015
2016
2017
2018
BMW Group new vehicles financed or
leased by Financial Services segment*
Credit financing and leasing business with retail
customers remain key elements in the success of the
Financial Services segment. During the period under
report, 1,908,640 new credit financing and leasing
contracts were concluded with customers, slightly
up (+4.4%) on the previous year (2017: 1,828,604
contracts). A slight increase in new contracts was
recorded for both credit financing (+4.3%) and leasing
business (+4.5%). Overall, leasing accounted for 33.1%
and credit financing for 66.9% of new business.
→ 34
Review of Operations
→Financial Services
Report on
164.2 165.6
145.0
137.0
123.5
2014
2015
2016
2017
2018
BMW Group - key motorcycle markets 2018
→ 32
as a percentage of sales volume
Economic Position
Motorcycle production down year-on-year due to
model changes
Eight new models introduced
BMW Motorrad presented a total of eight new models
at the international motorcycle trade shows in Cologne
(INTERMOT) and Milan (EICMA), comprising the
R 1250 GS, R 1250 GS Adventure, R 1250 RT, R 1250 R,
R 1250 RS, C 400 GT, F 850 GS Adv. and S 1000 RR. In
the case of the third generation of the S 1000 RR, BMW
Motorrad's customers can now select a BMW M package
for the first time. The R 1250 models are also equipped
with new engines that generate more power, especially
at lower speeds, and help improve energy efficiency.
14.4 Germany
10.0 France
Other 46.5
8.5 Italy
8.4 USA
6.7 Spain
UK 5.5
53
54
Combined
Management
Report
A total of 162,687 motorcycles rolled off BMW Motor-
rad's production lines at five locations during the year
under report (2017: 185,682 units; -12.4%). Since
July 2018, BMW Motorrad scooters have also been
manufactured by BMW Motorrad's partner Loncin
Motor Co., Ltd in Chongqing, China.
90
in %
60
in % per region
Asia/Pacific 8.7
China 10.7
EU Bank✶ 21.1
32.8 Europe/
Middle East/Africa
Deposit business volume up on previous year
Customer deposits represent an important source of
refinancing for the Financial Services segment. The
volume of deposits stood at €14,359 million at the end
of the reporting period, representing a solid increase
over one year earlier (2017: €13,572 million; +5.8%).
26.7 Americas
Growth in insurance brokerage business
With an increase of 3.2% in 2018, the number of
newly brokered insurance contracts grew to 1,381,093
contracts (2017: 1,337,652 contracts). At 31 Decem-
ber 2018, the total number of brokered insurance
contracts stood at 3,906,550 (2017: 3,649,362 con-
tracts; + 7.0%).
*EU Bank comprises BMW Bank GmbH, its branches in Italy, Spain and Portugal, and its
subsidiary in France.
Slight growth in fleet business
The BMW Group is one of Europe's foremost leasing
and full-service providers. The Financial Services
segment's fleet management business, under the
brand name Alphabet, offers leasing and financing
arrangements as well as specific services to com-
mercial customers. The number of fleet contracts
rose by 3.0% during the financial year 2018. At
31 December 2018, the segment was thus managing
a portfolio of 700,080 fleet contracts (2017: 679,895
contracts).
55
Solid year-on-year growth in dealership financing
The total volume of dealership financing continued
to grow during the financial year 2018, standing at
€20,438 million at the end of the reporting period
(2017: €19,161 million; +6.7%).
55
56
Combined
Management
Report
Report on
Economic Position
Review of Operations
→Financial Services
Segment
→ Research and
Development
Risk profile
Despite ongoing political and economic uncertainties,
such as the diesel debate in European countries con-
cerning higher levels of emissions from diesel vehicles
as well as Brexit and trade conflicts, the risk profile
across the Financial Services segment's total portfolio
remained stable at a low level.
0.25
Development of credit loss ratio
99
60
Report on
Decrease in multi-brand financing
49.6
50.0
46.3
46.8
41.7
22.3
21.2
22.1
20.8
30
Leasing 20.9
27.3
Multi-brand financing in the Financial Services seg-
ment registered a significant drop (-13.5%) in new
business in 2018, with the number of new contracts
falling to 136,283 contracts (2017: 157,626 contracts).
The total portfolio comprised 401,007 contracts at
31 December 2018, slightly lower than one year earlier
(2017: 406,813 contracts; -1.4%). The reason for the
decline was a stronger focus on the Group's own
brands within this line of business.
Financing 20.8
26.0
28.8
0
2014
2015
2016
2017
2018
*Until 2015 excluding Rolls-Royce.
The total portfolio of financing and leasing contracts
with retail customers developed positively again in
2018, with a solid increase of 6.3% year-on-year. In
total, 5,235,207 contracts were in place with retail
customers at 31 December 2018 (2017: 4,926,228
contracts) in the Financial Services segment. The
China region recorded the fastest growth rate of all
regions, significantly growing its contract portfolio by
25.6% year-on-year. The Europe/Middle East/Africa
region (+7.0%), the EU Bank* region (+6.2%) and
the Americas region (+2.2%) also registered solid
or slight year-on-year growth respectively, whereas
the Asia/Pacific region saw a slight decrease in its
contract portfolio (−2.5%).
Contract portfolio retail customer financing
of Financial Services segment 2018
→ 35
24.2
180
in 1,000 units
→ 31
50,224
53,105
-5.4
2.0
15,612
21,084
-26.0
0.6
06
10,956
8,952
22.4
6.2
0.4
12,768
-39.3
0.3
4,353
3,308
31.6
0.2
308
299,939
269,309
11.4
11.8
7,752
191,888
-19.7
157,799
→ Purchasing and
Supplier Network
→Sales and Marketing
Purchasing and Supplier Network
Ensuring access to resources in a
volatile environment
With its globally oriented organisation, the Purchasing
and Supplier Network ensures access to all necessary
external resources in an environment that remains
highly volatile. Activities include the procurement
and quality assurance of production materials, raw
materials, capital goods and services as well as the
manufacturing of vehicle components produced
in-house. External suppliers are selected systematically
according to the criteria of quality, innovation, flexibil-
ity and cost. In 2018, procurement activities focused
on components for the fast-growing percentage of
electrified vehicles.
Connecting procurement markets
The BMW Group remains committed to its strategy of
maintaining a regional balance with regard to growth
in delivery, production and purchasing volumes. The
strategy makes an important contribution to natural
hedging against currency fluctuations. The global
distribution of purchasing volumes for production
materials and raw materials is closely linked to pro-
duction volumes in the BMW Group's global plant
network. Global distribution remained largely stable
in the financial year 2018.
Global trade policy influences purchasing
Global trade policy is increasingly influencing the
BMW Group's purchasing activities as well as its
globally interlinked supply chains. With its pur-
chasing strategy, the Group is pursuing the goal of
increasing its own competitiveness and at the same
time contributing towards cutting customs costs. This
is achieved, for example, through localisation in free
trade areas with minimum requirements in terms
of local value creation and through the intelligent
controlling of material flows within a global network.
The BMW Group's purchasing function also works
to ensure the greatest possible flexibility to allow for
short-term changes in trade policy.
Regional mix of BMW Group
purchase volumes 2018
→ 37
in %, basis: production material
196,455
Asia 6.5
North America
Rest of Western
Europe 17.0
1.2 Other
38.0
Germany
22.4 Eastern Europe
246,043
-0.7
9.6
234,501
223,817
4.8
9.2
14.9
127,440
50.6
7.6
To ensure full capacity utilisation of its production
network in the long term and to be capable of
responding rapidly and flexibly to changing customer
requirements, the BMW Group pursues the strategy of
integrating the production of all-electric and plug-in
hybrid vehicles in its existing manufacturing system.
In 2018, the Group produced electrified vehicles at
ten different locations worldwide. In the future, every
BMW Group production plant in Europe will also
manufacture electrified vehicles.
52
52
Combined
Management
Report
Report on
Economic Position
Review of Operations
→ Automotive Segment
→ Motorcycles
Segment
German plants play leading role within network
Overall, the Group's German manufacturing plants
in Munich, Dingolfing, Regensburg and Leipzig again
produced over one million vehicles in 2018.
At the same time, important innovations are being
further developed and tested at these plants. Moreover,
they are playing a key role in integrating e-mobility
throughout the BMW Group's production network.
In 2018 alone, more than €1 billion were invested in
the Group's German production sites for continu-
ous modernisation projects and to prepare them for
electric mobility.
The technologies used in making electric drivetrain
components and batteries are developed at the proto-
type construction centre in Munich. The Dingolfing
and Landshut plants play a leading role as centres of
competence for the production of electric drivetrain
systems. Electric motors for the BMW Group's elec-
trified vehicles are also produced at these plants. The
batteries required are produced at the three battery
factories in Dingolfing (Germany), Spartanburg (USA)
and Shenyang (China). In Thailand, the BMW Group
works closely with a partner that manufactures bat-
teries for electrified vehicles produced locally.
Its production network leverages innovative technolo-
gies from the fields of digitalisation and Industry 4.0,
standardised modules and intelligent mixed manu-
facturing methods. The production system ensures
consistent premium quality and enables a high level
of customisation for customers. MINI buyers, for
example, can optionally design selected components
to suit their individual tastes.
The ability to produce electric drivetrain systems,
batteries and prototypes for battery cells in-house
gives the BMW Group a decisive competitive edge
that enables it to secure valuable knowledge of new
technologies, gain important system expertise and
leverage cost advantages.
International production network
By expanding its international production network,
the BMW Group follows global market developments
with the aim of ensuring a balanced distribution of
added value. In 2018, the Group announced the
construction of a new plant in Hungary in order to
increase capacity in its global production network in
the long term.
In 2018, the Group's largest plant in Spartanburg
(USA) began producing the first BMW X7 and the
new BMW X4 and BMW X5 models. The plant, which
specialises in the BMW X Series ranging from the X3
to the X7, produces a total of five different models for
the world market.
Due to the high global demand for these models,
the plants in Dadong (China) and Rosslyn (South
Africa) have also been producing the BMW X3 since
2018. Previously, the Rosslyn plant had produced the
BMW 3 Series for over 35 years. The new BMW Group
plant in San Luis Potosí (Mexico) will take over these
capacities going forward. The first BMW 3 Series
Sedans have already been successfully produced there
as pre-series models. The plant in Mexico is due to be
officially opened in mid-2019.
In 2018, the BMW Group celebrated the 15th anniver-
sary of the successful BMW Brilliance Automotive
(BBA) joint venture in Shenyang (China). A total of six
BMW models are manufactured at the two BBA plants
in Dadong and Tiexi. The BMW X2 will become the
seventh model in 2019.
Worldwide network for conventional drivetrain
production
The engine manufacturing plants in Munich, Hams
Hall (UK), Steyr (Austria) and Shenyang (China) sup-
ply both diesel and petrol engines for the production
network. The BMW Group's largest engine plant in
Steyr also serves as the development centre for diesel
engines worldwide. In Steyr, more than 700 techni-
cians and engineers are working on making the drive-
trains of the future generate even fewer emissions and
operate more efficiently and powerfully with the help
of state-of-the-art testing and measuring technology.
Motorcycles Segment
Motorcycle deliveries increase
Deliveries of motorcycles reached a new record level
of 165,566 units in 2018 (2017: 164,153 units; +0.9%),
marking the eighth successive year of growth.
Effect of model change felt particularly in Europe
The model change in the mid-class segment had a
particularly significant impact on the European mar-
ket, causing motorcycle deliveries to fall slightly by
3.3% to 98,144 units in 2018 (2017: 101,524 units). At
23,824 units, deliveries to customers in Germany were
down year-on-year (2017: 26,664 units; -10.7%).
Italy saw a slight decrease, with deliveries falling to
14,110 units (2017: 14,430 units; -2.2%). By contrast,
volumes remained similar to the previous year's level
in Spain (11,124 units; 2017: 11,193 units; −0.6%)
and France (16,615 units; 2017: 16,607 units; 0.0%).
In the USA, BMW Motorrad reported a slight increase
of 2.2% to 13,842 units despite difficult market con-
ditions (2017: 13,546 units).
BMW Group deliveries of motorcycles
In the future, the Group intends to concentrate its
battery cell expertise in an in-house competence cen-
tre. The aim is to continue developing the technology
and to fully analyse and understand the value-added
processes of the battery cell. The competence centre
is due to be opened in 2019.
The BMW Group's production system is based on
the Strategy NUMBER ONE > NEXT and is ideally
prepared for the future. The system is characterised
by unique flexibility, outstanding efficiency and
robust processes, enabling the BMW Group to
respond rapidly to changing market situations
and fluctuations in regional demand. This level of
manufacturing expertise gives the Group a crucial
competitive edge and makes a key contribution to
its overall profitability.
4 Contract production.
3 Joint Venture BMW Brilliance Automotive Ltd., Shenyang.
211,660
168,969
25.3
8.3
63
64,431
50,272
28.2
2.5
42,660
38,064
12.1
1.7
2,541,534
2,505,741
1.4
100.0
Goodwood
San Luis Potosí²
Tiexi (BBA)³
Dadong (BBA)³
Born (VDL Nedcar)4
Graz (Magna Steyr)4
Partner plants
Group
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2018: 491,872 units, 2017: 396,749 units).
2 2018 only pre-series production, plant opens in 2019.
→ 36
286,827
in %
15
2018
in units
→ 28
Deliveries of Rolls-Royce vehicles
by model variant
In 2018, Rolls-Royce Motor Cars marked its best
in over 100 years of corporate history with 4,107 deliv-
eries worldwide (2017: 3,362 units; +22.2%). The
Rolls-Royce Phantom* (830 units; 2017: 235 units)
and the new Rolls-Royce Cullinan* (544 units), the
latter of which has been available to customers since
November 2018, contributed substantially to this
performance.
year
Rolls-Royce with record deliveries
100.0
-2.8
371,881
361,531
27.6
2017
17.5
99,750
13.1
-20.7
59,572
47,236
8.9
-3.0
33,351
32,356
50.4
-6.1
194,070
84,888
182,189
Change in %
830
33,676
37,545
BMW i
Change in %
2017
2018
in units
Deliveries of electrified models
→ 29
With a total of 142,617 units, deliveries of BMW Group
electrified vehicles rose by more than a third in 2018
(2017: 103,080 units; +38.4%). Deliveries of BMWi
and BMW plug-in hybrid models increased by one
third to 129,398 units in the year under report (2017:
97,281 units; +33.0%). With a total of 91,853 units,
BMW plug-in hybrids made an important contribu-
tion to this performance (2017: 63,605 units; +44.4%).
Deliveries of the electrified MINI Countryman*, avail-
able since June 2017, totalled 13,219 units during the
year under report (2017: 5,799 units).
The BMW Group succeeded in reaching its target of
delivering more than 140,000 electrified vehicles in
the financial year 2018, underlining its leading posi-
tion worldwide in terms of combined deliveries of
all-electric and plug-in hybrid vehicles and as market
leader in Europe.
Delivery target of 140,000 electrified automobiles
achieved
22.2
Phantom*
3,362
Rolls-Royce total
544
Cullinan*
-12.5
2,029
1,775
Wraith/Dawn
-12.8
1,098
958
Ghost
235
4,107
11.5
2018 in %
2017
BMW i
1.6
-13.5
40,531
35,040
BMW X6
7.3
-14.0
180,905
155,575
BMW X5
2.2
37,545
-11.9
45,950
BMW X4
9.5
37.7
146,395
201,637
BMW X3
3.2
67,576
BMW X2
13.5
0.0
52,167
Change in %
33,676
1.8
2018
MINI sales volume
Proportion of
MINI total
MINI Countryman
MINI Clubman
MINI Convertible
MINI Hatch (3- and 5-door)
in units
→ 27
Deliveries of MINI vehicles by model variant
increased by almost one fifth to 99,750 units (2017:
84,888 units; +17.5%). The MINI Hatch (3- and 5-door)
achieved a volume of 182,189 units (2017: 194,070
units; -6.1%).
11.5
2018 was the second-best year in MINI's history.
Worldwide deliveries totalled 361,531 units (2017:
371,881 units; -2.8%). Deliveries of the MINI Countryman 7
Review of Operations
→ Automotive Segment
Economic Position
Report on
Combined
Management
Report
Review of Operations
50
*Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2018: 459,581 units, 2017: 384,124 units).
100.0
1.8
2,088,283
2,125,026
BMW total
MINI achieves second-best year
BMW iPerformance
91,853
63,605
Deliveries of BMW vehicles by model variant*
→ 26
in units
2018
2017
Change in %
Proportion of
BMW sales volume
2018 in %
BMW 1 Series
199,980
201,968
-1.0
9.4
49
BMW 2 Series
181,113
-16.0
7.2
BMW 3 Series
366,475
409,005
-10.4
17.2
BMW 4 Series
109,887
133,104
-17.4
152,215
5.2
The BMW X family again enjoyed high demand
in 2018. Worldwide deliveries of 792,605 X units
represented a significant 12.1% increase year-on-
year (2017: 706,741 units). The BMW X3 made an
important contribution to this performance, with
deliveries up by more than one third to 201,637 units
(2017: 146,395 units; +37.7%). Now coming to the
end of its life cycle, BMW X5 deliveries fell short
of the previous year, in line with expectations
(155,575 units; 2017: 180,905 units; -14.0%). The
successor to the X5 has been available since Novem-
ber 2018 and will generate additional impetus from
2019 onwards.
At 199,980 units, deliveries of the BMW 1 Series
were almost at their previous year's level (2017:
201,968 units; -1.0%). Now nearing the end of its
model life cycle, deliveries of the BMW 3 Series were
down on the previous year, in line with expectations
(366,475 units; 2017: 409,005 units; -10.4%). The new
BMW 3 Series Sedan celebrated its world première
in autumn 2018, amid great acclaim from customers
and media alike. Deliveries of the BMW 5 Series 7
0.50
!!!!!
2014
2015
2016
2017
2018
The risk profile of the segment's credit financing port-
folio also remained stable at a low level. The credit
loss ratio on the total credit portfolio amounted to
0.25% at 31 December 2018, and therefore below the
previous year's level (2017: 0.34%).
Proceeds generated from the sale of BMW and MINI
brand vehicles again rose slightly in the financial year
2018 due to volume and mix effects. Market values sta-
bilised in North America. By contrast, the European
pre-owned vehicle market experienced a downward
trend, in line with expectations, mainly in the wake
of the diesel engine debate.
Further information on the risk situation is provided
in the section Risks and Opportunities.
57
52
rose significantly by 10.2% to 382,753 units (2017:
347,313 units). The BMW 6 Series benefited from the
new Gran Turismo model and achieved a volume of
26,606 units worldwide (2017: 11,052 units).
Research and Development
In 2018 the research and development division at the
BMW Group faced a series of challenges, which were
successfully met. Firstly, as part of the model offensive,
the Company developed new vehicles and vehicle
concepts. Secondly, it played a key role in advancing
the technologies that will drive tomorrow's world,
such as autonomous driving, battery research and
electric mobility as well as software development
and connectivity. Moreover, the transition to the new
WLTP testing cycle was successfully completed during
the course of the year.
Autonomous Driving Campus working at full speed
In May 2018, the BMW Group celebrated the official
opening of its Autonomous Driving Campus in Unter-
schleißheim near Munich. On 23,000 square metres
of office space, the BMW Group is rapidly developing
state-of-the-art driver assistance systems as well as
highly and fully automated driving technology. The
campus has created many new jobs, particularly for
IT specialists and software developers in the fields
of artificial intelligence, machine learning and data
analysis.
244,248
Combined
Management
Report
58
Furthermore, in May 2018 the BMW Group became
the first international automotive manufacturer to
obtain a test licence for autonomous driving within
China. Level 4 functions (fully automated driving) are
being trialled by a test fleet comprising the latest mod-
els of the current BMW 7 Series on approximately six
kilometres of designated test routes in the Chinese city
of Shanghai. The development team, which is made
up of more than 60 experts, is currently collecting data
that reflect urban traffic in all its complexity. These
data will serve as the basis for developing machine
learning algorithms capable of depicting highly auto-
mated driving strategies.
Following the R&D centre in Shenyang, the BMW Group
opened a new location in Beijing in May 2018, where
topics such as requirements management, testing and
validation as well as the development of systems and
services are now handled. In June, the BMW Group
added a third location - Shanghai - to its Chinese
R&D network. The R&D centre in Shanghai will focus
on autonomous driving, digital services and futuristic
design and expand existing collaboration arrangements
with leading high-tech companies. The R&D team
comprises over 200 technical specialists and design-
ers. The two new locations are intended to bolster the
BMW Group's local innovative strength in China.
Substantial expansion of R&D activities in China
As part of its corporate strategy, the BMW Group
took a number of decisive steps in 2018 in the field of
research and development to secure the future of the
enterprise as a whole. China is playing an increasingly
significant role for the BMW Group as a driver of
innovation and future mobility.
Driver assistance and autonomous driving continue to
play key roles in the BMW Group's forward-oriented
strategy. During the year under report, a total of
80 vehicles were deployed to test the new technolo-
gies on highways and in urban environments across
Europe, the USA and China.
At the end of 2018, around 1,300 experts from the
BMW Group as well as from external partners such as
Fiat Chrysler Automobiles, Intel and Mobileye were
already working in Unterschleißheim. On campus,
the associates actively practise an open, agile way of
working (Large Scale Scrum - LeSS), enabling the
teams to tackle the high complexity of their tasks more
quickly and with greater efficiency. This approach
enables the BMW Group to focus keenly on developing
new key technologies such as artificial intelligence
and driving simulation.
BMW* deliveries rise to new record level
In 2018, BMW brand deliveries rose to 2,125,026 units
(2017: 2,088,283; +1.8%), reaching a new record high
for the eighth year in succession. The BMW 5 Series,
the BMW 6 Series and the X Family all made
major contributions to this result. Moreover, the
fleet of electrified vehicles is continually gaining
in significance.
→ www.bmwgroup.com/innovation
BMW 5 Series
382,753
347,313
2018
Araquari
Chennai
Rayong
Rosslyn
Munich
Oxford
Leipzig
Regensburg
Dingolfing
Spartanburg
in units
2017
(2017: 2,123,947¹ units; +2.1%), 368,685 MINI (2017:
378,486 units; -2.6%) and 4,353 Rolls-Royce brand
vehicles (2017: 3,308 units; +31.6%).
Vehicle production of the BMW Group by plant
A new production volume record of 2,541,534¹ units
(2017: 2,505,741¹ units; +1.4%) was set during the
year under report, comprising 2,168,496¹ BMW 7
Production reaches new all-time high
*Fuel consumption and CO2 emissions information are available on page 108.
38.4
103,080
142,617
Total
5,799
13,219
MINI Electric
44.4
→ 30
Change in %
Proportion of
production in %
51
10.2
18.0
BMW 6 Series
26,606
11,052
1.3
BMW 7 Series
56,037
64,311
-12.9
2.6
BMW 8 Series
923
BMW X1
12.7
-5.5
338,259
319,592
12.9
-12.7
376,580
328,862
14.0
-3.9
371,316
356,749
555
0.5
Economic Position
Motorcycles
59
Financial result
Profit before tax
694
776
-10.6
9,815
10,675
-8.1
Income taxes
Profit from continuing operations
-2,575
-7.9
-2,000
7,240
8,675
-16.5
Loss from discontinued operations
-33
Net profit
7,207
8,675
-16.9
Earnings per share of common stock in €
Earnings per share of preferred stock in €
-28.8
9,899
9,121
-494
Deliveries of BMW, MINI and Rolls-Royce brand
vehicles during the financial year 2018 increased
slightly by 1.1% year-on-year to 2,490,664 units. The
BMW Group condensed income statement
→ 42
figure includes 459,581 units (2017: 384,124 units)
manufactured by the joint venture BMW Brilliance
Automotive Ltd., Shenyang.
in € million
Revenues
Cost of sales
Gross profit
Selling and administrative expenses
Other operating income and expenses
Profit before financial result
2018
2017*
Change in %
97,480
98,282
-0.8
-78,924
-78,329
-0.8
18,556
19,953
-7.0
-9,558
-9,560
123
10.82
13.07
-17.2
10.84
66
Combined
Management
Report
Report on
Economic Position
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Due to currency effects, BMW Group revenues
remained at a similar level to the previous year.
Adjusted for currency factors, revenues grew slightly
on the back of higher delivery volumes and a good
financing portfolio performance. The positive impact
of volume growth was held down by intense compe-
tition on the markets. The unexpectedly high level
of competition was due in particular to the reaction of
competitors to the early implementation of WLTP
regulations. Trade conflicts and uncertainties also
exacerbated the situation and had an unfavourable
impact on selling prices.
Group revenues by region were as follows:
BMW Group revenues by region
→ 43
in %
Europe
Asia
2018
2017*
46.1
46.0
30.9
30.2
Americas
20.2
20.8
7
Other regions
2.8
3.0
Group
99
Results of operations
65
positive effect of the growth in vehicle deliveries. The
currency impact was mainly attributable to changes in
the exchange rates of the US dollar, Chinese renminbi,
Russian rouble and Australian dollar against the euro.
The net amount reported for other operating income
and expenses had a positive effect. Profit before tax
for the year ended 31 December 2018 was moderately
down on the previous year.
13.09
-17.2
in %
2018
2017*
Change in %pts
Pre-tax return on sales
10.1
10.9
-0.8
Post-tax return on sales
7.4
8.8
-1.4
Gross margin
19.0
20.3
-1.3
Effective tax rate
26.2
18.7
7.5
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
The BMW Group had a worldwide workforce of
134,682 employees at the end of the reporting period
(31 December 2017: 129,932 employees).
Gross profit for the twelve-month period under report
fell moderately year-on-year. A combination of higher
research and development expenses, intense com-
petition and currency effects more than offset the
69
RESULTS OF OPERATIONS,
FINANCIAL POSITION AND
NET ASSETS
Social engagement is firmly anchored in the
BMW Group's understanding of its corporate role.
As a globally operating company, the BMW Group
assumes responsibility and is concerned with current
social challenges. Its commitment focuses on long-
term solutions that are internationally applicable and
have a long-term impact according to the principle of
"helping people to help themselves". In doing so, the
company concentrates on its core competencies, such
as intercultural understanding, social inclusion and
the conservation of resources.
Social engagement
62
62
Combined
Management
Report
Report on
Economic Position
Review of Operations
→ Workforce
→ Sustainability
BMW Group remains a highly attractive employer
In 2018, the BMW Group was once again ranked
among the world's most attractive employers. In the
latest "World's Most Attractive Employers" rankings
published by the agency Universum, the BMW Group
was once again named the most attractive automotive
company in the world.
In the period under report, BMW Group China was
also named the most attractive employer in the auto-
motive industry in both the local Universum Students
Survey and the Zhaopin Most Attractive Employer
Award.
The Group also came out top again in Trendence's
Young Professional Barometer Germany. In the Tren-
dence Graduate Study Germany, the BMW Group
retained first place in the business management and
engineering target groups and improved its position
for the IT target group, where it moved into second
place. It also improved its rankings in the Universum
study "Young Professionals Germany”, finishing first,
second and third in the categories Business, Engineer-
ing and IT respectively. Based on the overall results of
studies across all sectors, the BMW Group remained
one of the world's highest-ranked companies in 2018.
Employee attrition rate at BMW AG*
→ 40
Diversity as a competitive factor
Diversity is a key factor in ensuring the BMW Group's
continued competitiveness. Emphasis is placed on
the three aspects of gender, cultural background and
age/experience. The aim is to ensure equal opportu-
nities for all employees and at the same time utilise
and promote the diversity of the Group's workforce.
To achieve this end, a broad array of measures was
implemented within the BMW Group during 2018.
Further information on this topic is also provided in
the Sustainable Value Report 2018. → www.bmwgroup.com/svr
The proportion of women in the workforce as a whole,
as well as in management functions and young talent
development programmes, increased during the finan-
cial
year under report. The percentage of women in the
total BMW Group workforce rose to 19.9% (BMW AG:
16.5%), above the internal target range of 15 to 17%.
The number of women in management functions rose
to 17.2% across the BMW Group (BMW AG: 15.1%).
In the year under report, female representation in the
BMW Group's trainee and student programmes stood
at 44% and 28% respectively.
Proportion of female employees in manage-
ment functions at BMW AG/BMW Group*
→ 41
in %
as a percentage of workforce
7.0
3.5
2.70 2.64 2.78
2.08
1.41
¡III
61
2014
High level of investment in employee qualification
Spending on training and development increased to
€373 million year-on-year (2017: €349 million; +6.9%).
By training its workforce in areas such as electric
mobility, robotics, data analysis and artificial intel-
ligence, the BMW Group is creating an important
foundation for the future success of its Strategy
NUMBER ONE > NEXT. Managers are also closely
involved in training and are prepared in the areas
of transformation process design and leadership in
agile organisations.
2017
3,709
3,506
5.8
Financial Services
8,860
8,645
2.5
4,964
5,000
4,595
4,700
4,613
4,750
Other
119
117
1.7
Group
134,682
129,932
3.7
2,500
2014
2015
2016
2018
100.0
2015
2017
The separate combined non-financial report is availa-
ble online within the Sustainable Value Report 2018
at www.bmwgroup.com/svr.
Stakeholder dialogues and materiality analysis as
basis for sustainability management
The BMW Group is in continual dialogue with a large
number of stakeholders, both in Germany and abroad.
Stakeholder feedback provides the BMW Group with
a clear picture of how current trends are changing
the business environment and is incorporated in the
strategic considerations of the Company. For example,
in the course of 2018, stakeholder dialogue events on
the topics of urban mobility and digitalisation were
held in Los Angeles, Melbourne, Shenzhen, Rotter-
dam and Berlin.
As part of a regular materiality analysis, social chal-
lenges are continually monitored and analysed in
order to gauge their significance, from the point of
view of both external and internal stakeholders. The
results of the materiality analysis are described in
greater detail in the Sustainable Value Report 2018.
Top rankings in sustainability ratings
The BMW Group again achieved top rankings in
prestigious sustainability ratings in 2018, thereby
underlining its leading position as a sustainable
enterprise. In the Dow Jones Sustainability Indices
(DJSI) rating, the BMW Group is the only German
automobile maker to have been included once again
in the two indices "World" and "Europe" and has
been continuously represented since the indices were
established in 1999. In the CDP rating (formerly the
Carbon Disclosure Project), the Group achieved the
category "Leadership" with a rating of A- in the year
under report. Furthermore, the Group was again listed
in the British FTSE4Good Index in 2018.
Fleet CO2 emissions at previous year's level
The development of sustainable products and services
is an integral part of the BMW Group's business model.
The fleet-wide deployment of Efficient Dynamics
technologies and electrification are contributing to a
continual reduction in CO2 emissions. The electrifica-
tion of the fleet continued to make progress in 2018.
Due to the expansion of the model range, deliveries
of electrified BMW Group vehicles in 2018 increased
significantly and, at 142,617 units, surpassed the pre-
viously announced target of 140,000 units. Efficient
Dynamics and electrification form the basis for future
compliance with statutory CO2 and fuel consumption
limits going forward. The BMW Group has reduced
the CO2 emissions of its newly sold vehicles in Europe
by approximately 42% between 1995 and 2018.
63
63
64
Combined
Management
Report
Report on
Economic Position
Review of Operations
→ Sustainability
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
In 2018, the BMW Group's fleet of new vehicles sold
in Europe (EU-28) had an average fuel consumption of
4.9 litres of diesel and 6.0 litres of petrol per 100 km
respectively. CO2 emissions averaged 128 g/km
(adjusted value for 2017: 128 g/km). Despite a further
decline in the share of diesel vehicles, the figure was in
line with the previous year, also thanks to a significant
growth in deliveries of electrified models.
Clean production
In 2018, at 2.12 MWh per vehicle produced, the
BMW Group slightly reduced the amount of energy
consumed in the production process compared with
the previous year (2017: 2.17 MWh; -2.3%). This was
mainly due to the use of a new painting technology
at various locations, such as at the Munich plant, and
the installation of LED lighting throughout the entire
production network.
Through measures to boost energy efficiency and
the purchase and in-house generation of electricity
from renewable sources at BMW Group manufactur-
ing sites, production-related CO2 emissions fell by
2.4% to 0.40 tonnes per vehicle produced in the year
under report compared with the previous year (2017:
0.41 tonnes).
In 2018, at 2.39 m³ per vehicle produced, water
consumption was slightly higher than the previous
year's level (2017: 2.22 m³; +7.7%). This was mainly
due to above-average temperatures at the sites, which
had a direct impact on water consumption. The non-
recyclable waste from production processes rose to
4.27 kg per vehicle produced during the reporting
period (2017: 3.86 kg; +10.6%). This was mainly due
to a change in the structure of the waste disposal
companies at the Shenyang site. As a result, specific
waste streams, such as sludge from the wastewater
treatment plant, could not be recycled in the year
under report. Additionally, the high moisture content
from household waste at the plant in Rosslyn, South
Africa hindered recycling.
Sustainability along the value chain
Sustainability criteria also play a key role in the selec-
tion and assessment of suppliers. The BMW Group has
therefore comprehensively integrated sustainability
management in its purchasing processes. This also
includes greater transparency, which results from
close collaboration between the Group and its sup-
pliers. The BMW Group is also involved in initiatives
aimed at standardising sustainability requirements
and establishing verification mechanisms for critical
raw materials.
Sustainability in human resources policies
In 2018, the BMW Group continued to consolidate
its position as one of the most attractive employers
worldwide. Its leading role in terms of sustainability
contributes significantly to the high degree of employee
loyalty within the BMW Group and is one of the
reasons for the low staff attrition rate. This enables
the BMW Group to maintain a low level of personnel
recruitment expenditure. Further information is
provided in the section Workforce.
Based on the requirements of the German CSR Direc-
tive Implementation Act, BMW AG has been required
since the financial year 2017 to publish a non-financial
declaration at both Company and Group level. The
declaration is published jointly for BMW AG and the
BMW Group as a separate combined non-financial
report within the Sustainable Value Report.
2016
The Sustainable Value Report is published together
with the Annual Report and is drawn up in accordance
with the "Comprehensive" option of the standards
of the Global Reporting Initiative (GRI). This is the
highest level of transparency set out in the GRI stand-
ards, in which all relevant information and indicators
of the aspects identified as material are reported on.
The Sustainable Value Report is drawn up subject to
a limited assurance engagement in accordance with
IASE 3000 (International Standard on Assurance
Engagements 3000 (Revised): “Assurance Engage-
ments other than Audits or Reviews of Historical
Financial Information").
• Responsibility towards employees and society
Further information on sustainability within the
BMW Group and related topics is provided in the
Sustainable Value Report 2018, which is published
online at www.bmwgroup.com/svr.
2018
18
17.2
16.0
15.3
15.1
14.3
BMW Group 13.5
14.0
13.3
12.5
BMWAG 11.3
2014
2015
2016
2017
2018
*Since 2017 including maternity leave.
* Number of employees on unlimited employment contracts leaving the Company.
The Group's workforce is becoming increasingly
international. Employees from over 110 countries
work together successfully for BMW AG. Moreover, a
balanced age structure in the workforce encourages
an exchange of ideas and knowledge between gen-
erations and plays a key role in reducing the loss of
know-how when valuable employees retire.
Sustainability
→ www.bmwgroup.com/responsibility
In order to secure its future existence, the BMW Group
consistently integrates sustainability in its business
model. The Company sees global challenges such as
climate change and urbanisation as opportunities
to drive innovation. In its constant endeavours, the
BMW Group concentrates on three main fields:
The development of products and services
that provide sustainable individual mobility
(e.g. electric mobility and services such as
DriveNow and ReachNow)
The efficient use of resources along the entire
value chain
Through its sustainability policy, the BMW Group
supports the achievement of the UN's Sustainable
Development Goals (SDG), which were adopted in
September 2015.
3.7
100.0
→ 44
-17.6
2,161
2,207
-2.1
-45
80
553
-534
9,815
10,675
-8.1
205
2018
Change in %pts
16.2
19.1
-2.9
7.2
9.2
-2.0
20.0
20.9
-0.9
8.1
20171
169
-20.0
8,717
2.2
2,173
2,272
-4.4
-1.4
28,165
27,567
2.2
4.5
6
7
-14.3
-7.6
-18,710
-17,306
-8.1
11.1
97,480
98,282
-0.8
1.2
2018
20171
Change in %
6,977
9.1
-1.0
117,664
121,994
→ Workforce
Economic Position
Review of Operations
→ Sales and Marketing
Report on
Combined
Management
Report
60
60
in 2018.
Apart from the M vehicles, BMW M GmbH also offers
special driving safety training courses under the brand
name BMW Driving Experience. During the financial
year 2018, more than 25,000 participants completed
training courses in Germany alone. Demand for the
training courses also grew internationally. Accordingly,
the international network partner of BMW M was
expanded to include China and South Africa. Alto-
gether, the BMW Driving Experience trained around
105,000 participants at international training locations
Highest-ever number of deliveries for BMW M
The year 2018 was the most successful in the history
of BMW M GmbH. The main contributors to BMW M
deliveries in the High Performance segment, apart
from the M2*, were again the BMW M3 and M4 models
as well as the new BMW M5*. Within the Performance
segment, the new BMW X3 M40i* accounted for the
majority of deliveries. The strong demand at BMW M
also led to growth in BMW M certified dealerships.
During 2018, their number grew to more than 1,000
certified dealerships worldwide.
of five new models and also introduced two model
revisions as well as two new variants of BMW M
vehicles worldwide. The new BMW X2 went on
sale at dealerships in March 2018, followed by the
i8 Roadster* in May. The new X4 became available
to customers in July. The fourth generation of the
successful BMW X5 model and the new BMW 8 Series
Coupé were both launched in November. The Active
Tourer and Gran Tourer models of the BMW 2 Series
both underwent model revisions in the year under report,
and BMW M GmbH added the M2 and M5 Competition
as well as the M3 CS* variants to its portfolio.
During the year under report, BMW launched a total
BMW broadens model range
In line with its Strategy NUMBER ONE > NEXT, the
BMW Group is increasingly investing in digital services.
The aim is to develop and successfully operate new
digital business models with a rigorously customer-
oriented approach. This enables the BMW Group to
additionally differentiate itself and underscores the
attractiveness of its vehicle portfolio. A directly acces-
sible customer base makes it possible to disseminate
offers of new products and services, which customers
can also benefit from after purchasing their vehicles.
Currently, the range of digital offerings is focused on
the areas MyCar (e.g. remote access to vehicle func-
tions such as air conditioning), MyJourney (e.g. real-
time traffic information and parking services), MyLife
(e.g. music streaming services) and MyAssistant (BMW
Intelligent Personal Assistant). The level of interest
in digital services has grown steadily in recent years.
Digitisation promotes individual mobility
As a systems provider, BMW i provides its customers
with solutions that go far beyond the vehicle itself:
BMWi 360° ELECTRIC and ChargeNow are compre-
hensive service offerings for charging both at home
and away from home. Energy services such as grid
integration for electric vehicles and battery storage
applications are also available. Additional offerings
include charging technologies such as inductive charg-
ing as well as charging infrastructure projects such as
the super-fast charging network Ionity.
In addition to its BMWi vehicles, in 2018 the
BMW Group successfully offered a range of six BMW
plug-in hybrid models and one MINI plug-in* world-
wide. The BMW Group is committed to providing flex-
ible platforms where customers have the free choice of
drivetrain system depending on their personal pref-
erence. The advantage for the BMW Group lies in its
flexible response to uncertain demand developments
and the best possible utilisation of plant capacity.
Since its market launch in 2014, the BMW i8 has been
one of the best-selling hybrid sports cars. Launched
in 2018, the new BMW i8 Roadster* offers an emotional
combination of electric mobility and the experience of
open-top driving. Apart from its remarkable design,
pioneering technologies and sustainable mobility
concept, it stands above all for the driving pleasure
typically epitomised by BMW.
The BMWi offers not only trendsetting vehicle con-
cepts but also connected mobility services and a new
understanding of premium, which is determined in
particular by sustainability. The all-electric BMW i3* *Fuel
has meanwhile established itself as one of the most
successful electric vehicles in its segment. With a cell
capacity increased to 120 ampere hours (Ah) and a
current gross energy content of 42.2 kilowatt hours
(kWh), a new generation of high-voltage batteries
is helping the BMW i3* and its sporty sister model
the BMW i3s* to extend its reach by about 30% to
travel longer distances of up to 260 km. The entire
production chain is supplied with green energy for
both of these models and they are also 95% recyclable.
on page 108.
consumption
and CO₂ emis-
sions informa-
tion are available
BMW i remains on road to success
The BMW Group's sales and distribution network
currently comprises some 3,500 BMW, 1,600 MINI
and 140 Rolls-Royce dealerships worldwide. Sales are
conducted via independent authorised distributors,
branch offices of the BMW Group, subsidiaries, and
independent import companies in some markets.
→ www.bmwgroup.com/brands
Sales and Marketing
59
MINI achieves second-best year
0.1
In 2018, due to external factors, the MINI brand was
unable to quite match the high level of deliveries seen
the previous year. In particular, a changed competitive
environment caused by the conversion to the new
WLTP testing cycle played a decisive role. Uncertainty
also arose from ongoing trade disputes. In several
markets, this led to considerable sales disruptions
and unexpectedly fierce competition. Nevertheless,
MINI managed to increase its share for small and
compact cars in the premium segment compared to
the previous year in more than 60% of its markets.
Rolls-Royce Cullinan* successfully
takes to the road
Automotive
→ 39
Change in %
31.12.2017
31.12.2018
BMW Group apprentices at 31 December
The realignment of the dual vocational training system
launched in the previous year moved to the implemen-
tation phase during 2018. At the start of training in
2018, three new training profiles were introduced at
the German plant locations, namely for IT applications
development, IT systems integration, and electronics
for automation technology. Moreover, a new training
programme was established with twelve dual courses
of study, in which recruits can acquire a bachelor's
degree in STEM subjects (science, technology, engi-
neering and mathematics). At the same time, new
teaching content was added to existing job profiles
and appropriate technical equipment acquired. Meas-
ures were also initiated at international locations to
restructure fields of expertise, focusing on automation
technology, robotics and additive manufacturing
processes. The total number of apprentices and
participants in development programmes for young
talent increased slightly to 4,964 (2017: 4,750; +4.5%).
Realignment of dual vocational training
→ 38
BMW Group employees
At 31 December 2018, the BMW Group had a world-
wide workforce of 134,682 employees, a slight increase
(+3.7%) compared to the end of previous financial
year (2017: 129,932 employees). The increase was
partly attributable to the further expansion of the
global production network. Moreover, in conjunction
with the implementation of the Group's Strategy
NUMBER ONE > NEXT, a growing number of experts
continued to be hired in future-oriented fields such as
artificial intelligence and autonomous driving, electric
mobility, smart production and logistics, as well as
data analysis, software architecture, agile software
development and innovative drivetrain systems.
Slight increase in workforce
→ www.bmwgroup.com
Workforce
In December 2018, at the beginning of the fifth sea-
son, BMW i Andretti Motorsport entered the ABB
FIA Formula E Championship as a works team. The
drivetrain of the racing car was developed in close
collaboration with the engineers of BMW i and BMW
Motorsport and embodies the technology transfer
between motor racing and series development like
no other motorsport project before it. Apart from
its sporting commitment, BMWi remains an official
partner of Formula E and, within the scope of this
partnership, provides the support vehicle fleet, includ-
ing the BMW i8 Coupé* as a safety car for the races.
BMW enters Formula E
In September 2018, the BMW Group introduced
the Intelligent Personal Assistant, which has been
available in the first vehicles and in the Connected
app as from March 2019. It explains the workings
of the vehicle to the customer and enables access to
functions and information by voice control. The assis-
tant supports drivers, learns their preferences and
knows their preferred settings, such as seat heating or
frequently used navigation destinations. The abilities
of the self-learning personal assistant are supported
by artificial intelligence and continuously enhanced.
BMW Intelligent Personal Assistant
Since 2018, MINI Yours Customized has enabled its
customers to personalise their interior products via
3D printing and order them directly online. This
service was given the German Innovation Award in
the category "Excellence in Business to Consumer".
In these times of digitalisation, the focus is on the
mobility and service requirements of premium
customers. Using digitalised channels such as BMW
Connected, customers are able to view their vehicle
status and also make use of functions outside the
vehicle. Offers and interactions connected with
services, maintenance and repairs can therefore be
synchronised via all customer channels (physically,
online or via the vehicle).
and CO2 emis-
sions informa-
tion are available
on page 108.
* Fuel
consumption
The BMW Group's services business again recorded
significant growth in the year under report. In
order to achieve this, continuous investments are
being made in a sustainable, flexible, global logistics
network that can optimally supply customers with
spare parts, accessories and lifestyle products on a
worldwide basis.
Enhancement and customisation
of the services business
Launched in November 2018, the new Cullinan* is
the first Rolls-Royce to exhibit outstanding driving
characteristics both on and off the road. At its world
première in May and the press event in October, the
Cullinan* was extremely well received by customers
and international media representatives alike. The
top-of-the-range model, the Rolls-Royce Phantom*,
which has been on the market since the beginning
of 2018, is extremely popular and contributed sig-
nificantly to the record year for Rolls-Royce Motor
Cars. At Rolls-Royce Motor Cars, the term bespoke
refers to equipment configurations with which the
vehicles are highly individualised in accordance with
customer requirements. The result is the creation of
unique vehicles that make a major contribution to
the company's success and secure Rolls-Royce Motor
Cars an outstanding position in the luxury segment.
The second generation of the MINI Countryman in
particular remains a cornerstone of the MINI brand.
Deliveries increased significantly year-on-year, with
the highly successful plug-in hybrid model making
a key contribution. Moreover, the MINI Convertible
was one of the best-selling vehicles of its kind in a
competitive market. Demand for the John Cooper
Works models also remained high, with a new record
share of total MINI deliveries.
85,742
85,846
change² in %
Cost of sales
1,729
2,097
-17.5
2,996
2,857
4.9
78,924
78,329
0.8
The Group's cost of sales were in line with the
previous year. Higher research and development
expenses as well as higher cost of sales relating to 7
financial services business were offset by positive
currency effects. Inter-segment eliminations reduced
the Group's warranty expense for the
BMW Group performance indicators relating to research and development expenses
→ 45
year.
in %
2018
2017*
Change in %pts
Research and development expenses as a percentage of revenues
5.5
5.0
0.5
Research and development expenditure ratio
7.1
Other cost of sales
6.2
Warranty expenses
2,081
in € million
2018
2017*
Change in %
Manufacturing costs
43,262
43,442
-0.4
Cost of sales relating to financial services business
23,383
22,932
2.0
thereof interest expense relating to financial services business
2,051
1,801
13.9
Research and development expenses
5,320
4,920
8.1
thereof amortisation of capitalised development costs
Service contracts, telematics and roadside assistance
1,414
1,236
14.4
2,234
7.4
BMW Group cost of sales
0.9
43.3
Group
BMW Group profit/loss before tax by segment
→ 47
in € million
Automotive
Motorcycles
Financial Services
Other Entities
Eliminations
Group
BMW Group margins by segment
→ 48
in %
Automotive
Gross profit margin
EBIT margin
Motorcycles
Gross profit margin
EBIT margin
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
2 The adjustment for exchange rate factors is calculated by applying the relevant current exchange rates to the prior year figures.
Currency adjusted
2018
20171
Change in %
Eliminations
Capitalisation rate
Other Entities
Motorcycles
39.7
3.6
*Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
67
62
Due to a continuation of the product initiative, vehicle
electrification and development work on autonomous
driving, research and development expenses amount-
ed to €5,320 million (2017: €4,920 million), a solid
increase over the previous year. As a result, total
research and development expenditure - comprising
research costs, non-capitalised development costs and
capitalised development costs (excluding amortisation
thereon) – amounted to €6,890 million in the year
under report (2017: €6,108 million). The higher level
of capitalised development costs was mainly related
to the production start of new models, modules and
architectures.
At €9,558 million, selling and administrative expenses
were similar to one year earlier.
Depreciation and amortisation on property, plant
and equipment and intangible assets recorded in cost
of sales and in selling and administrative expenses
totalled €5,113 million (2017: €4,822 million).
The net amount of other operating income and
expenses improved significantly from negative
€494 million to positive €123 million, mainly due to
lower allocations to provisions for litigation.
Profit before financial result (EBIT) fell by €778 million
to €9,121 million (2017: €9,899 million).
The financial result dropped by €82 million to €694 mil-
lion and was therefore significantly down on the pre-
vious year, partly due to a €107 million deterioration
in the result from equity accounted investments.
The main factors here were the €183 million positive
earnings effect in the previous year arising on the
sale of shares in HERE International B.V., Amsterdam,
offset by a €107 million improvement in the earnings
contribution from BMW Brilliance Automotive Ltd.
on the back of higher volumes. The financial result
for the financial year 2018 was also influenced by the
change in other financial result. The previous year's
figure contained the positive effect of fair value meas-
urement gains on commodity derivatives totalling
€236 million. As a result of the first-time application of
IFRS 9, most of these effects - without the adjustment
to comparative figures – are now recognised directly
in equity. Unlike the result from equity accounted
investments and the other financial result, both the
result on investments and the net interest result had
a positive impact on earnings in the financial year
under report. The result on investments included a
gain of €209 million arising in conjunction with the
revaluation of the DriveNow companies.
Overall, profit before tax decreased moderately to
€9,815 million (2017: €10,675 million).
The income tax expense for the year amounted to
€2,575 million (2017: €2,000 million).
68
98
Combined
Management
Report
Report on
Economic Position
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Results of operations by segment
BMW Group revenues by segment
→ 46
in € million
Automotive
Financial Services
-2,080
9,774
→ 59
18.5
Investments accounted for using the equity method
2,624
2,769
-5.2
-5.2
1.3
4.6
Other investments
690
7.1
6.0
0.4
Receivables from sales financing
86,783
80,434
739
7.9
6.4
38,572
balance sheet
total in %
2018
75
15
Intangible assets
10,971
9,464
15.9
36,257
15.8
Property, plant and equipment
19,801
18,471
7.2
6.7
9.5
Leased products
5.2
7.2
41.4
Financial assets
31.12.2017*
31.12.2018
in %
10,334
BMW Group equity ratio
Group equity rose by €3,981 million to €58,088 million,
increased primarily by the profit of €7,117 million
attributable to shareholders of BMW AG and decreased
by the dividend payment of €2,630 million.
33
Change in %pts
60
100
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
2017*
2018
2017*
2018
8%
66
27.8
27.7
0.1
7,685
→ see
note 6
Overall, the results of operations, financial position
and net assets position of the BMW Group remained
stable during the year under report.
The line items "Assets held for sale" and "Liabilities
in connection with assets held for sale" relate to the
discontinued operations of the DriveNow companies.
Further information is provided in → note 2 to the
Group Financial Statements.
The significant increase in other liabilities includes
the effect of higher return right liabilities for future
leased vehicles in conjunction with the introduction of
IFRS 15. Further information is provided in → note 6
to the Group Financial Statements.
Financial liabilities increased solidly compared to the
end of the previous year, mainly due to the issue of
new long-term bonds.
Pension provisions decreased significantly compared
to the end of the financial year 2017. Higher discount
rates and lower inflation expectations in Germany and
the UK as well as a revision of mortality tables in the
UK contributed to this development.
* Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
-0.5
10.7
10.2
Financial Services segment
-1.0
42.0
41.0
Automotive segment
Group
Proportion of
thereof cash and cash equivalents 9%
change² in %
20171
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
BMW Group composition financial liabilities
→ 54
in € million
Derivate instruments 1,675
Commercial paper 2,480
Liabilities to banks
13,196
Economic Position
Liabilities from
customer deposits
(banking) 14,359
Other 1,206
Bonds
53,346
A total of nine public ABS transactions were executed
in 2018, including three in the USA, two in China and
one each in Germany, France, Canada and the UK with
a total volume equivalent to €5.9 billion. Further funds
were also raised via new ABS conduit transactions in
Japan, the UK, Germany, Canada, Australia and the
USA amounting to €2.7 billion. Other transactions
remain in place in Germany, Switzerland, South
Korea, South Africa and Australia, amongst others.
The following table provides an overview of amounts
utilised at 31 December 2018 in connection with the
BMW Group's money and capital market programmes:
Programme
Programme
framework
Amount
utilised*
Asset-backed financing
transactions 17,335
in € billion
Report on
Combined
6,793
4,334
2,459
133
-1,113
1,246
Refinancing
Management
Report
A broad range of instruments on international money
and capital markets is used to refinance worldwide
operations. Funds raised are used almost exclusively to
finance the BMW Group's Financial Services business.
1. The ability to act through permanent access
to strategically important capital markets
2. Autonomy through the diversification of refi-
nancing instruments and investors
3. Focus on value through the optimisation of
financing costs
Financing measures undertaken at corporate level
ensure access to liquidity for the Group's operating
subsidiaries at standard market conditions and con-
sistent credit terms. Funds are acquired in line with
a target liability structure, comprising a balanced
mix of financing instruments. The use of longer-term
instruments to fund the Group's Financial Services
business and the maintenance of a sufficiently high
liquidity reserve serves to avoid the liquidity risk in
the portfolio. This conservative financial approach
also helps the Group's rating. Further information
is provided in the section Liquidity risks within the
"Report on Outlook, Risks and Opportunities".
On account of its good ratings and the high level
of acceptance it enjoys on capital markets, the
BMW Group was again able to refinance operations
at favourable conditions on debt capital markets
during the financial year 2018. In addition to bonds,
loan notes and private placements, the Group also
issued commercial paper. As in previous years, all
issues were in high demand, not only from private
investors but also in particular from institutional
investors. In addition, retail customer and dealership
financing receivables as well as rights and obligations
from leasing contracts are securitised in the form of
asset-backed securities (ABS) financing arrangements.
Specific banking instruments, such as the customer
deposits used by the Group's own banks in Germany
and the USA, are also employed for financing purposes.
In addition, loans are taken from international banks.
73
74
The overall objective of Group financing is to ensure
the solvency of the BMW Group at all times, focusing
on three areas:
Euro Medium Term Notes
Australian Medium Term Notes
Commercial Paper
Further information with respect to financial liabilities
is provided in → notes 31, 35 and 39 to the Group
Financial Statements.
0
Maturity (years)
within
1
between
1-5
2017 2018
2017 2018
2017 2018
The BMW Group also has access to a syndicated credit
line, which was newly agreed upon in July 2017. The
syndicated credit line of €8 billion has a minimum
term up to July 2023 and is being made available by a
consortium of 44 international banks. The credit line
was not being utilised at 31 December 2018.
In 2018, the BMW Group issued four euro bench-
mark bonds on the European capital market with a
total issue volume of €7.3 billion, as well as bonds
on the US capital market with a total issue volume
of US$ 7 billion. Bonds were also issued in British
pounds, Canadian dollars and Chinese renminbi for
a total amount of €1.8 billion. Private placements
totalling €4.1 billion were also issued.
BMW Group condensed balance sheet at 31 December
→ 56
in € million
ASSETS
Group
Currency adjusted
2018
Net assets
At 31 December 2018, liquidity remained at a solid
level of €16.3 billion.
→ see
notes 31,
35 and 39
later
than 5
BMW Group financial liabilities by maturity
→ 55
*Measured at exchange rates at the relevant transaction dates.
in € million
60,000
30,000
51,851
43,865
41,100
38,825
50.0
36.6
1.5
13.1
2.4
9,683
12,921
Change in %
0
41% Current provisions and liabilities
17% Non-current provisions and liabilities
-1.2
11,999
11,854
Other provisions
1.1
-28.6
-28.4
-2.0
3,252
Pension provisions
27.8
7.6
7.4
54,107
58,088
Equity
2,330
EQUITY AND LIABILITIES
5.7
2,964
4.6
-1.0
-0.6
9,731
9,669
Trade payables
49.6
Deferred and current tax
8.2
94,648
103,597
Financial liabilities
1.4
-14.4
-9.7
3,281
9.5
100.0
6.1
6.9
13,047
5.7
29.6
29.6
9,115
11,816
Trade receivables
12,707
Inventories
1.4
-19.2
-16.9
3,559
2,956
Deferred and current tax
3.7
Other assets
2.7
2.7
6.2
195,506
208,980
0.2
461
5.3
21.8
21.5
9,039
10,979
Total assets
Assets held for sale
Cash and cash equivalents
1.2
-4.5
-4.5
2,667
2,546
66
Other liabilities
20,416
18,488
→ 58
Balance sheet structure - Automotive segment
2017*
2018
2017*
2018
5%
Balance sheet total in € billion
thereof cash and cash equivalents 5%
H
196
38%
28%
209
38%
Current assets 40%
34%
100
97
Non-current assets 47%
41%
54%
Current assets 53%
#] ||
42% Equity
37% Current provisions and liabilities
35% Non-current provisions and liabilities
28% Equity
18%
41%
94
94
94
97
- 33
66
46%
-70
-807
62%
140
Property, plant and equipment rose solidly compared
to the previous financial year, with investments in the
X5 and X7 models as well as in the 3 Series in particular
contributing to the increase.
Intangible assets were significantly higher than one
year earlier, mainly due to the increase in capitalised
development costs.
The balance sheet total of the BMW Group increased
solidly compared to 31 December 2017.
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
2 The adjustment for exchange rate factors is calculated by applying the relevant current exchange rates to the prior year figures.
100.0
6.1
6.9
Leased products also went up solidly year-on-year
on the back of portfolio growth in various countries,
including Germany and France. Adjusted for currency
factors, leased products increased slightly.
195,506
Total equity and liabilities
0.0
62
Liabilities in conjunction with assets held for sale
9.8
9.7
10.4
208,980
Receivables from sales financing increased solidly
over the twelve-month period, mainly due to larger
credit financing volumes in the USA, the UK and
China. A total of 1,277,207 new credit financing
contracts were signed during the financial year 2018.
Compared to the end of the previous financial
year,
the contract portfolio under management grew by
7.0% to 3,889,344 contracts.
66
76
196
209
210
70
10
140
210
Balance sheet total in € billion
→ 57
Balance sheet structure - Group
Other assets were significantly higher than one year ear-
lier. The increase was attributable, among other items,
to the higher volume of return right assets for future
leased vehicles in conjunction with the introduction of
IFRS 15, higher receivables from companies in which
an investment is held and an increase in prepayments.
Further information relating to IFRS 15 is provided in
→ note 6 to the Group Financial Statements.
→ see
note 6
7
Financial assets decreased significantly compared
to 31 December 2017, mainly due to changes in the
volume of currency derivatives and their fair value
measurement. Lower fair values as well as a change in
the volume of commodity derivatives also contributed
to this development.
Economic Position
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Report on
Combined
Management
Report
Non-current assets 60%
-26.0
-25.6
-1,158
0.8
720
0.7
7.5
99,243
100.0
100,125
100.0
-0.9
53,132
53.5
51,043
51.0
4.1
12,924
13.1
15,630
-0.8
33.4
33,452
33.4
33,187
Gross value added
774
-0.9
66,673
66.6
66,056
Bought-in costs
-17.3
15.6
66.6
-11.9
1.1
1,123
20171
2018
in %
in € million
2018
Net valued added by the BMW Group remained at a
high level in the financial year 2018.
added benefits employees. The remaining proportion
in the Group is retained to finance future operations.
The
gross value added amount treats depreciation as
a component of value added which, in the allocation
statement, would be treated as internal financing.
20171
322
Value added statement
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Economic Position
Report on
Combined
Management
Report
78
The value added statement shows the value of work
performed by the BMW Group during the financial
year, less the value of work bought in. Deprecia-
tion and amortisation, cost of materials, and other
expenses are treated as bought-in costs in the value
added calculation. The allocation statement applies
value added to each of the participants involved in
the value added process. The bulk of the net value
Depreciation and amortisation of total tangible,
in € million
Change
in %
1.0
989
-0.8
98.2
98,282
98.2
in %
97,480
Cost of materials²
Total output
Other income
Financial income
Revenues
WORK PERFORMED
Other expenses
intangible and investment assets
8,441
8.5
24,997
100.0
24,746
Net value added
4.7
0.3
100.0
86
90
Minority interest
-19.2
23.8
5,959
19.5
0.4
4,814
-1.0
² Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).
-621
21,267
20,646
19,488
19,787
-299
1 Prior year figures adjusted due to first-time application of IFRS 15, see note 6 to the Group Financial Statements.
2018
Change
-6,790
-6,384
-406
130
937
2017
77
-12.4
2,630
Shareholders
Government/public sector
Providers of finance
Employees
ALLOCATION
-1.0
Group
25.0
24.9
24,746
Net value added
-0.2
8.4
8,455
24,997
10.5
12,479
12,052
9.3
2,303
26.0
8.9
2,204
11.2
50.4
2,777
8.3
2,066
9.2
2,283
3.5
48.2
10.5
→ see
note 2
BMW Group value added statement
→ 60
Automotive segment
The decrease in cash inflow from the Automotive
segment's operating activities was mainly due to a
combination of lower net profit for the year and higher
working capital. Cash outflow from investing activities
was influenced in particular by higher disbursements
for investments in intangible assets and property,
plant and equipment.
-1,496
-225
-25
-1,746
4,459
2,713
155
130
Adjustment for net investment in marketable securities and investment funds
Free cash flow Automotive segment
-6,544
-6,769
Cash inflow (+)/outflow (-) from investing activities
10,848
9,352
Cash inflow (+)/outflow (-) from operating activities
Change
2017
2018
0
Cash outflow
from
Cash inflow
from
investing
activities
financing
activities
71
Group composition
cash
equivalents
31.12.2018
Free cash flow for the Automotive segment was as
follows:
Free cash flow Automotive segment
→ 51
in € million
5,000
Cash and
22
72
Combined
in € million
Cash inflow (+)/outflow (-) from operating activities
Cash inflow (+)/outflow (-) from investing activities
Cash inflow (+)/outflow (-) from financing activities
Net
The increase in cash outflow from the Financial Ser-
vices segment's operating activities was mainly due to
the lower net profit for the year. The decrease in cash
inflow from investing activities was largely attributable
to cash proceeds received in the previous year from
the disposal of investments and other business units
(€970 million). Cash inflow from financing activities
was mainly driven by new loans raised and an increase
in asset-backed securities financing.
2018
2017
→ 53
Change
7,157
1,474
4,321
4,336
-15
7,694
8,631
from
operating
activities
Net cash flows for the Financial Services segment
*Excluding derivative financial instruments.
Management
Report
Report on
Economic Position
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
In the Automotive segment, net financial assets com-
prised the following:
Net financial assets Automotive segment
Net cash inflows and outflows for the Financial Ser-
vices segment were as follows:
→ 52
Cash and cash equivalents
Marketable securities and investment funds
Intragroup net financial assets
Financial assets
Less: external financial liabilities*
Net financial assets Automotive segment
in € million
Cash inflow
Currency
translation,
changes in
0
70
Combined
Management
Report
Report on
Economic Position
→ Results of Opera-
tions, Financial Posi-
tion and Net Assets
Financial position
The consolidated cash flow statements for the Group
and the Automotive and Financial Services segments
show the sources and applications of cash flows
for the financial years 2018 and 2017, classified
according to operating, investing and financing
activities. Cash and cash equivalents in the cash flow
69
Cash and
cash
equivalents
31.12.2017
Cash flows from operating activities are determined
indirectly, starting with Group and segment net profit.
By contrast, cash flows from investing and financing
activities are based on actual payments and receipts.
in € million
Cash inflow (+)/outflow (-) from operating activities
Cash inflow (+)/outflow (-) from investing activities
Cash inflow (+)/outflow (-) from financing activities
Effects of exchange rate and changes in composition of Group
Change in cash and cash equivalents
The decrease in cash inflow from the Group's operat-
ing activities was due to the lower net profit for the
year and higher working capital. The lower increase
in receivables from financial services compared to the
previous year had an offsetting effect.
statements correspond to the amounts disclosed in
the balance sheet.
The higher level of cash outflow from the Group's
investing activities mainly reflects a rise in invest-
ments in intangible assets and property, plant and
equipment, increased expenditure for investment
assets (primarily relating to the acquisition of the
DriveNow companies) and lower proceeds from the
disposal of investment assets. The decreased level of
investments in marketable securities and investment
funds had an offsetting effect.
69
Other Entities segment/Eliminations
Automotive segment revenues remained at a similar
level to the previous year due to currency factors.
Adjusted for currency factors, they rose slightly, par-
tially as a result of higher delivery volumes. Despite
the volume growth achieved, market competition
intensified to an unexpectedly high level, mainly
reflecting the reaction of competitors to the early
implementation of WLTP regulations. Trade conflicts
and other uncertainties also exacerbated the situation
and had an unfavourable impact on selling prices. The
segment's cost of sales went up slightly year-on-year,
with higher research and development expenses as
well as raw materials costs contributing to the increase.
Additions to provisions in connection with goodwill
and warranty measures also had an effect on cost of
sales. Warranty expenses include the accrued expense
for vehicle recall actions, the cost of which is expected
to exceed amounts previously recognised. In this
context, a figure of €793 million was allocated to the
warranty provision, partially in connection with the
exhaust gas recirculation cooler. The lower volume
of ongoing warranty expenditure compared with the
previous year had a positive impact.
At €7,880 million, selling and administrative expenses
were similar to one year earlier.
The net amount of other operating income and
expenses improved from negative €525 million to
positive €134 million in the year under report, mainly
due to lower allocations to provisions for litigation.
At €795 million, the Automotive segment's financial
result was slightly down on the previous year, influ-
enced by the factors described above for the Group.
Profit before tax for the year was significantly lower
than one year earlier.
Motorcycles segment
Profit before tax in the Other Entities segment fell
significantly year-on-year. Among other things, higher
administrative expenses arising in connection with
the adjustment to the existing pension obligation
in the UK (Guaranteed Minimum Pension) had a
negative impact. In addition, lower market interest
rates caused the net interest result to deteriorate.
Inter-segment eliminations increased Group profit
before tax by €553 million in the financial year 2018,
a year-on-year improvement of €1,087 million. This
was mainly due to the positive impact of reversals in
conjunction with the strong portfolio growth of prior
years for leased products and the favourable effect of
lower margin eliminations in 2018.
Motorcycles segment revenues decreased slightly year-
on-year, mainly due to the ramp-up situation caused
by multiple model changes and compounded by a
combination of product mix and currency effects.
Financial Services segment
Despite unfavourable foreign currency translation
effects, Financial Services segment revenues rose
slightly year-on-year on the back of portfolio growth.
Cost of sales relating to financial services business
increased by €555 million (2017: €23,986 million).
The net amount of other operating income and
expenses deteriorated from negative €17 million to
negative €82 million. The decline was mainly due to
higher expenses for litigation.
The segment's risk profile remained stable during the
financial year 2018. Whereas price levels on the North
American pre-owned vehicle market improved slightly,
residual values for pre-owned vehicles in Germany
dropped slightly, mainly because of the debate on
diesel bans in a number of cities.
Profit before tax in the Financial Services segment was
slightly down on the previous year, primarily due to
negative foreign currency translation effects.
Profit before tax for the twelve-month period was
significantly lower than one year earlier.
The increase in cash inflow from the Group's financing
activities resulted mainly from the issue of bonds and
from new loans taken up. The repayment of commer-
cial paper had an offsetting effect.
BMW Group cash flows
→ 49
2018
The cash outflow from investing activities exceeded the
cash inflow from operating activities by €2,312 million
in the financial year 2018. In the previous year, the
shortfall had been lower at €254 million.
→ 50
in € million
15,000
10,000
9,039
BMW Group change in cash and cash equivalents
-5,000
-7,363
15,000
+4,296
10,979
-44
10,000
+5,051
781
-1,480
1,940
-159
-44
2,724
1,572
4,296
-1,200
115
-7,363
-858
5,909
5,051
Change
2017
-6,163
1,159
Return on equity expected at previous year's level
The BMW Group forecasts a stable business per-
formance for the Financial Services segment in the
financial year 2019. The return on equity is expected
to remain at the previous year's level (2018: 14.8%).
Deliveries to customers: slight increase expected
The BMW Group expects a further year-on-year
increase in deliveries of BMW, MINI and Rolls-Royce
brand vehicles and aims to occupy a leading posi-
tion in the global premium segment again in 2019.
Balanced growth in major sales regions will help to
compensate for volatilities in individual markets.
Assuming economic conditions do not deteriorate,
deliveries to customers are forecast to rise slightly to
a new high (2018: 2,490,664¹ units).
Financial Services segment
The EBIT margin in the Motorcycles segment in 2019
is forecast to lie within the target range between 8 and
10% (2018: 8.1%).
EBIT margin in target range between 8 and 10%
expected
Deliveries to customers: solid increase expected
The BMW Group expects business in the Motorcycles
segment to develop positively in the current year.
Business is predicted to benefit from the extensive
measures taken to rejuvenate the segment's product
range in the previous year as well as from the array
of new models presented at international motorcy-
cle trade fairs in autumn 2018. The addition of the
mid-class C 400 GT Scooter has also expanded the
segment's product range designed for the urban
environment. Overall, a solid increase in deliveries
of BMW motorcycles to customers is forecast for 2019
(2018: 165,566 units).
3 EU-28
2 Fuel consumption
and CO₂ emis-
sions information
are available
on page 108.
units).
(2018: 459,581 Motorcycles segment
1 Includes the
joint venture
BMW Brilliance
Automotive,
Shenyang Ltd.
As stated in the Annual Report 2017, the use of
return on capital employed (RoCE) as a performance
indicator was due to be reviewed, partly in connec-
tion with the introduction of IFRS 16 (Leases). The
review confirmed the significance of ROCE as a key
performance indicator, in particular with a view to
managing profitability and capital efficiency. The use
of this indicator is also closely linked to the Group's
project-oriented management logic.
Return on capital employed: significant decrease
expected
Against the background of the challenges referred
to above, an EBIT margin within a range of 6 to 8%
is expected for the Automotive segment the core
business of the BMW Group - for the 2019 financial
year (2018: 7.2%).
EBIT margin in target range between 6 and 8%
expected
Fleet CO2 emissions³: slight decrease expected
Given that the effects of the conversion to WLTP and
the further course of the diesel debate are difficult to
assess, any forecast for 2019 is subject to a particu-
larly high degree of uncertainty. Nevertheless, the
BMW Group aims to reduce its average fleet CO2 emis-
sions slightly for the year 2019 (2018: 128 g CO2/km).
The BMW 8 Series Coupé launched in November 2018
and the new X5 models are expected to contribute
to sustained growth. Moreover, in autumn 2018 the
BMW Group announced the launching of numerous
new models during the first quarter of 2019. These
include the seventh generation of the BMW 3 Series
Sedan, the new BMW 8 Series Convertible and the
new BMW X7 and Z4 models. Other new models
will follow over the course of 2019. The Rolls-Royce
Cullinan², which has been available to customers since
November 2018, is expected to stimulate demand and
make an important contribution to the success of the
Company.
Return on capital employed: solid increase expected
Due to the product initiatives described above, the
Motorcycles segment is expected to generate a solid
year-on-year increase in RoCE in 2019 (2018: 28.4%).
The long-term target RoCE of 26% for the Motorcycles
segment will therefore be surpassed.
The Automotive segment's RoCE is expected to drop
significantly in 2019 (2018: 49.8%). The decrease is
partly due to the introduction of IFRS 16 (Leases).
Further reasons are higher investments in the elec-
trification of the vehicle fleet, digitalisation, the expan-
sion and rejuvenation of the model portfolio and the
expansion of the production network. Furthermore,
the segment's earnings trend is likely to have a damp-
ening effect on RoCE. However, the long-term target
ROCE of at least 26% for the Automotive segment will
be surpassed.
Expected consequences for the BMW Group
Future developments on international automobile
markets also have a direct impact on the BMW Group.
While competition could intensify further in contract-
ing markets, new opportunities may appear in growth
regions. Challenges in the competitive environment
will have a significant effect on sales volumes in
some countries. Due to its global business model, the
BMW Group is well placed at all times to capitalise
on any opportunities that present themselves, even at
short notice. Coordination between the Group's sales
and production networks also enables it to balance
out the impact of unforeseeable developments in the
various regions. Investments in markets important for
the future also form a basis for further growth, while
simultaneously strengthening the global presence of
the BMW Group. Thanks to its three premium brands –
BMW, MINI and Rolls-Royce the BMW Group
expects the positive development in vehicle deliveries
Opportunities
Deferred income
Liabilities
Other liabilities
Liabilities to subsidiaries
Trade payables
Liabilities to banks
Total equity and liabilities
8,608
8,469
7,824
139
214
29
28
8,038
545
965
5,560
The increase in other receivables and other assets to
€3,595 million (2017: €2,827 million) was mainly due
to higher receivables from companies with which
an investment relationship exists and to higher tax
receivables.
Receivables from subsidiaries, most of which relate to
intragroup financing receivables, rose to €8,570 million
(2017: €7,641 million).
At €4,811 million (2017: €4,643 million), inventories
were higher than one year earlier due to an increase
in goods for resale.
The carrying amount of investments decreased to
€3,559 million (2017: €3,676 million), mainly as a result
of an impairment loss of €119 million (2017: reversal
of impairment losses of €70 million) recognised on the
investment in SGL Carbon SE, Wiesbaden in order to
reduce its carrying amount to the lower market value.
Capital expenditure on intangible assets and prop-
erty, plant and equipment in the year under report
totalled €2,975 million (2017: €2,628 million), up by
13.2% compared to the previous year. Depreciation
and amortisation amounted to €2,470 million (2017:
€2,350 million).
41,472
2,685
3,168
45,535
15,104
19,060
333
285
8,187
12,670
5,619
15,046
15,241
2,630
2,303
1,290
668
Surplus of pension and similar plan assets over liabilities
483
535
Prepayments
-
28,545
4,218
6,542
Current assets
Cash and cash equivalents
4,185
4,080
2,827
Total assets
Equity increased by €195 million to €15,241 million.
The equity ratio changed from 36.3% to 33.5 %, mainly
due to the increased balance sheet total.
45,535
EQUITY AND LIABILITIES
9,605
10,103
2,153
2,177
658
658
Provisions
Other provisions
Pension provisions
Registered profit-sharing certificates
Equity
Unappropriated profit available for distribution
Revenue reserves
Capital reserves
Subscribed capital
41,472
3,595
In order to secure pension obligations, cash funds
totalling €550 million were transferred to BMW Trust
e. V., Munich, in conjunction with a Contractual Trust
Arrangement (CTA), to be invested in plan assets. Plan
assets are offset against the related guaranteed obliga-
tions. The resulting surplus of assets over liabilities is
reported in the BMW AG balance sheet on the line item
Surplus of pension and similar plan assets over liabilities.
Other provisions decreased year on year, mainly due
to a change in the valuation method used for provisions
for warranties, goodwill and product guarantees as
well as to a reduction in litigation and liability risks.
Additions to provisions for selling and marketing
obligations had an offsetting effect.
The US economy is likely to remain strong in 2019,
potentially giving the US Federal Reserve more scope
for further interest rates hikes. The Fed has announced,
however, that it will take a more cautious approach in
2019 than in previous years. After ending its securities
purchasing programme, the ECB indicated the possi-
bility of an interest rate increase in the third quarter
2019 at the earliest, which would mean a departure
from its highly expansive monetary policy. In this
context, the euro could gradually appreciate in value
against the US dollar over the course of 2019.
Currencies of particular importance for the interna-
tional operations of the BMW Group are the US dollar,
the Chinese renminbi, the Japanese yen and the
British pound. All of these currencies are expected
to remain volatile in 2019.
Currency markets
→ Outlook
Opportunities
Risks and
The economic links between the USA and China sug-
gest that the Chinese renminbi is likely to develop
relatively synchronously to the US dollar. For this
reason, the renminbi is expected to depreciate slightly
against the euro in 2019.
Report on Outlook,
86
98
85
Emerging markets could see growth on a par with the
previous year, with economic expansion predicted
for India (+7.3%), Russia (+1.4%) and Brazil (+2.4%).
The Japanese economy is forecast to grow by only
1.0% in 2019. Demand for capital goods as well as
domestic consumer spending could help drive growth.
The weak yen is also likely to bolster exports.
In China, reducing overcapacities and strengthening
domestic consumption will continue to have priority
in 2019. Against this backdrop, GDP is still forecast
to rise by 6.2%. Achieving a balance between short-
term measures aimed at stabilising the economy and
restructuring the Chinese economy on a long-term
basis will remain the government's most difficult task.
Therefore, the risk of a significant economic downturn
in China cannot be entirely ruled out.
Combined
Management
Report
The value of the British pound is currently being
determined to a large extent by the progress of Brexit
negotiations. Accordingly, the most likely scenario is
a volatile sideways movement of the pound against
the euro.
The Japanese central bank's highly expansionary
monetary policy is unlikely to change in 2019, so
that the euro/yen exchange rate will probably follow
a sideways trend. However, it cannot be ruled out
that the euro will appreciate slightly against the yen.
The currencies of numerous emerging markets could
come under pressure against the US dollar and the
euro, due to the continuing normalisation of monetary
policies in the USA and Europe, which could result in
capital outflows from emerging markets. This applies in
particular to countries such as Russia, Brazil and India.
Japan's central bank is likely to maintain its ultra-ex-
pansive monetary policy in order to drive inflation
and stimulate the economy.
In China, fiscal policy will focus on safeguarding the
country's financial stability. In order to bolster the
economy in the event of an aggressive trade war, the
Chinese central bank could reduce the minimum
reserve ratio and cut taxes further.
The US Federal Reserve is likely to pursue a more
restrictive monetary policy again in 2019.
The uncertainty surrounding the ongoing Brexit nego-
tiations will continue to weigh on the UK economy
in 2019. The Bank of England's monetary policy over
the coming months will be geared to managing the
economic impact of the Brexit negotiations.
In view of significantly increasing economic risks,
low inflation and political pressure to maintain loose
monetary policies, the ECB is not expected to raise
its benchmark interest rate from the current record
low of zero per cent until the economic climate has
brightened.
A moderate slowdown is predicted for the global
economy in 2019. The main reasons for slower growth
are the weaker impact of fiscal incentives in the USA
accompanied by tighter monetary policies in many
emerging markets. Unemployment in many indus-
trialised countries is at a low level.
International interest rate environment
The BMW Group expects the world's motorcycle mar-
kets in the 250 cc plus class to grow slightly in 2019.
In Europe, the upward trend is expected to continue
in the major markets of Germany, France, Italy and
Spain. Conversely, the US motorcycle market is fore-
cast to see a slight fall in new registrations in 2019.
International motorcycle markets
Registrations in Russia are expected to rise by around
8.4% in 2019 to 1.8 million units on the back of
economic recovery. In Brazil, registration figures are
also expected to increase by 11.6% to 2.3 million units
in the current year.
Additionally, the forecast for China is a decrease of
0.6% in passenger car registrations to 23.0 million
units. The downward trend on the Japanese auto-
mobile market is set to continue in 2019 (5.0 million
units; -2.4%).
The USA is unlikely to maintain a sustainable recovery
in 2019 after the previous year's dip. Based on current
forecasts, the downward trend in US registrations is
likely to continue (17.0 million units; −1.6%).
Europe's automobile markets are forecast to see a
slight increase (15.8 million units; +1.0%), with contri-
butions to growth coming particularly from Germany
(3.5 million units; +1.9%). In France (2.2 million
units; -0.3%) and Italy (1.9 million units; -0.2%),
automobile markets are likely to contract slightly
in 2019. For the UK, registration forecasts are also
negative (2.3 million units; -2.3%).
After a weaker performance in 2018, a reversal of
this trend in 2019 is not expected for registrations
on international automobile markets (85.5 million
units; -0.3%).
International automobile markets
Economic momentum in the USA is expected to weaken
only slightly compared with the previous year. The
high employment rate, combined with the ongoing
economic stimulus from the tax reform, should con-
tinue to have a positive impact on economic activity in
2019, as a result of which the economy is expected to
grow by 2.4%. The US Federal Reserve will most likely
continue pursuing a moderately restrictive monetary
policy. Unexpected developments, in particular in US
domestic policy, could result in a less favourable outlook.
The UK's economic performance in the outlook period
will be influenced significantly by the progress of EU
exit negotiations. The lack of planning certainty con-
tinues to weigh on companies and private households
alike. Consequently, GDP growth of only 1.4% is
forecast for 2019. Uncertainty remains at a high level.
Gross domestic product in the eurozone is only
expected to grow by around 1.5% in 2019. Germany's
economy should see growth on a similar scale (+1.4%).
The growth prospects of other member states in the
eurozone are expected to be on the modest side.
France (+1.4%) and Italy (+0.7%) are likely to see an
increase in GDP over the outlook period. Based on an
expected growth rate of 2.2%, the Spanish economy
is set to grow faster than the eurozone average.
Global economic growth is currently forecast at just
over 3% in 2019. At the same time, the outlook for
the global economy remains exposed to an array of
uncertainties. These include above all the exit negotia-
tions between the EU and the UK as well as the future
foreign trade policy of the US administration. In the
event of unfavourable developments, global growth
could be significantly affected. The debt situation of
Chinese companies as well as the high level of national
debt in Japan and some eurozone countries could
also jeopardise stability on financial markets. Last
but not least, the global economy could also be neg-
atively impacted by excessively restrictive monetary
policies imposed by the Fed in the USA and the ECB
in Europe. Further information on political and global
economic risks is also available in the section Risks
and Opportunities.
Management
Report
Combined
84
883
KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, has
issued an unqualified audit opinion on the financial
statements of BMW AG, of which the balance sheet and
the income statement are presented here. The BMW AG
financial statements for the financial year 2018 will be
submitted to the operator of the electronic version of
the German Federal Gazette and can be obtained via the
Company Register website. These financial statements
are available from BMW AG, 80788 Munich, Germany.
Due to its significance in the Group and its close ties
with Group companies, expectations for BMW AG
with respect to its financial and non-financial
performance indicators correspond largely to the
BMW Group's outlook for the Automotive segment.
This is described in detail in the Report on Outlook,
Risks and Opportunities section of the Combined
Management Report.
Outlook
BMW AG is integrated in the group-wide risk man-
agement system and internal control system of the
BMW Group. Further information is provided in the
section Internal Control System Relevant for Accounting
and Financial Reporting Processes within the Combined
Management Report.
BMW AG's performance is essentially dependent on
the same set of risks and opportunities that affect the
BMW Group and which are described in detail in the
Report on Outlook, Risks and Opportunities section
of the Combined Management Report. As a general
rule, BMW AG participates in the risks entered into
by Group companies in proportion to the respective
shareholding percentage.
Risks and opportunities
to €6,542 million, mainly due to the surplus from
operating activities and as a result of the higher level
of financial liabilities to subsidiaries. The repayment
of loans as well as the payment of the dividend for
the previous financial year had an offsetting effect.
Cash and cash equivalents increased by €2,324 million
Liquidity within the BMW Group is managed centrally
by BMW AG on the basis of a group-wide liquidity
concept. This involves concentrating a significant part
of the Group's liquidity at the level of BMW AG. An
important instrument in this context is the cash pool
based at BMW AG. The liquidity position reported
by BMW AG therefore reflects the global activities of
BMW AG and other Group companies.
The increase in liabilities to subsidiaries in the amount of
€4,483 million was mainly due to intragroup refinancing.
Deferred income increased by €483 million to
€3,168 million and included mainly amounts for
services still to be performed relating to service and
maintenance contracts.
Liabilities to banks decreased by €420 million, mainly
as a result of the repayment of project-related loans.
Report on Outlook,
Provisions for pensions increased from €139 million
to €214 million, after offsetting of pension liabilities
with pension assets.
Risks and
→ Outlook
Economic outlook
The BMW Group and Daimler AG are merging their
mobility services in a new joint venture. Following
approval by the antitrust authorities, the agreement
between the two companies was concluded with effect
from 31 January 2019. It is currently assumed that the
impact on earnings during the forecast period will be
of minor significance.
The BMW Group also anticipates that trade tensions
between the USA and China will continue to be a
source of uncertainty. The Group also assumes that
trade between the EU and the USA will not be subject
to additional tariffs.
In the UK, the ongoing uncertainties in connection with
the Brexit negotiations are impairing the reliability of
forecasts drawn up by businesses. This applies to the
BMW Group as well, which could be further adversely
affected due to the necessary preparations. Notwith-
standing these difficulties, the assumption is that the
UK will leave the EU in an orderly manner.
The following outlook relates to a forecast period
of one year and is based on the composition of the
BMW Group during that time. The outlook takes
account of all information available at the time of
reporting, and any which could have an effect on the
overall performance of the Group. The expectations con-
tained in the outlook are based on the BMW Group's
forecasts for 2019 and reflect its most recent status.
Along with other inputs, they represent a consensus
of opinions of leading organisations, such as economic
research institutes and banks. The basis and principal
assumptions of the forecast are set out below:
Assumptions used in the outlook
The continuous forecasting process ensures the
BMW Group's ability to exploit opportunities quickly
and systematically as they arise and react in a similar
way to unexpected risks. The principal risks and
opportunities are described in detail in the section
Risks and Opportunities. The matters discussed
therein are relevant for all of the BMW Group's key
performance indicators and could result in variances
between the outlook and actual outcomes.
The report on outlook, risks and opportunities con-
tains forward-looking statements. These are based
on the BMW Group's expectations and assessments
and are subject to uncertainty. As a result, actual out-
comes can deviate either positively or negatively from
the expectations described below - for example on
account of political and/or economic developments.
The report on outlook, risks and opportunities describes
the expected development of the BMW Group, includ-
ing the significant risks and opportunities, from a
Group management perspective. In line with the
Group's internal management system, the outlook
covers a period of one year. Risks and opportunities
are managed on the basis of a two-year assessment.
The report on risks and opportunities therefore
addresses a period of two years.
OUTLOOK
Business environment remains
volatile
of 6 to 8%
EBIT margin in the range
Growth in deliveries planned
REPORT ON OUT-
LOOK, RISKS AND
OPPORTUNITIES
Opportunities
to continue.
7,641
766
in € million
→ 62
BMW AG Income Statement
Results of operations
80
60
2018
At 31 December 2018, BMW AG employed a workforce
of 89,842 people (31 December 2017: 87,940 people).
Business environment and review of operations
The general and sector-specific environment of BMW AG
is essentially the same as that of the BMW Group and is
described in the Report on Economic Position section
of the Combined Management Report.
Differences between the accounting treatment of the
German Commercial Code and International Financial
Reporting Standards (IFRS), according to which the
BMW Group Financial Statements are prepared, are
mainly to be found in connection with the capitali-
sation of intangible assets, the creation of valuation
units, the recognition and measurement of financial
instruments and provisions as well as the recognition
of deferred tax assets. Differences also arise in the
presentation of assets and liabilities and of items in
the income statement.
The key financial and non-financial performance
indicators for BMW AG are essentially identical and
concurrent with those of the Automotive segment of
the BMW Group. These are described in detail in the
Report on Economic Position section of the Combined
Management Report.
Bayerische Motoren Werke Aktiengesellschaft (BMW AG),
based in Munich, Germany, is the parent company of
the BMW Group. The comments on the BMW Group
and Automotive segment provided in earlier sections
apply to BMW AG, unless presented differently in
the following section. The Financial Statements of
BMW AG are drawn up in accordance with the pro-
visions of the German Commercial Code (HGB) and
the relevant supplementary provisions contained in
the German Stock Corporation Act (AktG).
COMMENTS ON FINANCIAL
STATEMENTS OF BMW AG
Financial Statements
of BMW AG
BMW AG develops, manufactures and sells automo-
biles and motorcycles as well as spare parts and acces-
sories manufactured in-house, by foreign subsidiaries
and by external suppliers, and performs services
related to these products. Sales activities are carried
out primarily through branches, subsidiaries, inde-
pendent dealerships and importers. In 2018, BMW AG
increased automobile deliveries by 25,782 units to
2,519,897 units. This figure includes 490,582 units
relating to series sets supplied to the joint venture
BMW Brilliance Automotive Ltd., Shenyang, an
increase of 93,833 units over the previous year.
2017
81
4
-2,733
-2,803
Administrative expenses
-3,958
-4,078
16,398
14,514
-62,817
-63,841
79,215
78,355
Selling expenses
Gross profit
Cost of sales
Revenues
→ Comments on
Economic Position
Report on
Management
Report
The BMW Group holds a leading position among com-
petitors in various new fields of technology, including
digitalisation and autonomous driving. Given its firm
intention to expand in these areas, investments in
future-oriented projects will remain at a high level.
The BMW Group also plans to electrify drivetrain
systems across its entire model portfolio. Additional
challenges are likely to arise in the future as a conse-
quence of new regulatory measures. The production
network will also be further expanded during the
outlook period. Due to these external challenges and
the upfront expenditure necessary to secure future
operations, the Group's pre-tax profit is expected to
decrease significantly (2018 adjusted: €9,627 million).
Workforce size at year-end expected at previous
year's level
In connection with the projects referred to above, the
need for suitably qualified staff across the BMW Group
will remain high during the current year. According
to current estimates, the size of the workforce is
expected to remain at the previous year's level (2018:
134,682 employees).
Outlook for the BMW Group
Application of International Financial Reporting Stan-
dard IFRS 16 (Leases) is mandatory with effect from
1 January 2019. Comparative figures for the year 2018
are required to be adjusted accordingly. In order to
ensure a transparent presentation of changes in key
financial performance indicators, the outlook shows
values adjusted in accordance with IFRS 16 as well as
the actual values reported for 2018. With regard to key
financial performance indicators for 2019, the outlook
is based on values for 2018 adjusted in accordance with
IFRS 16. Further information on IFRS 16 is provided in
→ note 5 to the Group Financial Statements.
→ see
note 5
88
87
88
88
Combined
Management
Report
Report on Outlook,
Risks and
Profit before tax: significant decrease expected
Competition on international automobile markets
is set to remain fierce in 2019. Furthermore, politi-
cal and economic developments in Europe remain
increasingly uncertain. Above all, this is due to the
currently unforeseeable impact of Brexit. In addition,
it is difficult to predict how trade tensions between the
USA and the EU on the one hand and the USA and
China on the other are likely to develop. Volatilities
on international currency and raw materials markets
could also have a negative impact on Group profit
before tax. Further information is provided in the
macroeconomic risks and opportunities section of
the Risks and Opportunities Report.
Research and development expenses
Group
BMW Group value added 2018
Combined
79
-0.4% Minority interest
19.5% Group
9.3% Shareholders
11.2% Government/public sector
9.2% Providers of finance
24.9 Net value added
50.4% Employees
C
Cost of materials 53.5
13.1 Other expenses
Depreciation and amortisation 8.5
in %
→ 61
In view of increasingly unpredictable political devel-
opments, actual economic performance in some
regions may deviate from expected trends and out-
comes. Potential sources of political unpredictability
include policies affecting trade and customs tariffs,
security developments and possible further interna-
tional trade conflicts.
8,570
-5,859
Other operating income and expenses
Intangible assets
ASSETS
2017
2018
in € million
→ 63
252
Financial Statements
of BMW AG
Economic Position
Report on
Management
Report
Combined
BMW AG Balance Sheet at 31 December
Financial and net assets position
→ Comments on
288
Property, plant and equipment
11,976
947
Marketable securities
Other receivables and other assets
Receivables from subsidiaries
Trade receivables
4,643
4,811
Inventories
15,419
15,787
Tangible, intangible and investment assets
3,676
3,559
Investments
11,455
62
82
After deducting the expense for taxes, the Company
reported a net profit of €2,801 million, compared to
€3,197 million in the previous year.
The expense for income taxes relates primarily to
current tax for the financial year 2018.
Other taxes
3,213
2,820
Profit after income tax
-1,563
-872
Income taxes
-541
-1,452
Financial result
1,081
2,344
Result on investments
-303
1,026
Net profit
-5,168
Transfer to revenue reserves
-19
Results on investments benefited from higher income
arising under profit transfer arrangements with Group
companies. By contrast, the financial result deteriorated
year-on-year by €911 million, mainly due to higher
interest expenses for pension liabilities and expenses
incurred for the corresponding plan assets as well as
an impairment loss recognised on the investment in
SGL Carbon SE, Wiesbaden.
The net amount of other operating income and
expenses improved by €1,329 million to a net positive
amount of €1,026 million. The year-on-year change
resulted mainly from the reversal of provisions for
warranty, goodwill and product guarantees due to the
changed valuation method as well as to lower alloca-
tions or higher reversals to provisions for litigation
and liability risks.
higher expenditure for the electrification of vehicles
and autonomous driving. Compared to the previous
year, research and development expenses increased
by 13.4%.
Research and development expenses related mainly to
new vehicle models in conjunction with the continued
product offensive (including the new 3 Series and
X models), expenses for the development of refer-
ence architectures and drivetrain systems as well as
Selling and administrative expenses went up
year-on-year, partly reflecting the impact of the larger
workforce as well as higher expenses for selling and
marketing obligations.
overall
Cost of sales increased by 1.6% to €63,841 million,
mostly due to the higher number of deliveries and the
rise in cost of materials. The change in the valuation
method used for provisions for warranties, goodwill
and product guarantees had an offsetting effect. Gross
profit decreased by €1,884 million to €14,514 million.
Despite the higher number of deliveries, revenues
were 1.1% lower than in the previous financial
year. The decrease was mainly due to exchange-rate
effects, selling price adjustments and the change in
the valuation method used to measure provisions for
warranties, goodwill and product guarantees. In geo-
graphical terms, the decrease mainly related to Europe
and the USA. Revenues totalled €78,355 million (2017:
€79,215 million), of which Group internal revenues
accounted for €58,707 million (2017: €59,736 million)
or 74.9% (2017: 75.4%).
2,630
2,303
-567
-498
3,197
2,801
-16
Unappropriated profit available for distribution
24,280
→ Outlook
Automotive segment
1,721
2,312
2,172
2,194
227
103
194
175
207
9,870
2,162
4,499
6,182
7,888
13,400
4,830
7,411
7
6
5
3
5
66.7
3,701
- 17,306
- 19,443
- 14,194
-19,857
39.9
9,899
8,933
- 18,875
14
-27
29
169
187
100
228
2,207
2,143
205
2,272
3,753
80
BMW
GROUP
M
THE FUTURE IS
ELECTRIC,
1,725
9.4
11,805
4,467
36
-8
- 404
431
377
808
2,722
-390
9,627
7,118
5,222
16,060
8,717
6,977
10,675
32,867
30,044
29,598
Motorcycles
Financial Services²
Other Entities
Eliminations²
Group profit/loss before tax (EBT)²
Automotive
Automotive
Motorcycles
Other Entities
Eliminations²
Group income taxes²
Profit/loss from continuing operations²
7,112
8,013
Financial Services²
7,784
Group profit/loss before financial result (EBIT)²
Other Entities
in € million
2017
2018
2019
2020
2021
Eliminations²
Change in %
Depreciation and amortisation
Free cash flow Automotive segment
Group revenues²
Automotive
Motorcycles
Financial Services²
Total capital expenditure¹
DIGITAL AND
6,222
20.8
85,742
85,846
91,682
80,853
95,476
18.1
12.4
2,272
2,368
2,284
2,748
20.3
27,567
27,705
2,173
7,518
111,239
104,210
4,822
5,113
6,017
6,143
6,495
5.7
98,990
4,459
2,567
3,395
6,354
87.2
98,282
96,855
2,713
FURTHER FINANCIAL PERFORMANCE FIGURES
← = Q
MINI
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
4
->
BMW Group Integrated Strategy
TO THE CHAPTER
> 20%
supply chain
Reduction of CO₂ emissions in the
> 50%
Reduction of CO2 emissions in the
use phase of the vehicle
≥ 18%
Return on capital employed
Automotive segment
8-10%
Share of electrified cars in total
deliveries
Share of women in management
positions
>30%
TARGET ACHIEVEMENT BY 2030
22%
Other Information
↑
total deliveries
> 50%
Reduction of CO2 emissions per
vehicle produced
80%
The diagram provides a simplified overview of the key performance indicators (KPIs) disclosed in the report. Detailed explanations of the KPIs as well as an
-45
Share of fully electrified cars in
-96
-235
531
² The figures for 2018 were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 ( Annual Report 2019, Note 6 to the Group Financial Statements).
3 Group profit/loss before tax as a percentage of Group revenues.
13.07/13.09
10.60/10.62
4,978
44
5,022
7.47/7.49
3,857
1 Expenditure for capitalised development costs, other intangible assets and property, plant and equipment.
12,463
12,463
18.77/18.79
10.9
9.9
6.8
5.3
14.4
3,857
5.73/5.75
TARGET ACHIEVEMENT BY 2025
Pre-tax return on sales 2,3 in %
7,064
-534
383
288
910
-257
- 2,000
8,675
Earnings in € per share of common stock / preferred stock²
-2,530
-1,365
- 3,597
Profit/loss from discontinued operations
7,097
-33
Group net profit/loss²
8,675
- 2,140
> 10%
EBIT margin Automotive segment
EBT margin Group
KEY PERFORMANCE INDICATORS
PROFIT / LOSS BEFORE TAX
in € million
EBIT MARGIN AUTOMOTIVE SEGMENT
in %
EBIT MARGIN MOTORCYCLES SEGMENT in %
In 2021, the BMW Group demonstrated how profitability and transformation can go hand in glove, des-
pite tough market conditions. Electric mobility is gathering pace, with delivery figures on a steep up-
ward trajectory. At the same time, the BMW Group is working on digital solutions that make life more
convenient for customers and provide access to a broad range of services. The BMW Group's vision of
a circular economy is gradually taking shape, the ultimate goal being fully sustainable mobility.
Further information is provided in the following report.
ROE FINANCIAL SERVICES SEGMENT
16,060
Significant increase compared to
prior year
10.3
8.3
22.6
↑
in %
Significant increase to prior year
BMW GROUP REPORT 2021
Other Information
ROLLS-ROYCE
MOTOR CARS LTD
BMW GROUP REPORT 2021
On the way to an electric and digitalised mobility
in a sustainable and circular economy. Report
on the BMW Group's economic performance and
its ecological and social contributions.
← = Q
7 Link to the Online-Report
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
2
W
Significant increase to prior year
GROUP EMPLOYEES
TO THE CHAPTER
BMW Group in figures
->
3
BMW Group Report 2021
To Our Stakeholders
Significant increase to prior year
Combined Management Report
Corporate Governance
Remuneration Report
Other Information
← = Q
STRATEGIC TARGETS OF THE BMW GROUP
FINANCIAL TARGETS
Group Financial Statements
Significant increase to prior year
13.0
↑
end of year
DELIVERIES AUTOMOTIVE SEGMENT
in units
DELIVERIES MOTORCYCLES SEGMENT
in units
SHARE OF ELECTRIFIED
VEHICLES IN DELIVERIES
The diagram provides a simplified overview. Detailed explanations of the KPIs as well as an indication of the scope of the audit can be found in the respective
chapters of the report.
in %
Slight decrease to prior year
2,521,514
194,261
Solid increase to prior year
71
Significant increase to prior year
118,909
CIRCULAR
BMW Group in Figures
Other Information
Combined Non-Financial Statement (NFS) at Group
and Company level in accordance with § 289 b and
§ 315 b HGB. 7 NFS-Index
German Commercial Code (HGB) (among other relevant
legislation)
The Combined Management Report is based on the follow-
ing legal frameworks:
Combined Management Report
The BMW Group Report 2021 is based on the following re-
porting and accounting standards:
FRAMEWORKS APPLIED
SASB-Index
7 GRI 102-48, 102-49
In light of recent and prospective changes in non-financial
disclosure requirements, including the revision of the Non-Fi-
nancial Reporting Directive at EU level (Corporate Sustain-
ability Reporting Directive), the related development of EU
reporting standards and the establishment of the Inter-
national Sustainability Standards Board (ISSB) under the
umbrella of the IFRS Foundation, the pace of change within the
reporting environment will continue to gather momentum
and increase the extent to which non-financial and financial
disclosures need to be presented on an integrated basis.
The BMW Group is preparing itself for these new trends by
developing its internal control system to ensure that non-fi-
nancial performance indicators are monitored to the same
degree as financial performance indicators. In the year under
report, we also complied with the disclosure requirements of
the (EU Taxonomy] Regulation and expanded our reporting in
line with the requirements of the Sustainability Accounting
Standards Board.
Changes in reporting and outlook for reporting
requirements
About This Report
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
Other Information
← = Q
About This Report
ABOUT THIS REPORT
(PART OF THE COMBINED MANAGEMENT REPORT)
REPORTING CONCEPT
German Accounting Standards (GASS) underpinning
HGB requirements
Integrated reporting and corporate strategy
For this reason, since the financial year 2020, the BMW Group
has kept stakeholders informed of its business performance
by reporting on an integrated basis. With the Integrated
Group Report 2021, we aim to provide a clear and compre-
hensive insight into the BMW Group and explain our activities
in a transparent, comprehensible and measurable manner.
We are well aware that integrated reporting is among the
subjects of an ongoing discussion currently taking place be-
tween stakeholders, regulators and reporting entities. The
status achieved to date is therefore still subject to constant
review and continuous improvement.
The BMW Group is keen to demonstrate to its shareholders
how economic, ecological and social issues complement
one another and are often mutually dependent, and which
general external conditions influence the company and de-
fine our potential to boost sustainability. For these reasons,
we explain the BMW Group's corporate strategy as well as the
latest developments and the way in which the business is
managed on the basis of key financial and non-financial tar-
gets. KPI Dashboard
On 8 March 2022, the Financial Statements of BMW AG
were authorised for issue by the Board of Management and
the Group Financial Statements approved for publication.
The BMW Group Report combines the management reports
of Bayerische Motoren Werke Aktiengesellschaft (BMW AG)
and the BMW Group in a Combined Management Report.
6
BMW Group Report 2021
To Our Stakeholders
In the BMW Group's view, a key prerequisite for a company's
profitability is that its activities are compatible with external
economic, ecological and social interests. Conversely, profit-
ability is the prerequisite for a company's ability to develop
sustainable and innovative technologies, ensure job security,
and cooperate with all its business partners along a value
chain that is striving to become increasingly sustainable.
German Stock Corporation Act (AktG)
Taxonomy Regulation (Regulation (EU) 2020/852 of the
European Council and of the European Parliament on the
Establishment of a Framework to Facilitate Sustainable
Investment, and amending Regulation (EU) 2019/2088)
The Combined Management Report is also based on:
Guidelines on Alternative Performance Measures issued
by the European Securities and Markets Authority (ESMA)
German Corporate Governance Code
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
PwC has audited the Group Financial Statements and the
Combined Management Report for the year ended 31 De-
cember 2021 and issued an unqualified audit opinion there-
upon. Further information is provided in the Independent Audi-
tor's Report and the Independent Practitioner's Report on
Non-financial Disclosures.
Combined Management Report
The contents of the NFS, in accordance with § 289 b and
315 b HGB, were subjected to an audit to obtain limited
assurance and is denoted with the symbol [...]]. The chapter
7 Dialogue with stakeholders and the additional information pro-
vided in the section Additional GRI Information were also sub-
jected to a limited assurance engagement. Certain individual
parts of the NFS as well as the remainder of the Combined
Management Report were subjected to a reasonable assur-
ance engagement. Information provided in the SASB-Index is
subjected to a limited assurance review on a voluntary basis.
The TCFD-Index refers to the corresponding chapter, in which
the respective test levels are denoted.
The material topics addressed in the NFS to ensure compli-
ance with § 289 c and § 315 c HGB were determined partly
on the basis of the results of the materiality analysis updated
in 2018, in line with the requirements of the Global Reporting
Initiative (GRI), and partly on the basis of the BMW Group's
own long-term targets. For these purposes, consideration
was given to the BMW Group's own business operations,
products and services on the one hand and its business re-
lationships (for example in the supply chain) on the other. In
accordance with statutory materiality requirements, infor-
mation has been aggregated in each case with a view to pro-
viding an understanding of the BMW Group's course of busi-
ness, results of operations and financial position, while also
showing the impact of its activities on the non-financial as-
pects specified in the legislation. A stakeholder survey con-
ducted during the period under report with selected repre-
sentatives from capital markets and academia confirmed our
selection of material topics.
7 GRI 102-46, 102-49
Connection to figures in the Group Financial Statements
For each topic, an assessment was carried out to identify
figures reported in the financial statements that enable a
better understanding of the NFS, and which therefore need
to be disclosed and explained.
Forward-looking statements
The BMW Group Report 2021 contains various forward-look-
ing statements concerning future developments that are
based on the current status of the BMW Group's assumptions
and forecasts. These statements are therefore subject to a va-
riety of predictable and unpredictable risks, uncertainties and
other factors, which means that the actual outcome, including
Material topics addressed in the NFS
Remuneration Report
To Our Stakeholders
7
Furthermore, the following reporting standards and trans-
parency requirements have, for the most part, been integrat-
ed in the Combined Management Report:
-
Global Reporting Initiative (GRI) ( GRI-Index), option
"comprehensive"
Sustainability Accounting Standards Board (SASB)
(7 SASB-Index)
Task Force on Climate-related Financial Disclosures
(TCFD) (TCFD-Index)
UN Global Compact Progress Report: see references in
GRI Content Index (GRI-Index)
BMW Group Report 2021
About This Report
Group Financial Statements
ADDITIONAL INFORMATION
ON THE REPORT
Publication and scope
The BMW Group Report is published annually to coincide
with the BMW Group Annual Conference most recently
held on 17 March 2021 - and is subsequently available in
both German and English on the BMW Group website. The
7 GRI Content Index is also available on the website as a sepa-
rate document. The reporting period covers the financial
year from 1 January to 31 December 2021. The statements
made in the report relate to the BMW Group reporting entity.
Any deviations are marked accordingly. Nothing significant
has changed in the reporting period with regard to the or-
ganisational structure of the BMW Group. The BMW Group
Report 2022 will be published on 15 March 2023.
7 GRI 102-45, 102-48, GRI-Index 102-52
External audit
The entire report of BMW AG, comprising the Combined
Management Report, the Group Financial Statements, the
disclosures on corporate governance and the additional GRI
information, has been subject to an annual independent au-
dit by PricewaterhouseCoopers GmbH Wirtschaftsprüfungs-
gesellschaft ("PwC" or "Auditor"). The external audit serves
to underpin the reliability and trustworthiness of the infor-
mation contained therein for external users. The external au-
dit supports the Supervisory Board of BMW AG in fulfilling its
auditing duties. Any links and/or disclosures that refer to
additional information outside the BMW Group Report and
the GRI Content Index are not part of the audit. The Remuner-
ation Report 2021 was prepared in accordance with the require-
ments of § 162 of the German Stock Corporation Act (AktG)
and its content audited by PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft.
The Group Financial Statements of Bayerische Motoren
Werke Aktiengesellschaft for the year ended 31 December
2021 have been prepared in accordance with International
Financial Reporting Standards (IFRS) as endorsed by the
European Union (EU) and the supplementary requirements
of § 315 e HGB.
Corporate Governance
Group Financial Statements
Combined Management Report
TO OUR STAKEHOLDERS
67
Production, Purchasing and Supplier Network
153 Cash Flow Statement for Group and Segments
9
BMW Group in Figures
1
80
12
Report of the Supervisory Board
91
Financial Performance
155 Statement of Changes in Equity for Group
157 Notes to the Group Financial Statements
Employees and Society
21
Balance Sheet for Group and Segments at 31 December 2021
Products and Mobility Solutions
Contents
CONTENTS
2
COMBINED MANAGEMENT REPORT
5
About this Report (Part of the Combined Management Report)
151
34
38
BMW Group Integrated Strategy
3 GROUP FINANCIAL STATEMENTS
149 Income Statement for Group and Segments
150 Statement of Comprehensive Income for Group
51
Overview of the BMW Group
that of the BMW Group's net assets, financial position and re-
sults of operations, its development or performance, could
differ considerably to those statements.
Statement of the Chairman of the Board of Management
The Board of Management
6 OTHER INFORMATION
321 Further GRI Information
332 SASB-Index
337 TCFD-Index
341 NFS-Index
342 Consumption and Carbon Disclosures
5
344 BMW Group Ten-year Comparison
351 Financial Calendar
352 Contacts
6
5
BMW Group Report 2021
To Our Stakeholders
346 Glossary and Explanation of Key Figures
27
271 Remuneration Report
5
28
Dialogue with Stakeholders
31
BMW Group and Capital Markets
121 EU Taxonomy
124 Outlook, Risk and Opportunity Management
REMUNERATION REPORT
143 Internal Control System
4
CORPORATE GOVERNANCE
248 Fundamental Aspects of Corporate Governance
(Part of the Combined Management Report)
258 Responsibility Statement by the Company's Legal
Representatives
259 Independent Auditor's Report
267 Independent Practitioner's Report
144 Disclosures Relevant for Takeovers and Explanatory Comments
← = Q
Editorial comments
The BMW Group Report uses also the simplified term "car-
bon" or the abbreviation CO₂ instead of CO₂e. Since not only
carbon dioxide, but also other gases such as methane (CH4)
and nitrous oxide (N₂O) contribute to climate warming to a
varying extent, the impact is converted into so-called CO₂
equivalents (CO₂e).
4.5
8.2
8.1
9.1
- 5.7
0.33
- 14.1
115.99
99.1 (135.0)8
0.35
0.40
0.40
0.41
127.0
127.5
128.0
56.6
13.0
49.8
29.0
12.7
59.9
2,465,021
2,486,149
8.3
2,537,504
2,521,514
8.4
4.2
5.7
5.8
8.3
2,325,179
84.4
34.0
28.4
6 EU-27 countries including Norway and Iceland; with effect from 2021, values are calculated on a converted basis in line with WLTP (Worldwide Harmonised Light Vehicles Test Procedure). Values from 2017 to 2020 according to New European Driving Cycle (NEDC).
7 This is a preliminary internal calculation with a potential variation of +/- 0.5 g CO2/km, as official registration figures from the authorities are not available from all EU states. The EU Commission is not expected to publish official figures until November the following year.
8 To improve year-on-year comparability, the 2020 NEDC figures were converted to WLTP after adjusting for permissible flexibilities - specifically from 99 g CO₂ / km according to NEDC (including 5 g CO2/km phase-in, 7.5 g CO2/km supercredits and 2.4 g CO2/km eco-innovations) to 135 g CO2/km according to WLTP
(excluding flexibilities). In 2020, a phase-in regulation was accepted, as was the recognition of supercredits. As of 2021, these two simplifications no longer apply for the BMW Group.
9 Flexibilities as defined in the regulatory requirements for 2021 are as follows: eco-innovation with 1.7 g CO2/km (WLTP).
10 Efficiency ratio calculated on the basis of Scope 1 and Scope 2 CO₂ emissions (i.e. a market-based method according to GHG Protocol Scope 2 guidance; mainly the use of the VDA emissions factors as well as isolated use of local emissions factors; but excluding climate-changing gases other than carbon dioxide) from vehicle pro-
duction (BMW Group manufacturing sites incl. joint venture BMW Brilliance Automotive Ltd. and motorcycles, excluding contract manufacturers), as well as BMW Group non-manufacturing sites (e.g. research centre, sales centre, offices) divided by the number of vehicles (excluding motorcycles) produced (BMW Group manufacturing
sites incl. joint venture BMW Brilliance Automotive Ltd., excluding contract manufacturers).
"From 2021, this indicator will include the carbon emissions of all other BMW Group locations in addition to the carbon emissions generated by production. The figures for 2019 (base year) and 2020 have been adjusted accordingly for comparison purposes (2019 before adjustment: 0.30 tons, 2020 before adjustment: 0.23 tons).
12 Figures from 2017 and 2018 are audited with limited assurance.
5 Retail vehicle delivery data for 2020 and 2021 are not directly comparable to the data presented for previous years. See Retail vehicle delivery data in the section Comparison of Forecasts with Actual Outcomes for further information.
10
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
10
10.3
4 Deliveries including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2017: 385,705 units, 2018: 455,581 units, 2019: 538,612 units, 2020: 602,247 units, 2021: 651,236 units).
1 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 ( Annual Report 2019, Note 6 to the Group Financial Statements).
2 The term "employee" has been redefined with effect from the reporting year 2020 (for definition, see Glossary and explanation of key figures). The figure for 2019 was restated accordingly for comparison purposes (2019 before adjustment: 133,778 employees). For the period 2018 and earlier, the percentage of employees no
longer covered by the new definition is between 7.5 and 8.0 %.
29.4
15.0
35.9
164,153
165,566
175,162
3 The new definition of the term "employee" (see footnote 1) also has an impact on disclosures relating to the percentage of female employees. The 2019 figure was adjusted accordingly for comparison purposes (2019 before adjustment: 17.5 %).
169,272
14.8
18.1
14.8
15.0
11.2
22.6
194,261
The key figures presented in this report have been rounded
in accordance with standard commercial practise. In certain
cases, this may mean that figures do not add up exactly to
the stated total and that percentages cannot be derived from
the figures shown.
2.7
7.2
28
Dialogue with Stakeholders
31
BMW Group and Capital Markets
TO OUR
STAKEHOLDERS
The Board of Management
9
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
BMW Group Report 2021
← = Q
27
21
Summarised disclosures of fuel consumption, carbon emis-
sions and electricity consumption are provided in the section
Consumption and carbon emissions data.
8
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Statement of the Chairman of the Board of Management
Corporate Governance
Other Information
← = Q
9
BMW Group in Figures
12
Report of the Supervisory Board
Remuneration Report
4.9
BMW Group in Figures
KEY PERFORMANCE INDICATORS
2018¹
2019
2020
2021
Change in %
10,675
129,932
16.0
2017
9,627
134,682
17.2
126,016
17.2
5,222
120,726
17.8
16,060
118,909
18.8
- 1.5
5.6
9.2
77.7
7,118
BMW GROUP IN FIGURES
RoE in %
Deliveries
GROUP
Profit/loss before tax in € million
Workforce at year-end²
Share of women in management positions in the BMW Group³
AUTOMOTIVE SEGMENT
EBIT margin in %
FINANCIAL SERVICES SEGMENT
RoCE in %
Share of electrified vehicles in deliveries (in %)
CO2 emissions EU new vehicle fleet (in g/km) 6,7
CO₂ emissions per vehicle produced (in tons) 10, 11, 12
MOTORCYCLES SEGMENT
EBIT margin in %
RoCE in %
Deliveries 4,5
indication of the scope of the audit can be found in the respective chapters of the report.
MOTORCYCLES SEGMENT
Deliveries to customers
Return on capital employed (RoCE) 6
91
46,878
Change in %
9.6
Cost of sales relating to financial services business
26,409
27,114
-2.6
thereof interest expense relating to financial services business
1,643
1,960
- 16.2
Research and development expenses
6,299
5,689
10.7
thereof amortisation of capitalised development costs
Service contracts, telematics and roadside assistance
1,935
1,710
89,253
4.2
1,345
1,401
-26.2
2,971
51,361
2,192
Other cost of sales
Warranty expenses
12.8
1,411
1,591
13.2
Cost of sales
85,408
2020
Manufacturing costs
Gross profit margin³
19.8
13.7
6.1
Pre-tax return on sales¹
14.4
5.3
9.1
Post-tax return on sales²
11.2
3.9
7.3
Effective tax rate4
22.4
26.1
- 3.7
1 Group profit before tax as a percentage of Group revenues.
in € million
Financial Performance
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
2021
Combined Management Report
BMW Group Report 2021
99
BMW GROUP COST OF SALES
"Income taxes as a percentage of Group revenues.
3 Gross profit as a percentage of Group revenues.
² Group net profit as a percentage of Group revenues.
To Our Stakeholders
4.5
Antitrust investigation concluded
In the Half-Year Report to 30 June 2021, information was
provided on the conclusion of the EU Commission's antitrust
proceedings in connection with allegations of colluding to
restrict competition for innovation with regard to certain ex-
haust treatment systems. In accordance with the updated
Statement of Objections received on 20 May 2021, the EU
Commission dropped most of the original charges. Remeas-
urement of the provision originally recognised in the financial
year 2019 gave rise to a positive impact on earnings of
around one billion euros in the second quarter 2021. The pro-
ceedings were concluded by settlement on 8 July 2021 and
resulted in a fine of approximately € 373 million, which was
paid in July 2021. Further information, in particular relating to
further antitrust proceedings and civil lawsuits, is provided in
note 38 to the Group Financial Statements 2021.
-2,300
1,935
1,710
6,299
5,689
rise to fair value measurement losses on interest rate hedges.
Other financial result was additionally impacted by positive
valuation effects, primarily arising on investments held by
the BMW i Ventures fund and on the investment in SGL
Carbon shares.
The increased at-equity result from the Chinese joint venture
BMW Brilliance Automotive Ltd., Shenyang, amounting to
€ 1,727 million (2020: € 1,212 million) was another key driver
of the improved financial result.
As forecast most recently in the Quarterly Statement to
30 September 2021, Group profit before tax of € 16,060 mil-
lion was significantly higher than one year earlier (2020:
€ 5,222 million) and therefore in line with expectations.
Income tax expense for the year increased to € 3,597 million
(2020: € 1,365 million), mainly due to the significant year-
on-year improvement in Group profit before tax. The effec-
tive tax rate for the 12-month period was 22.4% (2020:
26.1%), reflecting the partial reversal in 2021 of the risk pro-
vision in connection with the antitrust proceedings of the EU
Commission as well as the impact of fair value measurement
gains within other financial result.
The size of the workforce decreased slightly to 118,909 em-
ployees year-on-year and was therefore in line with expect-
ations (2020: 120,726 employees; -1.5%).
BMW GROUP PERFORMANCE INDICATORS RELATING TO RESEARCH AND DEVELOPMENT EXPENSES
in %
Research and development expenditure ratio¹
Capitalisation rate²
1 Research and development expenditure as a percentage of Group revenues.
² Capitalised development costs as a percentage of research and development expenditure.
2021
2020
solid increase
Share of electrified vehicles in deliveries
significant increase
Emissions new vehicle fleet²
significant decrease
CO2 emissions per vehicle produced³
-2,506
moderate decrease
-0.1
36.6
36.5
Change in
%-pts.
-0.1
6.3
6.2
EBIT margin
6,279
6,870
2020
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
100
= Q
↑
Group Financial Statements
Further information is provided in note 32 to the Group Financial Statements.
In the previous year, warranty expenses were impacted by
the recognition of provisions in connection with the exhaust
gas recirculation cooler and other warranty-related items.
Other factors influencing the increase were volume-related
cost of sales for lease returns, rising raw materials and energy
prices, and the higher proportion of electrified vehicles sold.
Furthermore, reversals of and lower additions to credit risk al-
lowances as well as the remarketing result arising on the sale
of lease returns had a positive impact on cost of sales.
Group cost of sales rose to € 89,253 million (2020: € 85,408 mil-
lion; +4.5%), mainly due to sales volume growth.
also higher in 2021, whereby the increase was held down by
production shortfalls due to supply bottlenecks for semicon-
ductor components. However, this unfavourable impact was
more than offset by improved pricing, due to both the grow-
ing desire for individual mobility on the one hand and the
reduced worldwide availability of products triggered by those
same semiconductor component shortages on the other. In
addition, revenues were also boosted by favourable product
mix effects due to increased sales of high-revenue models.
The semiconductor scarcity was also reflected in higher sell-
ing prices on pre-owned vehicle markets, which in turn gave
rise to higher revenues from the sale of lease returns.
Group revenues were significantly higher in the financial year
2021, reflecting the impact of coronavirus-related dealership
closures in the previous 12-month period (2021: € 111,239 mil-
lion; 2020: € 98,990 million; + 12.4%). Sales volume was
Increase in Group net profit in 2021
The reduced workforce size and changeover effects resulting
from the modernisation of the pension plan model in Germa-
ny amounting to € 562 million had a positive impact on cost
of sales and selling and administrative expenses, while higher
expenses for performance-related remuneration components
had an offsetting effect. Depreciation and amortisation on
property, plant and equipment and intangible assets recorded
in cost of sales and in selling and administrative expenses to-
talled € 6,495 million (2020: € 6,143 million).
%-points
Corporate Governance
Other Information
2021
Other financial result benefited in 2021 from the continued
favourable fair value development of interest rate hedges re-
sulting from the rise in yield curves in the USA, whereas in
the previous year the downward trend in interest rates gave
The financial result improved significantly to a net positive
amount of € 2,660 million (2020: net positive amount of
€ 392 million), influenced in particular by improvements in
the line items "Other financial result” and “Result from equity
accounted investments".
As a result of the various factors described above, profit
before financial result jumped to € 13,400 million (2020:
€ 4,830 million).
Research and development expenses
Amortisation
Remuneration Report
New expenditure for capitalised development costs
in € million
BMW GROUP RESEARCH AND DEVELOPMENT EXPENSES
The net amount of other operating income and expenses im-
proved significantly, primarily due to the income arising on
the partial reversal of the provision relating to the antitrust
proceedings of the EU Commission, which was recorded in
the second quarter 2021.
A substantial part of research and development expenditure
in 2021 related to new vehicle models (including the all-elec-
tric BMW iX and BMW i4 models and the new BMW 2 Series
Active Tourer) as well as the development of digital products,
automated driving and new architectures. The year-on-year
rise in research and development expenses clearly reflects
the increase in vehicle and module production start-up activ-
ities as the BMW Group continues its electric offensive.
Financial Performance
← = Q
Research and development expenditure
2020
2021
in %
Return on capital employed (ROCE]6
FINANCIAL SERVICES SEGMENT
Return on equity (ROE)
EBIT margin
%
22.6 (+11.4%-points)
1 Including automobiles from the joint venture BMW Brilliance Automotive Ltd. Shenyang (2021: 651,236 units).
2 EU-27 countries including Norway and Iceland; with effect from 2021, values are calculated on a converted basis in line with WLTP (Worldwide Harmonised Light Vehicles Test Procedure).
3 Efficiency indicator calculated on the basis of Scope 1 and Scope 2 emissions (i. e. a market-based method according to GHG Protocol Scope 2 guidance; mainly use of VDA emission factors as well as occasional use of local emis-
sions factors). This excludes climate-changing gases (other than carbon dioxide) that are emitted in conjunction with vehicle production (BMW Group plants incl. BMW Brilliance Automotive Ltd. joint venture and Motorrad, excluding
partner plant and contract manufacturing) as well as other BMW Group locations not assigned to manufacturing (e.g. research centres, sales centres, office buildings) divided by the number of vehicles generated in automobile
production (BMW Group plants including the BMW Brilliance Automotive Ltd. joint venture and partner plants, excluding contract manufacturing).
"For better comparability of the previous year's values with the current year under report, the 2020 NEDC figures were converted to WLTP, making adjustments for applicable flexibilities specifically from
99 g CO2/km according to NEDC (including 5 g CO2/km phase-in, 7.5 g CO2/km supercredits and 2.4 g CO2/km eco-innovations) to 135 g CO2/km according to WLTP (excluding flexibilities). In 2020, a phase-in
scheme and the awarding of supercredits were possible. In 2021, these two exemptions were no longer available for the BMW Group.
5 Due to the expansion of the reporting scope during the year under report, the comparative figure (in 2020 before the adjustment: 0.31 tonnes) was revised to 0.35 tonnes.
6 Unlike the other key performance indicators, the RoCE forecast for the Automotive and Motorcycles segments is based on the change in percentage points. Glossary
97
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
To Our Stakeholders
BMW Group Report 2021
98
* See Glossary for the definition of deliveries.
Retail vehicle deliveries during a given reporting period do
not correlate directly to the revenue that BMW Group recog-
nizes in respect of such reporting period.
Retail vehicle delivery data for periods prior to 2020 in-
clude an immaterial number of pre-series vehicles that
were never intended to be sold to end users (such as ve-
hicles for use by government agencies in connection with
safety evaluations (e.g., crash tests) or for other tests).
between 6 and 8
The definition of deliveries includes vehicles delivered in
the United States and Canada if the relevant dealers des-
ignate such vehicles as service loaner vehicles or demon-
strator vehicles.
The preparation of BMW Group's retail vehicle delivery data
involves a variety of estimates and judgments, some of
which are complex and all of which are inherently subjective,
and is subject to other uncertainties. In addition, as
BMW Group continues to enhance its policies and proce-
dures regarding retail vehicle delivery data, it may not always
be practicable for BMW Group to adjust prior-period data
(and any such adjustments would be of a de minimis nature
without any material impact on the comparability of periods).
Examples of the foregoing include:
The retail vehicle delivery data for automobiles for
BMW Group's other markets have not been adjusted for any
period prior to 2020, nor have any retail vehicle delivery data
for motorcycles been adjusted for any period prior to 2020.
BMW Group believes the impact on BMW Group's retail ve-
hicle delivery data presented in this report of such data not
having been adjusted to reflect the Revised Reporting Pro-
cess to be immaterial.
When presenting total retail vehicle delivery data for auto-
mobiles other than model-by-model data, data relating to
the years 2016 through 2019 for BMW Group's 16 most sig-
nificant markets were adjusted to reflect the Revised Report-
ing Process. In the years 2016 through 2019, these 16 mar-
kets represented on average approximately 87% of
BMW Group's total retail deliveries of automobiles. For each
of the years 2016 through 2019, these revisions amounted to
less than 1% of BMW Group's total retail deliveries of
automobiles.
In 2020, BMW Group reviewed and revised its policies and
procedures for the reporting of retail vehicle delivery data for
automobiles in order to further improve the reliability and
validity of its retail vehicle delivery data, in particular with re-
spect to the timing of the recognition of retail vehicle deliver-
ies (the Revised Reporting Process). BMW Group has ap-
plied the Revised Reporting Process to all markets with
effect from the year 2020. While BMW Group revised retail
vehicle delivery data for certain of its most significant mar-
kets for the years 2016 through 2019 presented in this report,
such data were not revised for BMW Group's other markets.
As a result, retail vehicle delivery data presented in this re-
port for the years 2016 through 2019 is not directly compar-
able to such data presented for the years 2020 and 2021.
Specifically, the retail vehicle delivery data for automobiles
presented in this report have been revised as follows:
Retail vehicle delivery data*
Financial Performance
The vast majority of deliveries of vehicles are carried out
by independent dealerships or other third parties, and
BMW Group is reliant on such third parties to correctly re-
port relevant data to BMW Group.
Q2: between 7 and 9
Q3: between 9.5 and 10.5
significant increase
€ million
59.9 (+47.2 %-points)
significant increase
solid increase
Q2: significant increase
units
194,261 (+14.8%]
%
significant increase
8.3 (+3.8 %-points)
%
35.9 (+20.9 %-points)
significant increase
between 8 and 10
significant increase
between 12 and 15
Q2: between 17 and 20
Q3: between 20 and 23
%
Combined Management Report
10.3 (+7.6 %-points)
0.33 (-5.7%) 5
moderate decrease
16,060 (+207.5 %)
significant increase
118,909 (-1.5%)
slight decrease
%
18.8 (+ 5.6%)
%
solid increase
%
in g/km
in tons
2,521,514 (+8.4%)
solid increase
13.0 (+ 56.6%)
significant increase
115.9 (-14.1 %)4
significant decrease
units
slight increase
Group Financial Statements
Remuneration Report
21.4
Other operating income and expenses
647
43
Other regions
2.3
2.2
Profit before financial result
13,400
4,830
Group
100.0
100.0
Financial result
Profit/loss before tax
Income taxes
2,660
Change in
5.75
18.79
Earnings per share of preferred stock in €
5.73
18.77
22.8
Earnings per share of common stock in €
Net profit
- 1,365
-3,597
5,222
16,060
392
12,463
Americas
- 5.0
- 8,795
Change in %
12.4
2020
98,990
111,239
2021
Gross profit
Cost of sales
BMW GROUP REVENUES BY REGION
Revenues
Group revenues by region were as follows:
BMW GROUP CONDENSED INCOME STATEMENT
EARNINGS PERFORMANCE OF THE BMW GROUP
Financial Performance
← = Q
Other Information
in € million
Corporate Governance
in %
2020
-9,233
Selling and administrative expenses
32.1
32.5
Asia
61.9
2021
13,582
44.3
42.4
Europe
- 4.5
- 85,408
-89,253
21,986
slight decrease
3,857
Deliveries to customers'
93
Source: Reuters
2022
Source: Reuters
Chinese renminbi
- British pound
Japanese yen
Russian rouble --- US dollar
2021
2020
2019
2018
2017
50
50
60
70
30
120
110
00
100
06
BMW Group Report 2021
90
Post-Brexit, the British pound remains fairly close to the
lower value it fell to after the 2016 referendum. However, at
an average rate of 0.86 pounds to the euro, the British cur-
rency was slightly stronger than in previous years. In re-
sponse to the high inflation rate, the Bank of England (BoE)
raised the official bank rate by 15 basis points to 25 basis
points in December 2021.
In China, the rapid recovery of the domestic economy and
the sharp growth in exports in 2021 led to a continuous ap-
preciation of the Chinese renminbi. On average over the year,
the Chinese currency traded at 7.63 renminbi to the euro.
Bucking the international trend, the Chinese central bank
lowered the reserve requirement ratio for most banks by 50
basis points at the end of 2021, thereby easing its monetary
policy in order to shore up the economy.
The average exchange rate of the Japanese yen was 130 to
the euro during the year under report.
As in the previous year, the currencies of major emerging
markets weakened again in 2021 due to the impact of the
coronavirus pandemic. While the average value of the Indian
rupee fell by around 3% against the euro, the Russian rou-
ble depreciated by 5% and the Brazilian real by as much as
8% on average against the euro.
80
60
The bandwidth of fluctuation in the US dollar/euro exchange
rate was slightly narrower in 2021 than in the previous year.
The US currency fluctuated between 1.23 and 1.12 US dollars
to the euro and weakened somewhat compared to the previ-
ous year with an average rate of 1.18 US dollars to the euro in
2021. Both the European Central Bank (ECB) and the US
Federal Reserve (Fed) left their benchmark interest rates
unchanged. Towards the end of the year, however, they
announced that bond purchases would be curtailed.
To Our Stakeholders
Combined Management Report
Group Financial Statements
180
135
135
90
90
45
225
0
2018
2019
2020
2021
2022
-Lithium hydroxide ---Lithium carbonate
2017
130
270
360
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Performance
Energy and raw materials prices
315
The year 2021 was marked by a pronounced shortage of raw
materials, with demand outstripping supply for nearly all
commodities. Average prices for steel and aluminium rough-
ly doubled year-on-year, but fell again slightly towards the
end of the 12-month period.
rhodium and palladium. Lower demand from the automotive
industry also had a dampening effect on prices.
Prices of raw materials for batteries, however, rose signifi-
cantly, mainly due to the growing demand for electric ve-
hicles. Quoted prices for cobalt, for example, were up almost
twofold compared to the low for the year recorded one year
earlier. Similarly, the average price of lithium almost doubled
year-on-year.
DEVELOPMENT OF METALS PRICES
Index: December 2016 = 100
450
405
Prices for precious and non-ferrous metals also followed a
similar trend. After rising sharply through to mid-2021, prices
fell again during the second half of the year, particularly for
Silver
140
Index: December 2016 = 100
117
Course of Business
109
Value Added Statement
107
Net Assets Position of the BMW Group
105
Refinancing
103
Financial Position of the BMW Group
101
Earnings Performance of the BMW Group
98
Outcomes
Comparison of Forecasts with Actual
96
Overall Assessment by Management of the
Financial Year
significant increase
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Comments on the
Remuneration Report
← = Q
Financial Performance
91
FINANCIAL PERFORMANCE
General and Sector-Specific Environment
95
Other Information
Financial Statements of BMW AG
AT A GLANCE
16,060 million
M
92
92
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
ECONOMIC GROWTH
Group Financial Statements
Remuneration Report
Other Information
← = Q
Financial Performance
Currency markets and international interest rate
environment
Supply chain bottlenecks, capacity constraints and higher
energy prices caused inflation to rise in the world's major
economies in 2021. Towards the end of the year, a number of
central banks announced their intention to modify their pre-
vious highly expansionary monetary policies.
Corporate Governance
150
DECENT WORK AND
China's economic growth rate rose to 8.1% in 2021, well up
on the previous year, boosted in particular by a renewed
sharp rise in exports. However, the pace of growth slowed
somewhat towards the end of the year due to weaker con-
sumer demand.
Group profit before tax (up 207.5 % on the previous year)
Direct link to section
€ 9,870 million
Profit before financial result: Automotive segment
(up 356.5 % on the previous year)
7 Direct link to section
€3,753 million
Profit before tax: Financial Services segment
After contracting significantly in 2020, Japan's economy re-
covered slightly during the first half of 2021. Despite exten-
sive stimulus packages, however, the second half of the year
saw a drop in economic output, with the year-on-year growth
rate finishing at 1.8%.
(up 117.6% on the previous year)
FINANCIAL PERFORMANCE
GENERAL AND
SECTOR-SPECIFIC
ENVIRONMENT
Following the pandemic-related slump in 2020, the global
economy experienced an upswing in the year under report.
According to the provisional calculations of the International
Monetary Fund (IMF), global gross domestic product (GDP)
grew by 5.9% year-on-year in 2021. All three major regions -
Europe, the USA and China - saw an economic recovery.
The coronavirus crisis hit countries in the eurozone harder
than in other major regions. For this very reason, however,
the subsequent recovery in the worst affected European
countries was more pronounced. Overall, the economies of
the eurozone countries grew by 5.1% year-on-year. At 2.7%,
Germany's economy recorded a lower growth rate than other
European countries, mainly reflecting the impact of supply
shortfalls, particularly for semiconductor components. By
contrast, the economies of France (+6.7%), Italy (+6.3%)
and Spain (+5.0%) all grew strongly, influenced in particular
by good progress made on the vaccination front, the easing
of pandemic restrictions and the catch-up effects driven by
pent-up demand.
Despite its exit from the European Union (EU) and the im-
pact of supply bottlenecks, the economy of the United King-
dom (UK), which had experienced a particularly severe
slump in the previous year, recovered in 2021, with GDP up
by 7.0%.
The US economy grew by 5.7% year-on-year. The US labour
market also staged a recovery in 2021. Although the USA's
employment figures have not yet returned to pre-crisis levels,
some sectors are already seeing labour shortages.
7 Direct link to section
― Palladium
EXCHANGE RATES COMPARED TO THE EURO
STEEL PRICE TREND
+32
+ 15
+19
+ 11
+22
thereof Brazil
thereof USA
Americas
thereof Spain
thereof Italy
thereof France
+10
- 12
+7
Change compared to
previous year in %
thereof Germany
Europe
+1
+1
International motorcycle markets
The trend on international motorcycle markets in the 250 CC
plus class was predominantly positive in 2021. Worldwide,
motorcycle registrations were 14% up on one year earlier,
when pandemic-related factors had caused the markets to
contract. Markets in Europe also showed an upward trend,
with registrations up by 7% year-on-year. Among the major
motorcycle markets, positive contributions to the region's re-
covery came from Italy (+22%), Spain (+11%) and France
(+10%). By contrast, registration figures in Germany fell
sharply (-12%). Registrations in the USA rose by 15% year-
on-year. The Brazilian market also performed extremely well,
with registrations up by 32% after a decline one year earlier.
China recorded the biggest increase with growth of 44%.
Registration figures on international motorcycle markets
developed as follows in the year under report:
COOPER
Asia
USA
Japan
Total
+3 INTERNATIONAL MOTORCYCLE MARKETS
+3
-3
+1
China
thereof China
+44
Total
Forecast revision
in 2020 Group Report
during the year
Actual
outcome in 2021
COMPARISON OF FORE-
CASTS WITH ACTUAL
OUTCOMES
Forecast for 2021
The following table shows the development of key per-
formance indicators for the BMW Group as a whole as well as
for the Automotive, Motorcycles and Financial Services seg-
ments in the financial year 2021 compared to the forecasts
made in the BMW Group Report 2020. Favourable selling
price trends for new and pre-owned vehicles as well as the
partial reversal of the provision for the EU antitrust proceed-
ings resulted in the EBIT margin forecast for the Automotive
segment being adjusted during the year. Due to lower risk
provisioning expense recognised for expected residual value
and credit risks, higher profits on the resale of lease returns
and the reversal of credit risk allowances, the BMW Group
also adjusted its forecast for the return on equity (ROE) range.
The changes are shown below.
GROUP
Profit before tax
Workforce at year-end
Share of women in management
positions in the BMW Group
Cobalt
AUTOMOTIVE SEGMENT
Detailed information on the BMW Group's key performance
indicators is provided below in conjunction with the analysis
of the Group's results of operations, financial position and
net assets. Changes in the key performance indicators used
for the Automotive, Motorcycles and Financial Services
segments are explained in the respective sections on the
segments.
+6
BMW GROUP: COMPARISON OF THE FORECASTS FOR 2021 WITH ACTUAL OUTCOMES IN 2021
Financial Performance
+14
OVERALL ASSESSMENT
BY MANAGEMENT OF THE
FINANCIAL YEAR
Despite the global challenges driven by semiconductor com-
ponent supply shortages and the impact of the coronavirus
pandemic, the BMW Group can be satisfied with the course
of business in the financial year 2021.
96
The BMW Group's results of operations, financial position
and net assets are indicative of its solid financial condition.
Business developed in line with management expectations.
This assessment also takes into account events after the
end of the reporting period.
BMW Group Report 2021
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
To Our Stakeholders
+1
+31
Change compared to
previous year in %
-2
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Performance
Whereas in the previous year, oil markets had seen negative
prices for a brief period in the wake of the coronavirus pan-
demic, crude oil prices rose massively in 2021. WTI-grade oil
was temporarily quoted at over 84 US dollars per barrel and
Brent crude at over 86 US dollars per barrel, both reaching
their highest level in seven years. Prices fell again slightly
towards the end of 2021, but were still well above prior-year
levels.
Combined Management Report
OIL PRICE TREND
100
90
90
80
10
70
Price per barrel of Brent Crude
60
To Our Stakeholders
94
Index: January 2016 = 100
200
-10
150
50
100
BMW Group Report 2021
50
2018
2019
2020
2021
2022
Source: Working Group for the Iron and Metal Processing Industry.
2017
60
Group Financial Statements
50
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
Financial Performance
To Our Stakeholders
International automobile markets
International automobile markets recovered slightly overall
in 2021, despite the continuing supply bottlenecks reported
in many markets. Registration figures for passenger cars and
light commercial vehicles worldwide edged up by 1% to 73.4
million units.
Europe
thereof Germany
thereof France
thereof Italy
thereof Spain
thereof United Kingdom (UK)
INTERNATIONAL AUTOMOBILE MARKETS
BMW Group Report 2021
← = Q
95
40
30
20
10
0
2017
2019
2018
2021
2022
- Price in US dollars
Price in euros
Source: Reuters
2020
40.5
Providers of finance
12,286
12,244
63.0
0.3
1,808
3,758
2,129
10.9
- 15.1
Government / public sector
1,229
12.4
Employees
6.0
ALLOCATION
Depreciation and amortisation of total tangible,
19.3
6.3
31.3
33.8
31,435
intangible and investment assets
36.3
11,758
10.1
11,976
11.9
- 1.8
Net value added
30,315
26.2
19,459
55.8
Shareholders
Financial Performance
12.6
* Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).
108
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
BMW GROUP VALUE ADDED 2021
in %
11.8 %
42,073
Other expenses
55.8
3,827
100.0
100.0
1,253
6.4
Group
8,555
28.2
2,522
13.0
Minority interest
81
0.3
82
0.4
- 1.2
Net value added
30,315
19,459
Gross value added
4.5
68.8
Other Information
← = Q
Financial Performance
VALUE ADDED STATEMENT
The value added statement shows the value of work per-
formed by the BMW Group during the financial year, less the
value of work bought in. Depreciation and amortisation, cost
of materials, and other expenses are treated as bought-in
costs in the value added calculation. The allocation state-
ment applies value added to each of the participants in-
volved in the value added process. The bulk of the net value
added benefits the employees. The remaining proportion in
the Group is retained to finance future operations. The gross
value added amount treats depreciation and amortisation as
a component of value added which, in the allocation state-
ment, would be treated as internal financing.
Net value added by the BMW Group rose sharply in 2021 due
to the year-on-year improvement in earnings.
BMW GROUP VALUE ADDED STATEMENT
WORK PERFORMED
Revenues
Financial income
Other income
Total output
Cost of materials *
2021
in € million
Remuneration Report
2021
in %
Corporate Governance
Combined Management Report
32.7
Depreciation and
28.4
4.3
41.5
37.0
Financial Services segment
11.3
10.5
0.8
1 Equity capital as a percentage of the balance sheet total, respectively.
2 Further information is provided in note 32 to the Group Financial Statements.
107
BMW Group Report 2021
To Our Stakeholders
Group Financial Statements
6.7
2020
in € million
in %
15.2
60,173
51.9
52,355
52.1
14.9
Other expenses
Bought-in costs
13,599
11.8
16,766
16.7
- 18.9
73,772
63.7
69,121
100.0
2020
100,556
115,845
Change in %
111,239
96.0
98,990
98.4
12.4
2,904
2.5
650
0.6
1,702
1.5
916
0.9
85.8
100.0
amortisation
59.9
Cost of materials
Americas
949.1
913.6
1,081.6
1,097.4
266.8
285.0
330.5
310.6
1,101.9
296.5
164.3
163.2
233.8
236.8
242.4
thereof UK
451.7
thereof Germany
The BMW brand set a new record in 2021, delivering a total
of 2,213,7901 units (2020: 2,028,8411 units; +9.1%). The core
brand's growth was mainly attributable to its youthful, at-
tractive range of models. The BMW X family in particular re-
mained extremely popular. The BMW X3 and BMW X4 model
revisions launched in 2021 made a significant contribution to
the brand's strong overall sales performance. The figure in-
cluded 37,938 units of the new BMW iX33, which means ap-
proximately every tenth BMW X3 vehicle delivered worldwide
was all-electric.
Korea
USA
3.1
14.6
UK
6.5
Germany
10.6
BMW GROUP DELIVERIES OF VEHICLES BY REGION AND MARKET 2
in 1,000 units
2021
2020
2019
2018
2017
BMW brand sets new record
Europe
3.0
379.7
457.1
Other markets
52.8
45.4
52.2
59.3
Total1
2,521.5
2,325.2
2,537.5
2,486.1
2,465.0
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 538,612 units; 2018: 455,581 units; 2017: 385,705 units).
2 Retail vehicle delivery data presented for 2020 and 2021 is not directly comparable to such data presented for previous years. For further information on retail vehicle delivery data, please see Comparison of
Forecasts with Actual Outcomes.
37 Consumption and carbon emissions.
Change in
%-points
595.0
472.9
635.8
778.4
456.1
thereof USA
368.0
307.9
375.7
355.4
358.8
Asia¹
1,067.9
986.5
930.8
871.8
847.7
thereof China¹
847.9
724.7
France
2.8
China
33.6
Remuneration Report
Other Information
← = Q
Financial Performance
DELIVERIES OF ELECTRIFIED MODELS
2021
2020
Change in %
BMW Group PHEV
BMW Group BEV
Total
224,460
148,121
51.5
103,854
44,541
133.2
Corporate Governance
328,314
Group Financial Statements
To Our Stakeholders
51.9 %
Net
value added
26.2%
Employees
40.5 %
Government/public
sector
12.4 %
Group
28.2%
Providers of finance
6.0%
Shareholders
12.6 %
Minority interest
0.3%
109
BMW Group Report 2021
Combined Management Report
192,662
70.4
COURSE OF BUSINESS
Remuneration Report
Other Information
← = Q
Financial Performance
Sales volume situation in main markets:
new record set in China
Deliveries of BMW, MINI and Rolls-Royce brand vehicles in
Asia rose solidly to a new high of 1,067,9141 units (2020:
986,464 units; +8.3%). The sales figure for China grew by
8.9%, also resulting in a new record level of 847,9351 units
(2020: 778,412¹ units).
Europe saw a slight increase in the number of deliveries to
949,124 units (2020: 913,642 units; +3.9%). In Germany,
however, the impact of the coronavirus pandemic became
even more pronounced at the beginning of 2021, a fact re-
flected in weak sales figures during the early stages of the
year. Over the year as a whole, a total of 266,818 units were
delivered, well down on the previous year (2020: 285,019
units; -6.4%).
In the UK, sales of all three brands totalled 164,344 units
(2020: 163,174 units; +0.7%), marginally up on the previous
year's figure. France and Italy, however, both recorded
double-digit growth rates. Sales in France, for example, rose
to 76,845 units (2020: 69,880 units; +10.0%), while in Italy
the BMW Group delivered a total of 70,224 units (2020:
62,538 units; +12.3%).
Sales also recovered well in the Americas region during the
year under report, with delivery numbers rising to 451,747
units (2020:379,714 units; +19.0%). A total of 368,032 units
were delivered in the USA (2020: 307,876 units; +19.5%).
-
LARGEST AUTOMOBILE
BMW GROUP
MARKETS 2021
as a percentage of sales volume
Other
25.8
Italy
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
Automotive segment
BMW Group retains leadership in premium segment
Despite global challenges such as semiconductor component
supply issues and the impact of the coronavirus pandemic,
the BMW Group can be satisfied with the positive course of
business in the financial year 2021. Driven by brisk demand
and an attractive product range, automobile deliveries grew
by a solid 8.4% to a total of 2,521,514¹ BMW, MINI and Rolls-
Royce brand vehicles (2020: 2,325,1791 units), enabling the
BMW Group to extend its lead in the premium segment.
Deliveries² of BMW brand vehicles grew by 9.1% to 2,213,7901
units (2020: 2,028,8411 units). MINI also recorded an in-
crease, with deliveries rising to 302,138 units (2020: 292,582
units; +3.3%). Rolls-Royce Motor Cars delivered a total of
5,586 units (2020: 3,756 units; +48.7%), the highest figure
recorded for the luxury marque to date.
Deliveries of electrified vehicles at record level
Electric mobility continues to gain in significance for the en-
tire sector and is a key driver of sales volume growth for the
BMW Group. The trend is reflected in the sharp rise in the
sale of electrified models offered by the BMW and MINI
brands.
With a total of 328,3143 units, deliveries jumped sharply by
70.4% in the year under report (2020: 192,662³ units). De-
mand was particularly strong for the Group's all-electric
models and delivery figures more than doubled year-on-year
to 103,8543 units (2020: 44,5413 units; +133.2%). Their
share of total delveries was 4.1% (2020: 1.9%) in the year
under report. Two additional all-electric models, the BMW iX4
and the BMW i44, went on sale towards the end of 2021, both
of which have been highly acclaimed in the trade press. By
the end of the period under report, the BMW Group had a
total of 14 electrified models on the roads. In 2022, the prod-
uct range will be expanded to include the all-electric BMW i7
luxury sedan and the BMW iX1. The increased share of deliv-
eries accounted for by electrified vehicles and the rigorous
use of Efficient Dynamics technologies enabled further pro-
gress to be made in decarbonising fleet emissions. Further
information is provided in the chapter 7 Carbon emissions and pol-
lutants.
in units
10.1%
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang
² See 7 Glossary for definition of deliveries.
3 Includes the joint venture BMW Brilliance Automotive Ltd., Shenyang.
47 Consumption and carbon emissions.
ix
4
110
BMW Group Report 2021
(2021: 651,236 units; 2020: 602,247 units).
31. 12. 2020
Commercial Paper
Automotive segment
Other Information
← = Q
Financial Performance
Cash and cash equivalents held by the Financial Services
segment changed as follows:
CASH FLOWS FINANCIAL SERVICES SEGMENT
in € million
Cash inflow (+)/outflow (-) from operating activities
Cash inflow (+)/ outflow (-) from investing activities
Cash inflow (+)/ outflow (-) from financing activities
Effects of exchange rate and changes in composition of segment
Change in cash and cash equivalents
2021
2020
Change
3,259
2,762
497
74
Remuneration Report
424
Corporate Governance
Combined Management Report
1,115
Financial assets
24,887
21,277
3,610
Less: external financial liabilities*
-2,525
-2,815
290
Net financial assets Automotive segment
22,362
18,462
3,900
*Excluding derivative financial instruments.
103
BMW Group Report 2021
To Our Stakeholders
Group Financial Statements
- 350
-2,629
- 2,508
Other Information
← = Q
Financial Performance
bond amounting to € 1.5 billion and a bond denominated in
Canadian dollars with a total value of 0.5 billion Canadian
dollar. ABS transactions with a total financing volume equiv-
alent to € 15.1 billion were executed in 2021, including both
new and rolled-over ABS transactions. During the year under
report, the BMW Group was party to ABS transactions in the
following markets: Australia, Canada, China, France, Germa-
ny, Japan, South Africa, South Korea, Switzerland, the USA
and the UK.
The following table provides an overview of amounts utilised
at 31 December 2021 in connection with the BMW Group's
money and capital market programmes:
The BMW Group also has access to a syndicated credit line,
which was renegotiated in July 2017. The syndicated credit
line of € 8 billion has a term ending in July 2024 and is being
made available by a consortium of 44 international banks.
The credit line was not being utilised at 31 December 2021.
Further information with respect to financial liabilities is
provided in notes 31, 35 and 39 to the Group Financial
Statements.
Programmes
in € billion
Programme volume
Amount utilised*
Euro Medium Term Notes
50.0
30.7
Australian Medium Term Notes
1.6
13.0
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
-121
-96
110
608
788
- 206
- 180
The main factor driving up net cash inflow from operating
activities was the increase in segment profit before tax. Fur-
thermore, a reduction in dealership inventories and the as-
sociated reduction in receivables from sales financing, pri-
marily dealership financing, had a positive effect, while the
increase in retail customer financing had an offsetting im-
pact. The decrease in inventories as a consequence of strong
demand for lease returns also had a positive impact. The
change in the net cash inflow from investing activities was
attributable to the combined effect of higher outflows for in-
vestments in and lower inflows from sales of marketable
securities.
REFINANCING
7,996
A broad range of instruments on international money and
capital markets is used to refinance worldwide operations.
Funds raised are used almost exclusively to refinance the
BMW Group's Financial Services business. The overall ob-
jective of Group financing is to ensure the solvency of the
BMW Group at all times, focusing on three areas:
2. Autonomy through the diversification of refinancing in-
struments and investors
3. Focus on value through the optimisation of financing
costs
Financing measures undertaken at corporate level ensure
access to liquidity for the Group's operating subsidiaries at
standard market conditions and consistent credit terms.
Funds are acquired in line with a target liability structure,
comprising a balanced mix of financing instruments. The use
of longer-term instruments to refinance the Group's Finan-
cial Services business and the maintenance of a sufficiently
high liquidity reserve serves to rule out any imminent liqui-
dity risk for the portfolio. This conservative financial ap-
proach also has a favourable effect on the Group's rating.
Further information is provided in the section "Liquidity
risks" within the chapter 7 Outlook, Risk and Opportunity Management.
Focused capital market management, good ratings and the
high level of acceptance enjoyed by the BMW Group on
those markets enabled it to refinance itself on the world's
debt capital markets at favourable conditions during the
period under report. In addition to bonds, the BMW Group
also issued commercial paper in 2021. As in previous years,
all issues were in high demand, not only from institutional
investors, but also from private investors in selected transac-
tions. Moreover, retail customer and dealership financing
receivables as well as rights and obligations from leasing
contracts are securitised in the form of asset-backed secur-
ities (ABS) financing arrangements. Specific banking instru-
ments, such as the customer deposits used by the Group's
own banks in Germany and the USA, are also deployed for
financing purposes. In addition, loans are taken from inter-
national banks.
In 2021, the BMW Group issued bonds totalling approxi-
mately € 6.9 billion. The BMW Group refinanced itself by
means of 144A transactions with a total volume of 4.5 billion
US dollar on the US capital market and by means so-called
Panda bonds with a volume of 9.5 billion Chinese renminbi
on the Chinese capital market. Activities on international
capital markets were rounded off by one euro benchmark
104
BMW Group Report 2021
To Our Stakeholders
1. The ability to act through permanent access to stra-
tegically important capital markets
9,111
Intragroup net financing
8
13,251
2,652
-6,389
-3,636
- 2,753
Cash inflow (+)/ outflow (-) from financing activities
-6,735
- 8,254
1,519
Effects of exchange rate and changes in composition of Group
-307
140
-447
Change in cash and cash equivalents
2,472
1,501
971
15,903
Change
2020
2021
101
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
102
← = Q
The consolidated cash flow statements for the Group and
the Automotive and Financial Services segments show the
sources and applications of cash flows for the financial years
2021 and 2020, classified according to operating, investing
and financing activities. Cash and cash equivalents in the
cash flow statements correspond to the amounts disclosed
in the balance sheet.
Cash flows from operating activities are determined indirect-
ly, starting with Group/segment profit before tax. By con-
trast, cash flows from investing and financing activities are
based on actual payments and receipts.
The main factors driving the higher net cash inflow from op-
erating activities were the Group's improved profit before tax
on the one hand and the overall change in working capital on
the other. Within working capital, the rise in trade payables
due to higher production volumes had a favourable effect,
while the increase in inventories in the Automotive segment
- partially compensated by a decrease in inventories in the
Financial Services segment - had an offsetting effect. Within
receivables from sales financing, amounts due from retail
customers went up on the back of higher business volumes.
On the other hand, receivables from dealership financing fell
in light of brisk demand and short standing times for ve-
hicles, and therefore had an offsetting effect. The decrease
in provisions mainly reflected the partial reversal in 2021 of
the risk provision in connection with the antitrust proceed-
ings of the EU Commission.
Substantial investments in property, plant and equipment
and intangible assets, in particular for the launch of new ve-
hicle models, resulted in a higher net cash outflow from in-
vesting activities. In the previous year, proceeds from the
sale of marketable securities and the receipt of a dividend
from BMW Brilliance Automotive Ltd., Shenyang, also had a
positive effect on the net cash flow from investing activities.
The change in the net cash outflow from financing activities
mainly reflected the higher level of financial liabilities pay-
able to BMW Group companies in which an investment is
held as well as the lower dividend paid out for the 2020 pan-
demic year.
BMW GROUP CASH FLOWS
in € million
Cash inflow (+)/ outflow (-) from operating activities
Cash inflow (+)/outflow (-) from investing activities
FINANCIAL POSITION OF
THE BMW GROUP
1.4
BMW Group Report 2021
Combined Management Report
3,395
2,959
The Automotive segment generated free cash flow amount-
ing to € 6,354 million in 2021. The main factor influencing the
increase in the net cash inflow from operating activities was
the year-on-year improvement in profit before tax. Within
working capital, the positive impact of higher trade payables
was partially offset by the increase in inventories resulting
from production adjustments caused by semiconductor sup-
ply bottlenecks. The increase in the net cash outflow from
investing activities was mainly attributable to the changes
described in the Group Cash Flow Statement.
In the Automotive segment, net financial assets comprised
the following:
NET FINANCIAL ASSETS AUTOMOTIVE SEGMENT
in € million
31.12.2021
31.12.2020
Change
Cash and cash equivalents
12,009
9,522
2,487
Marketable securities and investment funds
3,767
31.12.2021
829
- 850
-21
6,354
Change
4,405
-2,275
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Performance
Free cash flow for the Automotive segment was as follows:
FREE CASH FLOW AUTOMOTIVE SEGMENT
To Our Stakeholders
in € million
Cash inflow (+)/ outflow (-) from investing activities
Adjustment for net investment in marketable securities and investment funds
Free cash flow Automotive segment
2021
2020
12,583
8,178
-6,208
- 3,933
Cash inflow (+)/outflow (-) from operating activities
* Measured at the exchange rate on the trade date of the respective transaction.
3,759
105
3,693
-66.2
- 66.5
0.5
Other provisions
13,954
13,982
-0.2
-2.5
6.1
Deferred and current tax
2,379
1,256
89.4
86.0
Financial liabilities
103,463
1,247
Pension provisions
32.7
18.3
Total assets
229,527
216,658
5.9
2.6
7.0
100.0
Proportion of
balance sheet
total in % 2021
1.0
106,376
Adjusted for currency effects, the BMW Group's balance
sheet total was slightly higher than at 31 December 2020.
Including currency effects from the US dollar, the British
pound and the Chinese Renminbi, amongst others, the bal-
ance sheet total grew solidly compared to the previous year².
Based on constant currencies, leased products were slightly
highly than one year earlier. Although the contract portfolio
under management was at a similar level compared to the
previous year, leased products in the balance sheet grew as
a consequence of volume growth as well as the higher aver-
age financing volume per vehicle, the latter brought about by
an improved product mix.
Investments accounted for using the equity method (adjust-
ed for currency effects) increased significantly over the
12-month period under report, mainly driven by the rise in the
BMW Group's at-equity valuation of the Chinese joint ven-
ture BMW Brilliance Automotive Ltd., Shenyang, in light of
that entity's higher earnings and the fact that it did not pay
out a dividend during the financial year 2021.
Receivables from sales financing (adjusted for currency ef-
fects] went down slightly compared to 31 December 2020,
primarily due to the decrease in dealership financing, mainly
in the USA, Germany, the UK and France. The currency-ad-
justed decrease in dealership financing receivables was par-
tially offset by rising retail customer financing. Overall, how-
ever, receivables from sales financing grew slightly. A total of
1,334,853 new credit financing contracts were concluded
EQUITY AND LIABILITIES
Equity
75,132
61,520
22.1
Adjusted for currency effects, property, plant and equipment
and intangible assets all went up year-on-year, driven by higher
capital expenditure, particularly in connection with the electrifi-
cation of the vehicle fleet as well as new model revisions.
16.2
-6.0
Trade payables
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Performance
with retail customers during the financial year 2021. The
number of contracts in place with dealerships and retail cus-
tomers fell by 2.6% to 3,929,583 contracts.
The earnings-related higher cash holdings of Group com-
panies contributed to the increase in cash and cash
equivalents.
Group equity rose to € 75,132 million, driven primarily by the
profit of € 12,382 million attributable to shareholders of
BMW AG and reduced by the dividend payout of € 1,253 million.
Adjusted for currency effects, pension obligations decreased
significantly to € 1,247 million, mainly due to actuarial gains
and the positive effects arising from the modernisation of the
pension model in Germany².
Financial liabilities decreased over the 12-month period due
to the repayment of bonds (adjusted for currency effects).
Despite the volatile situation with respect to the further
course of the coronavirus pandemic and the limited avail-
ability of semiconductor components, the BMW Group's re-
sults of operations, financial position and net assets all im-
proved during the financial year 2021.
BMW GROUP EQUITY RATIO1
in %
The BMW Group continued to deploy robust liquidity-related
measures throughout 2021 to ensure its ability to act flexibly
and independently at all times. Thanks to the combination of
financing measures taken and the high free cash flow gener-
ated during the year, liquidity on hand totalled € 20.2 billion
at 31 December 2021 and was therefore significantly higher
than the previous year's corresponding figure of € 17.8 bil-
lion.
Group
To Our Stakeholders
BMW Group Report 2021
106
2 Further information is provided in note 4 to the Group Financial Statements.
10,932
8,644
26.5
24.4
4.8
Other liabilities
22,420
21,187
45.1
5.8
9.8
Total equity and liabilities
229,527
216,658
5.9
2.6
100.0
1 The adjustment for exchange rate factors is calculated by applying the relevant current exchange rates to the prior-year figures.
1.3
18.3
-2.7
16,009
Property, plant and equipment
22,390
21,850
2.5
0.7
Leased products
44,700
41,995
6.4
2.9
5.7
9.8
19.5
Investments accounted for using the equity
method
5,112
3,585
42.6
42.6
2.2
5.2
12,342
12,980
Intangible assets
BMW Group Report 2021
To Our Stakeholders
13,537
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
Other investments
← = Q
NET ASSETS POSITION OF THE BMW GROUP
BMW GROUP CONDENSED BALANCE SHEET AT 31 DECEMBER
in € million
2021
2020
Change in %
Currency-adjusted
change in %1
ASSETS
Financial Performance
1,241
4.9
735
Other assets
10,243
10,326
-0.8
-3.0
4.4
15,928
14,896
1.6
6.9
6.9
Trade receivables
2,261
2,298
- 1.6
- 4.5
1.0
Cash and cash equivalents
4.0
16.6
Inventories
3.7
21.7
61.9
Receivables from sales financing
87,417
84,277
68.8
- 1.0
38.1
Financial assets
7,752
-3.1
-4.6
3.3
Deferred and current tax
3,731
3,065
7,515
0.5
Subscribed capital
2020
Corporate Governance
660
2021
704
662
in € million
Other Information
2021
Intangible assets
ASSETS
in € million
Financial Performance
← = Q
Remuneration Report
488
2020
Capital reserves
Equity
2,239
Group Financial Statements
15,165
18,927
Inventories
16,834
18,511
Tangible, intangible and investment assets
1,253
3,827
Unappropriated profit available for distribution
3,826
5,067
Investments
11,013
12,096
Revenue reserves
12,520
12,740
Property, plant and equipment
2,342
Combined Management Report
-426
BMW Group Report 2021
Income taxes
Financial result
Result on investments
Other operating expenses
1,253
-449
- 1,083
3,827
1,702
Profit after income tax
-18
-214
1,720
4,927
- 1,068
- 280
2,991
- 1,250
- 1,460
7,287
-17
4,910
Other taxes
Net profit
Transfer to revenue reserves
BMW AG BALANCE SHEET AT 31 DECEMBER
Financial and net assets position
119
119
Subject to the shareholders' approval of the appropriation of
results at the Annual General Meeting, the unappropriated
profit available for distribution amounts to € 3,827 million
(2020: € 1,253 million). As a percentage of Group net profit,
the dividend corresponds to a payout ratio of 30.7% (2020:
32.5%), which is therefore within the forecasted target range
of 30% to 40%.
After deducting the expense for taxes, the Company reports
a net profit of € 4,910 million, compared to € 1,702 million in
the previous year.
The expense for income taxes related primarily to current tax
for the financial year 2021.
The financial result deteriorated by € 146 million, mainly due
to lower income from designated plan assets offset against
pension obligations.
Income from profit transfer agreements with Group com-
panies, reported in the line item Result on investments, was
similar to one year earlier.
Other operating expenses increased slightly to € 1,460 mil-
lion (2020: € 1,250 million) and, as in the previous year, com-
prised mainly expenses from financing transactions and ad-
ditions to other provisions.
Other operating income increased to € 2,199 million (2020:
€ 1,237 million), primarily due to income arising on the partial
reversal of the provision relating to EU Commission antitrust
proceedings.
chitectures. Research and development expenses rose by
19.6% year-on-year, reflecting the increase in vehicle and
module production start-up activities as the BMW Group
continues its electric offensive.
A large proportion of the research and development ex-
penses incurred in 2021 are related to new vehicle models
(including the all-electric BMW iX and BMW 14 models and
the new BMW 2 Series Active Tourer) as well as to the devel-
opment of digital products, automated driving and new ar-
Overall, selling expenses decreased slightly and general ad-
ministrative expenses increased significantly.
3,084
Gross profit rose by € 4,929 million to € 16,243 million.
Cost of sales went up by 13.4% to € 72,283 million, mostly
due to sales volume growth.
Revenues increased by € 13,486 million in 2021, primarily re-
flecting year-on-year sales volume growth. In geographical
terms, the greater part of the increase was generated
in the USA, China and Rest of Europe. Revenues totalled
€ 88,526 million (2020: € 75,040 million), of which Group
internal revenues accounted for € 60,373 million (2020:
€ 49,348 million) or 68.2% (2020: 65.8%).
Unappropriated profit available for distribution
To Our Stakeholders
5,748
Outlook
758
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
120
Receivables from subsidiaries increased to € 21,019 million
(2020: € 18,939 million), mainly reflecting the higher level of
intragroup trade receivables.
Inventories rose to € 7,287 million (2020: € 5,748 million),
primarily due to higher levels of bought-in goods for resale,
work in progress and finished goods.
Investment assets increased to € 5,067 million (2020:
€ 3,826 million) mainly due to a non-cash contribution re-
corded in capital reserves in the amount of € 957 million at
the level of BMW INTEC Beteiligungs GmbH, Munich.
Capital expenditure on intangible assets and property, plant
and equipment in the year under report totalled € 3,304 mil-
lion (2020: € 2,790 million), up by 18.4% compared to the
previous year. Depreciation and amortisation amounted to
€ 2,846 million (2020: € 2,646 million).
Group Financial Statements
57,640
3,879
64,705
Total equity and liabilities
Deferred income
28,511
31,456
Liabilities
57,640
64,705
3,615
Corporate Governance
Remuneration Report
Other Information
2,199
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesell-
schaft, Frankfurt am Main, Munich branch, has issued an
unqualified audit opinion on the financial statements of
BMW AG, of which the balance sheet and the income state-
ment are presented here. The BMW AG financial statements
for the financial year 2021 will be submitted to the operator of
the electronic version of the German Federal Gazette and
can be obtained via the Company Register website. These
financial statements are available on the BMW Group's web-
site at www.bmwgroup.com/ir.
Due to its significance in the Group and its close ties with
Group companies, expectations for BMW AG with respect to
its non-financial performance indicators correspond largely
to the BMW Group's outlook. This is described in detail in the
7 Outlook, Risk and Opportunity Management section of the Combined
Management Report.
IFRS) within a range of between 30% and 40%. Up to the
financial year 2021, the payout ratio was defined as the un-
appropriated profit of BMW AG in accordance with HGB in
relation to the Group net profit in accordance with IFRS
(2021: 30.7%).
For the financial year 2022, BMW AG expects an unchanged
dividend payout ratio (unappropriated profit of BMW AG in
accordance with HGB in relation to the Group net profit at-
tributable to shareholders of BMW AG in accordance with
BMW AG is integrated in the Group-wide risk management
system and internal control system of the BMW Group. Fur-
ther information is provided in the Internal Control System chap-
ter of the Combined Management Report.
BMW AG's performance is essentially dependent on the
same set of risks and opportunities that affect the
BMW Group and which are described in detail in the 7 Outlook,
Risk and Opportunity Management chapter of the Combined Man-
agement Report. As a general rule, BMW AG participates in
the risks entered into by Group companies in proportion to
the respective shareholding percentage. At the same time,
the result on investments has a significant impact on the
earnings of BMW AG.
Risks and opportunities
Cash and cash equivalents increased by € 2,002 million to
€ 8,824 million, mainly due to surpluses from operating ac-
tivities. Cash outflows for investments in fixed assets had an
offsetting effect.
Liquidity within the BMW Group is ensured by means of a li-
quidity concept applied uniformly across the Group. This in-
volves concentrating a significant part of the Group's liquid-
ity at the level of BMW AG. An important instrument in this
context is the cash pool based at BMW AG. The liquidity pos-
ition reported by BMW AG therefore reflects the global activ-
ities of BMW AG and other Group companies.
Deferred income increased by € 264 million to € 3,879 mil-
lion and included primarily amounts for services still to be
performed relating to service and maintenance contracts.
Liabilities to subsidiaries increased to € 24,462 million
(2020: € 23,404 million), mainly in connection with intra-
group refinancing.
Other provisions decreased slightly from € 10,093 million to
€ 9,995 million due to the utilisation and partial reversal of
the provision relating to EU Commission antitrust proceed-
ings. This was mainly offset by additions to personnel-relat-
ed provisions and provisions for statutory and non-statutory
warranty and product guarantee obligations.
Provisions for pensions increased from € 229 million to
€ 422 million, after offsetting of pension plan assets against
pension obligations.
In order to secure pension obligations, cash funds totalling
€ 1,081 million were transferred to BMW Trust e. V., Munich,
in conjunction with a Contractual Trust Arrangement (CTA),
to be invested in plan assets. Plan assets are offset against
the related guaranteed obligations. The resulting surplus of
assets over liabilities is reported in the BMW AG balance
sheet on the line item Surplus of pension and similar plan
assets over liabilities.
Equity increased by € 3,762 million to € 18,927 million due to
the higher level of unappropriated profit reported, which
was, in turn, attributable to the combined effect of the previ-
ous year's lower dividend payout and the higher transfer to
other revenue reserves as well as the issue of shares of pre-
ferred stock in conjunction with the Employee Share Pro-
gramme in 2021. The equity ratio changed from 26.3% to
29.3%.
The increase in other receivables and other assets to
€ 4,071 million (2020: € 3,849 million) was mainly attributa-
ble to higher tax receivables. The decrease in financial mar-
ket receivables had an offsetting effect.
Financial Performance
← = Q
221
462
Other liabilities
1,261
Current assets
Cash and cash equivalents
Marketable securities
10,093
9,995
Other provisions
3,849
4,071
229
422
Pension provisions
18,939
21,019
Other receivables and other assets
Receivables from subsidiaries
27
26
Registered profit-sharing certificates
778
Prepaid expenses
Trade receivables
3,077
Provisions
1,086
Surplus of pension and similar plan assets over liabilities
Total assets
23,404
24,462
Liabilities to subsidiaries
73
72
4,785
6,531
Trade payables
39,472
45,036
101
1
Liabilities to banks
6,822
8,824
10,322
10,417
3,336
Other operating income
EQUITY AND LIABILITIES
Research and development expenses
22.2
16.8
420,295
490,969
BMW 3 Series / BMW 4 Series
-1.1
268,915
265,964
BMW 1 Series / BMW 2 Series
To mark its 50th anniversary in 2022, the BMW M brand will
continue its market offensive with the addition of new
all-electric models, starting with the BMW iX M601, which
celebrated its world première on the North American market
at the beginning of 2022. Together with the BMW 14 M501,
the BMW Group is also focusing on electric mobility in the
high-performance class.
12.0
Share of BMW
Change in % deliveries 2021 in %
= Q
↑
2020
2021
in units
DELIVERIES OF BMW VEHICLES BY MODEL VARIANT 1,2
New milestone in BMW M success story
The BMW Group marked a new milestone in the success
story of its BMW M brand in 2021, delivering a total of
163,541 units of its high-performance models (2020:
144,231 units), 13.4% up on the previous year. The new
BMW M31 and BMW M41 as well as the BMW X5 M1 and
BMW X6 M¹ Sports Activity Vehicles all contributed signifi-
cantly to the sales growth recorded in 2021.
The BMW brand brought a variety of new vehicles to market in
2021. For example, at the beginning of the year, the all-electric
BMW iX31 was launched in Europe, followed in March 2021 by
the BMW 320e¹ and BMW 520e¹. These two new entry-level
models with plug-in hybrid drive systems are part of the BMW
3 Series and BMW 5 Series respectively. The BMW X3 and
BMW X4 model revisions were launched during the summer.
The second generation of the BMW 4 Series Gran Coupé
celebrated its market début in the autumn. The all-new BMW
iX and BMW i4 models were added to the all-electric vehicle
product range in November 2021. The BMW 2 Series Coupé
was launched on the North American market towards the
end of the year under report, with other markets following in
early 2022.
Numerous new BMW brand products
BMW 5 Series / BMW 6 Series
Financial Performance
326,212
1.2
18.7
19.3
347,565
414,671
BMW X3/X4
14.1
2.5
304,270
311,928
BMW X1/X2
0.7
- 1.4
14,982
14,778
BMW Z4
2.8
- 6.1
66,728
62,628
BMW 7 Series / BMW 8 Series
14.7
322,457
BMW X5/X6
Other Information
Corporate Governance
Profit before tax for the year amounted to € 11,805 million
and was therefore significantly higher than one year earlier
(2020: € 2,722 million).
In line with expectations, the Automotive segment's RoCE
for 2021 rose sharply to 59.9% (2020: 12.7%; +47.2 percent-
age points), mainly due to the considerable year-on-year rise
in EBIT on the one hand and the lower volume of capital em-
ployed on the other, the latter attributable primarily to lower
average inventories during the financial year under report.
2021
2020
Change
in %-points
17.6
11.6
6.0
10.3
2.7
7.6
17.8
15.0
2.8
EBIT margin²
8.3
4.5
3.8
1 Gross profit as a percentage of segment revenues.
2 Profit before financial result as percentage of segment revenues.
114
Gross profit margin¹
Remuneration Report
MOTORCYCLES
Gross profit margin¹
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
1=1
111
- 6,451
Remuneration Report
Other Information
← = Q
Financial Performance
Results of operations of the Automotive segment
Automotive segment revenues amounted to € 95,476 mil-
lion (2020: € 80,853 million; +18.1%, currency-adjusted:
+18.3%) and were therefore significantly higher than one
year earlier.
Sales volume was also higher in 2021, whereby the increase
was held down by production shortfalls due to supply bottle-
necks for semiconductor components. However, this un-
favourable impact was more than offset by improved pricing
due to both the growing desire for individual mobility on the
one hand and the reduced worldwide availability of products
triggered by those same semiconductor component short-
ages on the other. Other factors with a positive impact on
segment revenues were the increased volume of high-re-
venue vehicles sold, the exceptionally strong performance of
pre-owned vehicle markets and hence better residual values
and growth in spare parts and accessories business.
Segment cost of sales rose significantly to € 78,637 million
(2020: € 71,456 million; +10.0%), whereby the year-on-year
increase was primarily attributable to sales volume growth.
Further negative factors included rises in raw materials and
energy prices, higher expenses due to the increasing propor-
tion of electrified vehicles, larger allocations to provisions for
performance-related remuneration components and higher
research and development expenses. In the previous year,
warranty expenses were impacted by the recognition of pro-
visions in connection with the exhaust gas recirculation cool-
er and other warranty-related items.
As described in the section above on the results of opera-
tions for the BMW Group as a whole, the changeover effects
arising from the modernisation of the pension model in Ger-
many had a total positive impact of € 542 million on Auto-
motive segment cost of sales and selling and administrative
expenses, while higher expenses for performance-related
remuneration components had an offsetting effect.
The net amount of other operating income and expenses im-
proved significantly, largely due to the partial reversal of the
provision for EU antitrust proceedings in the second quarter
2021, as described above.
The Automotive segment EBIT margin (profit before finan-
cial result as a percentage of revenues) came in at 10.3%
(2020: 2.7%; +7.6 percentage points). As forecast in the
quarterly statement to 30 September 2021, the EBIT margin
was within the target range of between 9.5 and 10.5% and
therefore in line with revised expectations. In the 2020 An-
nual Report, a segment EBIT margin within a target range of
between 6 and 8% was forecast.
At € 1,935 million, the Automotive segment's financial result
was significantly up on the previous year (2020: € 560 mil-
lion). As described above, the main driving factors in this re-
spect were the improved result from the at-equity accounted
Chinese joint venture BMW Brilliance Automotive Ltd., Shen-
yang, positive valuation effects recognised in other financial
result arising on investments held by the BMW i Ventures
fund and on the investment in SGL Carbon shares.
BMW GROUP MARGINS BY SEGMENT
in %
AUTOMOTIVE
EBIT margin²
240,504
206,774
16.3
Share of MINI
deliveries 2021 in %
Change in %
2020
2021
48.7
3,756
5,586
Rolls-Royce total
10.1
2,199
2,422
Cullinan
-5.2
873
828
Wraith/Dawn
324
1,909
18.6
360
427
164,270
Ghost
157,040
54.4
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
100.0
3.3
292,582
302,138
27.3
6.0
77,709
82,363
10.0
-7.8
32,958
30,385
113
1.0
24,875
25,120
4.6
Phantom
Change in %
2020
112
12
1
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2021: 651,236 units, 2020: 602,247 units).
17 Consumption and carbon emissions data
100.0
9.1
2,028,841
2,213,790
1.4
10.7
28,162
31,179
BMW total
BMW i (iX, i3 and 18)
2.5
12.9
48,693
54,957
BMW X7
10.9
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
2021
in units
DELIVERIES OF ROLLS-ROYCE VEHICLES BY MODEL
VARIANT *
MINI total
MINI Countryman
MINI Clubman
MINI Convertible
MINI Hatch (3- and 5-door)
in units
DELIVERIES OF MINI VEHICLES BY MODEL VARIANT
BMW Group Report 2021
Rolls-Royce Motor Cars can also look back on a highly suc-
cessful year, in which a record number of 5,586 ultra-luxury
vehicles were delivered to customers (2020: 3,756 units;
+48.7%). High demand for the marque worldwide was driv-
en in particular by the popularity of the Ghost* and the Cull-
inan*. The Black Badge variants, with their exclusive fea-
tures and more powerful engines, also remained extremely
sought-after.
Revised models of the MINI 3-door, MINI 5-door and MINI
Convertible were also launched during the year under report.
Demand for the John Cooper Works Performance models re-
mained high.
MINI also recorded higher sales volumes, with a total of
302,138 units delivered worldwide (2020: 292,582; +3.3%).
A key factor driving the growth was the number of electrified
vehicles sold. The all-electric MINI Cooper SE* was the
best-selling model in the MINI family, with sales almost
doubling to 34,851 units year-on-year (2020: 17,580 units;
+98.2%). Together with the MINI Countryman Plug-in Hy-
brid, it accounted for 18% of the brand's total deliveries
worldwide in 2021.
Sales growth for MINI
UCC 991
LNC 3136
Financial Performance
← = Q
Other Information
Remuneration Report
Corporate Governance
New record for Rolls-Royce
To Our Stakeholders
8.3
Group Financial Statements
China
14.2
EU Bank²
18.3
Europe/
Middle East/Africa
35.2
Americas
24.5
Due to adjustments in delivery figures, numbers have been adjusted retroactively,
7 Glossary.
2 With effect from the fourth quarter 2019, the EU Bank comprises BMW Bank
GmbH and its branches in Italy, Spain and Portugal. The former subsidiary in
France was transferred for organisational purposes to the Europe / Middle East/
Africa region in conjunction with strategic realignments.
Under the brand name Alphabet, the Financial Services seg-
ment's fleet management business primarily offers leasing
and financing arrangements as well as specialist services to
commercial customers. At 31 December 2021, the contract
portfolio stood at 696,393 contracts (2020: 704,977 con-
tracts; -1.2%).
Dealership financing significantly lower
The dealership financing line of business was impacted by a
significant reduction in vehicle inventories held by dealer-
ships at the end of the year, mainly due to constraints on
new vehicle production caused by semiconductor shortages
on the one hand and the high demand for new and pre-
owned vehicles on the other. As a result, the volume of deal-
ership financing decreased significantly by 19.0% to € 13,149
million at 31 December 2021 (2020: € 16,241 million).
Results of operations of the Financial Services segment
Financial Services segment revenues increased to
€ 32,867 million (2020: € 30,044 million; +9.4%), driven in
particular by the higher level of revenues generated with
end-of-contract business on the back of ongoing favourable
conditions on pre-owned vehicle markets. Segment cost of
sales went up by € 791 million (2020: € 26,958 million;
+2.9%), mainly due to increased costs associated with the
sale of returned lease vehicles.
At the same time, the remarketing values of those vehicles
also surged, with a corresponding positive impact on earn-
ings. Moreover, segment earnings benefited from the un-
changed low level of allowances required to be recognised
for credit risks. This contrasts with the situation one year ear-
lier, when earnings were impacted by additional risk provi-
sioning expenses for credit and residual value risks in light of
the coronavirus pandemic.
The Financial Services segment's profit before tax rose sig-
nificantly to € 3,753 million (2020: € 1,725 million).
Return on equity (ROE) finished at 22.6%, significantly high-
er than the level recorded one year earlier (2020: 11.2%;
+11.4 percentage points). The main reason for the increase
was the improved risk profile throughout the year
in par-
ticular thanks to better remarketing outcomes and lower ex-
penses for credit risk allowances.
-
The RoE in 2021 was therefore in line with the revised fore-
cast of between 20 and 23%. Originally, an RoE within a
range of 12 to 15% was predicted for 2021 in the BMW Group
Report 2020.
Other Entities segment/Eliminations
The Other Entities segment recorded a profit before tax of
€ 531 million in the financial year under report (2020: loss
before tax of € 235 million). The turnaround was primarily
attributable to the improvement in other financial result,
which benefited from the recognition of fair value measure-
ment gains on interest rate hedges entered into with match-
ing maturities in conjunction with the refinancing of Financial
Services business in a period of rising rather than falling in-
terest rates.
Eliminations gave rise to a loss before tax of € 257 million
(2020: profit before tax of € 910 million). The deterioration
here reflected the higher volume of leasing-business-related
eliminations required, primarily due to the year-on-year in-
crease in new leasing business, both in terms of sales vol-
ume and contract values.
7.8
17
Asia/Pacific
CONTRACT PORTFOLIO RETAIL CUSTOMER FINAN-
CING OF FINANCIAL SERVICES SEGMENT 2021
50.1
49.8
50.5
46.7
|
22.3
21.2
21.4
20.8
LEASING 20.7
FINANCING
28.9
29.9
28.4
29.7
26.0
0
2017
2018
2019
2020
2021
in % per region
117
BMW Group Report 2021
To Our Stakeholders
Financial Performance
Results of operations
BMW AG INCOME STATEMENT
in € million
Revenues
Cost of sales
Gross profit
2020
75,040
- 63,726
11,314
-4,030
-2,747
-5,394
1,237
Combined Management Report
2021
88,526
-72,283
16,243
Selling expenses
- 3,858
Administrative expenses
-3,243
← = Q
Other Information
Remuneration Report
Corporate Governance
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Performance
COMMENTS ON THE
FINANCIAL STATEMENTS
OF BMW AG
Bayerische Motoren Werke Aktiengesellschaft (BMW AG),
based in Munich, Germany, is the parent company of the
BMW Group. The comments on the BMW Group and the Au-
tomotive segment provided in earlier sections apply to
BMW AG, unless presented differently in the following sec-
tion. The Financial Statements of BMW AG are drawn up in
accordance with the provisions of the German Commercial
Code (HGB) and the relevant supplementary provisions con-
tained in the German Stock Corporation Act (AktG).
52.2
The key financial performance indicator for BMW AG is the
dividend payout ratio (unappropriated profit of BMW AG in
accordance with HGB in relation to net profit for the year of
the BMW Group in accordance with IFRS). The key non-fi-
nancial performance indicators are essentially identical and
concurrent with those of the BMW Group. These are de-
scribed in detail in the Financial Performance section of the
Combined Management Report.
Business environment and review of operations
The general and sector-specific environment of BMW AG is
essentially the same as that of the BMW Group and is de-
scribed in the ▾ Financial Performance section of the Combined
Management Report.
BMW AG develops, manufactures and sells automobiles and
motorcycles as well as spare parts and accessories manu-
factured in-house, by foreign subsidiaries and by external
suppliers, and performs services related to these products.
Sales activities are conducted primarily through branches,
subsidiaries, independent dealerships and importers. Bene-
fiting mainly from the diminishing impact of the coronavirus
pandemic, automobile deliveries increased by 187,648 units
to 2,437,591 units in the financial year 2021. This figure in-
cludes 674,995 units relating to series sets supplied to the
joint venture BMW Brilliance Automotive Ltd., Shenyang, an
increase of 76,142 units over the previous year.
At 31 December 2021, BMW AG employed a workforce of
83,308 people (31 December 2020: 84,668 people).
Despite the global challenges driven by semiconductor sup-
ply shortages and the impact of the coronavirus pandemic,
BMW AG can be satisfied with the course of business in the
financial year 2021.
The BMW Group's results of operations, financial position
and net assets of the financial year 2021 are indicative of its
solid financial condition. Business developed in line with
management expectations. This assessment also takes into
account events after the end of the reporting period.
118
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Differences in accounting treatments based on HGB (used
for the Company Financial Statements) and IFRS (used for
the Group Financial Statements) are mainly to be found in
connection with the capitalisation of intangible assets, the
creation of valuation units, the recognition and measure-
ment of financial instruments and provisions as well as the
recognition of deferred tax assets. Differences also arise in
the presentation of assets and liabilities and of items in the
income statement.
in %
⚫ 7 Consumption and carbon emissions
Financial Performance
2020
2021
-
BMW GROUP
MARKETS 2021
LARGEST MOTORCYCLE
as a percentage of sales volume
Germany
13.4
France
10.2
Other
Italy
40.2
8.3
Brazil
USA
5.7
Spain
6.5
8.3
China
7.4
2019
New products unveiled: systematically embracing electrification
The BMW Group unveiled the BMW Motorrad Vision Amby at
the IAA Mobility in 2021. This completely new concept motor-
cycle has been designed as an electrified vehicle that com-
bines the typical elements of a bicycle and a motorcycle. To-
gether with the all-electric CE 02 concept vehicle, which was
presented to the public online in September, these models
provide a revealing glimpse of how the future of urban mobil-
ity could look.
2018
0
Motorcycles segment
BMW GROUP NEW VEHICLES FINANCED OR
LEASED BY FINANCIAL SERVICES SEGMENT1
Financial Performance
← = Q
Other Information
Remuneration Report
BMW Motorrad reports best sales performance to date
The Motorcycles segment had the most successful year in its
history with a total of 194,261 units delivered during the year
under report (2020: 169,272 units), 14.8% up on the previ-
ous year. Despite the ongoing impact of semiconductor
shortages and pandemic-related issues, the revised outlook
for the full year, as communicated in the quarterly statement
to 30 September 2021, was achieved within a generally fa-
vourable market environment.
Sales volume growth in nearly all markets
In Europe, sales volume grew solidly by 8.9% to 111,126 units
in 2021 (2020: 102,026 units). Excellent sales performances
were recorded for France with 19,887 units (2020: 17,539
units; +13.4%), Italy with 16,034 units (2020: 13,918 units;
+15.2%) and Spain with 12,616 units (2020: 11,030 units;
+14.4%). Within a generally contracting market, deliveries in
Germany fell moderately to 25,972 units (2020: 27,516 units;
-5.6%).
Figures for the USA were also significantly higher than in
the previous year, with deliveries rising at a double-digit
rate to 16,030 units (2020: 12,135 units; +32.1%). The pic-
ture was similar in China, where deliveries climbed by 21.4%
to 14,309 units (2020: 11,788 units). Brazil also saw a slight
increase, with deliveries rising to 11,150 units (2020: 10,707
units; +4.1%).
New models launched in the year under report
-
The BMW Group brought five new motorcycle models and
three model revisions onto the market in 2021. The first of
these was the M 1000 RR the first M model from BMW
Motorrad to be powered by a high-performance in-line
four-cylinder engine - which was launched in February 2021
in the Sports segment. The same month saw the launch of
the R 18 Classic in the Heritage segment, based on the
high-capacity 1,800 cc R18 boxer engine. The launch was
followed in March 2021 by the model revisions of the G 310 R
(Roadster segment), the G 310 GS (Adventure segment) and
the R 1250 RT (Tour segment). The S 1000 R was also added
to the model range in the Roadster segment in May. Last but
not least, in September, BMW Motorrad launched the R 18 B
and the R 18 Transcontinental models in the Heritage seg-
ment – two further derivatives of the 1,800 cc boxer family.
BMW GROUP DELIVERIES OF MOTORCYCLES
in 1,000 units
175.2
164.2
165.6
169.3
194.3
|||||
2017
BMW Motorrad systematically continued to pursue its elec-
tric mobility strategy throughout the year under report, in-
cluding the unveiling of the CE 04 Electric Scooter (Urban
Mobility segment) in July 2021. The launch of this new prod-
uct is scheduled for the first half of 2022.
Corporate Governance
15
in 1,000 units
5,235
5,486 5,592
5,577
4,926
|
2017
2018
2019
2020
2021
1 The calculation only includes automobile markets in which the Financial Services
segment is represented by a consolidated entity.
2 EU Bank comprises BMW Bank GmbH with its branches in Italy, Spain and
Portugal.
116
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Corporate Governance
Remuneration Report
← = Q
In addition, a number of series production models were pre-
sented to the public during the year under report, including the
C 400 GT and C 400 X Scooter models in March and the
K1600 GT, K1600 GTL and K1600 B Tourer models in October.
CONTRACT PORTFOLIO OF FINANCIAL
SERVICES SEGMENT WITH RETAIL CUSTOMERS
At 31 December 2021, the contract portfolio with retail cus-
tomers comprised 5,577,011 contracts and was therefore at a
similar level to one year earlier (2020: 5,591,799 contracts;
-0.3%). In regional terms, China grew at the fastest rate,
registering a 9.0% year-on-year increase. The Asia/Pacific
region finished at a similar level to the previous year (+0.3%).
By contrast, the Americas (-2.2%), the EU Bank² (-1.7%)
and the Europe/Middle East/Africa regions (-1.7%) all reg-
istered slight contract portfolio decreases.
Group Financial Statements
The total volume of new credit financing and leasing con-
tracts concluded with retail customers during the 12-month
period amounted to € 63,414 million, significantly up on the
previous year (2020: € 57,200 million; +10.9%).
115
The share of new BMW Group vehicles either leased or fi-
nanced by the Financial Services segment stood at 50.5%¹
(2020: 49.8%; +0.7 percentage points).
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Performance
Other Information
The Motorcycles segment EBIT margin (profit before finan-
cial result as a percentage of revenues) came in at 8.3%
(2020: 4.5%; +3.8 percentage points) and thus within the
forecast target range of between 8 and 10%.
Results of operations of the Motorcycles segment
A total of 1,956,514 new credit financing and leasing contracts
were signed with retail customers during 2021 (2020:
1,845,271 contracts; +6.0%). The improved performance in
2021 reflected growth in both new credit financing business
(+7.8%) and new leasing business (+2.4%). The biggest in-
creases were registered in China and the USA. Overall, leas-
ing accounted for 31.8% and credit financing for 68.2% of
new business.
New business with retail customers moderately up on previous
year
In balance sheet terms, business volume grew slightly by 4.8%
to stand at € 139,530 million at the end of the reporting period
(2020: € 133,093 million).
ities in the Financial Services segment is provided in the
chapter Risk and opportunity management.
Business with pre-owned vehicles also developed positively,
with the number of new contracts signed up by 1.4%. In
total, 411,520 new credit financing and leasing contracts for
pre-owned BMW and MINI brand vehicles were signed dur-
ing the year under report (2020: 405,713 contracts).
The financial year 2021 was a successful one for the Finan-
cial Services segment, with profit before tax up by 117.6% to
€ 3,753 million (2020: € 1,725 million). In the previous year,
additional risk provisioning expenses for credit and residual
value risks had had a negative impact on earnings. The year
under report, however, was influenced by the exceptionally
positive trend on pre-owned vehicle markets, particularly in
the USA and the UK. The upturn on the pre-owned market
caused the remarketing values of lease returns to increase
sharply. Alongside this favourable development, segment
earnings also benefited from the unchanged low level of al-
lowances that needed to be recognised for credit risks. The
credit loss ratio on the total credit portfolio fell to a historical-
ly low level of 0.18% at 31 December 2021 (2020: 0.21%),
comprising 0.11% (2020: 0.16%) for leasing business and
0.28% (2020: 0.31%) for credit financing business with re-
tail customers. Further information on risks and opportun-
Profit before tax for the year was significantly higher at
€ 228 million (2020: € 100 million), mostly driven by favour-
able product mix effects and year-on-year sales volume
growth, the latter also partially reflecting the adverse impact
of coronavirus-related dealership closures in the previous
year.
Financial Services segment
Record segment profit before tax
The ROCE for the Motorcycles segment in 2021 was 35.9%
and therefore significantly higher than one year earlier (2020:
15.0%; +20.9 percentage points), mainly due to the im-
proved EBIT performance, and was therefore in line with the
revised outlook communicated in the quarterly statement to
30 September 2021.
parties or the delivery of parts to cooperation partners (in-
cluding BBA) are not taken into account.
Operational expenditure comprises only non-capitalised
development costs, maintenance and refurbishment costs
for buildings, repairs to property, plant and equipment, rele-
vant IT costs in the Financial Services segment, non-capital-
ised expenses relating to short-term lease contracts with
expenditure for low value assets, and contracts with purely
variable remuneration. The KPI figure calculated for taxono-
my-purposes is not used by the BMW Group for financial re-
porting purposes. ]]
124
BMW Group Report 2021
To our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
In the case of the disclosures for capital expenditure, ref-
erence is made to 7 note 21 and 7 note 22 to the Group Finan-
cial Statements. Capital expenditure is calculated in accord-
ance with IAS 16.73 (e) (i) and (iii) (Property, Plant and
Equipment), IAS 38.118 (e) (i) (Intangible Assets) and IFRS
16.53 (h) (Leases). In accordance with the definition of cap-
ital expenditure provided in Annex I of the Delegated Regu-
lation (EU) 2021/2178, the KPI figure used for taxonomy
purposes comprises additions to intangible assets, in par-
ticular capitalised development costs, additions to property,
plant and equipment as well as right-of-use assets in ac-
cordance with IFRS 16, and leased-out products. Capital
expenditure relating to the sale of parts to external third
OUTLOOK,
RISK AND OPPORTUNITY MANAGEMENT
OUTLOOK
Both the Outlook and the Risk and Opportunity Management
sections of this report present the expected development in
2022, including the main risks and opportunities from the
perspective of the BMW Group's management. In line with
the Group's performance management, the outlook covers a
period of one year. Risks and opportunities are managed
on the basis of a two-year assessment period. Disclosures
relating to risk and opportunity management therefore ad-
dress a period of two years.
It is not yet possible to accurately assess the full impact of
the war in Ukraine, as the situation remains highly volatile,
making it extremely difficult to forecast macroeconomic de-
velopments and the likely performance of international auto-
mobile markets in the financial year 2022 Forecast assumptions.
The continuous forecasting process applied within the
BMW Group ensures that it is constantly ready to take ad-
vantage of opportunities as they arise, but also to react ap-
propriately to any unexpected risks. The principal risks and
opportunities are described in detail in the Risk and Oppor-
tunity Management section. Actual outcomes may deviate
from the outlook due to unexpected events.
Outlook, Risk and Opportunity Management
Proportion (in %)
100.0
]]
Non-eligible activities
Economic outlook
Total (in € million)
92,262
18,977
Proportion (in %)
82.9
17.1
Total (in € million)
25,917
67
Regulation (EC) No. 1126/2008. Revenues relating to the
sale of parts and components (e.g. after-sales business ex-
cluding the provision of repair services) and the supply of
production components to BBA and third parties, insurance
premiums, and interest income on deposit-taking and credit
business were not included, as these economic activities are
not classified as taxonomy-eligible.
Proportion (in %)
99.7
0.3
Eligible activities
[Technical information
The proportion of total revenues, capital expenditure and op-
erational expenditure relating to eligible and non-eligible ac-
tivities are shown in each case as an aggregate percentage
for the BMW Group. Only taxonomy-eligible revenues, cap-
ital expenditure, and operational expenditure as listed for
Environmental Objective 1 ("Climate change mitigation") are
disclosed, given that taxonomy-eligible revenues, capital ex-
penditure and operational expenditure for Environmental
Objective 2 ("Climate change adaptation") are a subset of
the values for Environmental Objective 1 ("Climate change
mitigation"). This approach avoids double counting of rev-
enues, capital expenditure and operational expenditure
when determining the KPI in the numerator across multiple
economic activities.
Further information on revenues is provided in note 7 to the
Group Financial Statements. Revenues are calculated in ac-
cordance with Article 2(5) of Directive 2013/34/EU. Re-
venues comprise revenue and income items recognised in
accordance with IAS 1.82(a), as amended by Commission
Total (in € million)
4,478
0
0.0
OPERATIONAL EXPENDITURE
Non-eligible activities
International automobile markets
In the Eurozone, GDP growth is projected to be around 3.0 %
in 2022. At 2.1%, the growth rate in Germany is expected to
be slightly lower than one year earlier and similar figures are
predicted for France (+2.8%), Italy (+3.1%) and Spain
(+4.6%).
The trend is similar in the USA, with the market expected to
grow by 6% to 15.9 million units in 2022. However, this is still
below the pre-coronavirus crisis level.
In China, on the other hand, the automobile market as a
whole is expected to remain flat, reflecting the slowdown in
economic momentum. After the slight recovery in 2021, pas-
senger vehicle registrations are therefore expected to be in
the region of 21.2 million units in 2022, just 1% up on the
previous year.
The Japanese automobile market is currently predicted to
expand slightly in 2022 (4.4 million units; +2%).
Registration figures on international automobile markets are
expected to develop as follows in 2022:
INTERNATIONAL AUTOMOBILE MARKETS
Europe
thereof Germany
thereof France
thereof Italy
thereof Spain
thereof UK
USA
China
Japan
Total
International motorcycle markets
Change
in Registrations %
+6
+6
+4
+4
Eligible activities
Europe's automobile markets are expected to grow moder-
ately in 2022 (12.5 million units; +6%).
According to IMF projections in January, the global economy
will continue to grow in 2022, less strongly than in the previ-
ous year, and reach a level of around 4.0%. Risks definitely
persist, however, first and foremost due to the further course
of the war in Ukraine, the estimated impact of which has
been taken into account in the current economic forecasts
only rudimentarily. High inflation is likely to lead to interest
rate increases in some countries and weaken demand to
some extent. New virus variants, pandemic-related restric-
tions or prolonged supply bottlenecks could slow the pace of
economic growth. Further information on political and global
economic risks is also available in the section Risk and Oppor-
tunity Management.
Supply bottlenecks are likely to continue having a dampen-
ing impact on automobile markets in 2022. The war in
Ukraine will significantly exacerbate the current supply bot-
tlenecks. The forecasts are generally based on the assump-
tion that the supply bottlenecks will be overcome in the sec-
ond half of 2022. Registration figures worldwide are expected
to grow at a slightly faster rate than in the previous year (ap-
proximately 77 million units; +4%). However, due to the
marked weakness of recent years, absolute registration fig-
ures remain well below normal levels.
After appreciating against the euro in 2021, the Chinese ren-
minbi is expected to lose in value slightly in the course of
2022, due to the Chinese central bank's recent decision to
ease monetary policy with a view to ensuring that the greater
demand for financing can be met.
The UK economy is projected to grow by 3.5% in 2022 de-
spite labour shortages and continued supply bottlenecks.
A growth rate of 3.2% is projected for the USA in 2022,
which is still positive, although not as strong as in the previ-
ous year. The stimulus and infrastructure packages adopted
by the US Administration are likely to provide support for the
economy.
After strong growth in the previous year, momentum in China
is expected to drop slightly in 2022. A growth rate of 5.1% is
therefore projected for the 12-month period.
After a slight recovery in the year under report, the pace of
growth in Japan is projected to increase moderately in 2022
(+2.3%).
Currency markets and international interest rate
environment
Currencies of particular importance for the international op-
erations of the BMW Group are the Chinese renminbi, the
British pound, the US dollar and the Japanese yen.
Whereas the ECB is likely to keep persevering with its expan-
sionary monetary policy in 2022, the US Federal Reserve
has announced its intention to tighten its policy in light of
high inflation and the USA's strong economic recovery and
to raise interest rates during the first half of 2022. Compared
with the previous year, the US dollar is therefore likely to ap-
preciate against the euro.
Following the gain in value of the British pound against the
euro in 2021 and the tighter monetary policy predicted in the
UK over the 12-month period, combined with moderate inter-
est rate hikes, a further slight appreciation of the currency is
expected in 2022.
125
BMW Group Report 2021
To our Stakeholders
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Combined Management Report
Outlook, Risk and Opportunity Management
The central bank in Japan is unlikely to change its highly ex-
pansionary monetary policy in 2022. The yen is therefore
likely to depreciate slightly against the euro.
The Russian rouble has depreciated significantly, especially
since the beginning of the military conflict with Ukraine. The
currencies of emerging market countries such as Brazil and
India are likely to remain under pressure against the US dol-
lar and the euro in 2022, mainly due to the ongoing impact of
the coronavirus pandemic.
CAPITAL EXPENDITURE
7 Overview of the BMW Group
Eligible activities
The BMW Group supports the overarching aim of the EU
Taxonomy Regulation to promote the private financing of
sustainable economic activities in order to make Europe the
world's first climate-neutral continent by 2050. As a com-
pany aspiring to establish a climate-neutral business model
across its entire value chain by 2050, we welcome initiatives
that serve this objective. For this reason, we have set our-
selves specific targets and report systematically each year
on the actual levels achieved.
In the coming years, the significant growth in electric mobility
will mean that - depending on the energy mix - the majority of
carbon emissions will be generated in particular within the up-
stream value chain rather than in the use phase. Without the
anticipated set of measures, emissions generated within the
BMW Group supply chain would already exceed direct carbon
emissions in the use phase prior to 2030. Strategy/Supplier net-
work/Carbon emissions Accordingly, the BMW Group is taking a ho-
listic approach to achieving its sustainability-related targets
and is committed to considering carbon emissions over the
entire life cycle of the vehicles it produces. Carbon Emissions and
Pollutants Currently, however, for the purpose of assessing car-
bon emissions, the EU taxonomy focuses exclusively on reduc-
ing emissions in the use phase that are attributable to locally
emissions-free drive systems, an approach which also ignores
the emissions indirectly attributable to the supply of energy.
Moreover, the taxonomy only reflects the impact of decarbon-
isation measures in production to the extent that they serve to
manufacture taxonomy-aligned products. However, increasing
the energy efficiency of paint shop processes also reduces
carbon emissions when a conventionally powered vehicle is
painted. 1]
⚫ Commission Delegated Regulation (EU) 2021/2139 dated 4 June 2021 and
Commission Delegated Regulation (EU) 2021/2178 dated 6 July 2021.
122
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Our understanding of sustainability
Group Financial Statements
Remuneration Report
Other Information
EU Taxonomy
↑
= Q
[Explanatory comments on reporting procedures
For the reporting year 2021, the currently applicable simplifi-
cation rules only require reporting on taxonomy eligibility in
relation to the environmental objections of climate change
mitigation and climate change adaptation. Taxonomy eligi-
bility is an indicator of the environmental sustainability po-
tential of an economic activity based on the selective re-
quirements of the EU taxonomy. It does not, however, say
anything about the actual sustainability of a company's eco-
nomic activities at the present point in time. Our aspiration is
to successively make all of the BMW Group's economic ac-
tivities more sustainable.
An economic activity is taxonomy-eligible if it is described in
the Delegated Acts relating to the six environmental objec-
tives, regardless of whether that economic activity meets all
of the technical screening criteria stipulated in those Dele-
gated Acts. The BMW Group's business activities can cur-
rently be allocated to two economic activities that are de-
scribed in the Delegated Act relating to the first two
environmental objectives:
Economic activity 3.3 Manufacture of low carbon technol-
ogies for transport including the production of passenger
vehicles and motorcycles.
Corporate Governance
The EU Taxonomy Regulation was published in July 2020.
The Delegated Act on the first two environmental objectives,
climate change mitigation and climate change adaptation,
and the delegated regulation on reporting requirements
(Article 8 of the EU Taxonomy Regulation) came into force at
the end of December 2021*. In addition, the EU Commission
published an initial FAQ document in December 2021 and a
second FAQ document in early February 2022 to explain ap-
plication issues relevant for the first year of reporting. On the
basis of the phased introduction of the EU taxonomy in the
Delegated Acts, in 2021 companies such as the BMW Group
are required to report the taxonomy-eligible proportion of
revenues, capital expenditures and operational expenditures
for the first two environmental objectives. From the reporting
years 2022 and 2023 onwards, the reporting requirements
are to be successively expanded to include the taxono-
my-aligned proportion of revenues, capital and operational
expenditures and to all environmental objectives.
significantly harmed, and minimum protection criteria for oc-
cupational safety and human rights must also be met.
Substantial contribution depends on the extent to which the
economic activity in question fulfils so-called technical
screening criteria. No other environmental objective may be
121
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EU Taxonomy
EU TAXONOMY
[Within the framework of the EU Green Deal and the Action
Plan "Financing Sustainable Growth", the EU taxonomy is a
cornerstone of the EU's aspiration to become climate-neu-
tral by 2050. Its key objectives are to create transparency for
capital market participants and to channel capital flows to-
wards sustainable economic activities.
The EU taxonomy is a classification system that defines
economic activities as environmentally sustainable based on
predetermined criteria. Environmental sustainability is as-
certained in three steps.
Essentially, an economic activity can only be classified as
sustainable if it makes a substantial contribution to one of
the following six environmental objectives:
1) Climate change mitigation
2) Climate change adaptation
3) The sustainable use and protection of water and
marine resources
4) The transition to a circular economy
5) Pollution prevention and control
6) The protection and restoration of biodiversity and
ecosystems
+6
Economic activity 6.5 Transport by motorbikes, passen-
ger cars and light commercial vehicles including the pur-
chase, financing, renting, leasing and operation of pas-
senger cars and motorcycles.
7 Overview of the BMW Group
Based on the descriptions of the two economic activities list-
ed for Environmental Objective 1 (Climate change mitiga-
tion), a large part of the BMW Group's business model falls
within the scope of the EU taxonomy*.
safeguard criteria
+
for occupational and
human rights
]]
Economic
activity is
taxonomy-
aligned
* It should be noted that the relevant Delegated Regulation describes the economic
activity "Manufacture of low-carbon technologies for transport" differently for
Environmental Objective 1 (Climate change mitigation) and Environmental Objec-
tive 2 (Climate change adaptation). For the purposes of consistent reporting on the
taxonomy-eligibility of vehicle production, the BMW Group follows the description
given for Environmental Objective 1, given that taxonomy-eligible vehicle produc-
tion as listed for Environmental Objective 2 is a subset of taxonomy-eligible vehicle
production for Environmental Objective 1.
123
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EU Taxonomy
[ MANDATORY EU TAXONOMY DISCLOSURES
REVENUES
Ensuring the minimum
Non-eligible activities
objectives
not cause significant harm
Only the sale of parts and components, such as aftersales
business excluding the provision of repair services and the
supply of production components to BMW Brilliance Auto-
motive Ltd. (BBA) as well as other third parties, and non-au-
tomotive banking and insurance services performed by the
[EXPLANATORY COMMENTS ON REPORTING PROCEDURES
Reporting in 2021
Reporting from 2022 onwards
Financial Services segment, are not described as economic
activities in the Delegated Regulation and are therefore not
taxonomy-eligible.
Accordingly, for 2021, 82.9% of revenues, 99.7% of capital
expenditure, and 100.0% of operational expenditure are
taxonomy-eligible.
The taxonomy-aligned proportions that will need to be re-
ported in the coming years will initially be significantly lower
than these values. They will subsequently increase due to
the growing share of zero-emissions vehicles, the develop-
ment and production methods used, and potentially contri-
butions made to other environmental objectives as yet to be
defined. Due to the high level of investment in the trans-
formation of our business activities, for example in the elec-
trification of our vehicles and research into alternative drive
systems, these economic activities have the potential to be-
come taxonomy-aligned over time. Overall, we anticipate
that the proportion of taxonomy-aligned economic activities
will steadily rise as a result of the increasing electrification of
our product portfolio.
By 2025 the share of electrified automobiles in total Group
deliveries is expected to rise to at least 30%. Over the next
decade, we expect that some ten million of our all-electric
vehicles will be on the roads. Therefore, by 2030, at least
every second automobile delivered by the BMW Group will
be an all-electric model. ]]
Economic activities are
described in the Delegated
Act on environmental
objectives 1 and 2
Taxonomy eligibility
+
Fulfillment of technical
screening criteria:
substantial contribution
to at least one of the
environmental objectives
+
Economic activity does
to other environmental
+12
Combined Management Report
Outlook, Risk and Opportunity Management
+1
between 8 and 10
%
35.9
21.9
between 19 and 24
%
22.6
between 14 and 17
1 Deliveries including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2021: 651,236 units).
² EU-27 countries including Norway and Iceland; with effect from 2021, values are calculated on a converted basis in line with WLTP (Worldwide Harmonised Light Vehicles Test Procedure).
3 Efficiency ratio calculated on the basis of Scope 1 and Scope 2 CO₂ emissions (i.e. a market-based method according to GHG Protocol Scope 2 guidance; but excluding climate-changing gases other than carbon
dioxide from vehicle production (BMW Group manufacturing sites incl. joint venture BMW Brilliance Automotive Ltd. and motorcycles, but excluding contract manufacturers), as well as BMW Group non-manufac-
turing sites, (e.g. Research centre, Sales centre, offices) divided by the number of vehicles (excluding motorcycles) produced (BMW Group manufacturing sites incl. joint venture BMW Brilliance Automotive Ltd.,
excluding contract manufacturers).
4 New method of calculation applied with effect from 2022. Performance Management
129
BMW Group Report 2021
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8.3
Outlook, Risk and Opportunity Management
%
194,261
%
59.9
24.0
MOTORCYCLES SEGMENT
Deliveries to customers
EBIT margin
Return on capital employed (ROCE)4
FINANCIAL SERVICES SEGMENT
Return of Equity (RoE)
2022
Outlook
Significant increase
Significant increase
Slight increase
in line with last
year's level
Significant increase
Slight decrease
Slight decrease
between 7 and 9
between 14 and 19
units
Slight increase
10.3
RISK AND OPPORTUNITY
MANAGEMENT
The management of risks and opportunities is essential in
order to respond appropriately to any changes that occur in
political, economic, ecological, social, technological or legal
conditions. The BMW Group has put a comprehensive risk
management system in place to effectively manage these
risks as they arise.
According to Group-wide guidelines, every employee and
manager has a duty to report risks via the relevant reporting
channels. The key elements of an appropriate risk culture are
embedded in the BMW Group's core values, the BMW Group
Risk Management Policy and the BMW Group Risk Manage-
ment Guidelines as well as in the Group's overall risk strat-
egy. New information and requirements are continuously in-
corporated in the BMW Group's risk management system,
thereby ensuring its ongoing development. Training pro-
grammes and informational events are regularly conducted
throughout the BMW Group, particularly within the risk man-
agement network.
The risk management process is applicable across the entire
Group and comprises the early identification, analysis and
measurement of risks, the coordinated use of appropriate
risk management tools and the monitoring and assessment
of the measures taken.
RISK MANAGEMENT IN THE BMW GROUP
Group-wide risk management
Identifi-
cation
Analysis and
Measurement
Effectiveness
Practicability
Group
Compliance
Council
Reporting/
Monitoring
Controlling
Risk Manage-
ment Steering
Committee
Supervisory
Board
Completeness
Board of
Management
Measures
Internal Control System
Group Audit
Other functions such as Compliance and Human Rights and
the Internal Control System serve as key interfaces to the risk
management system. In its capacity as an independent con-
trol body, Corporate Audit reviews the risk management sys-
tem established by the Board of Management on an annual
basis.
The BMW Group's business is exposed to a variety of uncer-
tainties and changes. Against this backdrop, it consciously
takes well-calculated risks and makes full use of any oppor-
tunities that present themselves.
both the Board of Management and the Supervisory Board's
Audit Committee.
Organisation of Risk Management
31-9 457 423-16° X MT 5.00 H2 MIC
The aim of the risk management system is to identify, as-
sess and proactively manage any risks that could threaten
the attainment of the Group's corporate targets. As part of
that process, any individual or cumulative risks capable of
posing a threat to the profitability of the business are both
monitored and managed.
All opportunities and risks that are expected to materialise
have already been addressed in the Outlook Report. The fol-
lowing sections focus on potential future developments or
events that could result in a positive (opportunity) or a nega-
tive (risk) deviation from the outlook for the BMW Group.
As a general rule, the time horizon considered covers the
current and the following financial year. Potential short-term
effects of climate change are taken into account.
Medium to long-term risks in connection with the climate
change are described in the section Climate-related opportunities
and risks.
With effect from 11 February 2022, the BMW Brilliance Auto-
motive Ltd. (BMW Brilliance) joint venture is fully consolidat-
ed in the Group Financial Statements. If the full consolida-
tion of BMW Brilliance from that date is expected to result in
a different classification of individual risk categories, such
changes are indicated separately in this Risk Report.
Overall Risk and Opportunity Situation
The assessment of the overall risk situation is based on a
consolidated view of all significant individual risks to which
the BMW Group is exposed. The BMW Group's overall expo-
sure to risk, including the impact of integrating BMW Bril-
liance, has increased moderately compared with the previ-
ous year. A prolonged military conflict between Russia and
Ukraine and a worsening of the coronavirus pandemic could
I have a further negative impact on the global economy and
hold down sales volume. At the same time, considerable un-
certainties remain in the form of potential bottlenecks along
the entire supply chain, particularly for semiconductors.
However, if the effect of these issues were to prove less se-
vere in 2022 than currently expected, opportunities could
arise that could benefit both revenues and earnings.
The Management and the Supervisory Board do not see any
threat to the BMW Group's status as a going concern. Simi-
lar to one year earlier, the current set of risks to the
BMW Group are considered to be manageable. If these risks
- or opportunities - were to materialise, they could have an
impact on underlying key performance indicators, thus caus-
ing deviations from the outlook. Regardless of the full con-
solidation of BMW Brilliance, the BMW Group's financial re-
sources are stable and liquidity requirements are currently
covered by existing liquidity as well as the various financing
instruments available.
In addition to the risks described below, unforeseen events
could have a negative impact on business operations and
hence on the BMW Group's results of operations, financial
position and net assets as well as on its reputation.
BMW
130
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Risk management is organised as a decentralised, Group-
wide network and steered by a centralised risk management
function. The various BMW Group divisions are represented
by Network Representatives. The responsibilities and tasks
of the centralised risk management function and the Net-
work Representatives are clearly documented and accepted.
Risks pertaining to BMW Brilliance are incorporated in this
Risk Report on the basis of the assessment made by the
centralised risk management function. In future, BMW Bril-
liance will also be integrated in the risk management net-
work. Significant risks reported from within the network are
firstly presented for review to the Risk Management Steering
Committee, which is chaired by Group Controlling. After they
have been reviewed, any significant risks are reported to
%
0.33
tons
The dual impact of an economic upturn and supply bottle-
necks caused raw materials prices to rise sharply in 2021.
The BMW Group expects the overall situation on raw mate-
rials and energy markets to remain tense in the foreseeable
future and has already taken the initial impact of the pre-
vailing situation into account in its outlook for the financial
year 2022.
Moreover, the war in Ukraine is having a substantial effect on
that country's automotive supply industry, with supply restric-
tions resulting in production schedule adjustments and/or
interruptions at a number of BMW Group plants.
The outlook does not factor in the following:
A significant tightening of sanctions against Russia or a
change in the interpretation of existing sanctions
An escalation of the conflict outside Ukraine
Additional major price hikes for energy and raw materi-
als, including rises triggered by the war in Ukraine and/or
the related sanctions
Regardless of these uncertainties, however, the situation re-
mains highly volatile, making it very difficult to accurately
forecast outcomes for the financial year 2022. Other possible
longer-term effects of the war in Ukraine cannot be estimat-
ed at the present time and are therefore not taken into ac-
count in the outlook.
Outlook for the BMW Group
indicators
-
- key performance
Prior to the outbreak of war in Ukraine, the BMW Group was
set to forecast slight year-on-year growth in deliveries of
BMW, MINI and Rolls-Royce brand vehicles for the Automo-
tive segment. However, due to the production schedule ad-
justments and interruptions described above that have been
triggered by the war in Ukraine, it now predicts deliveries to
remain at previous year's level.
The BMW Group expects to achieve its target of slightly cut-
ting the carbon emissions generated by its EU new vehicle
fleet, driven in particular by the significantly growing share of
electrified automobiles in total deliveries.
Without the impact of the war in Ukraine, carbon emissions
per vehicle produced would have been predicted to decline
moderately². However, in light of the likely adverse impact of
production schedule adjustments and interruptions trig-
gered by the war in Ukraine, the scale of reduction is now
only expected to be slight.
Excluding the impact of the full consolidation of BMW Bril-
liance and the war in Ukraine, the Automotive segment EBIT
margin had been expected to finish within a target range of
between 8 and 10%.
Although, as described above, the BMW Group had been set
to forecast sales volume growth, the EBIT margin had never-
theless been expected to be lower year-on-year due to the
absence of various positive effects that had benefited the fi-
nancial year 2021, such as the partial reversal of the provi-
sion relating to the concluded antitrust proceedings, the
remeasurement gains arising on the modernisation of the
pension plan, and the highly favourable risk situation in the
leasing line of business. The full consolidation of BMW Bril-
liance would have increased segment revenues and EBIT
sharply, but due to consolidation effects, no significant im-
pact on the EBIT margin in the Automotive segment was ex-
pected for the financial year 2022 and the figure would have
been likely to remain between 8 and 10%. However, in light
of the probable adverse impact of production schedule ad-
justments and interruptions triggered by the war in Ukraine,
an EBIT margin of between 7 and 9% is now thought to be
more realistic.
Based on the newly adopted methodology, RoCE for the Au-
tomotive segment would have been forecast at between 19
and 24%, reflecting the lower level of earnings otherwise
expected without the increase in the stake in BMW Brilliance
and the impact of the war in Ukraine. However, the addition-
al net assets identified in conjunction with the increased
stake in BMW Brilliance plus fair value adjustments arising
on the purchase price allocation have the twin effect of in-
creasing capital employed. In combination with elimination
effects on earnings in 2022, the targeted range for ROCE
would therefore have been between 15 and 20%. However,
in light of the adverse impact of production schedule adjust-
1 Delivery figures already include vehicles produced by BMW Brilliance.
2 Carbon emissions per vehicle produced already take BMW Brilliance into account.
127
However, international demand for semiconductors is still
predicted to remain high, causing the supply situation to re-
main tight. As in the financial year 2021, the risk of supply
bottlenecks affecting the availability of the semiconductor
components required for production persists and the situa-
tion is not expected to ease before the second half of 2022.
BMW Group Report 2021
The coronavirus pandemic is no longer currently expected to
have a significant impact on the results of operations, finan-
cial and net assets position of BMW AG and the Group as a
whole.
The outlook takes account of all information available at the
time of reporting and which could have an impact on the
overall course of business of the Group. The expectations
contained in the outlook are based on the BMW Group's
forecast for 2022 and reflect its most recent status. The ba-
sis for the preparation of and the principal assumptions used
in the forecasts – which consider the consensual opinions of
leading organisations, such as economic research institutes
and banks are set out below. The BMW Group's outlook
takes account of these assumptions.
+2
+4
The BMW Group expects, subject to the further development
in Ukraine, the world's motorcycle markets in the 250 cc plus
class to remain stable in 2022, with volumes generally re-
maining at the previous year's level.
The impact of the war in Ukraine, the limited availability of
vehicle components, the further course of the coronavirus
pandemic, and macroeconomic factors will continue to influ-
ence the performance of motorcycles markets in 2022.
Expected consequences for the BMW Group
Future developments on international automobile markets
have a direct impact on the BMW Group. The challenging
market environment, the supply situation for vehicle compo-
nents, the coronavirus pandemic and further developments
in the Ukraine conflict are currently the factors most likely to
have a significant impact on business performance. Flexible
coordination between the Group's sales and production net-
works will also help cushion the impact of unforeseeable de-
velopments in individual regions. Risk and Opportunity Management
Assumptions used in the outlook
Both the Outlook and the Risk and Opportunity Manage-
ment sections of this report contain forward-looking state-
ments based on the BMW Group's expectations and assess-
ments and may be influenced by unforeseeable events. As a
result, actual outcomes can deviate either positively or neg-
atively from the expectations described below, due to chang-
es in the political and economic environment as well as other
factors. Risk and Opportunity Management
The following outlook covers a forecast period of one year
and is based on the composition of the BMW Group during
that time. For this reason, the outlook also includes the im-
pact of fully consolidating BMW Brilliance Automotive Ltd.,
Shenyang, (BMW Brilliance). On 11 February 2022, the
BMW Group increased its shareholding in the BMW Bril-
liance joint venture from 50% to 75%*. The full consolida-
tion of BMW Brilliance with effect from that date has a signif-
icant impact on some of the BMW Group's key performance
indicators.
* See note [3] to the Group Financial Statements
126
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Outlook, Risk and Opportunity Management
-
To our Stakeholders
Group Financial Statements
Corporate Governance
Share of women in management positions
in the BMW Group
AUTOMOTIVE SEGMENT
2021
reported
2021
adjusted
€ million
16,060
118,909
%
18.8
Deliveries to customers'
units
2,521,514
Share of electrified vehicles in deliveries
%
13.0
CO₂ emissions EU New Vehicle Fleet²
g/km
115.9
CO₂ emissions per vehicle produced³
EBIT margin
Workforce at year-end
Profit before tax
GROUP
BMW GROUP KEY PERFORMANCE INDICATORS
Remuneration Report
Other Information
← = Q
ments and interruptions triggered by the war in Ukraine, a
ROCE in a range between 14 and 19% is now considered
more likely.
Motorcycles segment deliveries are forecast to increase
slightly. The EBIT margin is predicted to finish within a range
of between 8 and 10% and, based on the revised methodol-
ogy, the segment ROCE within a range of 19 and 24%. Key
performance indicators for the Motorcycles segment will only
be marginally affected by the full consolidation of BMW Bril-
liance and are not currently expected to be substantially im-
pacted by the war in Ukraine.
The RoE in the Financial Services segment is predicted to
finish within a range of between 14 and 17%. Compared with
the financial year 2021, it has been assumed that the highly
favourable results from remarketing lease returns, combined
with an easing of the supply situation for semiconductors
during the second half of the year, will return to a normal lev-
el. The full consolidation of BMW Brilliance will not impact
the Financial Services segment, as the companies held
jointly with BMW Brilliance that are attributable to this seg-
ment have already been reported on a fully consolidated ba-
sis due to the segment's majority shareholdings in the enti-
ties concerned. Likewise, no significant impact is currently
expected from the war in Ukraine.
Excluding the impact of the full consolidation of BMW Bril-
liance, Group profit before tax would have decreased signifi-
cantly. Without the impact of the war in Ukraine, sales vol-
umes would have been expected to develop positively over
the forecast period. However, this volume growth would not
have been sufficient to compensate for the previous year's
effects, such as the partial reversal of the provision relating
to the concluded antitrust proceedings, the remeasurement
gains arising on the modernisation of the pension plan, and
the highly favourable risk situation within the credit and leas-
ing lines of business. Nonetheless, including the impact of
the full consolidation of BMW Brilliance, Group profit before
The share of women in management functions within the
BMW Group is expected to rise slightly, irrespective of the
Group's increased stake in BMW Brilliance.
Without taking the full consolidation of BMW Brilliance into
account, the targets described above would have been
achieved with only a slight rise in the overall number of em-
ployees. However, the increase in the stake in BMW Bril-
liance and the full consolidation of that entity will cause the
number of employees to rise significantly.
+6
The BMW Group's actual business performance may also
deviate from current expectations due to the risks and op-
portunities discussed below in the section on Risk and Oppor-
tunity Management.
BMW Group Report 2021
To our Stakeholders
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Outlook, Risk and Opportunity Management
128
Return on capital employed (ROCE)"
tax is set to increase significantly over the forecast period,
mainly reflecting BMW Brilliance's additional contribution to
the Automotive segment's operating profit as well as the
remeasurement of the at-equity investment previously re-
corded, with a positive effect of approximately € 7 to € 8 bil-
lion to be recognised within the financial result. These ef-
fects would more than compensate for the elimination of the
previous at-equity result of BMW Brilliance in the financial
result and the negative impact of consolidated adjustments
arising on full consolidation. Even taking into account the
negative impact of production schedule adjustments and in-
terruptions triggered by the war in Ukraine, Group profit is
expected to increase significantly.
Remuneration Report
← = Q
Combined Management Report
Outlook, Risk and Opportunity Management
Macroeconomic Risks and Opportunities
Economic conditions have an impact on business perform-
ance and hence on the level of earnings generated by the
BMW Group. Unforeseen disruptions in global economic re-
lations can have highly unpredictable effects. The risk
amount over the two-year assessment period is classified as
medium.
The invasion of Ukraine by Russian troops has, among other
factors, triggered supply restrictions affecting components
from Ukraine which have already led to production schedule
adjustments and interruptions at a number of BMW Group
plants. If the military conflict continues for a prolonged peri-
od, it will also have a perceptible impact on sales.
There is a risk of a further escalation of the conflict and
therefore of the sanctions imposed by Western countries on
Russia as well as possible retaliatory measures by Russia.
Any additional sanctions relating to the capital market and
the import and export of goods and raw materials will have
distinct consequences that are also likely to have a negative
impact on economies outside Russia.
Global supply shortfalls - particularly for semiconductors
continue to dampen the prospects of economic growth.
These bottlenecks could persist throughout the whole of
2022, with the resulting shortage of (upstream) products
causing the hitherto strong recovery of the global economy
to lose pace.
Mutation could result in the emergence of a highly conta-
gious coronavirus variant that could, in tum, cause severe
disease. In this case, strict containment measures could
slow down the economic recovery. The BMW Group is moni-
toring the situation on a continuous basis and taking appro-
priate measures as required.
Other Information
The conflict between the USA and China is also set to re-
main a major topic of discussion. The focus is currently shift-
Macroeconomic opportunities that could have a sustained
positive impact on the BMW Group's results of operation are
classified as insignificant.
Strategic and Sector-Specific Risks and Opportunities
Changes in legislation and regulatory requirements
The introduction of more stringent legislation and regula-
tions, particularly regarding emissions, safety and consumer
protection as well as regional vehicle-related purchase and
usage taxes, poses a significant risk for the automobile in-
dustry. Country- and sector-specific trade barriers can also
be subject to change at short notice. Any sudden tightening
of regulations in these areas could necessitate significantly
higher investments and ongoing expenses or exert influence
on customer behaviour. The risk amount attached to the oc-
currence of the risk of disruption in product availability due to
unforeseeable short-term changes in legislation and regula-
tions is classified as high.
At present, the BMW Group is seeing a continuous trend to-
wards increasingly stringent vehicle emissions regulations,
particularly for conventional drive systems, with the aim of
improving air quality, above all in conurbations. A legislative
proposal for the new Euro 7 emissions standard is being dis-
cussed within the European Union. As the technical require-
ments and the implementation timetable for the new stand-
ard are still subject to consultation, a certain element of risk
is involved. A discussion about fuel consumption and carbon
emissions could affect the Company's reputation.
Additional risks could result from the tightening of existing
import and export regulations, which could, in turn, lead pri-
marily to additional expenses, but also complicate the im-
port and export of vehicles and parts.
Changes in trade policies could also have a positive impact
on the BMW Group's earnings in the short to medium term.
Any reduction in tariff barriers, import restrictions or direct
excise duties could result in lower manufacturing costs or
enable products and services to be offered to customers at
more attractive prices. Additional opportunities potentially
arising from changes in legislation and regulations are clas-
sified as insignificant.
ing from simple tariff increases to further import and export
restrictions on specific technologies. This could also lead to
less favourable import and export conditions for the
BMW Group.
Market developments
Corporate Governance
To our Stakeholders
Significant
Stable
High
Low
Medium
Medium
Medium
Group Financial Statements
Increased
Stable
Stable
Decreased
Stable
Stable
Insignificant
Significant
Decreased
Stable
1 The classified risk amount does not change as a result of the full consolidation of BMW Brilliance.
2 As shown in the section "Risk measurement", the risk amount ranges used for risk classification purposes have been updated. The change shown here relates to the classification of prior-year risks using the
updated risk amount ranges.
133
BMW Group Report 2021
Significant
Increasingly fierce competition among established manufac-
turers and the emergence of new competitors can have re-
percussions that are difficult to predict. Unforeseen con-
sumer preferences and changes in brand perceptions could
also give rise to both opportunities and risks. The risk amount
attached to the occurrence of market risks over the two-year
assessment period is classified as medium.
Any toughening of market competition could ramp up pres-
sure on sales volume and selling prices. For instance, the
BMW Group could be confronted with short-term supply and
demand distortions in the transition from conventionally
powered vehicles to alternative drive concepts. Customer
behaviour can also change, such as in the event of changing
social values and norms or as a consequence of governmen-
tal policies relating to vehicle usage.
Sales markets are continuously monitored in order to opti-
mally meet customer requirements and, at the same time,
capitalise on opportunities in terms of sales growth and pri-
cing. Opportunities arising over the assessment period are
classified as insignificant.
Potential reasons for the failure of individual suppliers to de-
liver include IT-related risks, non-compliance with sustain-
ability or quality standards, the lack of availability of raw ma-
terials and other input materials, and the occurrence of
natural hazards and/or fires. Insufficient financial capacity
on the part of individual suppliers can also jeopardise sup-
plies to production plants. In this context, the BMW Group
ensures financial support for suppliers that are of critical im-
portance for maintaining production. Moreover, any major
deterioration of a particular country's security situation is
incorporated in the risk measurement process as a potential
reason for the failure of a value or supply chain.
Among other challenges, the military conflict between Rus-
sia and Ukraine is causing disruptions in the supply of com-
ponents produced in Ukraine. Any further escalation could
potentially affect both direct suppliers and upstream
sub-suppliers from neighbouring countries, thereby aggra-
vating the supply situation still further and curtailing the
availability of raw materials from Russia.
The growing complexity of the supplier network, particularly
in the case of sub-suppliers whose operations can only be
indirectly monitored by the BMW Group, is a further potential
cause of downtimes at supplier locations. Due to the high
level of demand on international semiconductor markets, the
135
BMW Group Report 2021
To our Stakeholders
Combined Management Report
Outlook, Risk and Opportunity Management
Risks and opportunities relating to purchasing
Purchasing risks relate primarily to supply risks caused by
the failure of a supplier as well as to threats to BMW Group-rel-
evant know-how within the supplier network. Production
problems at supplier level could lead to consequences
caused by increased expenditure for the BMW Group due to
production interruptions and a corresponding reduction in
vehicle sales. The BMW Group deploys an extensive set of
checks and proactive management measures to tackle the
challenges currently facing the automotive supply industry.
The risk amount attached to purchasing risks over the two-
year assessment period is classified as high.
Group Financial Statements
Remuneration Report
Other Information
← = Q
BMW Group has already experienced temporary bottlenecks
in the supply of electronic components.
The ongoing tight supply situation along the entire supply
chain particularly due to bottlenecks affecting the supply of
semiconductors could continue to result in adjustments to
the production schedule. Reporting on such eventualities
could also have a negative impact on the Company's reputa-
tion. The BMW Group is monitoring the situation very closely,
assessing developments on a continual basis and ensuring
that supply chains and production plants are working to-
gether as closely as possible.
The increased threat of cyberattacks along the entire value
chain also affects supply security as well as the ability to
protect know-how relevant to the BMW Group. In order to
ensure a uniform level of IT security for all those involved
along the value and supply chain, the BMW Group impresses
on suppliers the importance of obtaining appropriate IT se-
curity certification.
When selecting its suppliers, the BMW Group not only takes
into account external requirements, such as those contained
in the German Supply Chain Due Diligence Act (Lieferketten-
sorgfaltspflichtengesetz), but also ensures that the sustain-
ability standards set internally by the Group are met.
Corporate Governance
The BMW Group sees opportunities relating to production
processes and fields of technology primarily in the competi-
tive edge gained from mastering new and complex technol-
ogies. Given the long lead times involved in developing new
products and processes, additional opportunities are not
expected to have a significant earnings impact on the
BMW Group during the assessment period.
The development and testing of new technologies inherently
give rise to a certain level of risk. An accident - for example
involving a vehicle in automated driving mode could have
a negative impact on the Company's reputation, regardless
of cause. Avoiding these risks is a top priority for the
BMW Group.
The BMW Group recognises appropriate provisions for stat-
utory and non-statutory warranty obligations. It cannot be
ruled out, however, that additional costs could arise in con-
junction with vehicle recalls that are either not covered or not
fully covered by provisions. Despitely, deploying thorough
quality assurance processes, such risks can always arise if
the materials and/or processing procedures used prove in-
sufficient, in some cases years after a product has been
launched. A high number of recalls could also have a nega-
tive impact on the BMW Group's reputation. Further infor-
mation on risks in conjunction with provisions for statutory
and non-statutory warranty obligations is provided in
note 33 to the Group Financial Statements.
134
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Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Outlook, Risk and Opportunity Management
Risks and Opportunities Relating to Operations
Risks and opportunities relating to production and technologies
Risks relating to production processes and fields of technol-
ogy can lead to unplanned production interruptions or add-
itional costs due to vehicle recall actions. The risk amount
attached to the occurrence of such risks over the two-year
assessment period is classified as medium.
Potential causes of production downtimes include fires, nat-
ural hazards and infrastructural damage as well as machine
and tooling breakdowns. Equally significantly, however, pro-
duction could also be impaired by bottlenecks in the supply
of production materials or components, utility or media sup-
ply failures or disruptions to transportation, logistics or IT
systems, all of which could be caused by cyberattacks,
among other factors.
All production units have a variety of measures in place to
deal with potential production interruptions and downtimes,
some of which are already integrated in the planning process
and also applied at operational level with a high degree of
flexibility. These measures have an effect on both the amount
of damage and the probability of the risks occurring.
Technical fire protection, transparency with regard to poten-
tial natural hazards relevant for site selection and ongoing
operations, underpinned by other appropriate (e.g. struc-
tural) measures, a rapid response by on-site fire services
and employee training are the key strategies for preventing
or reducing any potential damage from fires and/or natural
hazards. Furthermore, policies are in place with insurance
companies of high credit standing to mitigate the impact of
any property damage caused by fire and/or natural events
that lead to significant business interruptions at either the
Group's or suppliers' premises.
Appropriate measures have been put in place to counter the
threat of targeted cyberattacks, reflecting the fact that any
such attacks could cause damage to production facilities
and possibly result in long downtimes and substantial
losses.
Vehicles could be damaged or destroyed by natural hazards
or other threats during transport from the Group's production
plants to its various sales regions. Premiums and deductibles
for transport insurance policies currently remain at a persis-
tently high level. Any further increase could make it econom-
ically unviable to take out insurance, as a result of which the
BMW Group would be required to bear the losses itself.
Decreased
Low
Other financial risks
Pension obligations
Legal risks
Liquidity
BMW Group Report 2021
To our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
132
← = Q
Opportunity Management
A dynamic market environment also gives rise to opportun-
ities. Identifying these opportunities is an integral part of the
BMW Group's strategic planning process. The Group's range
of products and services is continually reviewed on the basis
of these analyses.
The continuous monitoring of key business processes and
strict cost controls are also essential factors for ensuring
high levels of profitability and return on capital employed.
The importance of opportunities for the BMW Group is clas-
sified on a qualitative basis in the categories "significant"
and "insignificant". Probable measures aimed at increasing
profitability are already incorporated in the outlook.
Risks and Opportunities
The following table provides an overview of significant risks
and opportunities for the years 2022 and 2023 and indicates
their level of importance for the BMW Group. Overall, no risks
capable of threatening the continued existence of the
BMW Group were identified either at the balance sheet date
or at the date on which the Group Financial Statements were
drawn up.
Due to the particular features of the business model applied
for Financial Services business, risks and opportunities re-
lating to that segment are presented separately in the sec-
tion Risk management system in the Financial Services
segment.
Outlook, Risk and Opportunity Management
In accordance with § 289c of the German Commercial Code
(HGB) risks that could have an impact on the non-financial
aspects referred to in the relevant legislation are reviewed as
part of the reporting process. Significant risks in this context
are defined as those stemming from business activities,
business relationships and products and services provided
by the BMW Group that are highly likely to have a seriously
adverse impact. No significant non-financial risks were iden-
tified during the year under report.
Managing Non-Financial Risks as Reported in the NFS
Alongside the maintenance of a comprehensive system of
risk management, sustainability constitutes a core strategic
principle of the BMW Group. Risks resulting from sustain-
ability issues are generally identified via the Group-wide risk
management network.
Quite apart from the financial consequences, risks can also
have an impact on the BMW Group's reputation. For these
purposes, the BMW Group assesses all risks with regard to
their impact on its reputation using a scoring model. More-
over, other overarching topics are monitored by means of
regular media analysis. Any significant reputational reper-
cussions are described in the following sections.
In light of the continued growth of the business and the as-
sociated risks, the value limits used in the Annual Report
since 2013 have been revised.
The following ranges apply for the purpose of classifying the
risk amount:
New risk amount range
€0 200 million
Class
Low
Previous risk amount range
€0 50 million
Medium
> € 50-400 million
> € 200 1,000 million
High
> € 400 million
> € 1,000 million
The impact of risks and opportunities is presented separate-
ly without offsetting. If no specific reference is made, oppor-
tunities and risks relate to the Automotive segment. The
scope of entities consolidated for risk reporting purposes
corresponds to the scope of consolidated entities included in
the BMW Group Financial Statements.
Monitoring Risk-Bearing Capacity
Group-wide effects and trends can be identified by aggre-
gating all significant risks at Group level using value-at-risk
models. For this purpose, the potential earnings impact of
the risks (confidence level: 99%) is aggregated, taking cor-
relation effects into account. In order to assess the risk-bear-
ing capacity of the BMW Group, the aggregated amount of
risks is compared with the risk cover amount (i. e. the equity
capital of the BMW Group recognised for accounting pur-
poses). A limit system for various risks helps monitor the
risk-bearing capacity.
Managing Reputational Risks
Due to the medium- to long-term horizon involved, risks as-
sociated with climate change are presented in the section
7 Climate-related opportunities and risks.
The risks associated with the supply of raw materials are
mitigated either by reducing the use of the raw materials in
question or substituting them with alternative products.
Macroeconomic risks and opportunities
Strategic and sector-specific risks and opportunities
Changes in legislation and regulatory requirements
Market developments
Purchasing
Stable
High
Stable
Insignificant
Stable
Low
Stable
Insignificant
Insignificant
Information security, data protection and IT
Financial risks and opportunities
High
Increased
Insignificant
Stable
Foreign currencies
Raw materials
Stable
Stable
Medium
Stable
Sales network
Risks
Classification
of the risk amount¹
Change compared
to prior year 2
Classification
Medium
Stable
Insignificant
Opportunities
Change compared
to prior year
Decreased
High
Medium
Stable
Decreased
Insignificant
Stable
Insignificant
Risks and opportunities relating to operations
Production and technology
Within the Purchasing and Supplier Network, opportunities
arise primarily in the context of global sourcing and associ-
ated efficiency improvements. Making optimal use of any
innovations developed by suppliers is a key prerequisite for
developing future-oriented mobility products and services.
Similarly, favourable location-related cost factors, particular-
ly those arising due to the close proximity of supplier struc-
A further risk is seen in the very high rate of inflation current-
ly being observed in many regions. If inflation were to remain
high over an extended period, rising prices would curb de-
mand. The expected interest rate hikes by central banks will
also have a dampening effect on business.
Opportunities arising over the assessment period are classi-
fied as insignificant.
131
Risks and opportunities relating to the Financial Services segment
The main categories of risk relevant for financial services
business are credit and counterparty risk, residual value risk,
interest rate risk, operational risk and liquidity risk. The
evaluation of liquidity risk for the Financial Services segment
is included in the liquidity risk category for the Group as a
whole.
Credit and counterparty risks and opportunities relating to the
Financial Services segment
Credit and counterparty default risk arises within the Finan-
cial Services segment if a contractual partner (e.g. a cus-
tomer or dealership) becomes either unable or only partially
able to fulfil its contractual obligations, so that less income is
generated or losses are incurred. Among other consequenc-
es, the military conflict between Russia and Ukraine could
also result in credit losses. The risk amount attached to the
occurrence of unexpected credit or counterparty default risks
over the two-year assessment period is classified as medi-
um. The BMW Group classifies potential opportunities in this
area as insignificant.
Credit risk
Residual value
Interest rate changes
BMW Group Report 2021
Operational risks
Initial and continuous creditworthiness testing is an import-
ant aspect of the BMW Group's credit risk management sys-
tem. For this reason, every borrower's creditworthiness is
tested for all credit financing and leasing contracts entered
into by the BMW Group. Opportunities may arise if the man-
aged portfolio performs better over time than estimated
when the credits were granted. Changes in the creditworthi-
ness of customers arising during the credit term are covered
by risk provisioning procedures. The credit risk of individual
customers is quantified on a monthly basis and, depending
on the outcome, taken into account within the risk provision-
ing system. Macroeconomic developments are currently
subject to a higher degree of volatility. If developments are
more favourable than assumed in the outlook, credit losses
may be lower than expected, leading to a positive earnings
impact.
Classification
Opportunities
Change compared
to prior year
Risks
of the risk amount¹
In the financial year 2021, the Financial Services segment
benefited among other things from a favourable risk situ-
ation and the resulting lower level of impairment allowances
required. Credit losses were at an historically low level.
To our Stakeholders
Combined Management Report
Outlook, Risk and Opportunity Management
Group Financial Statements
Remuneration Report
Other Information
← = Q
Alleged or actual non-compliance with the law could also
have a negative impact on the BMW Group's reputation.
Risk Management System in fhe Financial Services
Segment
Risk management within the Financial Services business is
built on the prevailing risk culture, the defined risk strategy,
the internal capital adequacy assessment process frame-
work and a set of rules comprising principles and guidelines.
The main tool used to manage risk within the Financial Ser-
vices segment is to ensure its risk-bearing capacity.
All risks - in the sense of unexpected losses – must be cov-
ered at all times. Based on the segment's risk appetite, this
is achieved by ensuring specified levels of risk-covering as-
sets (asset cushions) in the form of equity capital. Unexpect-
ed losses are measured using various value-at-risk models,
which are validated at regular intervals. Risks are aggregat-
ed after taking account of correlation effects. In addition to
assessing the Group's ability to bear risk, stress scenarios
are also examined. The segment's risk-bearing capacity is
regularly controlled by means of an integrated limit system
for the various risk categories.
Due to the close interrelationships within the Group, devel-
opments that affect the BMW Group's industrial business in
the first step are also relevant for the Financial Services seg-
ment in the second step. In addition, banking supervisory
agencies around the world require sustainability risks to be
adequately addressed. Sustainability risks, such as natural
events or a change in carbon pricing, affect existing risk cat-
egories and can also have an impact in the short term.
The following overview provides a summary of the main risks
and opportunities in the Financial Services segment:
Risks are classified according to the risk amount (average
earnings impact, taking into account the probability of occur-
rence). The earnings impact may be significantly higher if the
risk actually materialises (worst-case scenario).
Risks are measured net of any risk mitigation measures that
are already taking effect (net basis).
The BMW Group utilises standardised methods to assess
risks. All significant risks are measured using value-at-risk
models and assessed on the basis of uniform loss distribu-
tion metrics, thereby enabling better comparability of risks
for both internal and external reporting purposes. The overall
impact of the risks on the results of operations, financial and
net assets position is referred to in the following sections
uniformly as "earnings impact”.
Risk Measurement
← = Q
Other Information
Remuneration Report
Corporate Governance
Change compared
to prior year 2
Corporate Governance
Classification
High
← = Q
Outlook, Risk and Opportunity Management
Residual value risks and opportunities relating to the Financial
Services segment
Risks and opportunities arise in conjunction with leasing
contracts if the market value of a leased vehicle at the end of
the contractual term of a lease differs from the residual value
estimated at the commencement date of the lease. A re-
sidual value risk exists if the expected market value of the
vehicle at the end of the contractual term is lower than its
estimated residual value at the date the contract was entered
into. The risk amount attached to the occurrence of unex-
pected residual value risks over the two-year assessment
period is classified as high. Opportunities can arise out of a
positive deviation between the actual market value and the
original residual value forecast. The BMW Group classifies
potential residual value opportunities as significant.
Each vehicle's estimated residual value is calculated at the
beginning of the contract on the basis of historical external
and internal data. Developments on pre-owned car markets
are an important factor for the BMW Group. The BMW Group
has developed and implemented specialised methods and
processes that enable the sustainability aspects of residual
value risks to be appropriately assessed and managed.
Market developments are observed throughout the contrac-
tual period and the risk assessment updated accordingly.
Residual value risk management essentially follows the
same established process, regardless of the drive system
variant.
The exceptional upturn in the pre-owned vehicle market,
particularly in the USA and the UK, combined with high lev-
els of revenue generated on lease returns sold, had a cor-
respondingly positive effect on the residual value situation
across the Financial Services segment during the financial
year 2021. This development was reflected in the lower level
of residual value risk provisioning required.
Other Information
Interest rate risks and opportunities relating to the Financial
Services segment
Operational risks relating to the Financial Services segment
In the Financial Services segment, operational risks are de-
fined as the risk of losses arising due to the unsuitability or
failure of internal procedures (process risks), people (per-
sonnel-related risks), systems (infrastructure and IT risks)
and external events (external risks). The recording and
measurement of risk scenarios, loss events and counter-
measures in the operational risk management system pro-
vide the basis for the systematic analysis and management
of potential or materialised operational risks. Annual self-as-
sessments are also carried out.
Due to closer interconnection with other risk categories, such
as outsourcing risks or information security risks, the level of
the risk amount has been raised slightly from low to medium
compared to the previous year. The classification of the risk
amount has changed to medium as the pertinent threshold
of €200 million was exceeded for the first time.
Climate-Related Opportunities and Risks
[[ Numerous developments of relevance for the BMW Group
are either directly or indirectly linked to climate-related is-
sues. The BMW Group is taking action to mitigate the impact
of climate change and to adapt to changing climatic condi-
tions. It is therefore imperative to identify climate-related
risks and opportunities and to take appropriate account of
them in determining the strategic direction to be followed,
managing the business and organising a Group-wide risk
management system. Since 2019, the BMW Group has been
acting on the recommendations of the Task Force on Cli-
mate-related Financial Disclosures (TCFD) and is continu-
ously developing its reporting on the management of cli-
mate-related risks and opportunities.
When considering climate-related risks, the BMW Group dis-
tinguishes between physical and transitory risks. Physical
risks refer to the actual impact of climate change. Physical
risks attributable to fundamental changes in climatic condi-
tions, such as rising temperatures or changing precipitation
patterns, are referred to as chronic and generally have a
longer-term effect. We therefore monitor these risks over a
period of up to 30 years. However, extreme weather events
such as storms, floods and heatwaves are already becoming
more frequent.
Transitory risks, on the other hand, arise from the transition
to a low-carbon economy. This category of risks includes for
example new and additional legal requirements relating to
climate protection. We also see the changes resulting from
the transition to a low-carbon future as an opportunity. In-
novative products and services enable us to develop new
fields of business, help decarbonise the mobility sector and
thus boost our competitiveness at the same time.
Organisation and processes for managing climate-related risks
Within the BMW Group, the Board of Management is directly
responsible for all matters relating to climate change includ-
ing dealing with the consequences of climate change. Ac-
Interest rate risks in the Financial Services segment relate to
potential losses caused by changes in market interest rates.
These can arise when fixed interest rate periods do not
match for assets and liabilities recognised in the balance
sheet. The risk amount attached to interest rate risks is clas-
sified as low. Favourable interest rate developments com-
pared to the outlook represent opportunities that the
BMW Group classifies as significant. Interest rate risks in the
Financial Services business are managed by ensuring that
fixed interest rate periods match to a large extent and
through the use of interest-rate derivatives. If the relevant
recognition criteria are fulfilled, derivatives used by the
BMW Group are accounted for as hedging relationships. Fur-
ther information on risks in conjunction with financial instru-
ments is provided in 7 note 39 to the Group Financial
Statements.
Remuneration Report
Corporate Governance
Group Financial Statements
Stable
Stable
Insignificant
Stable
Significant
Stable
Low
tures to new and existing BMW Group production plants as
well as the introduction of innovative production technol-
ogies, could lead to lower cost of materials for the
BMW Group.
Significant
Stable
Medium
Increased
1 The classified risk amount does not change as a result of the full consolidation of BMW Brilliance.
2 As shown in the section "Risk measurement", the risk amount ranges used for risk classification purposes have been revised. The change shown here relates to the classification of prior-year risks using the
revised risk amount ranges.
140
BMW Group Report 2021
To our Stakeholders
Combined Management Report
Medium
Group Financial Statements
Stable
To our Stakeholders
Financial Risks and Risks relating to the use of Financial
Instruments
Currency risks and opportunities
As an internationally operating enterprise, the BMW Group
conducts business in a variety of currencies, thus giving rise
to currency risks and opportunities. A substantial portion of
Group revenues, production, other purchases and funding
occur outside the eurozone, particularly in China and the
USA. Regularly updated cash-flow-at-risk models and scen-
ario analyses are used to measure currency risks and oppor-
tunities. The risk amount associated with currency risks is
classified as low. The risk situation is more favourable than
in the previous year, as exchange rates have developed posi-
tively compared with those assumed in earlier forecasts.
Operational currency management is based on the results of
currency risk analyses. The BMW Group manages currency
risks at both strategic (medium to long term) and operational
level (short to medium term). Medium- to long-term meas-
ures include increasing production and purchase volumes in
foreign currency regions, i. e. natural hedging. Currency risks
are managed in the short to medium term and for operation-
al purposes by means of hedging on financial markets. The
principal objective is to increase planning reliability for the
BMW Group. Hedging transactions are entered into only with
financial partners of good credit standing. Depending on ex-
change rate developments, significant opportunities may
arise.
Risks and opportunities relating to raw materials prices
As a manufacturing company, the BMW Group is exposed to
purchase price risks, particularly in relation to the raw mate-
rials used in vehicle production. Changes in prices are moni-
tored via a well-defined management process, the primary
objective of which is to improve planning reliability for the
BMW Group as a whole.
The analysis of raw materials price risks is based on planned
purchases of raw materials and components containing
those products. Cash-flow-at-risk models and scenario
analyses are deployed to measure risks and opportunities
relating to raw materials prices. Price fluctuations for pre-
cious metals (platinum, palladium, rhodium), non-ferrous
metals (aluminium, copper), raw materials for batteries
(lead, nickel, cobalt) and, to some extent, for steel and its
basic ingredients (iron ore, coking coal) as well as energy
(gas, electricity) are hedged using financial derivatives and
supply contracts with fixed pricing arrangements.
The loss or theft of sensitive business information could also
have a negative impact on the Company's reputation.
Due to high demand, the prices of many raw materials have
been, and continue to be, subject to a high degree of fluctu-
ations on commodity markets. Accordingly, the risk amount
associated with raw materials prices is classified as high.
Significant opportunities could arise if raw materials prices,
contrary to current expectations, develop favourably for the
BMW Group.
BMW Group Report 2021
To our Stakeholders
Combined Management Report
Outlook, Risk and Opportunity Management
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
137
With regard to cooperations and business partnerships, the
BMW Group protects its intellectual property as well as its
customer and employee data by issuing clearly defined in-
structions on information security and data protection. Trade
secrets and sensitive personal data are subject to particular-
ly stringent security measures.
documented in a comprehensive set of rules and guidelines.
A consistently applied policy of updating such rules and reg-
ulations to current situations, coupled with regular commu-
nication, awareness-raising and training measures, form the
basis for a high level of security and risk awareness in
general.
Combined Management Report
Outlook, Risk and Opportunity Management
Combined Management Report
Outlook, Risk and Opportunity Management
Risks and opportunities relating to the sales network
In order to sell its products and services, the BMW Group op-
erates a global sales network - mainly comprising inde-
pendent dealerships, branches, subsidiaries and importers.
Any threat to the continued activities of parts of the sales
network, for example due to the impending insolvency of
large-scale dealerships, would entail risks for the
BMW Group. The risk amount attached to sales and market-
ing risks over the two-year assessment period is classified
as low.
As in other areas, the BMW Group is shaping the future of its
sales organisation with a clear focus on placing the custom-
er experience at the centre of its activities. Our declared aim
is to deliver the best premium brand and customer experi-
ence in the industry. A key building block in this endeavour is
the digitalisation of the customer journey. In conjunction with
the dealership organisation, new opportunities are arising in
this context, which the BMW Group, however, classifies as
insignificant.
Information security, data protection and IT
Digitalisation and automation across all areas of the busi-
ness and all BMW Group products offer excellent opportu-
nities that are helping move the organisation forward on its
strategic path towards sustainability. At the same time, re-
quirements regarding the confidentiality, integrity and avail-
ability of information are becoming increasingly strict, with a
corresponding impact on the related use of information tech-
nology (IT). The level of threat has continuously risen in re-
cent years and the impact of the military conflict between
Russia and Ukraine could lead to a further increase in the
number of cyberattacks. Moreover, legal and regulatory re-
quirements are becoming ever stricter worldwide. Examples
include the Second Act to Increase the Security of Informa-
tion Technology Systems (German IT Security Act 2.0) and
new data protection laws in China.
In view of the higher incidence of observed attacks on
BMW Group applications and systems, the risk amount
despite extensive security measures - is classified as high.
In addition to threats in the form of cyberattacks and phys-
ical interventions, information and data can also be compro-
mised by a lack of risk awareness and inappropriate behav-
iour. The main direct consequences would be negative
effects on revenues, disruption in the production of compo-
nents and vehicles, or reputational damage.
The BMW Group places great emphasis on protecting busi-
ness information, for instance against unauthorised access
and/or misuse. Data security is an integral part of all Group
business processes and practised in accordance with the
ISO/IEC 27001 international standard. In conjunction with
risk management requirements, risks relating to information
security, data protection and IT are systematically docu-
mented, allocated appropriate measures by the departments
concerned and continuously monitored with regard to threat
level and risk mitigation. Regular analyses and controls as
well as tight security management policies ensure an appro-
priate level of security.
However, despite continuous testing and preventive security
measures, it is impossible to completely eliminate risks in
this area. All authorised persons are required to treat infor-
mation such as confidential business, customer and em-
ployee data with great care, use information systems
securely and handle risks in a transparent manner. Uniform
requirements that apply throughout the Group are
136
BMW Group Report 2021
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Group Financial Statements
Corporate Governance
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Other Information
← = Q
Liquidity risks
← = Q
Based on the experience gained during the global financial
crisis, a liquidity concept has been drawn up, which is rigor-
ously adhered to and continuously developed. In the Finan-
cial Services segment, the use of the "matched funding prin-
ciple" ensures that liquidity risks are generally avoided.
Combined Management Report
Outlook, Risk and Opportunity Management
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Legal Risks
The growing globalisation of the BMW Group's operations
as well as of business interdependencies in general, com-
bined with the variety and complexity of legal provisions -
increasingly including import and export regulations - give
rise to a greater risk of non-compliance with applicable
legislation. A Compliance Management System is in place
across the BMW Group to ensure that its representative
bodies, executives and staff members worldwide consist-
ently act in a lawful manner. Further information on com-
pliance within the BMW Group as well as on the Compli-
ance Management System is provided in the chapter
7 Compliance and human rights.
Like all entities with international operations, the
BMW Group is confronted with legal disputes and alleged
claims relating in particular to warranty and product liabil-
ity, infringements of protected rights and proceedings initi-
ated by government agencies. Any of these could, amongst
other consequences, have an adverse impact on the
Group's reputation. Proceedings of this nature are essen-
tially typical for the sector, may result as a consequence of
realigning product or purchasing strategies to changed
market conditions, or are antitrust-related. Particularly in
the US market, class action lawsuits and product liability
risks can have substantial financial consequences and
cause damage to the BMW Group's reputation. More rigor-
ous application, interpretation of, or changes to, existing
regulations could result in a greater number of recalls.
For several years, lawsuits have been filed against BMW
Bank GmbH (BMW Bank) in which consumers claim the
withdrawal of their loan and leasing contracts on the basis
of allegedly incorrect and insufficient pre-contractual infor-
mation. The focus is on loan contracts. Since 2017, BMW
Bank has won the vast majority of these lawsuits. In No-
vember 2019, the Federal Court of Justice (BGH) adopted a
decision of principle in favour of BMW Bank, confirming the
accuracy of consumer-relevant information in loan con-
tracts. In addition, in October 2020 the BGH decided in a
case in which BMW Bank was not involved that consumers
are generally obliged to pay a compensation after a suc-
cessful withdrawal. Since the beginning of 2020, several
references for a preliminary ruling on the scope of informa-
tion obligations have been filed with the European Court of
Justice (ECJ). On September 9, 2021, the ECJ decided on
the requests for preliminary ruling concerning the require-
ments on the terms and conditions in consumer credit
agreements in particular with regard to default interest and
prepayment penalty. Based on this ruling the BGH re-
quests the ECJ for another preliminary ruling whether the
concept of abuse of rights in connection with consumer
credit agreements is still applicable under certain circum-
stances. Although this is technically not a final decision,
the BGH mentioned in the reasoning part of its decision
that it does not consider BMW Bank's terms and conditions
in consumer credit agreements to completely fulfill the re-
quirements as set by the ECJ ruling. Therefore, there is a
legal risk that borrowers might withdraw consumer credit
agreements of BMW Bank with reference to the proceeding
submitted to the ECJ and the ECJ decision as of September
9, 2021. However, the right to compensation of BMW Bank
due to the car use period of the borrower is still applicable.
The possible financial impact cannot be definitively as-
sessed at this stage.
International movements of goods require compliance with
extensive export control regulations. In addition to
goods-related restrictions, international trading may also
involve personal, country-specific and end-use-related re-
strictions. In particular, non-compliance with applicable
EU and US export control regulations could result in signif-
icant legal consequences for the BMW Group. In light of its
strong presence in the USA and China, any intensification
of the trade dispute between the two countries could be a
potential source of additional risk exposure.
The BMW Group is subject to tax and customs audits in
every country in which it operates, potentially resulting in
back taxes, retrospective customs duties, interest, penal-
ties and similar payments. Payments of this nature may,
for instance, result from the full or the partial non-recogni-
tion of intercompany transfer prices in the countries con-
cerned. Further substantive legal risks may also arise as a
result of changes in tax or customs legislation or due to the
way that legislation is interpreted by tax and customs au-
thorities or courts. In many cases, such changes can also
have a retrospective impact on calendar years that were
not yet subject to definitive audits. In order to minimise
procedural tax and customs risks, the BMW Group recently
set up a comprehensive Tax and Customs Control Frame-
work that is already being applied in Germany and will be
rolled out successively in other countries.
The BMW Group recognises appropriate levels of provision
for lawsuits and risks. In addition, a part of these risks is
insured to an economically reasonable extent. Neverthe-
less, it cannot be ruled out that damages may occur in ex-
cess of the insured amounts. In accordance with Interna-
tional Financial Reporting Standards (IFRS), the required
information is not provided if the BMW Group concludes
that disclosure of the information could seriously prejudice
the outcome of the relevant legal proceedings. Further in-
formation on contingent liabilities is provided in 7 note 38 to
the Group Financial Statements.
139
The major part of the Financial Services segment's credit fi-
nancing and leasing business is refinanced on capital mar-
kets. Liquidity risks can arise in the form of rising refinancing
costs or from restricted access to funds due to the general
market situation. The risk amount associated with liquidity
risks is classified as low.
BMW Group Report 2021
To our Stakeholders
BMW Group Report 2021
Due to the global nature of its operations, the BMW Group
is exposed to various legal risks. Legal risks may result
from non-compliance with laws or other legal require-
ments, or from legal disputes with business partners or
other market participants. If legal risks were to materialise,
they could have a high earnings impact over the two-year
assessment period. The risk amounts attached to signifi-
cant identified legal risks are classified as medium.
138
Other financial risks worth mentioning include counterparty
risks as well as those arising in connection with investments
in other entities.
The BMW Group works together with banks to ensure that
the available liquidity is optimally invested in order to hedge
against financial market risks (particularly currency, com-
modity and interest rate risks) using derivative financial in-
struments and to protect payments made in advance. Coun-
terparty risk denotes the risk that the BMW Group will not
receive, or not receive in full, the payments due to it in con-
nection with the investment and hedging transactions re-
ferred to above. An enhanced value-at-risk model is em-
ployed to measure counterparty risk, taking into account the
creditworthiness (rating) of the banks and the business vol-
umes involved. Risk is managed using a limit system, which
includes daily monitoring of the extent to which limits are
being utilised at the level of the individual counterparties.
Solvency is assured at all times throughout the BMW Group
by adhering to liquidity ratios and using a broadly diversified
range of refinancing sources. Regular measurement and
monitoring ensure that cash inflows and outflows for the
various maturities and currencies offset one another. This
approach is an integral part of the BMW Group's liquidity
concept.
The BMW Group holds equity investments of varying
amounts in numerous entities, which could give rise to risks
requiring the recognition of impairment losses.
The risk amount associated with other financial risks is clas-
sified as medium. Generally speaking revaluations of invest-
ments could give rise to opportunities with a significant
earnings impact.
Other financial risks
The liquidity position is monitored continuously and man-
aged through the Group-wide planning of financial require-
ments and funding. At present, opportunities relating to li-
quidity are not expected to have any significant earnings
impact. Further information on risks in conjunction with fi-
nancial instruments is provided in 7 note 39 to the Group Fi-
nancial Statements.
Risks can arise from fluctuations in pension obligations on
the one hand and the related pension assets on the other.
Opportunities can arise if the value of pension assets on
capital markets develops favourably or if pension obligations
decrease at a more pronounced rate than the related assets.
Pension obligations are primarily measured using a discount
rate based on market yields from high-quality corporate
bonds. These yields are subject to market fluctuations and
therefore influence the level of pension obligations. Changes
in other parameters, such as rising inflation rates and longer
life expectancy, also impact the amount as well as the dura-
tion of future pension payments. Regulatory requirements or
changes may also affect the amount of pension obligations.
The fluctuation of pension assets reflects the volatility of in-
dividual asset classes on capital markets. The broadly diver-
sified portfolio comprises investments in interest-bearing
securities, equities, real estate and other asset classes.
The risk relating to pension obligations was substantially re-
duced by the restructuring of pension commitments in Ger-
many in 2021. Under the new arrangements, employees
were given the option to switch to the Company's defined
contribution pension plan. While the latter entails the risk as-
sociated with guaranteeing a minimum rate of return, the
overall risk is lower than that arising in connection with the
defined benefit pension plan.
The risk amount attached to pension obligations is classified
as medium.
Remeasurements on the liabilities and assets sides are rec-
ognised net of deferred taxes through other comprehensive
income and hence directly in equity of the BMW Group (with-
in revenue reserves). Further information on risks in conjunc-
tion with pension provisions is provided in 7 note 32 to the
Group Financial Statements.
Risks and opportunities relating to pension obligations
Future pension obligations are financed largely via external
pension funds or trust constructs that are legally separate
from the BMW Group. Externally managed funds are invest-
ed on capital markets in a broadly diversified portfolio with a
view to enabling future pension payments to be disbursed
out of pension assets. These arrangements greatly reduce
the need to fund pension payments out of ongoing
operations.
The principal features of the BMW Group's ICS are described
below.
Basically, the aim of any internal control system is to prevent,
or reduce the probability of, potential risks from occurring.
Both the system itself and the methods applied are subject
to continuous improvement, with system effectiveness as-
sessed regularly on the basis of centralised and decentral-
ised process analyses, data analyses within the various fi-
nancial systems, and audit-related procedures.
Guidelines for recognising, measuring and allocating items
to accounts, along with the definitions of non-financial per-
formance indicators are available to all employees via the
BMW Group's intranet system. New financial reporting
standards are assessed at an early stage for their impact on
the BMW Group's accounting and financial reporting sys-
tems. Pertinent requirements are reviewed continuously and
revised at least once a year, or more frequently if required.
Responsibilities for ensuring the effectiveness of ICS proce-
dures for accounting and financial reporting processes as
well as the further development of the reporting of non-fi-
nancial performance indicators are clearly defined in a role-
based model and allocated to the relevant line and process
managers. Once a year, the managers responsible report on
their assessment of the ICS in place for accounting and fi-
nancial reporting processes, based on the results of both
internal and external audits as well as continual monitoring.
The results of the assessment are gathered and document-
ed in a centralised IT system. Any weaknesses found in the
ICS are eliminated, taking into account their potential im-
pact. Both the Board of Management and the Audit Commit-
tee are informed about the effectiveness of the ICS on an
annual basis. The Board of Management and, where appro-
priate, the Supervisory Board, are promptly informed in the
event of any significant changes to the ICS.
things, to prevent business transactions from being recorded
incorrectly, ensure the complete recognition and accurate of
business transactions in accordance with the applicable re-
quirements, and provide the basis for checking the accuracy
of consolidation procedures.
Whenever changes are made to IT systems relating to ac-
counting and financial reporting processes, the aforemen-
tioned controls are adapted to take account of new require-
ments and/or any opportunities that have arisen due to
technical advances in information technology. Moreover, the
BMW Group deploys data analysis tools to identify and
subsequently eliminate weaknesses in its processes and/or
control systems.
144
BMW Group Report 2021
Preventive controls serve to identify and eliminate weak-
nesses and omissions in processes. Detective controls on
the other hand are deployed to detect and correct any errors
in the results of those processes and are generally based on
the principle of the segregation of duties. All key relevant IT
systems incorporate controls that are designed, among other
Group-wide mandatory accounting guidelines
Controls integrated in processes and IT systems
Organisational measures incorporating the principles of
the risk-oriented segregation of duties
Process-independent monitoring measures
← = Q
Internationally acknowledged standards for internal control
systems were taken into account when designing the various
elements of the ICS deployed by the BMW Group. The sys-
tem comprises:
The BMW Group's ICS is based on the "Three Lines of De-
fence" model, including a clear definition of how the various
functions are required to interact with one another to man-
age risks. As an essential component of the second line of
defence, the ICS serves as a link between the operating units
(first line), internal audit (third line) and the external auditor.
The ICS for financial reporting has the task of ensuring that
the BMW Group's accounting and financial reporting pro-
cesses are both accurate and reliable. The ICS for non-finan-
cial reporting focuses primarily on the further development
of the processes used to gather data as the basis for
reporting non-financial performance indicators within the
BMW Group Report.
The Internal Control System* (ICS) is part of the BMW Group's
overall system of internal governance, and is based on a set
of measures and control activities that are integrated in pro-
cesses and organisational structures with a view to ensuring
the accuracy of external financial and non-financial report-
ing. The requirements for the design and structure of ICS
procedures incorporated in accounting and financial report-
ing processes as well as those used to generate selected
non-financial information included in the BMW Group Report
are defined on a Group-wide basis.
INTERNAL CONTROL SYSTEM
Corporate Governance
Other Information
Combined Management Report
Internal Control System
Group Financial Statements
To Our Stakeholders
Remuneration Report
* Disclosures pursuant to § 289 and § 315 HGB.
Combined Management Report
In addition to shares of common stock, the Company has
also issued non-voting shares of preferred stock. Further in-
formation can be found in the section "Composition of sub-
scribed capital".
Corporate Governance
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
To Our Stakeholders
145
* Disclosures pursuant to § 289 a, § 315 a HGB.
Contractual holding period arrangements also apply to
shares of common stock acquired by Board of Management
members and certain senior department heads in conjunc-
tion with share-based remuneration programmes. Remuner-
ation Report
When the Company issues non-voting shares of preferred
stock to employees in conjunction with its Employee Share
Programme, these shares are generally subject to a Com-
pany-imposed blocking period of four years, calculated from
the beginning of the calendar year in which the shares were
issued.
Restrictions affecting voting rights or the transfer of
shares
(c) Uniform payment of any other dividends on shares of
common and preferred stock, provided the shareholders
do not resolve otherwise at the Annual General Meeting
Group Financial Statements
(b) Payment of an advance dividend of € 0.02 per € 1 par
value on non-voting shares of preferred stock
in full within one year and the arrears are not paid in the sub-
sequent year alongside the full preference amount due for
that year. With the exception of voting rights, holders of
shares of preferred stock are entitled to the same rights as
holders of shares of common stock. In addition, Article 24 of
the Articles of Incorporation confers preferential treatment to
the non-voting shares of preferred stock with regard to the
appropriation of the Company's unappropriated profit. Ac-
cordingly, the unappropriated profit is required to be appro-
priated in the following order:
The Company's shares of preferred stock are shares as de-
fined in §§ 139 et seqq. AktG, which carry a cumulative pref-
erential right in terms of the allocation of profit and for which
voting rights are excluded. These shares confer voting rights
only in exceptional cases stipulated by law, in particular if the
preference amount has either not been paid or not been paid
The rights and duties of shareholders derive from the Ger-
man Stock Corporation Act (AktG) in conjunction with the
Company's Articles of Incorporation, the full text of which is
available at ≈ www.bmwgroup.com. The right of shareholders to
have their shares evidenced is excluded in accordance with
the Articles of Incorporation. The voting power attached to
each share corresponds to its par value. Each €1 of par value
of share capital represented in a vote entitles the holder to
one vote (Article 18 no. 1 of the Articles of Incorporation).
The subscribed capital (share capital) of BMW AG amoun-
ted to € 661,399,500 at 31 December 2021 (2020:
€ 659,684,500) and, in accordance with Article 4 no. 1 of the
Articles of Incorporation is sub-divided into 601,995,196
shares of common stock (91.02 %) (2020: 601,995,196;
91.26%) and 59,404,304 shares of non-voting preferred
stock (8.98 %) (2020: 57,689,304; 8.74%), each with a par
value of € 1. The Company's shares are issued to bearer.
Composition of subscribed capital
DISCLOSURES RELEVANT FOR TAKEOVERS*
AND EXPLANATORY COMMENTS
Disclosures Relevant for Takeovers
and Explanatory Comments
← = Q
Other Information
Remuneration Report
(a) Subsequent payment of any arrears on dividends on
non-voting shares of preferred stock in the order of
accruement
BMW Group Report 2021
As part of the environmental analysis as part of the strategy
process, the BMW Group analyses and takes account of
transitory risks from a regulatory perspective on a continu-
ous basis. During the financial year under report, the
BMW Group successfully completed its "Adaptation to Cli-
mate Change" project with the involvement of top manage-
ment. The physical climate risks were analysed and as-
sessed using an external assessment tool.
By rigorously aligning its corporate strategy to meet specific
sustainability targets, the BMW Group takes appropriate ac-
count of risks and opportunities in all its investments, in-
novations and corporate decisions. ]]
Physical climate risks could have a negative impact on
economic growth in the regions affected, with noticeable
unfavourable macroeconomic consequences, including a
loss of income and the threat of unemployment for con-
sumers. These factors, in turn, could reduce purchasing
power in certain regions and have a negative impact on
the BMW Group's sales volumes and operating result.
Extreme weather events at suppliers' locations world-
wide can impact component deliveries and consequently
supplies to production plants. Under these circum-
stances, key transport routes could be blocked - with im-
plications for both the supply of components and the dis-
tribution of new vehicles.
Climate change is likely to cause natural disasters to oc-
cur more frequently at our locations, for example heavy
rains and heat waves, with the risk of damage to both
inventories and products. To avoid production stoppages,
we have already taken preventive measures at our pro-
duction sites and other premises, such as the installation
of sluice gates at the plant in Chennai, India.
Physical climate risks
hand, the RCP 2.6 scenario entails high transitory risks for
the BMW Group due to stricter regulatory requirements gov-
erning carbon emissions. On the other hand, fewer physical
risks would be likely to arise given the more ambitious cli-
mate protection measures. In the RCP 8.5 scenario, how-
ever, the physical risks dominate due to insufficient climate
protection measures. Based on the BMW Group's assess-
ment, the RCP 4.5 scenario is currently seen as the most
likely and roughly corresponds to the contributions currently
committed to by each country at national level.
The so-called RCP* scenarios range from a low-emissions
scenario in line with the 2°C target (RCP 2.6), a medium
scenario with global warming of 2.4-2.7°C by the year 2100
(RCP 4.5) through to a 5°C scenario (RCP 8.5). On the one
In the Adaptation to Climate Change project, we identified
and assessed physical risks comprehensively for the first
time on the basis of two different time horizons (2030 and
2050) as well as various climate change scenarios. Three
warming pathways developed by the Intergovernmental
Panel on Climate Change (IPCC) were applied and, in ac-
cordance with the TCFD recommendation, the impact of
physical risks on the various stages of the value chain (in-
cluding real estate, logistics and suppliers) was examined.
The BMW Group focuses on both mitigating and adapting to
the consequences of climate change.
Scenario analyses for identifying climate-related opportunities
and risks
cordingly, the individual members of the Board of Manage-
ment are each charged with the task of ensuring that their
portfolios are strategically aligned with the stated objectives.
Moreover, each proposal presented to the Board of Manage-
ment is required to be assessed from a sustainability per-
spective and thus also with regard to climate-related as-
pects. Internal management within strategy
Transitory climate risks
← = Q
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
Outlook, Risk and Opportunity Management
To our Stakeholders
BMW Group Report 2021
141
141
Group Financial Statements
3,159
Other Information
A significant tightening of laws and regulations in the
BMW Group's main markets (the EU, the USA and China),
particularly in terms of carbon emissions regulations
which may also result from possible legal proceedings or
court decisions and regional vehicle purchase and usage
taxes, could have an impact on the BMW Group's range
of products and services and result in higher costs
and/or lower sales volumes. Changes in legislation and regula-
tory requirements ]]
[Any serious failure to comply with sustainability or qual-
ity standards could cause disruptions in the supply chain
or the inability of individual suppliers to deliver.
The aim is to reduce carbon emissions across all relevant
supply chains on the basis of constructive cooperation
with suppliers. It is important to point out, however, that
the BMW Group depends on receiving accurate informa-
tion from suppliers in this regard.
By reporting comprehensively and transparently in a
manner that meets potential legal requirements at an
early stage, we are better able to ensure our access to
capital markets and obtain attractive financing condi-
tions on a long-term basis. 7 BMW Group and Capital Markets
In the best interest of a circular economy, the BMW Group
intends to gradually increase its use of secondary mater-
ials and hence reduce carbon emissions at the same
time. With this strategy, we are not only contributing to-
wards achieving our decarbonisation target in the supply
chain, but also reducing our dependence on primary ma-
terials in terms of their availability and cost. 7 Circular econ-
omy and resource efficiency
By switching to lower-carbon processes and technol-
ogies at its own production plants, the BMW Group is not
only boosting efficiency, but also cutting its costs. For ex-
ample, generating its own electricity from renewable en-
ergy sources reduces the carbon footprint and minimises
dependence on external electricity sources as well as its
exposure to price fluctuations on the energy market.
7 Renewable energy
The BMW Group can exert its influence across its global
supplier network to cut carbon emissions and work to-
wards implementing decarbonisation measures. For in-
stance, it has already entered into a contractual agree-
ment with its cell manufacturers that only green
electricity will be used to produce the fifth generation of
battery cells. Supplier network and purchases and Decarbo-
nisation
-
The BMW Group's strategic planning assumptions will
endeavour to anticipate the consequences of rising car-
bon prices in the form of taxes and levies as well as po-
tential shortfalls in emissions credits under emissions
trading schemes, taking into account the assumptions
applied in its own decision-making process and its coop-
eration with suppliers. Circular economy, resource efficiency and
renewable efficiency
The BMW Group sees the growing demand for electrified
vehicles as a major opportunity. We are leveraging this
opportunity by continuously expanding our range of elec-
trified products, while at the same time pressing ahead
with the in-house development and production of electric
drive systems, batteries and battery cell prototypes. This
approach enables us to secure key know-how in new
technologies at an early stage, gain crucial systems ex-
pertise and exploit cost advantages, which could also
provide a decisive competitive edge. 7 Production network
With its flexible vehicle architectures and production sys-
tems,
the BMW Group strives to take account of fluctuat-
ing customer demand as well as regulatory and infra-
structural differences in its markets in a swift and
adaptable manner. Production network
Climate-related opportunities
The transformation to a lower-emissions economy is fun-
damentally changing certain industries. Due to the po-
tential macroeconomic consequences, the related sus-
tainability risks are seen as a threat to the stability of
financial markets. They could also have a negative im-
pact on job security as well as the financial position of
selected industries and their employees.
Stricter requirements for carbon emitters due to regula-
tory tightening could affect the reputation of the
BMW Group and make it less attractive as a sustainable
investment.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
Outlook, Risk and Opportunity Management
To our Stakeholders
BMW Group Report 2021
142
* Representative Concentration Pathways.
The global spread of electric mobility may give rise to
bottlenecks in the availability of raw materials, particular-
ly those needed to manufacture battery cells. As a result,
higher raw materials prices could also have an impact on
the BMW Group's earnings situation.
However, if the carbon price were to rise to unexpected
levels without sufficient time to plan accordingly, produc-
tion costs will be driven up, with a correspondingly nega-
tive impact on the BMW Group's sales volumes and prof-
itability. Furthermore, setting a price for carbon emissions
could result in reduced purchasing power and thus hold
down economic growth in the regions concerned.
143
Corporate Governance
14,783
Other Information
5,222
16,060
102
133
-271
539
4
52
-3
1
560
1,935
392
2,660
- 208
638
5
53
17
479
- 186
11,805
2,722
228
100
9,160
3,857
12,463
-232
56
62
-119
-456
- 838
-26
1,170
-51
-2,645
-1,365
-3,597
13
910
-257
-235
531
1,725
3,753
-713
12
Attributable to minority interest
Net profit / loss
135
11
Interest and similar income
I
920
1,520
920
1,520
24
Result from equity accounted investments
116
808
36
- 8
1,721
3,701
103
227
2,162
9,870
4,830
13,400
-390
2,009
246
2
Income taxes
Profit/loss before tax
Financial result
Other financial result
1,394
1,122
-1,232
-974
-4
-3
236
- 3
-310
-458
-165
11
Interest and similar expenses
- 1,292
-989
1,169
875
3
-613
177
2,915
1,269
-224
-354
1,243
32
3,857
12,463
2020
2021
Note
* Prior year's figure adjusted.
139
Total comprehensive income attributable to shareholders of BMW AG
Total comprehensive income
Other comprehensive income for the period after tax
Items that can be reclassified to the income statement in the future
Currency translation foreign operations
Deferred taxes *
Other comprehensive income from equity accounted investments
Costs of hedging
Derivative financial instruments
Items not expected to be reclassified to the income statement in the future
Marketable securities (at fair value through other comprehensive income)
Deferred taxes
Total comprehensive income attributable to minority interests
Remeasurement of the net liability for defined benefit pension plans
1,019
-45
Remuneration Report
31
82
81
3,241
14,864
- 616
2,401
19
- 401
-215
1,382
1,228
-423
163
106
-50
201
72
991
14
7
- 1,283
Profit/loss before financial result
Net profit/loss
FOR GROUP
412
1,202
2,844
74
177
1,992
9,150
3,775
12,382
31
- 171
Attributable to shareholders of the BMW AG
67
71
17
10
82
81
678
-201
- 173
412
-2
in € million
- 201
Basic earnings per share of common stock in €
Basic earnings per share of preferred stock in €
Dilutive effects
STATEMENT OF COMPREHENSIVE INCOME
← = Q
Other Information
Remuneration Report
Group Financial Statements Corporate Governance
Statement of Comprehensive
Income for Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
150
5.75
678
18.79
5.73
18.77
14
Diluted earnings per share of common stock in €
Diluted earnings per share of preferred stock in €
5.75
18.79
14
5.73
18.77
14
14
197
74
-66
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
148
The BMW Group has not concluded any compensation
agreements with members of the Board of Management or
with employees for situations involving a takeover offer.
Compensation agreements with members of the Board
of Management or with employees in the event of a
takeover bid
-
BMW AG has entered into an agreement with Great Wall
Motor Company Limited to establish the joint venture
Spotlight Automotive Ltd. in China. The agreement
grants an extraordinary right of termination to either joint
venture partner in the event that - either directly or indi-
rectly more than 25% of the shares of the other party
are acquired by a third party or the other party is merged
with another legal entity. The termination of the joint ven-
ture agreement may result in the sale of the shares to the
other joint venture partner or in the liquidation of the joint
venture entity.
The development collaboration agreement between
BMW AG, FCA US LLC and FCA Italy S.p.A. relating to
the development of technologies used in conjunction
with automated vehicles, may be terminated by any of
the contractual parties if certain competitors in the tech-
nology sector acquire and subsequently hold at least
30% of the voting shares of one of the other contractual
parties.
The development collaboration agreement between
BMW AG, Intel Corporation and Mobileye Vision Technol-
ogies Ltd., relating to the development of technologies
used in automated vehicles, may be terminated by any of
the contractual parties if a competitor of one of the par-
ties acquires and subsequently holds at least 30% of the
voting shares of one of the contractual parties.
Group Financial Statements
BMW AG is party to the shareholder agreement relating
to There Holding B. V., which is the majority shareholder
of the HERE Group. In accordance with the shareholder
agreement, each contractual party is required to offer its
directly or indirectly held shares in There Holding B. V. for
sale to the other shareholders in the event of a change in
control. A change in control of BMW AG arises if a person
takes over or loses control of BMW AG, with control de-
fined as (i) holding or having control over more than 50%
of the voting rights, (ii) the possibility to control more than
50% of voting rights exercisable at Annual General
Meetings on all or nearly all matters, or (iii) the right to
determine the majority of members of the Board of Man-
agement or the Supervisory Board. Furthermore, a
change in control occurs if competitors of the HERE
Group, or certain potential competitors of the HERE
Group from the technology sector, acquire at least 25%
of BMW AG. If none of the other shareholders acquire
these shares, the other shareholders are entitled to re-
solve that There Holding B. V. be dissolved.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
147
BMW AG and Mercedes-Benz Group AG have entered
into a Joint Venture Agreement relating to mobility ser-
vices, which includes the areas of car sharing, ride hailing
and charging, and entitles both Mercedes-Benz Group
AG and BMW AG (hereafter referred to as "principals") to
initiate a bidding procedure in the event that (i) the other
principal receives notice in accordance with § 33 of the
German Securities Trading Act (WpHG) that - including
shares attributed pursuant to § 34 WpHG - a sharehold-
ing of more than 50% has been attained or, in accord-
ance with § 20 AktG of the German Stock Corporation Act
(AktG) that a shareholding of more than 50% has been
attained or (ii) a shareholder or a third party - including
shares attributed pursuant to § 30 WPHG - holds more
than 50% of the voting rights or shares in the other prin-
cipal, or (iii) the other principal has concluded a control
agreement as a dependent company. The outcome of
such a bidding procedure is that the joint venture will go
to the principal making the highest bid.
Disclosures Relevant for Takeovers
and Explanatory Comments
owned equity capital which confers the power to elect a
majority of the Supervisory Board of a contractual party
or any other ownership interest that enables the acquirer
to exercise control over a contractual party or which con-
stitutes a merger or a transfer of net assets.
Corporate Governance
150 Statement of Comprehensive Income for Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
149
FINANCIAL
STATEMENTS
3
GROUP -
←三〇
Other Information
Remuneration Report
149 Income Statement for Group and Segments
231 List of investments at 31 December 2021
201 Other Disclosures
178 Notes to the Balance Sheet
176 Notes to the Statement of Comprehensive Income
169 Notes to the Income Statement
157 Accounting Principles and Policies
157 Notes to the Group Financial Statements
155 Statement of Changes in Equity for Group
153 Cash Flow Statement for Group and Segments
Balance Sheet for Group and Segments at 31 December 2021
151
228 Segment Information
Group Financial Statements
Income Statement
Framework agreements are in place with financial insti-
tutions and banks (ISDA Master Agreements) with re-
spect to trading activities with derivative financial instru-
ments. These agreements include an extraordinary right
of termination that triggers actions in the event that the
creditworthiness of the party involved is materially weak-
er following a direct or indirect acquisition of beneficially
A cooperation agreement concluded with Peugeot SA re-
lating to small (1- to 1.6-litre) petrol engines entitles each
of the cooperation partners to give extraordinary notifica-
tion of termination in the event of a competitor acquiring
control over the other contractual party and if any con-
cerns of the other contractual party regarding the impact
of the change of control on the cooperation arrange-
ments are not resolved during the subsequent discussion
process.
0.2
Direct share of
voting rights
Indirect share of
voting rights
25.62
16.63
5 Controlled entities, of which 3% or more are attributed: Susanne Klatten Beteiligungs GmbH.
4 Controlled entities, of which 3% or more are attributed: AQTON GmbH & Co. KG für Automobilwerte.
3 Controlled entities, of which 3% or more are attributed: AQTON Verwaltung GmbH, AQTON GmbH & Co. KG für Automobilwerte.
² Controlled entities, of which 3% or more are attributed: AQTON SE, AQTON Verwaltung GmbH, AQTON GmbH & Co. KG für Automobilwerte.
1 Based on voluntary notifications provided by the listed shareholders as at 31 December 2021.
The voting percentages disclosed above may have changed
subsequent to the stated date if these changes were not re-
quired to be reported to the Company. As the Company's
shares are issued to bearer, the Company is generally only
aware of changes in shareholdings if such changes are sub-
ject to mandatory notification rules.
Susanne Klatten Beteiligungs GmbH, Bad Homburg v. d. Höhe, Germany
9.0
Susanne Klatten, Germany
AQTON Verwaltung GmbH, Bad Homburg v. d. Höhe, Germany
AQTON SE, Bad Homburg v. d. Höhe, Germany
Stefan Quandt, Germany
in %
Based on the information available to the Company, the fol-
lowing direct or indirect holdings exceeding 10% of the vot-
ing rights at the end of the reporting period were held at the
stated reporting date:¹
Direct or indirect investments in capital exceeding 10%
of voting rights
= Q
↑
23
Disclosures Relevant for Takeovers
and Explanatory Comments
AQTON GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe, Germany
BMW AG acts as guarantor for all obligations arising from
the joint venture agreement relating to BMW Brilliance
Automotive Ltd. in China. This agreement grants an ex-
traordinary right of termination to either joint venture
partner in the event of a change in control at either one of
the parties, or if more than 25% of the shares of the oth-
er party are acquired by a third party - either directly or
indirectly or if the other party is merged with another
legal entity. Termination of the joint venture agreement
may lead to the dissolution of the joint venture, with an
optional purchase right for BMW (or the partner) to ac-
quire the shares of the other partner or to the liquidation
of the joint venture company.
16.64
0.2
one or more parties jointly acquire direct or indirect con-
trol of BMW AG. The term "control" is defined as the ac-
quisition of more than 50% of the share capital of
BMW AG, the right to receive more than 50% of the divi-
dend, or the right to direct the affairs of the Company or
appoint the majority of members of the Supervisory
Board.
An agreement concluded with an international consor-
tium of banks relating to a syndicated credit line, which
was not being utilised at the balance sheet date, entitles
the lending banks to give extraordinary notice to termin-
ate the credit line, such that all outstanding amounts, in-
cluding interest, would fall due with immediate effect if
Significant agreements of the Company taking effect in
the event of a change in control following a takeover bid
BMW AG is party to the following major agreements, which
contain provisions that would apply in the event of a change
in control or the acquisition of control as a result of a take-
over bid:
In accordance with Article 4 no. 5 of the Articles of Incorpor-
ation, the Board of Management is authorised, with the ap-
proval of the Supervisory Board, to increase by means of
cash contributions BMW AG's share capital during the period
up to and including 15 May 2024 by up to € 1,722,600 for the
purposes of an Employee Share Programme by issuing new
non-voting shares of preferred stock, which carry the same
rights as existing non-voting shares of preferred stock (Au-
thorised Capital 2019). The subscription rights of existing
shareholders are excluded. No conditional capital was in
place at the reporting date.
Authorisations of the Board of Management, in particu-
lar with respect to the issuing or buying back of shares
The Board of Management is authorised to buy back shares
and sell repurchased shares in situations specified in § 71
AktG, for example to avert serious and imminent damage to
the Company and/or to offer shares to persons either cur-
rently or previously employed by BMW AG or one of its affili-
ated companies.
Disclosures Relevant for Takeovers
and Explanatory Comments
← = Q
Other Information
Remuneration Report
Corporate Governance
16.6
Group Financial Statements
To Our Stakeholders
BMW Group Report 2021
146
Amendments to the Articles of Incorporation must comply
with §§ 179 et seqq. AktG. Amendments must be decided
upon by the shareholders at the Annual General Meeting
(§ 119 (1) no. 6, § 179 (1) AktG). The Supervisory Board is au-
thorised to approve amendments to the Articles of Incorpor-
ation that only affect its wording (Article 14 no. 3 of the Ar-
ticles of Incorporation). Resolutions are passed at the
Annual General Meeting by a simple majority of votes cast
unless otherwise explicitly required by binding provisions of
law or, if a majority of share capital is required, by a simple
majority of share capital represented in the vote (Article 20
no. 1 of the Articles of Incorporation).
The appointment or removal of members of the Board of
Management is based on the rules contained in §§ 84 et
seq. AktG in conjunction with § 31 of the German Co-Deter-
mination Act (MitbestG).
Statutory regulations and provisions contained in the
Articles of Incorporation governing the appointment and
removal of members of the Board of Management and
changes to the Articles of Incorporation
Control of voting rights when employees participate in
capital and do not directly exercise their control rights
Like all other shareholders, employees exercise their control
rights pertaining to shares they have acquired in conjunction
with the Employee Share Programme and/or the share-
based remuneration programme directly on the basis of rele-
vant legal provisions and the Company's Articles of
Incorporation.
Shares with special rights that confer control rights
There are no shares with special rights that confer control
rights.
20.7
20.75
Combined Management Report
Corporate Governance
Several supply and development contracts between
BMW AG and various industrial customers, all relating to
the sale of components for drivetrain systems, grant an
extraordinary right of termination to the relevant indus-
trial customer in specified cases of a change in control at
BMW AG (for example BMW AG merges with a third party
or is taken over by a third party; an automobile manufac-
turer acquires more than 50% of the voting rights or
share capital of BMW AG).
Remuneration Report
-26
-41
- 1,326
-1,385
- 240
-264
-7,237
-7,580
- 8,795
-9,233
34
9
-465
3
5
3,086
5,118
343
489
9,397
16,839
13,582
753
21,986
Other operating income
1,702
-6
-73
- 68
-2
-1
-929
- 1,003
-873
- 1,055
10
10
Other operating expenses
15
125
34
34
36
2
3
931
1,614
916
-176
14,947
37
Gross profit
2020
2020
2021
2020
2021
Note
Selling and administrative expenses
Cost of sales
Revenues
in € million
2021
supplementary information) supplementary information)
Other Entities (unaudited
Financial Services (unaudited
supplementary information)
Motorcycles (unaudited
Group supplementary information) supplementary information)
Automotive (unaudited
FOR GROUP AND SEGMENTS
INCOME STATEMENT
for Group and Segments
19,392
← = Q
Other Information
Eliminations (unaudited
2020
2021
2021
- 14,194
-19,857
3
5
30,044
-26,958
-27,749
- 1,941
32,867
2,284
80,853
- 71,456
- 78,637
- 85,408
2,748
-2,259
8
95,476
98,990
111,239
7
2020
2021
- 89,253
2020
14,783
13
-317
-32
81
13
13,401
2,401
2,401
1,718
14,864
Revenue
reserves
-1,253
-24
-1,277
1
1
1
126
-317
126
126
-1,253
-32
660
1,019
7
31
2,199
59,550
Translation
differences
-2,156
Marketable
securities
Derivative
financial
instruments
Costs of
hedging
Equity
attributable to
shareholders
of BMW AG
Minority
1,718
interest
34
868
-264
60,891
629
61,520
12,382
12,382
81
12,463
Total
- 189
Equity
attributable to
shareholders
of BMW AG
80
Comprehensive income at 31 December 2020
Dividend payments
Subscribed share capital increase out of
Authorised Capital
Premium arising on capital increase relating to
preferred stock
Other changes *
31 December 2020
* Prior year's figures adjusted.
Accumulated other equity
Other comprehensive income for the period after tax
Note
Capital
reserves
Revenue
reserves
Translation
differences
Marketable
securities
Derivative
financial
instruments
Costs of
hedging
Minority
interest
Total
reserves
Subscribed
capital
Net profit
1 January 2020
in € million
- 102
31
661
2,325
71,705
- 438
2
362
-251
74,366
766
75,132
156
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Statement of Changes
in Equity for Group
Corporate Governance
Remuneration Report
Other Information
← = Q
STATEMENT OF CHANGES
IN EQUITY FOR GROUP
-182
Capital
37
Note
-447
-27
218,348
- 18
153,823
-232,089
- 171,532
-659
-982
-219,488
-156,657
-367
1,829
-6,735
1,049
2,782
- 8,254
-3,745
-3,973
-2,629
-2,508
-307
180
- 143
718
-275
164,478
-217
224,916
-2,438
302
31
2,200
1,679
260
521
- 6,389
-3,636
- 6,208
-3,933
74
424
103
28
103
28
- 1,277
- 1,671
- 1,277
- 1,671
- 1,545
-901
-2,511
130
Subscribed
capital
-96
Effect of changes in composition of Group on cash and cash equivalents
To Our Stakeholders
Combined Management Report
Group Financial Statements
Statement of Changes
in Equity for Group
Corporate Governance
Remuneration Report
Other Information
← = Q
STATEMENT OF CHANGES
IN EQUITY FOR GROUP
in € million
BMW Group Report 2021
1 January 2021
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2021
Dividend payments
Subscribed share capital increase out of
Authorised Capital
Premium arising on capital increase relating to
preferred stock
Other changes
31 December 2021
Accumulated other equity
Net profit
155
The reconciliation of liabilities from financing activities is presented in 7 Note [35].
1 With the exception of interest for lease liabilities, interest relating to financial services business is classified as revenues/cost of sales.
2 Includes dividends received from investment assets amounting to € - million (2020: € 1.020 million).
- 40
43
Change in cash and cash equivalents
Cash and cash equivalents as at 1 January
2,472
1,501
2,487
445
608
788
13,537
12,036
9,522
9,077
2,863
2,075
Cash and cash equivalents as at 31 December
16,009
13,537
12,009
9,522
3,471
2,863
110
659
Based on current assessments, the application of the new
rules is not expected to have a material impact on the Group
Financial Statements of the BMW Group. Early adoption of
IFRS 17 is not planned.
57,667
Remuneration Report
Other Information
← = Q
which has been provisionally calculated at € 11 to 12 billion.
The expected remeasurement gain of € 7 to 8 billion will be
recognised in the financial year 2022 on the line item "Result
on investments" within the financial result.
The fair values of the assets acquired and liabilities assumed
at the acquisition date are currently in the process of being
measured. The balance sheet values at 31 December 2021
are included in 7 note 24. The remeasurement of acquired
assets and liabilities will give rise primarily to the recognition
of reacquired rights and dealership relationships as intangi-
ble assets. Other fair value adjustments will also be recog-
nised, mainly for property, plant and equipment and invento-
ries. Due to the proximity of the acquisition date and the date
on which these financial statements were authorised for
issue, further information is not yet available for disclosure
and will be provided in the BMW Group's next quarterly
statement. Adjustments to the fair value may also arise over
the course of the financial year 2022 as the fair value meas-
urement process is finalised.
Following the business combination, minority interests in the
equity capital of BMW Automotive Finance (China) Co. Ltd.
and in Herald International Financial Leasing Co., Ltd. will
change to 10.5% in each case. As the two entities are
already included in the Group Financial Statements as sub-
sidiaries, the change will be recognised through Group equity
without any impact on profit or loss.
04 Foreign currency translation and measurement
The financial statements of consolidated companies which
are presented in a foreign currency are translated using the
modified closing rate method. Under this method, assets
and liabilities are translated at the closing exchange rate,
whilst income and expenses are translated at the average
exchange rate. Differences arising on foreign currency trans-
lation are presented in "Accumulated other equity".
In the single entity accounts of BMW AG and its subsidiaries,
foreign currency receivables and payables are measured on
initial recognition using the exchange rate prevailing at the
date of first-time recognition. Advance payments to suppli-
ers or from customers in a foreign currency that result in the
addition of non-monetary assets or liabilities are recorded at
1 Euro =
US Dollar
Corporate Governance
British Pound
Russian Rouble
Korean Won
the exchange rate prevailing at the date of payment. At the
end of the reporting period, foreign currency receivables and
payables are measured using the closing exchange rate. The
resulting unrealised gains and losses, as well as realised
gains and losses arising on settlement, are recognised in the
income statement, in line with the underlying substance of
the transaction. Non-monetary balance sheet items denom-
inated in foreign currencies are rolled forward on the basis of
historical exchange rates.
The exchange rates of currencies which have a material
impact on the Group Financial Statements were as follows:
Closing rate
Average rate
31.12.2021
31.12.2020
2021
2020
Chinese Renminbi
1.14
Group Financial Statements
Notes to the Group
Financial Statements
To Our Stakeholders
-
An entity is classified as an associated company if BMW AG
either directly or indirectly – has the ability to exercise sig-
nificant influence over the entity's operating and financial
policies. As a general rule, the Group is assumed to have
significant influence if it holds 20% or more of the entity's
voting power.
Joint operations and joint ventures are forms of joint arrange-
ments. Such an arrangement exists when a BMW Group
entity jointly carries out activities with a third party on the
basis of a contractual agreement.
In the case of a joint operation, the parties that have joint
control of the arrangement have rights to the assets, and
obligations for the liabilities, relating to the arrangement.
Assets, liabilities, revenues and expenses of a joint opera-
tion are recognised proportionately in the Group Financial
Statements on the basis of the BMW Group entity's rights
and obligations (proportionate consolidation). The impact of
joint operations on the Group Financial Statements are of
minor significance.
The BMW Group's largest joint operation is Spotlight Auto-
motive Limited (Spotlight), which has been operated jointly
with the Chinese automobile manufacturer Great Wall Motor
Company Limited (Great Wall) since 2019, jointly developing
and manufacturing electric vehicles in China. The BMW Group
and Great Wall each hold 50% of the joint operation's equity.
In addition to electric MINI vehicles, Spotlight will in future
also develop and produce electric vehicles for Great Wall.
In the case of a joint venture, the parties which have joint
control only have rights to the net assets of the arrangement.
Associated companies and joint ventures are accounted for
using the equity method, with measurement on initial recog-
nition based on acquisition cost.
On 30. September 2021, the BMW Group signed an agree-
ment with the Huachen Group to acquire all of the shares of
Brilliance Automobile Manufacturing Co, Ltd., a Huachen
Group subsidiary. The acquisition includes land usage rights
as well as buildings and production facilities of a Huachen
Group vehicle plant at the Shenyang site. The transaction is
expected to be completed in the first half of 2022 after all the
necessary regulatory approvals have been obtained.
The other changes to the Group reporting entity do not have
a material impact on the results of operations, financial posi-
tion and net assets of the Group.
03 Increased shareholding in BMW Brilliance
Automotive Ltd.
Combined Management Report
On 11 February 2022, via the Group company BMW Holding
B. V., the BMW Group increased its shareholding in the joint
venture BMW Brilliance Automotive Ltd. (BMW Brilliance)
from 50% to 75% with the acquisition of a further 25% of
BMW Brilliance's shares. On 11 October 2018, the BMW Group
signed an agreement with its joint venture partner, a wholly
owned subsidiary of Brilliance China Automotive Holdings
Ltd. (CBA), to acquire these shares. The agreement was
approved at the CBA shareholders' meeting on 18 January
2019.
a result of which it now has control over BMW Brilliance.
BMW Brilliance will therefore be fully consolidated as a sub-
sidiary in the BMW Group Financial Statements with effect
from 11 February 2022. The contractual term of the joint ven-
ture, which previously ran until 2028, has been extended to
2040.
BMW Brilliance manufactures BMW brand models primarily
for the Chinese market at its two vehicle production plants as
well as petrol engines and high-voltage batteries at a sepa-
rate facility.
The strategic objective of the acquisition is to further
strengthen the BMW Group's long-term collaboration with a
partner in China, to expand production capacities at the
existing locations in Shenyang and to systematically increase
the local production of further models including New Energy
Vehicles.
Since the acquisition took place prior to the date on which
the financial statements were approved for publication, this
report contains disclosures relating to the business combi-
nation, even though BMW Brilliance will not be fully consoli-
dated until the financial year 2022.
The consideration paid for the additional 25% stake totals
€ 3.7 billion, including hedging effects, and has been settled
entirely in cash.
Cash and cash equivalents acquired totalled approximately
€ 8.7 billion.
As the BMW Group already held 50% of the shares in BMW
Brilliance prior to the acquisition, the transaction constitutes
a business combination achieved in stages (step acquisi-
tion).
In this context, the Group's 50% shareholding in BMW Bril-
liance at the acquisition date will be measured at fair value,
159
BMW Group Report 2021
The previous joint venture requirement came to an end with
effect from 1 January 2022. The amended joint venture
agreement came into force and the formal transfer of shares
was completed on 11 February 2022, following the issuance
of an amended "business license". Since that date, the
BMW Group has held a 75% majority of the voting rights, as
1.23
1.18
1.14
a Financial reporting standards applied for the first time in the
financial year 2021:
Standard/Interpretation
Amendments to IFRS 9, IAS 39,
IFRS 7, IFRS 4 and IFRS 16
Interest Rate Benchmark
Reform Phase 2
-
In August 2020, the IASB published the Amendment Stand-
ard Interest Rate Benchmark Reform (IBOR) – Phase 2. The
amendments contain a number of reliefs to mitigate the
impact on the accounting treatment of hedge relationships,
financial instruments and lease liabilities resulting from the
reform of interest rate benchmarks.
The BMW Group is impacted by the reform of interest rate
benchmarks primarily in the area of financial liabilities and
related interest rate hedges. For a significant proportion of
these instruments, the previous benchmark interest rate was
replaced by an alternative interest rate in 2021.
The adoption of the rules contained in the amended Stand-
ard means that the existing hedging relationships can be
continued and the contractual changes arising due to the
interest rate benchmark reform do not therefore have any
direct impact on profit or loss.
Further explanatory comments on the impact of the interest
rate benchmark reform are provided in 7 note 39.
05 Financial reporting rules
The adoption of other financial reporting Standards or
Revised Standards in the financial year 2021 did not have
any significant impact on the BMW Group Financial State-
Date of issue by IASB Mandatory application IASB Mandatory application EU
27.08.2020
01.01.2021
01.01.2021
b Financial reporting pronouncements issued by the IASB, but
not yet applied
In May 2017, the IASB published IFRS 17 Insurance Con-
tracts. The Standard replaces IFRS 4 and contains new rules
relating to recognition, measurement, presentation and dis-
closure requirements for insurance contracts. The new rules
are mandatory for financial years beginning on or after 1 Jan-
uary 2023. In a Group-wide project, the BMW Group is cur-
rently examining the impact of adopting IFRS 17 for existing
agreements and, where applicable, the impact on financial
reporting.
Similarly, other financial reporting standards issued by the
IASB and not yet applied are not expected to have any sig-
nificant impact on the BMW Group Financial Statements.
06 Accounting policies, assumptions, judgements and
estimations
Revenues from customer contracts include in particular rev-
enues from the sale of products (primarily new and pre-
owned vehicles and related products) as well as revenues
from services. Revenue is recognised when control is trans-
ferred to the dealership or retail customer. In the case of
sales of products, this is usually at the point in time when the
risks and rewards of ownership are transferred. Revenues
are stated net of settlement discount, bonuses and rebates
as well as interest and residual value subsidies. The consid-
eration arising from these sales usually falls due for payment
immediately or within 30 days. In exceptional cases, a longer
payment may also be agreed. In the case of services, control
is transferred over time. Consideration for the rendering of
services to customers usually falls due for payment at the
beginning of a contract and is therefore deferred as a con-
tract liability. The deferred amount is released over the ser-
vice period and recognised as revenue in the income state-
ment. As a rule, amounts are released on the basis of the
expected expense trend, as this best reflects the perfor-
mance of the service. If the sale of products includes a deter-
minable amount for services (multiple-component con-
tracts), the related revenues are deferred and recognised as
income in the same way. Variable consideration compo-
nents, such as bonuses, are measured at the expected
value, and in the case of multi-component contracts, allo-
cated to all performance obligations unless directly attribut-
able to the sale of a vehicle.
- 91
ments.
Argentina has fulfilled the definition of a hyperinflationary
economy since 1 July 2018. Since that date, IAS 29 (Financial
Reporting in Hyperinflationary Economies) has therefore
been applied for the BMW subsidiary in Argentina. The price
indices published by the Federación Argentina de Consejos
Profesionales de Ciencias Económicas (FACPCE) are used
to adjust non-monetary assets and liabilities and items in
the income statement. The resulting effects are not material
for the BMW Group.
← = Q
Other Information
0.84
0.90
0.86
0.89
7.22
8.00
7.63
7.87
85.23
90.54
87.18
82.71
1,351.64
1,329.79
1,353.58
1,345.42
160
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
An entity is deemed to be controlled if BMW AG - either
directly or indirectly has power over it, is exposed or has
rights to variable returns from it and has the ability to influ-
ence those returns.
(joint) control, the BMW Group undertakes a new assess-
ment.
← = Q
Other Information
- 1,646
- 25
- 1,671
1
1
1
38
38
38
- 31
- 1,646
50
15
-11
4
31
660
2,199
59,550
- 2,156
34
868
-4
3,241
82
3,159
- 760
29
15
-447
59,324
583
59,907
3,775
3,775
82
3,857
-215
- 1,396
5
803
187
-616
-616
3,560
- 1,396
5
803
187
-264
2,161
60,891
61,520
185
206
Included for the first time in 2021
No longer included in 2021
16
16
1
16
17
Included at
31 December 2021
21
20
205
All consolidated subsidiaries have the same year-end as
BMW AG with the exception of BMW India Private Ltd. and
BMW India Financial Services Private Ltd., whose year-ends
are 31 March in accordance with local legal requirements.
Interim financial statements are prepared as at 31 December
for the two companies with divergent reporting dates.
When assessing whether an investment gives rise to a con-
trolled entity, an associated company, a joint operation or a
joint venture, the BMW Group considers contractual arrange-
ments and other circumstances, as well as the structure and
legal form of the entity. Discretionary decisions may also be
required. If indications exist of a change in the judgement of
158
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
185
Total
Foreign
Germany
157
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
NOTES TO THE GROUP FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES AND POLICIES
01 Basis of preparation
The consolidated financial statements of Bayerische
Motoren Werke Aktiengesellschaft (BMW Group Financial
Statements or Group Financial Statements) at 31 December
2021 were drawn up in accordance with International Finan-
cial Reporting Standards (IFRS), as endorsed by the Euro-
pean Union (EU), and the supplementary requirements of
§ 315 e (1) of the German Commercial Code (HGB). The
Group Financial Statements and Combined Management
Report will be submitted electronically to the operator of the
Federal Gazette and are accessible via the website of the
Company Register. Bayerische Motoren Werke Aktienge-
sellschaft (BMW AG), which has its seat in Germany, Munich,
Petuelring 130, is registered in the Commercial Register of
the District Court of Munich under the number HRB 42243.
BMW AG manufactures automobiles and motorcycles in the
premium segment.
The Group currency is the euro. All amounts are disclosed in
millions of euros (£ million) unless stated otherwise.
Key figures presented in the report have been rounded in
accordance with standard commercial practise. In certain
cases, this may mean that values do not add up exactly to
the stated total and that percentages cannot be derived from
the values shown.
The income statement for the BMW Group and segments is
presented using the cost of sales method.
In order to provide a better insight into the results of opera-
tions, financial position and net assets of the BMW Group,
and going beyond the requirements of IFRS 8 (Operating
Segments), the Group Financial Statements also include an
income statement and a balance sheet for the Automotive,
Motorcycles, Financial Services and Other Entities seg-
ments. The Group Cash Flow Statement is supplemented by
a statement of cash flows for the Automotive and Financial
Services segments. Inter-segment transactions relate pri-
marily to internal sales of products, the provision of funds for
Group companies and the related interest. A description of
the nature of the business and the major operating activities
of the BMW Group's segments is provided in note 45
("Explanatory notes to segment information").
Approval for the publication of the Group Financial State-
ments was granted by the Board of Management on 8 March
2022.
02 Group reporting entity and consolidation principles
The BMW Group Financial Statements include BMW AG and
all material subsidiaries over which BMW AG - either directly
or indirectly exercises control. This also includes 59 struc-
tured entities, consisting of asset-backed financing arrange-
ments and special purpose funds.
-
In relation to fully consolidated companies, the following
changes took place in the Group reporting entity in the finan-
cial year 2021:
Included at
31 December 2020
629
- 185
Other assets
-16
45,724
913
- 829
759
63,133
69,770
81,807
86,173
Current assets
2,863
3,471
5
9
9,522
12,009
46,661
520
58,775
Total assets
229,527 216,658
To Our Stakeholders
BMW Group Report 2021
152
- 88,855 - 83,264
-152,215 - 148,919
-83,216
-88,668
-48
13,537
-187
105,593
147,617
153,437
1,502
1,394
111,225
121,318
392
200
52,625
1,147
54,364
105,233
16,009
Cash and cash equivalents
56,589
520
612
542
4,152
4,925
5,108
5,800
Current tax
26
36,252
35,705
36,252
35,705
25
Receivables from sales financing
100
Financial assets
Combined Management Report
27
606
5,952
5,425
2
1,146
64
83
N│I
1,529
3
35,592
9,110
8,941
28
Other assets
342
300
33,747
94
Group Financial Statements
Balance Sheet for Group and Segments
at 31 December 2021
Remuneration Report
50,296
61,520
75,132
Equity
629
766
Minority interest
60,891
74,366
31
Equity attributable to shareholders of BMW AG
- 1,518
-325
31
Accumulated other equity
41,117
17,324
15,555
25,264
33
Other provisions
- 16,541
-17,752
21,389
338
108
49
59,550
35
31
3,197
1,073
3,693
1,247
32
Pension provisions
109
71,705
31
Revenue reserves
2021
Note
in € million
information)
information)
information)
Eliminations
(unaudited supplementary (unaudited supplementary (unaudited supplementary (unaudited supplementary (unaudited supplementary
information)
information)
2020
Other Entities
Motorcycles
Automotive
Group
AND SEGMENTS AT 31 DECEMBER 2021
BALANCE SHEET FOR GROUP
← = Q
Other Information
Financial Services
Corporate Governance
2021
2021
2,199
2,325
31
Capital reserves
660
661
31
2020
Subscribed capital
2020
2021
2020
2021
2020
2021
2020
EQUITY AND LIABILITIES
219
91
1,979
438
21,371
21,885
21,850
22,390
22
1
377
374
155
167
11,809
12,438
12,342
12,980
401
67
78
23
1,241
Receivables from sales financing
Other investments
3,585
5,112
3,585
5,112
21
24
Investments accounted for using the equity method
-6,764
-7,317
48,759
52,017
41,995
44,700
24
22
Leased products
Property, plant and equipment
Financial Services
Motorcycles
Automotive
Group
in € million
AND SEGMENTS AT 31 DECEMBER 2021
BALANCE SHEET FOR GROUP
Other Entities
← = Q
Remuneration Report
Corporate Governance
Group Financial Statements
Balance Sheet for Group and Segments
at 31 December 2021
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
151
Other Information
735
Eliminations
(unaudited supplementary (unaudited supplementary (unaudited supplementary (unaudited supplementary (unaudited supplementary
information)
information)
information)
Intangible assets
ASSETS
2020
2021
2020
2021
2020
information)
2021
2021
2020
2021
2020
2021
Note
information)
2020
6,061
4,711
21
- 1,873
131
41,860
50,869
46,818
100,956
107,713
589
635
-1,418
48,092
134,851
143,354
Non-current assets
38,882
2,929
2,649
33
51,548
30
-42,316
-63,360
2,076
2,298
2,261
30
Trade receivables
818
404
-46,467
687
13,391
14,868
14,896
15,928
29
Inventories
- 65,655
656
7,206
2,861
1,216
2,644
1,715
26
Financial assets
- 10,934
-57
-96
48,082
577
51,808
48,025
51,712
25
-11,740
6,938
6,899
20
I
2,057
559
159
1,302
28
39
550
618
3,196
3,418
I
2,459
13
Deferred tax
- 15
-18
1,939
997
161
2,202
6,488
12,583
6,268
1,810
-1,454
-11
-34
- 1,256
1,115
- 1,440
1,122
87
129
754
- 1,425
-26
1,047
- 1,432
13,251
8,178
3,259
2,762
Change in other operating assets and liabilities
Cash inflow/outflow from operating activities
- 1,526
- 1,192
1,799
6
-311
965
4,192
926
4,184
1,355
- 996
762
-841
433
-76
-563
370
- 1,032
422
438
-43
119
160
-16
191
1
- 1,602
15,903
BMW Group Report 2021
Change in other financial liabilities
Cash inflow/outflow from financing activities
Effect of exchange rate on cash and cash equivalents
2021
- 6,619
2020
- 6,150
2021
-6,439
2020
- 5,990
2021
-12
2020
-14
54
53
43
45
11
8
40
34
Repayment of non-current financial liabilities
154
Proceeds from issue of non-current financial liabilities
Intragroup financing and equity transactions
To Our Stakeholders
Combined Management Report
Group Financial Statements
Cash Flow Statement for Group
and Segments
Corporate Governance
Remuneration Report
Other Information
← = Q
CASH FLOW STATEMENT
FOR GROUP AND SEGMENTS
Automotive
Financial Services
Group (unaudited supplementary information) (unaudited supplementary information)
in € million
Total investment in intangible assets and property, plant and equipment
Proceeds from subsidies for intangible assets and property, plant and equipment
Proceeds from the disposal of intangible assets and property, plant and equipment
Expenditure for investment assets
Proceeds from the disposal of investment assets and other business units²
Investments in marketable securities and investment funds
Proceeds from the sale of marketable securities and investment funds
Cash inflow/outflow from investing activities
Payments into equity
Payment of dividends for the previous year
Interest paid¹
39
- 1,016
- 920
2021
16,060
Group (unaudited supplementary information) (unaudited supplementary information)
Financial Services
Automotive
Change in provisions
Change in trade payables
Change in trade receivables
Change in inventories
Changes in working capital
Change in receivables from sales financing
Change in leased products
Result from equity accounted investments
Other non-cash income and expense items
Depreciation and amortisation of tangible and intangible assets
Other interest and similar income/expenses¹
Interest received¹
Income taxes paid
Profit/loss before tax
in € million
FOR GROUP AND SEGMENTS
CASH FLOW STATEMENT
2020
5,222
← = Q
2021
2021
152
115
104
78
3
2
283
220
163
130
- 1,513
- 1,423
-382
- 1,805
- 1,605
-3,217
1,725
3,753
2,722
11,805
2020
2020
-1,282
Other Information
Corporate Governance
10
892
42,169
68,819
73,588
797
727
50,589
6,495
6,139
6,341
5,974
35
46
-713
99
-470
94
6,944
6
- 1,520
- 920
- 1,520
12,959
9
Remuneration Report
-187
Total equity and liabilities
Group Financial Statements
Cash Flow Statement for Group
and Segments
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
153
.148,919
-152,215
- 83,071
- 88,809
- 83,023
-88,622
21,797
34,829
105,233
22,943
38,456
105,593
147,617
153,437
1,502
1,394
111,225
121,318
216,658
229,527
-48
1
1
-158
37
Trade payables
15,418
25,178
24,428
897
1,462
38,986
41,121
35
Financial liabilities
18
81
192
140
537
700
747
921
34
Current tax
46
4
388
460
10,932
100
8,644
7,365
- 199
1
34
-1
263
1,328
260
1,327
-271
-925
71,963
76,466
Current provisions and liabilities
47,666
319
240
34,830
34,517
16,092
16,744
36
Other liabilities
894
378
378
9,650
109
6,960
6,175
36
Other liabilities
41,202
17,730
18,909
2
2,087
2,247
67,390
62,342
35
Financial liabilities
88
2,812
3,426
697
1,515
509
1,458
13
Deferred tax
146
152
74
110
5,676
5,095
6,739
7,270
7,494
6,748
33
Other provisions
- 49,307
52,504
- 46,214
-15
- 3,078
-3,571
-18
-42,065
-45,654
78
47,588
1,011
49,015
41,873
- 176
63,243
705
667
19,519
18,518
83,175
77,929
Non-current provisions and liabilities
475
42,506
40,003
522
524
62,525
- 132
Group Financial Statements
Notes to the Group
Financial Statements
In the opinion of the EU Commission, the carmakers con-
cerned within the framework of what was actually legiti-
mate technical cooperation in the development of SCR tech-
nology (SCR: selective catalytic reduction) created an
undue degree of transparency with regard to the sizes of
their AdBlue tanks, the range that can be achieved with a full
tank and the assumed average AdBlue consumption,
thereby violating EU competition law. The amount of the pro-
vision exceeding the fine was reversed with income state-
ment effect in the year under report. The fine was paid in July
2021, thereby concluding the EU Commission's proceedings.
Other Information
← = Q
compared to total Group cost of sales, they have not been
disclosed separately in the income statement.
Research and development expenses are as follows:
10 Other operating income and expenses
Other operating income and expenses comprise the follow-
ing items:
in € million
2021
2020
in € million
2021
2020
2020
Exchange gains
326
Research and development expenditure
6,870
6,279
Income from the reversal of provisions
1,162
114
New expenditure for capitalised develop-
ment costs
-2,506
-2,300
232
Income from the reversal of impairment
losses and write-downs
Manufacturing costs
46,878
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
170
Impairment losses recognised in the income statement 2021
in connection with receivables from sales financing
amounted to € 103 million (2020: € 646 million). In view of
the fact that the impairment losses are of minor importance
Cost of sales is reduced by public-sector subsidies in the
form of reduced taxes on assets and reduced consump-
tion-based taxes amounting to € 118 million (2020:
€ 105 million).
85,408
89,253
1,345
1,401
2,971
51,361
2,192
1,591
Expenses for service contracts,
telematics and roadside assistance
Warranty expenditure
Other cost of sales
Cost of sales
5,689
6,299
1,960
1,643
to financial services business
Research and development expenses
thereof: interest expense relating
27,114
26,409
Cost of sales relating to financial
services business
Remuneration Report
Corporate Governance
10
Amortisation
-98
Selling expenses
5,324
5,300
Sundry operating expenses
-272
Administrative expenses
3,909
3,495
Other operating expenses
-1,055
Loss on the disposal of assets
-47
- 117
- 266
- 873
Other operating income and expenses
647
43
expenses
9,233
8,795
Income from the reversal of and expenses for the recognition
of impairment allowances and write-downs relate mainly to
impairment allowances on receivables.
Impairment losses recognised on receivables from contracts
with customers amounted to € 7 million (2020: € 47 million).
The expense for additions to provisions includes litigation
and other legal risks. Income from the reversal of provisions
includes income arising on the reassessment of risks from
legal disputes.
In 2019, a provision of approximately € 1.4 billion was recog-
nised in connection with EU Commission anti-trust proceed-
ings which resulted in an increase in other operating
expenses in the financial year 2019 (see also note 10 to the
BMW Group Financial Statements for the financial year
2019). In this antitrust investigation, the EU Commission had
alleged that five German car manufacturers colluded with
the aim of restricting competition for innovation with regards
to certain exhaust treatment systems for petrol- and die-
sel-driven passenger vehicles. The investigation was solely
concerned with possible infringements of competition law.
There were no allegations that the BMW Group conducted a
deliberate and unlawful manipulation of the emissions con-
trol system. On the basis of BMW AG's detailed submissions,
the EU Commission dropped most of its charges. The pro-
ceedings were settled on 8 July 2021, and a fine amounting
to approximately € 373 million was issued.
-
Total selling and administrative
164
2020
in € million
1,935
1,710
Gains on the disposal of assets
13
30
Research and development expenses
6,299
5,689
Sundry operating income
285
282
2021
09 Selling and administrative expenses
Other operating income
1,702
916
Exchange losses
-204
- 286
Expense for additions to provisions
-474
- 157
Expense for impairment losses and
write-downs
-7
Selling and administrative expenses relate mainly to expenses
for marketing and communication, personnel and IT.
1,411
Finance leases, on the other hand, are accounted for as a
sale. At the lease commencement date, revenues are recog-
nised at the amount of the fair value of the leased asset and
reduced by any unguaranteed residual value of vehicles that
are expected to be returned to the Group at the end of the
lease term. In addition, initial direct costs are recognised as
cost of sales at the lease commencement date.
BMW Group Report 2021
Cash and cash equivalents comprise mainly cash on hand
and cash at bank with an original term of up to three months.
With the exception of money market funds, cash and cash
equivalents are measured at amortised cost.
Financial liabilities, with the exception of lease liabilities,
are measured on first-time recognition at their fair value. For
these purposes, transaction costs are taken into account
except in the case of financial liabilities allocated to the cat-
egory "measured at fair value through profit or loss". Subse-
quent to initial recognition, liabilities are - with the exception
of derivative financial instruments - measured at amortised
cost using the effective interest method.
Provisions for pensions are measured using the projected
unit credit method. Under this method, not only obligations
relating to known vested benefits at the reporting date are
recognised, but also the effect of future expected increases
in pensions and salaries. The calculation is based on inde-
pendent actuarial valuations which take into account the rel-
evant biometric factors.
In the case of funded plans, the pension obligation is offset
against plan assets measured at their fair value. If the plan
assets exceed the pension obligation, the surplus is tested
for recoverability.
In the event that the BMW Group has a right of reimburse-
ment or a right to reduce future contributions, it reports an
asset (within Other financial assets), measured on the basis
of the present value of the future economic benefits attached
to the plan assets. For funded plans, in cases where the obli-
gation exceeds plan assets, a liability is recognised under
pension provisions.
167
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Inventories also include vehicles held for sale in the financial
services business, measured at their amortised cost or lower
net realisable value.
Other Information
In the financial year 2021, as part of a modernisation of the
pension plan model in Germany, the previous pension enti-
tlement trend (Festbetragstrend) was converted - with the
exception of one remaining component – into a career trend.
Net interest expense on the net defined benefit liability or
net interest income on the net defined benefit assets are
presented separately within the financial result.
All other costs relating to allocations to pension provisions
are allocated to costs by function in the income statement.
Past service cost arises where a BMW Group company intro-
duces a defined benefit plan or changes the benefits paya-
ble under an existing plan. This cost is recognised immedi-
ately in the income statement.
Similarly, gains and losses arising on the settlement of a
defined benefit plan are recognised immediately in the
income statement.
Remeasurement of the net liability can result from changes
in the present value of the defined benefit obligation, the fair
value of the plan assets or the asset ceiling. Remeasure-
ment can result, amongst others, from changes in financial
and demographic parameters, as well as changes following
the portfolio development. Remeasurements are recognised
immediately through other comprehensive income and ulti-
mately in equity (within revenue reserves).
Other provisions are recognised when the BMW Group has
a present legal or factual obligation towards a third party
arising from past events, the settlement of which is proba-
ble, and when the amount of the obligation can be reliably
estimated. Provisions with a remaining period of more than
one year are measured at their net present value.
The measurement of provisions for statutory and non-stat-
utory warranty obligations (statutory, contractual and
voluntary) involves estimations. In addition to manufacturer
warranties prescribed by law, the BMW Group offers various
further standard (assurance-type) warranties depending on
the product and sales market. No provisions are recognised
for additionally offered service packages that are treated as
separate performance obligations.
Provisions for statutory and non-statutory warranties are
recognised at the point in time when control over the goods
is transferred to the dealership or retail customer or when it
is decided to introduce new warranty measures. With respect
to the level of the provision, estimations are made in particu-
lar based on past experience of damage claims and pro-
cesses. Future potential repair costs and price increases per
product and market are also taken into account. Provisions
for warranties for all companies of the BMW Group are
adjusted regularly to take account of new information, with
the impact of any changes recognised in the income state-
ment. Further information is provided in 7 note 33. Similar esti-
mates are also made in conjunction with the measurement
of expected reimbursement claims.
The recognition and measurements of provisions for litiga-
tion and liability risks necessitates making assumptions in
order to determine the probability of liability, the amount of
claim and the duration of the legal dispute. The assumptions
made, especially the assumption about the outcome of legal
proceedings, are subject to a high degree of uncertainty. The
appropriateness of assumptions is regularly reviewed, based
on assessments undertaken both by management and
external experts, such as lawyers. If new developments arise
in the future that result in a different assessment, provisions
are adjusted accordingly.
If the recognition criteria relevant for provisions are not ful-
filled and the outflow of resources on fulfilment is not unlikely,
the potential obligation is disclosed as a contingent liability.
← = Q
Related party disclosures comprise information on associ-
ated companies, joint ventures and non-consolidated sub-
sidiaries as well as individuals which have the ability to exer-
cise a controlling or significant influence over the financial
and operating policies of the BMW Group. This includes all
persons in key positions of the Company, as well as close
members of their families or intermediary entities.
Work in progress and finished goods are stated at the lower
of manufacturing cost and net realisable value. Manufactur-
ing cost comprises all costs which are directly attributable to
the manufacturing process as well as an appropriate propor-
tion of production-related overheads. This includes produc-
tion-related depreciation and amortisation and an appropri-
ate proportion of administrative and social costs. Financing
costs are not included in the acquisition or manufacturing
cost of inventories.
As a general rule, each income tax treatment is considered
independently when accounting for uncertainties in income
taxes. If it is not considered probable that an income tax
treatment will be accepted by the local tax authorities, the
BMW Group uses the most likely amount of the tax treatment
when determining taxable profit and the tax base.
Fair values are determined on the basis of valuation models.
Observable market price, tenor and currency basis spreads
are taken into account in the measurement of derivative
financial instruments. Furthermore, the Group's own credit
risk and that of counterparties is taken into account on the
basis of credit default swap values for market contracts with
matching terms.
The BMW Group applies the option to recognise the credit
risks arising from the fair values of a group of derivative
financial assets and liabilities on the basis of their total net
amount. Portfolio-based valuation adjustments (credit valu-
ation adjustments and debit valuation adjustments) to the
individual derivative financial assets and financial liabilities
are allocated using the relative fair value approach (net
method).
Where hedge accounting is applied, changes in fair value of
derivative financial instruments are presented as part of
other financial result in the income statement or within other
comprehensive income as a component of accumulated
other equity, depending on whether the hedging relationship
is classified as a fair value hedge or a cash flow hedge.
Fair value hedges are mainly used to hedge interest rate
risks relating to financial liabilities. The currency basis is not
designated as part of the hedging relationship in the case of
cross currency interest rate hedges accounted for as fair
value hedges. Accordingly, changes in the market value of
such components are recorded as costs of hedging within
accumulated other equity. Amounts accumulated in equity
are reclassified to other financial result within the income
statement over the term of the hedging relationship.
In addition, for selected fixed-interest assets, a portion of the
interest rate risk is hedged on a portfolio basis in accordance
with IAS 39. The designated hedged items (underlying
transactions) are reported in the balance sheet as receiva-
bles from sales financing or financial liabilities. Interest rate
risks are hedged on the basis of the present value of net
cash flows relating to fixed-income assets (on the asset
side) less cash flows relating to variable-rate financing (on
the liabilities side). The net cash flow determined in this way
is hedged by purchasing corresponding interest rate swaps
that have the effect of reducing the interest rate risk. Hedge
relationships are terminated and redesignated on a monthly
basis at the end of each reporting period, thereby taking
account of the constantly changing content of each portfolio.
Fair value hedge ineffectiveness is generally recognised in
other financial result.
-
-
The time values of option transactions and the interest com-
ponent including the currency basis of forward currency
contracts are not designated as part of the hedging relation-
ship in the case of currency hedges accounted for as cash
flow hedges. Changes in the fair value of such components
are recorded as costs of hedging on a separate line within
accumulated other equity. Amounts recorded in accumulated
other equity from currency hedges are reclassified to cost of
sales when the related hedged item is recognised in profit or
loss.
In the case of raw materials hedges that are accounted for as
cash flow hedges, the hedging instruments are designated in
full as part of the hedging relationship. As an exception to this
general rule, the interest component of raw materials deriva-
tive instruments redesignated in conjunction with the first-
time application IFRS 9 was not designated as part of the
166
Inventories of raw materials, supplies and goods for resale
are stated at the lower of average acquisition cost and net
realisable value.
BMW Group Report 2021
Combined Management Report
Group Financial Statements Corporate Governance
Notes to the Group
Financial Statements
Remuneration Report
Other Information
← = Q
hedging relationship. Changes in the fair value of this compo-
nent are recorded as costs of hedging on a separate line
within accumulated other equity. Amounts recorded in accu-
mulated other equity are included in the carrying amount of
inventories on initial recognition.
Ineffectiveness arising on cash flow hedges is recognised
directly in cost of sales, whereas the impact of prematurely ter-
minated hedging relationships is recognised in other operating
income and expenses.
Deferred income taxes are recognised for all temporary differ-
ences between the tax and accounting bases of assets and
liabilities, including differences arising on consolidation proce-
dures, as well as on unused tax losses and unused tax credits,
when it is probable that they can be utilised. Deferred tax assets
and liabilities are measured at the tax rates that are expected to
apply to the period when the asset is realised or the liability
settled, based on tax rates and tax laws that have been enacted
or substantively enacted at the balance sheet date.
The recoverability of deferred tax assets is assessed at each
balance sheet date on the basis of planned taxable income in
future financial years. If with a probability of more than 50 per-
cent future tax benefits will not be realised, either in part or in
total, a valuation allowance is recognised on the deferred tax
assets. The calculation of deferred tax assets requires assump-
tions to be made with regard to the level of future taxable
income and the timing of recovery of deferred tax assets.
These assumptions take account of forecast operating results,
future legislative changes in connection with climate change
and the impact on earnings of the reversal of taxable tempo-
rary differences. Since future business developments cannot
be predicted with certainty and to some extent cannot be
influenced by the BMW Group, the measurement of deferred
tax assets is subject to uncertainty.
Deferred tax liabilities on taxable temporary differences aris-
ing from investments in subsidiaries, branches and associ-
ated companies as well as interests in joint arrangements are
not recognised if the Group is able to control the timing of the
reversal and it is probable that the temporary difference will
not reverse in the foreseeable future. This is particularly the
case if it is intended that profits will not be distributed, but
rather will be used to maintain the substance and expand the
volume of business of the entities concerned.
Current income taxes are calculated within the BMW Group
on the basis of tax legislation applicable in the relevant coun-
tries. To the extent that judgement was necessary to deter-
mine the treatment and amount of tax items presented in the
financial statements, there is in principle a possibility that
local tax authorities may take a different position.
To Our Stakeholders
In the case of the BMW Group, this also applies to members
of the Board of Management and the Supervisory Board.
Details relating to these individuals and entities are pro-
vided in note 40 and in the list of investments disclosed in
7 note 46.
Share-based remuneration programmes which are
expected to be settled in shares are measured at their fair
value at grant date. The related expense is recognised as
personnel expense in the income statement over the vesting
period and offset against capital reserves.
Share-based remuneration programmes expected to be set-
tled in cash are revalued to their fair value at each balance
sheet date between the grant date and the settlement date
and on the settlement date itself. The expense is recognised
as personnel expense in the income statement over the
vesting period and presented in the balance sheet as a pro-
vision.
Income from lease instalments
11,526
11,345
11,322
Interest income on loan financing
and finance leases
3,701
3,677
Revenues from service contracts,
telematics and roadside assistance
2,766
Other income
2,424
13,780
Revenues
2,763
2,335
98,990
Revenues recognised from contracts with customers in
accordance with IFRS 15 totalled € 95,795 million (2020:
€ 83,814 million).
An analysis of revenues by segment is shown in the explan-
atory comments on segment information provided in 7 note 45.
Revenues from the sale of products and related goods are
generated primarily in the Automotive segment and, to a
lesser extent, in the Motorcycles segment. Revenues from
the sales of products previously leased to customers, income
from lease instalments and interest income on loan financ-
ing and finance leases are allocated to the Financial Ser-
vices segment.
Sundry other income relates mainly to the Automotive seg-
ment and the Financial Services segment.
The major part of revenues expected to arise from the
Group's order book at the end of the reporting period relates
to the sale of vehicles. Revenues resulting from those sales
will be recognised in the next financial year.
The services included in vehicle sale contracts that will be
recognised as revenues in subsequent years represent only
an insignificant portion of expected revenues. Accordingly,
use has been made of the practical expedient contained in
IFRS 15, permitting an entity not to disclose information on a
quantitative basis due to the short-term nature of items and
the lack of informational value of such disclosures.
Interest income on loan financing and finance leases
includes interest calculated on the basis of the effective
interest method totalling € 3,379 million (2020: € 3,424 mil-
lion). This interest income is not reported separately in the
income statement as it is not significant compared to total
Group revenues.
08 Cost of sales
Cost of sales comprises:
in € million
2021
111,239
to customers
Sales of products previously leased
2020
67,548
168
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
The share-based remuneration programme for Board of
Management members and senior heads of department
entitles BMW AG to elect whether to settle its commitments
in cash or with shares of BMW AG common stock. Based on
the decision to settle in cash, the share-based remuneration
programmes for Board of Management members and senior
heads of department are accounted for as cash-settled,
share-based remuneration programmes. Further informa-
tion on share-based remuneration programmes is provided
in 7 note 41.
169
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
Other Information
← = Q
NOTES TO THE INCOME STATEMENT
Financial Statements
07 Revenues
Revenues by activity comprise the following:
in € million
2021
Sales of products and related goods
77,042
Derivative financial instruments are used within the
BMW Group for hedging purposes in order to reduce cur-
rency, interest rate, fair value and market price risks. Deriva-
tive financial instruments are recognised as of the trade
date, measured at their fair value. Depending on their market
value at measurement date, these financial instruments are
reported in the balance sheet as financial assets or financial
liabilities.
161
Input factors available on the market, such as ratings and
probabilities of default, are used to calculate valuation allow-
ances for cash and cash equivalents, financial receivables,
receivables from subsidiaries and receivables from compa-
nies in which an investment is held. In the case of marketa-
ble securities and investment funds, the BMW Group usually
applies the option not to allocate financial assets with a low
default risk to different stages. Accordingly, assets with an
investment grade rating are always allocated to stage 1.
Forward-looking information (for instance forecasts of key
performance indicators) is also taken into account if, based
on past experience, such indicators show a substantive cor-
relation to actual credit losses.
-
As part of the process of assessing recoverability, it is gener-
ally necessary to apply estimations and assumptions in
particular regarding future cash inflows and outflows and the
length of the forecast period - which could differ from actual
amounts. Actual amounts may differ from the assumptions
and estimations used if business conditions develop differ-
ently to expectations.
The BMW Group determines the value in use on the basis of
a present value computation. Cash flows used for this calcu-
lation are derived from long-term forecasts approved by
management. These long-term forecasts are based on
detailed forecasts drawn up at an operational level, covering
a planning period of six years. For the purposes of calculat-
ing cash flows beyond the planning period, a perpetual
annuity return is assumed which does not take growth into
account. Forecasting assumptions are continually adjusted
to current information and regularly compared with external
sources. The assumptions used take account in particular of
expectations of the profitability of the product portfolio,
future market share development, macroeconomic develop-
ments (such as currency, interest rate and raw materials
prices) as well as the legal environment and past experi-
ence. Assumptions also take into account the impact of cli-
mate change and the influence of other sustainability factors
on business performance and the product portfolio, for
example as a result of changes in demand patterns, regula-
tory requirements or changes in production conditions.
Amounts are discounted on the basis of a market-related
cost of capital rate. Impairment tests are performed for
accounting and financial reporting purposes for the Automo-
tive and Motorcycles cash-generating units using a risk-ad-
justed pre-tax cost of capital (WACC). In the case of the
Financial Services cash-generating unit, a pre-tax cost of
equity capital is used, as is customary in the sector. The fol-
lowing discount factors were applied:
in %
Automotive
Motorcycles
Financial Services
2021
2020
10.1
of the recoverable amount, but no higher than the amortised
acquisition or manufacturing cost. Impairment losses on
goodwill are not reversed.
10.2
10.2
13.0
13.2
The risk-adjusted discount rate, calculated using a CAPM
model, also takes into account specific peer-group informa-
tion relating to beta-factors, capital structure data and bor-
rowing costs. In conjunction with the impairment tests for
cash-generating units, sensitivity analyses are performed for
the main assumptions in order to rule out that possible
changes to the assumptions used to determine the recover-
able amount would result in the requirement to recognise an
impairment loss. Even in the case of a 10% deterioration in
the individual measurement assumptions, the need to rec-
ognise an impairment loss did not arise.
All items of property, plant and equipment are measured at
acquisition or manufacturing cost less accumulated depreci-
ation and accumulated impairment losses.
The cost of internally constructed plant and equipment com-
prises all costs which are directly attributable to the manu-
facturing process as well as an appropriate proportion of
production-related overheads. This includes production-re-
lated depreciation and amortisation as well as an appropri-
ate proportion of administrative and social costs. Financing
costs are not included in acquisition or manufacturing cost
unless they are directly attributable to the asset. The carry-
ing amount of items of depreciable property, plant and
equipment is written down according to scheduled usage-
based depreciation as a general rule on a straight-line
basis over the useful lives of the assets. Depreciation is
recorded as an expense in the income statement.
-
163
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Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
10.1
Corporate Governance
Financial Statements
Other Information
To Our Stakeholders
Combined Management Report
Group Financial Statements Corporate Governance
Notes to the Group
Financial Statements
Remuneration Report
Other Information
← = Q
Revenues from the sale of products, for which repurchase
arrangements are in place, are not recognised immediately
in full. Instead, revenues are either recognised proportion-
ately or the difference between the sales and repurchase
price is recognised in instalments over the term of the con-
tract depending on the nature of the agreement. In the case
of vehicles sold to a dealership that are expected to be repur-
chased in a subsequent period as part of leasing operations,
revenues are not recognised at Group level at the time of the
sale of the vehicle. Instead, assets and liabilities relating to
the right of return vehicles are recognised.
Revenues from leases of own-manufactured vehicles are
recognised at Group level in accordance with the require-
ments for manufacturer or dealer leases. In the case of oper-
ating leases, revenues from lease payments are recognised
on a straight-line basis over the lease term.
Revenues also include interest income from financial ser-
vices. Interest income arising on finance leases as well as on
retail customer and dealership financing is recognised using
the effective interest method and reported as interest income
on credit financing within revenues.
Public sector grants are not recognised until there is rea-
sonable assurance that the conditions attaching to them
have been complied with and the grants will be received. The
resulting income is recognised in cost of sales over the peri-
ods in which the costs occur that they are intended to com-
pensate.
Earnings per share are calculated as follows: Basic earn-
ings per share are calculated for common and preferred
stock by dividing the net profit for the year after minority
interests and attributable to each category of stock, by the
average number of outstanding shares. Net profit for the
year is accordingly allocated to the different categories of
stock. The portion of the net profit that is not being distrib-
uted is allocated to each category of stock based on the
number of outstanding shares. Profits available for distribu-
tion are determined directly on the basis of the dividend pro-
posals or resolutions for common and preferred stock.
Diluted earnings per share are calculated and separately
disclosed in accordance with IAS 33.
Intangible assets are measured on initial recognition at
acquisition or manufacturing cost. Subsequently, intangible
assets with finite useful lives are amortised on a straight-line
basis over their useful lives of between three and 20 years.
Impairment losses are recognised where necessary. Intangi-
ble assets with indefinite useful lives are tested annually for
impairment. Internally generated intangible assets mainly
comprise development costs for vehicle, module and archi-
tecture projects.
← = Q
Development costs are capitalised if all of the criteria spec-
ified by IAS 38 are met. They are measured on the basis of
direct costs and directly attributable overhead costs. Pro-
ject-related capitalised development costs are amortised on
a straight-line basis following the start of production over the
estimated product life (usually five to twelve years).
Intangible assets also include emission allowances and
similar rights arising from programmes aimed at reducing
carbon or other climate-damaging emissions (for example
in conjunction with the EU Emissions Trading System or
vehicle-related emissions regulations in the USA or China).
These allowances and rights are carried at cost and, in the
event that they are allocated free of charge, recorded at a
value of zero. Amounts are derecognised at the date of the
return, sale or expiry of the allowances or rights. In parallel to
the recognition of these allowances and rights as assets,
provisions are recognised in accordance with IAS 37 corre-
sponding to the amount of obligations expected to arise in
conjunction with the related emission regulations. Provisions
are measured on the basis of the expected value of the
allowances or rights that are to be returned.
If there is any indication of impairment of intangible assets,
or if an annual impairment test is required (i. e. intangible
assets with an indefinite useful life, intangible assets during
the development phase and goodwill), an impairment test is
performed. Each individual asset is tested separately unless
the cash flows generated by the asset are not sufficiently
independent from the cash flows generated by other assets
or other groups of assets. In these cases, impairment is
tested at the level of a cash-generating unit, which is the
norm for the BMW Group.
For the purpose of the impairment test, the carrying amount
of an asset (or a cash-generating unit) is compared with the
recoverable amount. The first step of the impairment test is
to determine the value in use. If the value in use is lower than
the carrying amount, the next step is to determine the fair
value less costs to sell and compare the amount so deter-
mined with the asset's carrying amount. If the fair value is
lower than the carrying amount, an impairment loss is rec-
ognised, reducing the carrying amount to the higher of the
asset's value in use or fair value less costs to sell.
If the reason for a previously recognised impairment loss no
longer exists, the impairment loss is reversed up to the level
162
BMW Group Report 2021
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Combined Management Report
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
Goodwill arises when the cost of acquiring a business
exceeds the Group's share of the net fair value of the assets,
liabilities and contingent liabilities identified during the
acquisition.
Remuneration Report
Other Information
← = Q
With the exception of lease receivables, financial assets are
measured on initial recognition at their fair value. Financial
assets include in particular other investments, receivables
from sales financing, marketable securities and investment
funds, derivative financial assets, trade receivables and cash
and cash equivalents. As a general rule, initial recognition
takes place as soon as the BMW Group becomes a party to
a contract; in the case of standard purchases or sales of
non-derivative financial assets, initial recognition takes
place at the settlement date.
Depending on the business model and the structure of con-
tractual cash flows, financial assets are classified as meas-
ured at amortised cost, at fair value through comprehensive
income or at fair value through profit or loss. The category
"measured at fair value through comprehensive income" at
the BMW Group comprises mainly marketable securities and
investment funds used for liquidity management purposes.
Selected marketable securities and investment funds, money
market funds within cash and cash equivalents as well as
convertible bonds are recognised at fair value through profit
or loss, as their contractual cash flows do not solely repre-
sent payments of principal and interest.
The BMW Group does not make use of the option to meas-
ure equity instruments at fair value through other compre-
hensive income or debt instruments at fair value through
profit or loss.
The market values of financial instruments measured at fair
value are determined on the basis of market information
available at the balance sheet date, such as quoted prices or
using appropriate measurement methods, in particular the
discounted cash flow method.
Items reported under other investments within the scope of
IFRS 9 are measured at fair value through profit or loss.
Investments in subsidiaries, joint arrangements and associ-
ated companies that are not material to the BMW Group are
also included in other investments.
Receivables from sales financing are measured as a gen-
eral rule at amortised cost using the effective interest rate
method.
Receivables from sales financing also include finance lease
receivables which are measured at the amount of the net
investment in the lease. This balance sheet line item also
includes operating lease receivables due at the end of the
reporting period, while the related vehicles are reported as
leased products.
With the exception of receivables from operating leases and
trade receivables, the BMW Group applies the general
approach described in IFRS 9 to determine impairment of
financial assets. Under the general approach, loss allow-
ances are measured on initial recognition on the basis of the
expected 12-month credit loss (stage 1). If the credit loss risk
at the end of the reporting period has increased significantly
since initial recognition, the impairment allowance is meas-
ured on the basis of lifetime expected credit losses (stage 2
general approach). The measurement of the change in
default risk is based on a comparison of the default risk at
the date of initial recognition and at the end of the reporting
period. The default risk at the end of each reporting period is
determined on the basis of credit checks, current key perfor-
mance indicators and any overdue payments.
The BMW Group applies the simplified approach described
in IFRS 9 to operating lease and trade receivables, whereby
the amount of the loss allowance is measured subsequent to
the initial recognition of the receivable on the basis of life-
time expected credit losses (stage 2 – simplified approach).
For the purposes of allocating at item to stage 2, it is irrele-
vant whether the credit risk of the assets concerned has
increased significantly since initial recognition.
Investments accounted for using the equity method are
measured provided no impairment has been recognised -
at cost of investment adjusted for the Group's share of earn-
ings and changes in equity capital. If there is any indication
that an investment is impaired, an impairment test is per-
formed on the basis of the discounted cash flow method. An
indicator exists, for example, in the event of a serious short-
fall compared to budget, the loss of an active market or if
funds are required to avoid insolvency.
-
165
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
regardless of whether the general or simplified approach is
applied. In the case of stage 3 assets, interest income is cal-
culated on the asset's carrying amount less any impairment
loss.
The BMW Group derecognises financial assets when it has
no reasonable expectation of recovery. This may be the case,
for instance, if the debtor is deemed not to have sufficient
assets or other sources of income to service the debt.
Loss allowances relating to the balance sheet item "Receiv-
ables from sales financing" are determined primarily on the
basis of past experience with credit losses, current data on
overdue receivables, rating classes and scoring information.
As a general rule, the BMW Group assumes that a receivable
is in default if it is more than 90 days overdue or if there are
objective indications of insolvency, such as the opening of
insolvency proceedings. Credit-impaired assets are identi-
fied as such on the basis of this definition of default. In the
case of credit-impaired assets which had not been credit-im-
paired at the time they were acquired or originated, an
impairment allowance is recognised at an amount equal to
lifetime expected credit losses (stage 3). This is the case
Assumptions and estimations are required regarding future
residual values, since these represent a significant part of
future cash inflows. Relevant factors to be considered include
the trend in market prices and demand on the pre-owned
automobile market. The expected change in the drive-sys-
tem mix going forward, which is subject to continuous anal-
ysis, is also taken into account. The BMW Group has devel-
oped and implemented methods and processes that enable
the sustainability aspects of residual value risks, particularly
climate-related factors, to be appropriately assessed and
managed. Potential regulatory changes are also taken into
account. For example, upward or downward adjustments
can be made to residual values on the basis of a range of
scenario analyses. The assumptions are based on internally
available historical data and current market data as well as
on forecasts of external institutions. Furthermore, assump-
tions are regularly validated by comparison with external
data. Certain types of contracts require a high degree of
judgement when deciding whether they give rise to operat-
ing leases or finance receivables.
← = Q
Other Information
The following useful lives are applied throughout the
BMW Group:
in years
Factory and office buildings, residential buildings, fixed
installations in buildings and outside facilities
Plant and machinery
Other facilities, factory and office equipment
8 to 50
3 to 21
2 to 25
The useful life of the plant and equipment is reviewed regu-
larly and extended or shortened as necessary, based on the
assumptions used for long-term corporate planning pur-
poses and product-related decisions, as described above.
For machinery used in multiple-shift operations, deprecia-
tion rates are increased to account for the additional utilisa-
tion. If there is any indication of impairment of property, plant
and equipment, an impairment test is performed as
described above for intangible assets.
In the case of leased items of property, plant and equip-
ment, a right-of-use asset and a liability for the outstanding
lease payments are recognised with effect from the date on
which the leased asset becomes available for use by the
BMW Group. The cost of the right-of-use asset is the sum of
the amount at which lease liability is initially measured, any
lease payments made at or before the lease commence-
ment date, any initial direct costs incurred by the lessee and
the estimated costs of dismantling, removing or restoring the
leased asset. Lease incentives granted by the lessor are
deducted. Right-of-use assets are depreciated on a straight-
line basis over the shorter of the useful life of the leased
asset and the expected lease term. If ownership of the
leased asset is automatically transferred at the end of the
lease term or the exercise of a purchase option is reflected in
the lease payments, the right-of-use asset is depreciated on
a straight-line basis over the expected useful life of the
leased asset. Right-of-use assets are reported in the bal-
ance sheet within the relevant line items for property, plant
and equipment. The depreciation expense on right-of-use
assets is reported in the income statement in cost of sales
as well as in selling and administrative expenses.
The lease liability is measured on initial recognition at the
present value of the future lease payments. Subsequent to
initial recognition, the carrying amount of the lease liability is
increased to reflect interest on the lease liability and reduced,
without income statement impact, by the lease payments
made. Lease liabilities are reported within financial liabili-
ties, while interest expense is reported as part of net interest
result. In the cash flow statement, both the repayment por-
tion and the interest portion of lease payments are shown as
cash outflows from financing activities.
The lease payments to be taken into account to measure the
right-of-use asset and the lease liability comprise fixed pay-
ments, variable lease payments that depend on an index or
an interest rate as well as amounts expected to be payable
under residual value guarantees. If it is reasonably certain
that a purchase or lease extension option will be exercised,
the relevant payments are also included. Payments for peri-
ods for which the lessee has an option to terminate a lease
unilaterally are only included in the lease payments if it is
reasonably certain that the termination option will not be
exercised. For the purposes of assessing options, the
BMW Group takes account of all facts and circumstances
that create an economic incentive to exercise or not to exer-
cise the option.
IFRS 16 requires that lease payments are discounted as a
general rule using the interest rate implicit in the lease. How-
ever, since the interest rate in leases entered into by the
BMW Group cannot readily be determined, amounts are dis-
counted on the basis of the incremental borrowing rate,
comprising the risk-free interest rate in the relevant currency
for matching maturities plus a premium for the credit risk.
Specific risks attached to an asset are generally not taken
into account, given that collateral received in the context of
alternative financing arrangements is not relevant within the
BMW Group.
-
Determining which items are to be counted as lease pay-
ments including the issue of the lease term underlying
those payments and which discount rate to apply involves
using estimates and assumptions that may differ from actual
outcomes.
-
As lessee, the BMW Group makes use of the application
exemptions available for short-term leases and leases of
low-value assets.
The BMW Group has not applied the exemptions available to
lessees to account for COVID-19-related rent concessions
(amendments to IFRS 16 dated 28 May 2020 and 31 March
2021).
Group products recognised by BMW Group entities as
leased products under operating leases are measured at
manufacturing cost and all other leased products at acquisi-
tion cost, in each case including initial direct costs. All leased
products are depreciated over the period of the lease using
the straight-line method down to their expected residual
value.
Where the recoverable amount of a lease exceeds the
asset's carrying amount, changes in residual value expecta-
tions are recognised by adjusting scheduled depreciation
prospectively over the remaining term of the lease. If the
recoverable amount is lower than the asset's carrying
amount, an impairment loss is recognised for the shortfall. A
test is carried out at each balance sheet date to determine
whether an impairment loss recognised in prior years no
longer exists or has decreased. In such cases, the carrying
amount of the asset is increased to the recoverable amount,
at a maximum up to the amount of the asset's amortised
cost.
164
BMW Group Report 2021
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Combined Management Report
Group Financial Statements Corporate Governance
Notes to the Group
Financial Statements
Remuneration Report
Loss allowances on trade receivables are determined pri-
marily on the basis of information relating to overdue
amounts. Furthermore, both positive and negative economic
scenarios are used alongside the latest forecasts of key per-
formance indicators when determining the level of valuation
allowances. These scenarios are based on local analyses
and take into account, for example, anticipated political and
economic developments as well as sustainability risks in the
markets concerned.
The calculation of the amount of the provision requires
assumptions to be made with regard to discount rates, pen-
sion trends, employee fluctuation and the life expectancy of
employees, among other things. Discount rates are deter-
mined by reference to market yields at the end of the report-
ing period on high quality fixed-interest corporate bonds.
0
Result on investments
Other attestation services
Tax advisory services
Other services
Fee expense
PwC International
thereof: PwC GmbH
2021
Audit of financial statements
2020
2020
16
14
5
4
2
1
2021
2
in € million
18 Government grants and government assistance
Income from asset-related and performance-related grants,
amounting to € 94 million (2020: € 67 million) and € 152 mil-
lion (2020: € 210 million) respectively, was recognised in the
income statement in 2021.
13
17
Financial income on the net investment in
finance leases
964
890
Selling profit on the sale of vehicles
previously leased to retail customers under
finance leases
These amounts relate mainly to public sector grants aimed
at the promotion of regional structures as well as to subsi-
dies received for plant expansions.
1,557
Variable lease payments are based on distance driven. The
agreements have, in part, extension and purchase options.
17 Fee expense for the Group auditor
The fee expense pursuant to § 314 (1) no. 9 HGB recognised
in the financial year 2021 for the Group auditor and the PwC
network of audit firms amounted to € 19 million (2020:
€ 18 million) and consists of the following:
Services provided during the financial year 2021 by the Group
auditor PricewaterhouseCoopers GmbH Wirtschaftsprü-
fungsgesellschaft, Frankfurt am Main, Munich branch, on
behalf of BMW AG and subsidiaries under its control relate to
the audit of the financial statements, other attestation ser-
vices, tax advisory services and other services.
The audit of financial statements comprises mainly the audit
of the Group Financial Statements and the separate finan-
cial statements of BMW AG and its subsidiaries, and all work
related thereto, including the review of the Interim Group
Financial Statements.
Other attestation services include mainly project-related
audits, comfort letters and statutorily prescribed, contractu-
ally agreed or voluntarily commissioned attestation work.
Other services mainly include consulting services relating to
production processes.
1,167
Income from variable lease payments for
finance leases
0
0
19 Disclosures relating to the statement of comprehen-
sive income
Other comprehensive income for the period after tax com-
prises the following:
in € million
2021
2020
Remeasurement of the net liability for defined benefit pension plans
1,243
OF COMPREHENSIVE INCOME
- 354
-224
139
Items not expected to be reclassified to the income statement in the future
1,019
- 215
Marketable securities (at fair value through other comprehensive income)
-45
Deferred taxes
0
NOTES TO THE STATEMENT
Other Information
0
0
1
3
1
19
18
← = Q
8
176
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
4
7
148
Income from variable lease payments for
operating leases
-13
Е
5.80*
1.90
Interest expense arising on the
Е
5.82*
- 14
1.92
-48
-55
Earnings per share of preferred stock are computed on the
basis of the number of preferred stock shares entitled to
receive a dividend in each of the relevant financial years. As
in the previous year, diluted earnings per share correspond
to basic earnings per share.
15 Personnel expenses
The income statement includes personnel expenses as fol-
lows:
in € million
Wages and salaries
measurement of lease liabilities
Personnel expenses include € 223 million (2020: 602 mil-
lion) of costs relating to workforce measures.
of lease liabilities
18.79
2020
number
601,995,196
601,995,196
number
57,686,234
56,867,180
5.75
Expenses for leases of low-value assets
and short-term leases
- 91
€
18.77
5.73
Expenses relating to variable lease
payments not included in the measurement
Е
-74
109
The decrease in pension and welfare expenses was mainly
attributable to positive changeover effects resulting from the
modernisation of the pension plan model in Germany
amounting to € 562 million. The total pension expense for
defined contribution plans of the BMW Group amounted to
€ 160 million (2020: € 150 million). Employer contributions
paid to state pension insurance schemes totalled € 654 mil-
lion (2020: € 634 million).
2021
The BMW Group is party to leases at the end of the reporting
period which have not yet commenced. These leases could
give rise to future cash outflows amounting to € 530 million
(2020: € 225 million).
Total cash outflows for leases in 2021 amounted to
€ 600 million (2020: € 653 million).
Information on right-of-use assets, lease liabilities as well as
further explanatory comments are provided in 7 note 6
(Accounting policies, assumptions, judgements and estima-
tions), note 20 (Analysis of changes in Group tangible, intan-
gible and investment assets 2021), note 22 (Property, plant
and equipment (including right-of-use assets arising from
leasing) and note 35 (Financial liabilities).
175
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Most of the expenses for leases of low-value assets and
short-term leases relate to low-value assets.
Group Financial Statements
Notes to the Group
Financial Statements
Remuneration Report
Other Information
← = Q
As lessor
in € million
2021
2020
Corporate Governance
The average number of employees during the year was:
139
consolidated entities
10,598
Pension and welfare expenses
720
2020
10,081
1,252
Social insurance expenses
968
911
304
2021
Personnel expenses
12,286
12,244
Average number of employees
118,626
122,874
thereof at proportionately-
2020
2021
thereof gains/losses arising in the period under report
20
Other comprehensive income relating to equity accounted
investments is reported in the Group Statement of Changes
in Equity within currency translation differences with a posi-
tive amount of € 490 million (2020: negative amount of
€ 113 million), within derivative financial instruments with a
negative amount of € 368 million (2020: positive amount of
€ 118 million) and within costs of hedging with a negative
amount of € 37 million (2020: positive amount of € 46 mil-
lion).
Gains or losses realised on derivative financial instruments
which have been reclassified to acquisition costs for invento-
ries are not recognised through other comprehensive income
after tax.
178
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
-616
Corporate Governance
Other Information
← = Q
NOTES TO THE BALANCE SHEET
20 Analysis of changes in Group tangible, intangible and investment assets 2021
Translation
Acquisition and manufacturing cost
Reclassifi-
Depreciation, amortisation and impairment losses
Remuneration Report
Carrying amount
- 284
2,401
141
Other comprehensive income from equity accounted investments
Currency translation foreign operations
-50
135
85
106
-55
-332
51
1,228
- 1,283
- 1,283
Other comprehensive income
* Prior year's figures adjusted.
2,462
- 61
1,228
- 60
in € million
cations Disposals 31.12.2021
289
2
112
1,975
795
12
202
45
61
1,027
956
Intangible assets
19,111
46
2,795
2
948
1.1.2021 differences Additions
1,751
379
Development costs
16,976
2,506
195
19,287
Translation
1.1.2021 differences
5,969
Current Reclassifi- Value ad-
year cations justments¹
1,935
Other intangible assets
190
Goodwill
384
1
385
5
5
380
Disposals 31.12.2021 31.12.2021 31.12.2020
7,714 11,573 11,007
-38
201
-22
638
Other comprehensive income from equity accounted investments
Deferred taxes*
-50
106
163
-423
Currency translation foreign operations
359
1,228
Items that can be reclassified to the income statement in the future
1,382
-401
Other comprehensive income for the period after tax
2,401
-616
* Prior year's figure adjusted.
-1,283
177
-437
201
thereof reclassifications to the income statement
Derivative financial instruments
thereof gains/losses arising in the period under report
thereof reclassifications to the income statement
Costs of hedging
thereof gains/losses arising in the period under report
thereof reclassifications to the income statement
-287
-7
14
991
25
1,636
-11
-645
72
-13
50
BMW Group Report 2021
Combined Management Report
-215
Marketable securities (at fair value through other comprehensive income)
Derivative financial instruments *
-45
13
-32
7
-2
After tax
5
37
51
991
- 306
685
Costs of hedging *
72
14
To Our Stakeholders
Deferred taxes
139
1,019
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Deferred taxes on components of other comprehensive
income are as follows:
2021
- 354
2020
Remeasurement of the net liability for defined benefit pension plans
Before tax
Deferred taxes
After tax
Before tax
1,243
-224
in € million
in € million
326.9
1,083.8
-28
- 87
584
48
Income (+) and expenses (-) from finan-
cial instruments
586
subsidiaries and participations
-234
586
-234
Deferred taxes for non-German entities are calculated on the
basis of the relevant country-specific tax rates. These ranged
in the financial year 2021 between 9.0% and 40.0% (2020:
between 9.0% and 40.0%).
Other financial result
1,170
- 186
172
Sundry other financial result
BMW Group Report 2021
Expenses from investments in
30.8
surcharge
15.8
15.8
and participations
612
135
Income taxes
30.8
3,597
Municipal trade tax rate
15.0
15.0
thereof from subsidiaries:
14
12
German income tax rate
1,365
- 208
To Our Stakeholders
Group Financial Statements
Notes to the Group
1,608
Property, plant and equipment
Variances due to different tax rates
-596
-397
Leased products
Tax increases (+)/ tax reductions (-)
4,946
Other investments
Sundry other assets
Tax-exempt income
-597
- 97
Tax loss carryforwards
Non-deductible expenses
314
due to:
Combined Management Report
Expected tax expense
30.8%
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Statements
The difference between the expected tax expense based on
the underlying tax rate for Germany and actual tax expense
is explained in the following reconciliation:
The allocation of deferred tax assets and liabilities to bal-
ance sheet line items at 31 December is shown in the fol-
lowing table:
Intangible assets
in € million
2020
Profit before tax
16,060
5,222
in € million
Tax rate applicable in Germany
30.8%
2021
398
-583
Income from investments in subsidiaries
Interest and similar income
135
116
Net interest impact on other long-term
provisions
71
- 199
Net interest expense on the net defined
8
benefit liability for pension plans
-34
Other interest and similar expenses
-214
- 225
thereof subsidiaries:
-1
Interest and similar expenses
-22
-165
12
116
171
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
thereof from subsidiaries:
Other Information
11
Net interest result
in € million
2021
2020
Other interest and similar income
135
← = Q
wards and tax credits
- 458
2021
12 Other financial result
Corporate tax rate
15.0
15.0
thereof relating to temporary
differences
1,668
- 658
- 450
5.5
5.5
in € million
2021
2020
thereof relating to tax loss carryfor-
Corporate tax rate including solidarity
Solidarity surcharge
in € million
1,085
2021
2020
Net interest result
-30
- 342
Sundry other financial result comprises mainly income and
expenses arising on the measurement of stand-alone deriv-
atives and fair value hedge relationships, as well as income
and expenses from the measurement and sale of marketa-
ble securities and shares in investment funds.
Sundry other financial result benefited in 2021 from the favour-
able fair value development of interest rate hedges resulting
from the rise in yield curves in the USA, whereas in the previ-
ous year, the downward trend in interest rates gave rise to fair
value measurement losses on interest rate hedges.
13 Income taxes
2020
Taxes on income of the BMW group comprise the following:
The tax expense resulting from the change in the valuation
allowance on deferred tax assets relating to tax losses avail-
able for carryforward and temporary differences amounted
to € 3 million (2020: € 10 million).
Deferred taxes are determined on the basis of tax rates
which are currently applicable or expected to apply in the rel-
evant national jurisdictions when the amounts are recov-
ered. After taking account of an average municipal trade tax
multiplier rate (Hebesatz) of 428.0 (2020: 428.0), the under-
lying income tax rate for Germany was as follows:
Current tax expense
2,512
2,023
Deferred tax expense (+)/ deferred tax
income (-)
in %
The tax expense was reduced by € 28 million (2020: € 4 mil-
lion) as a result of utilising tax loss carryforwards, for which
deferred assets had not previously been recognised and in
conjunction with previously unrecognised tax credits and
temporary differences.
Capital Losses
Equity accounted
-370
Deferred taxes recognised directly in equity amounted to
€ 1,733 million (2020: € 1,710 million).
in € million
Deferred taxes at 1 January (assets (+)/ liabilities (-))
Deferred tax expense (-)/ income (+) recognised through income statement
Change in deferred taxes recognised directly in equity
thereof relating to fair value gains and losses on financial instruments and marketable securities recognised
directly in equity
thereof relating to the remeasurements of net liabilities for defined benefit pension plans
thereof from currency translation
Exchange rate impact and other changes
Deferred tax assets and deferred tax liabilities are netted for
each relevant tax entity if they relate to the same tax author-
ities.
Deferred taxes at 31 December (assets (+)/ liabilities (-))
2021
2020
1,950
1,562
- 1,085
658
23
Taxable temporary differences relating to investments in
subsidiaries, associated companies and joint ventures
amount to € 25,526 million (2020: € 22,174 million). No
deferred taxes are recognised on these taxable temporary
differences because the BMW Group is able to determine the
timing of the reversal of the temporary differences and it is
probable that the temporary differences will not reverse in
the foreseeable future, in particular in view of the fact that
there is no intention to distribute the profits, but rather to use
them to maintain their substance and reinvest in the compa-
nies concerned. No computation was made of the potential
impact of income taxes on the grounds of proportionality.
Deferred tax liabilities on expected dividends amount to
€ 79 million (2020: € 76 million) and relate primarily to divi-
dends from foreign subsidiaries and joint ventures.
- 305
Capital losses available for carryforward in the United King-
dom which do not relate to ongoing operations increased to
€ 1,959 million (2020: € 1,832 million) due to currency fac-
tors. As in previous years, deferred tax assets recognised on
these tax losses - which increased to € 490 million due to a
tax rate change in the UK (2020: € 348 million) - were fully
written down since they can only be utilised against future
capital gains.
For entities with tax losses available for carryforward, a net
surplus of deferred tax assets over deferred tax liabilities is
reported amounting to € 2,487 million (2020: € 392 million).
The basis for the recognition of deferred taxes is the
BMW Group business model or management's assessment
that there is material evidence that the entities will generate
future taxable profit, against which deductible temporary dif-
ferences can be offset. The increase in tax loss carryfor-
wards was mainly attributable to the exercise of a tax option
by the BMW Group's US companies. Furthermore, it is
assumed that tax start-up losses relating to the San Luis
Potosí plant in Mexico, opened in 2019, can be utilised by
offset against planned future profits.
2,202
2,459
1,458
509
744
1,950
173
Loss carryforwards amounting to € 3,834 million (2020:
€ 1,129 million) can be used indefinitely, while € 304 million
(2020: € 439 million) expire after more than 3 years.
BMW Group Report 2021
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Tax loss carryforwards relating to Germany and foreign
operations amounted to € 4,138 million (2020: € 1,568 mil-
lion). This includes one tax-loss carryforward amounting to
€ 413 million (2020: € 406 million), on which a valuation
allowance of € 140 million (2020: € 138 million) was recog-
nised on the related deferred tax asset.
To Our Stakeholders
- 13,339
247
-250
Average number of common stock shares in circulation
Average number of preferred stock shares in circulation
Basic / diluted earnings per share of common stock
Basic / diluted earnings per share of preferred stock
Dividend per share of common stock
Dividend per share of preferred stock
* Proposal by the Board of Management
16 Leases
2021
Profit attributable to preferred stock
€ million
2020
3,775.0
As lessee
In terms of accounting for leases as a lessee, the following
amounts are included in the income statement:
€ million
11,298.4
3,448.1
€ million
12,382.2
-443
Profit attributable to common stock
14 Earnings per share
161
26
-23
-144
744
35
1,950
The tax returns of BMW Group entities are checked regularly
by German and foreign tax authorities. Taking account of
numerous factors - including interpretations, commentaries
and legal decisions relating to the various tax jurisdictions as
well as past experience – adequate provision has been
made, to the extent identifiable and probable, for potential
future tax obligations.
Net profit attributable to the shareholders of BMW AG
174
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
BMW Group Report 2021
- 14,297
- 13,339
- 14,297
26.1 %
Valuation allowances on capital losses
Netting
Deferred taxes
Net
The tax reductions due to tax-exempt income related pri-
Imarily to the partial release of the provision for the EU anti-
trust proceedings as well as to the tax-exempt impact of the
mark-to-market valuation of participations.
Tax benefits for prior years resulted primarily from adjust-
ments to income tax receivables and provisions for prior
years, among other things due to transfer pricing issues in
connection with unconcluded and ongoing transfer pricing
proceedings.
22.4%
Deferred tax assets
2021
2020
2021
2020
4
17
3,494
Deferred tax liabilities
3,354
Effective tax rate
1,365
-210
Provisions
Tax expense (+) / benefits (-) for prior
years
-54
61
Liabilities
Valuation allowances on tax loss carryforwards
Effects from tax rate changes
17
Eliminations
Other variances
-71
-15
Actual tax expense
3,597
25
74
49
665
4,303
3,717
601
852
3,936
3,721
1,826
33
1,766
16,284
15,755
13,848
- 140
- 138
-490
- 348
17,129
29
6,655
6,070
673
300
282
4,493
3,203
5
6
1
1
886
1,013
4,646
3,966
1,061
476
490
348
307
21,647
Tax advisory services include primarily services related to
transfer pricing and tax compliance.
12
20
41
-4
104
thereof right-of-use assets from leases
333
-59
2,147
3,138
226
44
248
- 100
3,172
Other facilities, factory and office
equipment
76
40
18
2
15
1
6
58
31
8
121
1
31
34
37,428
60,991
2,067
-2
3,651
- 1,264
60,673
Property, plant and equipment
1,991
1,6192
1,619
- 1,294
941
- 19
1,991
Advance payments made and construction
in progress
73
70
51
16
1,025
927
2,211
206
37
- 1
- 705
82
10,884
9,345
9,244
6,691
124
846
- 135
6,104
15,935
293
538
621
- 380
15,449
buildings on third party land
Land, titles to land, buildings, including
11,729
12,342
6,769
1,232
2
1,893
-16
6,122
19,111
1,260
thereof right-of-use assets from leases
thereof right-of-use assets from leases
3,107
280
10,060
30,239
1,500
2
3,071
-511
29,177
40,299
1,548
710
1,841
-765
40,061
Plant and machinery
2,681
2,312
796
73
5
452
-14
426
3,108
219
12
-72
4,250
-2
1,830
23 Leased products
property rental agreements concerned often contain exten-
sion and termination options.
Right-of-use assets arising from leases of land and buildings
relate primarily to logistics and office premises and, to a
lesser extent, to selling and production premises. In order to
secure these premises and, in the interests of flexibility, the
As in the previous year, no financing costs were recognised
as a cost component of property, plant and equipment in
2021.
No impairment losses were recognised in 2021, as in the
previous year.
22 Property, plant and equipment (including right-of-
use assets arising from leasing)
As in the previous year, no financing costs were recognised
as a cost component of intangible assets in 2021.
As in the previous year, there was no requirement to recog-
nise impairment losses or reversals of impairment losses on
intangible assets in 2021.
Other intangible assets include a brand-name right amount-
ing to € 43 million (2020: € 40 million) which is allocated to
the Automotive segment and is not subject to scheduled
amortisation since its useful life is deemed to be indefinite.
The asset is subject to a limited right of ownership. Intangi-
ble assets also include goodwill of € 33 million (2020:
€ 33 million) allocated to the Automotive cash-generating
unit (CGU) and goodwill of € 347 million (2020: € 346 mil-
lion) allocated to the Financial Services CGU. The changes in
these items compared to the previous year are exclusively
currency-related.
Intangible assets mainly comprise capitalised development
costs on vehicle, module and architecture projects as well as
subsidies for tool costs, licences, purchased development
projects, emission allowances, software and purchased cus-
tomer lists.
21 Intangible assets
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
180
2 Including assets under construction of € 1,297 million.
1 Including € 57 million recognised through the income statement
703
735
529
Minimum lease payments of non-cancellable operating
leases amounting to € 23,026 million (2020: € 20,872 mil-
lion) fall due as follows:
10
in € million
well as petrol engines and high-voltage batteries at a sepa-
rate facility.
6,769
In collaboration with Mercedes-Benz Group AG, the Ford
Motor Company, the Volkswagen Group, Kia Motors Corpo-
ration and Hyundai Motor Corporation, the BMW Group
operates the joint venture IONITY, whereby each of the par-
ties has an equal shareholding. IONITY's business model
envisages the construction and operation of high-perfor-
mance charging stations for battery-powered vehicles in
Europe. On 1 November 2021, IONITY Holding GmbH & Co.
KG signed a contract with GRP III HPC Lux S.à.r.l. (Black-
rock) for the provision of financing amounting to € 500 mil-
lion to expand the charging network. The existing share-
holders are also investing an additional € 200 million in the
business. The transaction is due to be completed in the first
half of 2022.
IONITY
BMW Brilliance produces BMW brand models primarily for
the Chinese market at its two vehicle production plants as
BMW Brilliance
24 Investments accounted for using the equity method
Investments accounted for using the equity method com-
prise the joint venture BMW Brilliance Automotive Ltd. (BMW
Brilliance), Shenyang, the joint venture YOUR NOW Holding
GmbH, Munich, the joint venture IONITY Holding GmbH &
Co. KG (IONITY), Munich, and interests in the associated
company THERE Holding B.V. (THERE), Rijswijk, and the
associated company Solid Power Inc., Wilmington, Delaware.
Impairment losses amounting to € 338 million (2020:
€ 312 million) were recognised on leased products in 2021 as
a consequence of changes in residual value expectations.
Income from the reversal of impairment losses amounted to
€ 111 million (2020: € 110 million).
20,872
23,026
35
35
275
302
1,534
1,702
9,285
6,327
3,416
3,812
7,052
between one and two years
between two and three years
between three and four years
between four and five years
later than five years
Minimum lease payments
10,123
31.12.2021
The at-equity loss reported for YOUR NOW for 2021
amounted to € 171 million (2020: loss of € 349 million). On
29 March 2021 YOUR NOW Holding GmbH signed an agree-
ment with the bp Group for the latter to acquire a 33.3%
stake in Digital Charging Solutions GmbH (DCS) (Charge-
Now). The transaction was completed on 1 October 2021. In
addition, on 8 March 2021, YOUR NOW Holding GmbH
signed an agreement to sell PARK NOW Group to EasyPark
Group. Following receipt of regulatory approval, the transac-
tion was completed on 27 May 2021. The impact of the two
transactions is not material.
YOUR NOW
31.12.2020
The BMW Group acquired a further 25% of the shares in the
BMW Brilliance joint venture on 11 February 2022. The trans-
action is described in detail in note 3.
within one year
- 57
7
589
292
240
3,825
1,054
1,440
Participations
subsidiaries
Investments in non-consolidated
3,439
equity method
Investments accounted for using the
41,995 42,609
8,125
4,741
5,833
- 300
7,333
50,120
15,712
17,820
- 1,930
49,942
Leased products
21,850 23,245
39,141
-11
72
52
301
1,264
149
156
-35
1,292
Other investments
Non-current marketable securities
3,199
3,585
240
499
519
2
444
.57
10
501
963
84
-24
1,000
204
216
85
-3
88
10
2,571
97
17,851
2
51
131
19
927
907
2,344
249
2
335
45
2,211
3,251
262
73
25
4
121
thereof right-of-use assets from leases
71
235
67
3,138
Other facilities, factory and office
equipment
40
36
131
20
62
50,120
Leased products
22,390 21,850
41,370
2,766
4,358
637
39,141
63,760
2,961
-2
4,723
1,009
60,991
Property, plant and equipment
1,619
1,8842
1,884
5
-1,160
1,407
23
1,619
Advance payments made and construction
in progress
70
69
1,725
14
15
416
59
3,108
thereof right-of-use assets from leases
9,244
9,434
7,452
206
843
124
6,691
16,886
344
221
789
285
15,935
buildings on third party land
Land, titles to land, buildings, including
12,342
12,980
8,667
251
-53
2,137
220
19
3,363
20
18
145
38
125
58
thereof right-of-use assets from leases
10,060
10,165
31,574
2,311
2
3,180
468
30,239
2,350
864
2,292
634
40,299
Plant and machinery
2,312
2,229
1,134
115
433
796
18,465
41,739
53,847
cations justments¹
Reclassifi- Value ad-
Current
year
Translation
1.1.2020 differences
cations Disposals 31.12.2020
715 16,976
2,300
15,391
Development costs
1.1.2020 differences Additions
in € million
Carrying amount
Depreciation, amortisation and impairment losses
Acquisition and manufacturing cost
Reclassifi-
Translation
Analysis of changes in Group tangible, intangible and investment assets 2020
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
179
2 Including assets under construction of € 1,354 million.
Disposals 31.12.2020 31.12.2020 31.12.2019
1 Including € 434 million recognised through the income statement
4,948
689
Intangible assets
906
16,463
956
795
543
2
183
-16
1,169
1,751
545
2
271
-52
2,075
Other intangible assets
380
379
5
5
- 1
385
Goodwill
5,969 11,007 10,443
1,710
735
384
119
2
85
340
19
47
11
301
Participations
subsidiaries
Investments in non-consolidated
3,585
5,112
87
240
209
1,736
3,825
equity method
Investments accounted for using the
8,125
44,700 41,995
9,147
4,542
1,241
5,263
301
5,352
253
240
963
-434
-15
216
529
1,360
65
55
122
1,264
Other investments
Non-current marketable securities
519
988
39
-39
-39
-434
-17
28
75
444
1,020
32
46
7,752
thereof non-current
22,754
24,413
Gross investment in finance leases
48
1,112
due later than five years
1,046
Expected reimbursement claims
558
Financial assets
1,715
7,515
44
Receivables from subsidiaries
Collateral assets
546
454
due between one and two years
6,001
5,809
669
295
Prepaid expenses
694
364
5,108
5,800
thereof current
6,426
6,625
due within one year
2,644
397
due between four and five years
6,293
1,950
2,405
products
6,528
due between one and two years
Return right assets for future leased
4,226
4,243
3,041
Marketable securities and investment funds
7,147
due within one year
31.12.2020
Sundry other assets
31.12.2021
31.12.2020
in € million
6,970
1,581
Derivative instruments
3,256
Other taxes
199
216
Other
3,695
4,435
due between three and four years
2,998
2,048
Receivables from companies in which an
investment is held
71
58
Loans to third parties
5,190
5,590
due between two and three years
2,190
1,200
31.12.2020
due between two and three years
10,542
9,683
Finished goods and goods for resale
31.12.2021
in € million
31.12.2020
31.12.2021
in € million
Trade receivables comprise the following:
30 Trade receivables
Financial Statements
Inventories comprise the following:
29 Inventories
← = Q
Other Information
Gross carrying amount
2,293
2,345
Work in progress, unbilled contracts
services business
31.12.2021
404
818
Vehicles held for sale in the financial
-23
-14
Remuneration Report
Allowances for impairment of stage 3
2,277
Raw materials and supplies
-24
-18
Allowances for impairment of stage 2 -
simplified approach
1,373
3,175
1,660
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
Loss allowances
1,903
Unrealised interest income
22,510
Net investment in finance leases without
loss allowances
45
42
351
due later than five years
604
due between four and five years
3,395
4,080
due between three and four years
4,770
5,158
503
1,246
20,948
255
To Our Stakeholders
BMW Group Report 2021
186
20,693
22,159
Net investment in finance leases
9,110
1,806
8,941
1,302
10,326
10,243
Other assets
Collateral assets comprise mainly customary collateral
(banking deposits) arising on the sale of asset-backed
financing instruments.
thereof non-current
thereof current
27 Income tax assets
Income tax assets totalling € 1,529 million (2020: € 606 mil-
lion) include claims amounting to € 19 million (2020:
€ 43 million), which are expected to be settled after more
than one year. Claims may be settled earlier than this
depending on the timing of the underlying proceedings. The
increase in income tax assets was mainly attributable to the
exercise of a tax option by the BMW Group's US companies.
1,216
in € million
-7
31.12.2021
129
170
-1
-37
-3
Reclassification to Stage 3
119
-25
159
-15
Reclassification to Stage 2
-34
-31
4
Reclassification to Stage 1
Derecognition and origination of receivables
34
11
-55
Impairment allowances at 31 December 2021
3
-4
31
-65
Other changes
-31
1,639
-46
Changes in risk parameters
- 143
-131
-11
-1
Write-off of receivables
-9
10
643
39
474
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
184
379
-37
Corporate Governance
-35
- 337
216
- 125
2,729
Net carrying amount
-81
3,770
- 830
447
Remuneration Report
← = Q
483
Impairment allowances at 1 January 2021
Simplified
General
in € million
Stage 3
Stage 2
Other Information
Stage 1
Impairment allowances include € 102 million (2020:
€ 95 million) on credit-impaired receivables relating to
finance leases.
In connection with the coronavirus pandemic, allowances for
expected credit losses were increased in 2020 to take
account of the negative impact on retail customer and deal-
ership business, to the extent not covered by the
BMW Group's standard loss provisioning models (post-
model adjustments) and their level reviewed on a regular
basis. Although the level of expected credit losses decreased
significantly during 2021, a large proportion of the additional
allowance recorded one year earlier was retained due to
ongoing uncertainty about the further course of the pan-
demic.
1,599
-67
-35
Total
in accordance with IFRS 9, which only arise within the Finan-
cial Services segment, developed as follows:
Impairment allowances on receivables from sales financing
The estimated fair value of vehicles held as collateral for
credit-impaired receivables at the end of the reporting period
totalled € 569 million (2020: € 517 million). The carrying
amount of assets held as collateral and taken back as a
result of payment default amounted to € 21 million (2020:
€ 33 million).
31.12.2020
550
567
483
Impairment allowances at 31 December 2020
195
24
27
75
69
Other changes
176
49
1
66
60
Changes in risk parameters
- 106
474
39
643
1,639
in € million
Other assets comprise:
28 Other assets
Financial assets comprise:
26 Financial assets
Financial Statements
Finance leases are analysed as follows:
-90
← = Q
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
185
Other Information
-1
-14
-1
-6
1
Reclassification to Stage 1
1,099
517
12
209
- 4
361
Total
Simplified
General
in € million
Stage 3
Stage 2
Stage 1
Impairment allowances at 1 January 2020
35
-9
- 15
Write-off of receivables
1
-33
1
21
12
Derecognition and origination of receivables
Reclassification to Stage 2
160
-1
-30
-4
Reclassification to Stage 3
123
-15
153
195
2,261
1,247
Advance payments to suppliers
Inventories
The defined benefit pension plans are administered by BMW
Pension Trustees Limited, Farnborough, and BMW (UK)
Trustees Limited, Farnborough, both trustee companies
which act independently of the BMW Group. BMW (UK) Trus-
tees Limited, Farnborough, is represented by ten trustees
and BMW Pension Trustees Limited, Farnborough, by five
trustees. A minimum of one third of the trustees must be
elected by plan participants. The trustees represent the
interests of plan participants and decide on investment
strategies. Funding contributions to the funds are deter-
mined in agreement with the BMW Group.
190
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
The change in the net defined benefit liability for pension
plans can be derived as follows:
in € million
1 January 2021
EXPENSE / INCOME
Current service cost
Defined benefit plans exist in the United Kingdom which are
closed for all plan participants. Vested benefits remain in
place. New benefits are covered by contributions made to a
defined contribution plan.
United Kingdom
Board of Directors and adopting changes to the associa-
tion's statutes.
The assets of the German pension plans are invested by
BMW Trust e. V., Munich, in accordance with a CTA. The rep-
resentative bodies of this entity are the Board of Directors
and the Members' General Meeting. BMW Trust e. V., Munich,
currently has seven members and three members of the
Board of Directors elected by the Members' General Meet-
ing. The Board of Directors is responsible for investments,
drawing up and deciding on investment guidelines as well as
monitoring compliance with those guidelines. The members
of the association can be employees, employee representa-
tives, senior executives and members of the Board of Man-
agement of BMW AG. An ordinary Members' General Meet-
ing takes place once every calendar year, and deals with a
range of matters, including receiving and approving the
association's annual report, ratifying the activities of the
106
355
194
254
3,693
-7
-46
Defined
-29
- 82
- 13
The most significant of the BMW Group's pension plans are
described below.
Germany
Both employer- and employee-funded benefit plans exist in
Germany. Benefits paid in conjunction with these plans
comprise old-age retirement pensions as well as invalidity
and surviving dependants' benefits. The level of ongoing
pension payments is adjusted in accordance with §16 of the
Company Pensions Act (Betriebsrentengesetz).
The defined benefit plans have been closed to new entrants
since 2014. Defined contribution plans with a minimum rate
of return, comprising employer- and employee-funded com-
ponents, continue to exist. The fact that the plan involves a
minimum rate of return means that the defined contribution
entitlements are classified in accordance with IAS 19 as
defined benefit plans. In the financial year 2021, employees
in the defined benefit plan were given the option to switch to
the defined contribution plan.
In the case of defined benefit plans involving the payment of
a pension, the amount of benefits to be paid is determined
by multiplying a fixed amount by the number of years of ser-
vice.
-13
17.5
benefit obligation
26,587
Gains (-) or losses (+) on plan assets, excluding amounts included in interest income
-652
-652
Gains (-) or losses (+) arising from changes in financial assumptions
-1,341
Gains (-) or losses (+) arising from changes in demographic assumptions
-616
Gains (-) or losses (+) arising from experience adjustments
97
-1,341
-616
97
-652
-1,341
-616
97
Changes in the limitation of the net defined benefit asset to the asset ceiling
REMEASUREMENTS
Gains (-) or losses (+) arising from settlements
-527
22
-22,910
Total
3,677
Effect of limitation
of the net defined
benefit asset to the
asset ceiling
Net defined
benefit liability
3
3,680
Interest expense (+)/income (-)
Plan assets
Past service cost
411
257
- 235
22
-527
-527
411
411
3,084
947
thereof pension provisions
thereof assets
Combined Management Report
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Statements
Based on the measurement principles contained in IAS 19,
the following balance sheet carrying amounts apply to the
Group's pension plans:
Germany
United Kingdom
Other
Total
in € million
Present value of defined benefit obligations
To Our Stakeholders
BMW Group Report 2021
189
In addition, the career trend component, which is plan-de-
pendent and lies within a range of 0.25% to 0.50%, is now
part of the measurement of pension obligations in Germany
(2020: pension entitlement trend of 2.0%).
21.6
10
17.8
19.8
15.4
15.9
Total capital
31.12.2021
177,829
Mortality Table 2018 G issued by Prof. K. Heubeck (with invalidity rates reduced by 70%)
S3PA Tables and CMI_2020 model with improvement factor of 1.25%
Equity attributable to shareholders of BMW AG increased
during the financial year by 22.1%, primarily reflecting the
increase in revenue reserves.
32 Pension provisions
In the case of defined benefit plans, the BMW Group is
required to pay the benefits it has granted to present and
past employees. Defined benefit plans may be covered by
provisions or pension assets. In Germany, pension obliga-
tions of the BMW Group are mostly covered by assets trans-
ferred to BMW Trust e. V., Munich, in conjunction with a Con-
tractual Trust Arrangement (CTA) (funded plan). Funded
plans also exist in the UK, the USA, Switzerland, Belgium
and Japan. In the meantime, most of the defined benefit
plans have been closed to new entrants.
The following mortality tables are applied in countries, in
which the BMW Group has significant defined benefit plans:
Germany
United Kingdom
167,267
31.12.2020
31.12.2021
31.12.2020
22,910
Effect of limiting net defined benefit asset to asset ceiling
1,184
3
3
1,187
3
25,011
Carrying amounts
3,084
60
355
165
241
1,165
3,680
940
1,157
870
9,589
31.12.2021
31.12.2020
31.12.2021
31.12.2020
15,045
15,535
8,844
938
9,944
1,108
24,989
26,587
Fair value of plan assets
14,105
12,451
9,968
1,100
Transfers to fund
- 1,082
- 1,082
1,718,070
3,070
59,404,304
57,689,304
2021
56,867,304 601,995,196
2021
2020
Preferred stock
In addition, 3.070 previously issued shares of preferred stock
were acquired and re-issued to employees.
Issued share capital increased by € 1.7 million as a result of
the issue to employees of 1,715,000 new shares of non-vot-
ing preferred stock. BMW AG is authorised up to 15 May 2024
to issue 5 million shares of non-voting preferred stock
amounting to nominal € 5.0 million. At the end of the report-
ing period, 1.7 million of these amounting to nominal
€ 1.7 million remained available for issue.
In 2021, a total of 1,718,070 shares of preferred stock was
sold to employees at a reduced price of € 60.78 per share in
conjunction with an Employee Share Programme. These
shares are entitled to receive dividends for the first time with
effect from the financial year 2022.
All Company stock is issued to bearer and each share has a
par value of € 1.00. Preferred stock, to which no voting rights
are attached, bear an additional dividend of € 0.02 per
share.
Less: shares repurchased and re-issued
Shares issued / in circulation at 31 December
Shares issued in conjunction with Employee Share Programme
Shares issued in circulation at 1 January
Number of shares issued
822,124
124
Capital reserves
Common stock
The capital structure is managed in order to meet needs
arising from changes in economic conditions and the risks of
the underlying assets.
The BMW Group's objectives with regard to capital manage-
ment are to safeguard over the long-term the Group's ability
to continue as a going concern and to provide an adequate
return to shareholders.
Capital management disclosures
Accumulated other equity comprises amounts recognised
directly in equity resulting from the translation of the finan-
cial statements of foreign subsidiaries, changes in the fair
value of derivative financial instruments and marketable
securities, costs of hedging recognised directly in equity as
well the related deferred taxes.
Accumulated other equity
The proposed distribution was not recognised as a liability in
the Group Financial Statements.
Distribution of a dividend of € 5.80 per share of common
stock (€ 3,491 million)
31 Equity
Distribution of a dividend of € 5.82 per share of preferred
stock (€ 336 million)
It is proposed that the unappropriated profit of BMW AG for
the financial year 2021 amounting to € 3,827 million be uti-
lised as follows:
Revenue reserves comprise the non-distributed earnings of
companies consolidated in the Group Financial Statements.
In addition, remeasurements of the net defined benefit obli-
gation for pension plans are also presented in revenue
reserves.
Revenue reserves
Capital reserves include premiums arising from the issue of
shares and totalled € 2,325 million (2020: € 2,199 million).
The change amounting to € 126 million related to the share
capital increase in conjunction with the issue of shares of
preferred stock to employees.
57,689,304 601,995,196 601,995,196
601,995,196
2020
―
Financial Statements
← = Q
Other Information
8
72
47
2020
2021
Balance at 1 January
Allocated
in € million
16
Impairment allowances on trade receivables in accordance
with IFRS 9 developed as follows:
At 31 December 2021, the carrying amounts of inventories
expected to be realised after more than twelve months
amount to € 405 million (2020: € 359 million).
The expense recorded in conjunction with inventories during
the financial year 2021 amounted € 54,484 million (2020:
€ 48,128 million).
Out of the total amount recognised for inventories at
31 December 2021, inventories measured at net realisable
value amounted to € 1,457 million (2020: € 899 million).
Write-downs to net realisable value in the financial year 2021
amounted to € 41 million (2020: € 59 million), while rever-
sals of write-downs amounted to € 5 million (2020: € 2 mil-
lion).
14,896
15,928
503
389
At 31 December 2021 work in progress included unfinished
vehicles still held in inventories due to production programme
changes necessitated by semiconductor component short-
ages.
The BMW Group is not subject to any unified external mini-
mum equity capital requirements. Within the Financial Ser-
vices segment, however, there are a number of individual
entities which are subject to equity capital requirements of
relevant regulatory banking authorities.
-20
Utilised
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
187
- 36
In the case of trade receivables, collateral is generally held in
the form of vehicle documents and bank guarantees so that
the risk of bad debt loss is very limited. Expenses for impair-
ment losses and income from the reversal of impairment
losses is not significant for the BMW Group and is therefore
not reported separately in the income statement.
47
32
-4
1
Exchange rate impact and other changes
Balance at 31 December
-1
-4
Reversed
2,298
In order to manage its capital structure, the BMW Group
uses various instruments, including the amount of dividends
paid to shareholders and share buybacks. Moreover, the
BMW Group actively manages debt capital, carrying out
funding activities with a target debt structure in mind. A key
aspect in the selection of financial instruments is the objec-
tive to achieve matching maturities for the Group's financing
requirements. In order to reduce non-systematic risk, the
BMW Group uses a variety of financial instruments available
on the world's capital markets to achieve diversification.
BMW Group Report 2021
-22
1,187
1,165
Weighted duration of all pension obligations in years
63.6%
58.2%
Proportion of total capital
2.19
2.36
1.33
2.10
Pension level trend
106,376
103,463
Total financial liabilities
-25,011
24,989
21
27
- 1,082
Employee contributions
Pensions and other benefits paid
Translation differences and other changes
31 December 2021
thereof pension provisions
thereof assets
1.88
90
- 680
675
5
- 5
711
-717
-6
-90
2.27
1.19
1.83
United Kingdom
Germany
60,891
74,366
The assumptions stated below, which depend on the eco-
nomic situation in the relevant country, are used to measure
the defined benefit obligation of each pension plan. The fol-
lowing weighted average values have been used for Ger-
many, the UK and other countries:
31.12.2021 31.12.2020
Equity attributable to shareholders of
BMW AG
Other
in € million
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
The capital structure at the end of the reporting period was
as follows:
188
Proportion of total capital
36.4%
0.55
1.04
Discount rate
38,986
41,121
Current financial liabilities
31.12.2020
41.8%
31.12.2021
31.12.2021
31.12.2020
31.12.2021
in %
67,390
62,342
Non-current financial liabilities
31.12.2020
-17
1,157
174
16
113
84
87
1,546
2,027
Non-current financial liabilities, provisions and liabilities
244
209
1,226
897
1,214
1,090
7,388
11,176
17
19
341
444
24
2
5,137
8,493
55
49
767
528
13
Current financial liabilities, provisions and liabilities
10,809
8,217
7,388
11,176
Carrying amount
Eliminations
Group's interest in net assets
Net assets
55
127
486
297
87
9,763
12,836
24
Provisions and liabilities
336
1,712
1,194
1,214
1,177
17,151
24,012
Assets
RECONCILIATION OF AGGREGATED FINANCIAL INFORMATION
42
111
373
213
299
2
9,859
15,062
BMW Group Report 2021
182
-26
-26
-26
2020
2021
Total comprehensive income
Other comprehensive income
thereof from discontinued operations
thereof from continuing operations
Disclosures relating to the Income Statement
Profit/loss after tax
in € million
To Our Stakeholders
In May 2021, the BMW Group, together with the Ford Motor
Company and Volta Energy Technologies, participated in an
investment round relating to Solid Power, an industry-lead-
ing producer of solid-state batteries for electric vehicles. In
this context, some existing joint development partnerships
with Solid Power have also been expanded with a view to
securing the supply of solid-state batteries for future gener-
ations of electric vehicles. The investment meets the criteria
of an associated company and is accounted for using the
equity method.
Together with AUDI AG, Mercedes-Benz Group AG and other
companies, the BMW Group holds shares in THERE. HERE
International B.V. (HERE) is an associated company of
THERE. HERE's digital maps are laying the foundations for
the next generation of mobility and location-based services,
providing the basis for new assistance systems and, ulti-
mately, fully automated driving.
THERE
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
181
169
1,247
Solid Power
1,090
Combined Management Report
Corporate Governance
244
287
945
666
1,190
1,175
7,292
8,950
31.12.2020
31.12.2020 31.12.2021
31.12.2021
31.12.2020
31.12.2020 31.12.2021
Group Financial Statements
Notes to the Group
Financial Statements
31.12.2021
thereof cash and cash equivalents
Current assets
Non-current assets
DISCLOSURES RELATING TO THE BALANCE SHEET
in € million
IONITY
YOUR NOW
THERE
BMW Brilliance
Financial information relating to equity accounted invest-
ments is summarised in the following tables (from a 100%
perspective):
← = Q
Other Information
Remuneration Report
Equity
1,214
-82
1,226
9
80
185
-43
-39
- 693
- 309
-1
-1
3,174
4,457
19
26
4
127
707
729
8
30
234
248
23,913
28,001
2020
2021
2020
2021
2020
263
2021
38
2
199
897
-48
-
-37
-35
-701
-536
206
- 108
2,560
3,596
-37
5
-35
-337
206
2,560
3,596
- 8
-6
6
8
822
1,150
1
2
3
- 749
2020
-108
IONITY
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
183
49
42
591
424
335
← = Q
298
4,305
- 1,084
- 1,283
42
591
424
335
298
3,694
5,588
2021
209
244
2,610
in € million
49
Revenues
BMW Brilliance
THERE
YOUR NOW
DISCLOSURES RELATING TO THE INCOME STATEMENT
* Figure includes operating leases
84,277
87,417
20,693
22,159
Finance lease receivables
63,584
65,258
Credit financing for retail customers and
dealerships*
31.12.2021 31.12.2020
Receivables from sales financing
Receivables from sales financing comprise the following:
Income taxes
in € million
Profit/loss before financial result
Interest income
thereof from continuing operations
Scheduled depreciation
Profit/loss after tax
Other comprehensive income
Total comprehensive income
Group dividend income
25 Receivables from sales financing
thereof from discontinued operations
Interest expense
2,166,644
1,980,740
271,121
3,776
2,255,637
2,205,841
352,729
5,455
2,564,025
368,685
4,353
2,541,534
2,505,741
9.4
Total 4
MINI
Rolls-Royce
2,168,496
2,123,947
8.4
2,521,514
48.7
288,713
5,586
3.3
378,486
3,308
6.5
Production volume
56.6
New contracts with retail customer
302,138
FINANCIAL SERVICES SEGMENT
11.5
187,500
168,104
187,116
162,687
185,682
5,912
BMW
- 0.9
2.10
2.12
2.04
2.12
2.17
Energy consumption per vehicle produced (in MWh] 5,6
9.1
2,461,269
MOTORCYCLES SEGMENT
9.1
BMW Group in Figures
2,028,841
292,582
3,756
2,325,179
Spending on employee training and development (in million €)1
GROUP
OTHER NON-FINANCIAL PERFORMANCE FIGURES
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
AUTOMOTIVE SEGMENT
To Our Stakeholders
11
17
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
1,828,604
BMW Group Report 2021
2,213,790
Deliveries by brand²
MINI
2,184,939
347,465
5,100
2,537,504
364,101
4,194
2,486,149
2,117,854
2,089,854
371,729
3,438
2,465,021
39.4
389
279
370
373
BMW3
349
2021
2020
2019
2018
2017
BMW4
Production by brand
Total 3
Rolls-Royce
Change in %
1,908,640
To Our Stakeholders
1,845,271
The new remuneration system, which gives the Supervisory Board greater influence
on corporate strategy implementation was also the focus of one-on-one discussions
with investor representatives ahead of the Annual General Meeting 2021. Other
topics discussed on these occasions included corporate-governance-related issues,
such as succession planning for future appointments to the Supervisory Board.
the corporate strategy. Detailed information on Board of Management remuneration
is provided in the Remuneration Report.
Report of the Supervisory Board
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
The Supervisory Board exhaustively examined the long-term business plan for the
period up to 2027, the framework for which and the ambitious long-term targets con-
tained therein were presented by the Board of Management. Despite the prevailing
volatile and uncertain conditions, the Board of Management reaffirmed the key target
of achieving continuous growth, with a clear focus on the Group's planned sales of
all-electric models. The long-term business plan also included financial planning
and various potential scenarios, each involving their own opportunities and risks.
Following this thorough examination, the Supervisory Board approved the long-term
business plan for the BMW Group.
Other Information
15
The new remuneration system resolved by the Supervisory Board for the members
of the Board of Management during the previous financial year came into effect on
1 January 2021 and was approved by shareholders at the Annual General Meeting
2021 with a majority of 91.6% of valid votes. The Supervisory Board reviewed both
the targeted and the expected level of Board of Management remuneration for the
financial year 2021 in light of the BMW Group's business performance and also the
multi-year remuneration trend of its senior executives and employees in Germany.
Based on a comparative study conducted by an external remuneration consultant
and subsequent oral advice, we concluded that the remuneration of Board of Man-
agement members is appropriate. In December 2021, following thorough preparation
by the Personnel Committee, we adopted the variable remuneration component tar-
gets applicable to Board of Management members for the financial year 2022, taking
into account the budget for the financial year 2022, the long-term business plan and
Strategic cooperations were again a key topic at Supervisory Board meetings in 2021,
including in particular the positioning of the BMW Group in the vital Chinese market
going forward and the future structure of the BMW Brilliance Automotive joint ven-
ture. We also deliberated on the intended acquisition of shares in Brilliance Automo-
tive Manufacturing. The Board of Management updated us regularly on the strategic
positioning and status at the various YOUR NOW companies.
In light of the coronavirus pandemic and the accompanying restrictions on events
involving large numbers of people, in March 2021 we agreed on a plan to hold the
Annual General Meeting 2021 on a virtual basis. For the same reason, in December
2021, we approved the plan to hold the Annual General Meeting 2022 again in a
virtual format.
We also addressed the topic of compliance within the BMW Group in depth, including
the current status and ongoing developments. The Chief Compliance Officer pre-
sented the annual report on compliance, including compliance targets and a number
of other selected topics, focusing in particular on measures and processes aimed at
improving the Group's compliance management system on a continuous basis.
The Board of Management reported on the current status of the diversity concepts
developed by the Group and the extent to which targets have been achieved regard-
ing the proportion of women employed at various levels.
The Board of Management familiarised us with the NEUE KLASSE, which will herald
the third phase of the BMW Group's transformation to electric mobility from 2025
onwards and set new standards in terms of digitalisation, electrification and sus-
tainability in vehicles. We took a detailed look at the key features of the New Cluster
Vehicle Architecture (NCVA), which is specifically geared towards all-electric vehicles.
Furthermore, the Board of Management elucidated potential applications of artificial
intelligence (AI) in production planning processes. The Financial Services segment
was also included in our deliberations, particularly in light of positive developments in
terms of its risk profile and the pre-owned vehicle market. Key topics relating to the
Group's corporate finance system were also discussed. Regarding sales markets we
focused in particular on Asia as a whole.
The Supervisory Board also deliberated at length on key issues arising within the
Board of Management's various key areas of responsibility. We were given an insight
into working methods and working environments at the BMW Group currently being
developed in conjunction with the "Connected Works" project.
We also spent considerable time deliberating on the antitrust proceedings instigated
by the EU Commission in connection with the former working groups of several Ger-
man automobile manufacturers. In this context, we consulted with external attorneys
and an antitrust advisor engaged directly by the Supervisory Board. We were kept
well informed about the latest status of the proceedings at all times. In May 2021, af-
ter the EU Commission significantly scaled down its charges in terms of content and
timing, the BMW Group was able to reverse approximately € 1 billion of the € 1.4 bil-
lion provision recognised in 2019. After the proceedings were concluded in July 2021
with the payment of a fine amounting to around € 373 million, the Supervisory Board
carefully considered the question of potential personal responsibility on the part
of former Board of Management members and any duty of the Supervisory Board
to act. The Supervisory Board also obtained advice on this issue from an attorney,
whose written findings were also explained to us personally at the relevant meeting.
Based on this report and taking into account the supplementary explanations pro-
vided by the antitrust advisor, also regarding the legal particularities of the antitrust
proceedings, the Supervisory Board decided - after thorough discussion and on the
recommendation of the Audit Committee – not to assert any claims against former
members of the Board of Management of BMW AG in this context.
BMW Group Report 2021
Report of the Supervisory Board
In December, the Board of Management presented the budget for the financial year
2022, including HR planning. After detailed deliberations with the Board of Manage-
ment on this subject, the Supervisory Board also gave its approval to this document.
In December, the Board of Management and the Supervisory Board issued their Dec-
laration of Compliance with the German Corporate Governance Code. We will comply
with the recommendations of the Code as amended on 16 December 2019, again
without exception.
The meetings held in February and March 2021 focused on preparing the Superviso-
ry Board meeting at which the financial statements for the financial year 2020 were
discussed and examined. After obtaining the auditor's Declaration of Independence,
the Audit Committee recommended to the Supervisory Board that Pricewaterhouse-
Coopers GmbH Wirtschaftsprüfungsgesellschaft ("PwC") be proposed for election as
auditor at the 2021 Annual General Meeting. There were no indications of conflicts of
interest, grounds for exclusion or lack of independence on the part of the auditor.
The Audit Committee held five meetings and three conference calls during the year
under report.
The Presiding Board held four meetings during the financial year 2021. Together
with the Board of Management and senior heads of department, we prepared the
detailed agenda of Supervisory Board meetings (unless a committee was responsible
for doing so) and made suggestions for topics to be reported on at Supervisory Board
meetings.
The Supervisory Board has established a Presiding Board and four committees. In
our capacity as chairmen, the Chairman of the Audit Committee, Dr. Bock, and myself
reported in detail on the work of the Presiding Committee and the committees at each
of the subsequent Supervisory Board meetings. You can read more about the duties,
the composition and the working methods of the Presiding Board and various other
Supervisory Board committees in the Statement of Corporate Governance on the
BMW website.
Description of Presiding Board activities and committee work
The Supervisory Board is careful to avoid potential conflicts of interest in its delib-
erations and decisions. Therefore, as a precautionary measure, I did not take part in
the Supervisory Board's deliberations and resolution and the preparation of the Audit
Committee's recommendation to the Supervisory Board on whether claims should be
asserted against former members of the Board of Management in connection with
the EU Commission's antitrust proceedings against German automakers. I left the
room whenever these matters came up for discussion. No other potential conflicts of
interest were identified or reported.
Throughout the entire year, personal conversations with members of the Supervisory
Board enabled me to gather feedback concerning the work of the Supervisory Board.
At the end of 2021, we also assessed the effectiveness of our work at both Supervis-
ory Board and committee level by means of a questionnaire and concluded that there
was a high level of satisfaction with the work of the Supervisory Board. The feedback
we received on the organisation of our meetings as well as the topics covered in
meetings, training sessions and onboarding events was unanimously favourable. The
constructive and trusting cooperation prevailing both within the Supervisory Board
itself and in its work with the Board of Management was also commended. Proposals
put forward for improving individual aspects of Supervisory Board work and dealing
with certain topics in greater depth will be followed up in the coming financial year.
Report of the Supervisory Board
← = Q
We reviewed our contribution to ensuring good corporate governance within the
BMW Group and implemented changes concerning individual aspects. For example,
in order to ensure compliance with the Act on Strengthening Financial Market Integ-
rity, a number of changes were made to the Supervisory Board's rules of procedure,
a copy of which is published on the BMW website. Based on a self-assessment, we
concluded that the composition of the Supervisory Board at 31 December 2021 was
in line with the targets stipulated in the diversity concept, the competency profile and
other composition targets. An overview showing each individual Supervisory Board
member's areas of expertise is provided in the Statement of Corporate Governance
on the BMW Group website.
Other Information
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
16
New members of the Supervisory Board were given the opportunity to participate in
an onboarding programme comprising several modules, during which senior execu-
tives provided useful insights into key business areas and planning processes used
at the BMW Group as well as on key topics currently relevant for Supervisory Board
work.
The Board of Management and the Supervisory Board also visited the BMW and
MINI Driving Academy in Maisach together, in order to take an in-depth look at how
the Group's product portfolio can be best aligned to meet differing customer needs.
The members of the Supervisory Board were given the opportunity to test-drive the
full range of vehicle types, comprising all-electric, plug-in hybrid and conventionally
powered vehicles as well as the BMW iX5 Hydrogen, which is powered by hydrogen
fuel cell technology. A particular highlight was the unveiling of the new BMW 7 Series,
the only model in its segment to offer customers a choice between an internal com-
bustion engine and an all-electric drive system in the form of the BMW i7. Apart from
BMW, MINI and Rolls-Royce brand vehicles and a joint venture product, we also took
test drives in various competitor vehicles. Design presentations covering the BMW,
MINI, Rolls-Royce and BMW Motorrad brands as well as the BMW i Vision Circular
allowed us to take a fascinating look into the future.
The members of the Supervisory Board jointly attended various training events in
2021. In July, for instance, we took the opportunity to familiarise ourselves thoroughly
with battery cell technology. After an introductory presentation by the Board of Man-
agement covering various related topics, we visited the BMW Group Battery Cell Com-
petence Centre in Munich, where we had the opportunity to listen to an internationally
renowned researcher giving a talk on lithium-ion batteries, followed by a discussion of
the future of battery cell technology. In the newly constructed part of the Research and
Innovation Centre in Munich, we were given a guided tour to gain an insight into the
various new working environments. Partly with the Wirecard case in mind, coopera-
tion between supervisory boards, audit committees and auditors was the subject of a
workshop conducted by representatives of the BMW Group's auditors PwC.
Remuneration Report
2,003,782
← = Q
Remuneration Report
Chairman of the
Supervisory Board
Norbert Reithofer
The year 2021 was a particularly challenging one for the BMW Group, with semicon-
ductor supply issues and the ongoing coronavirus pandemic making the business
environment more volatile and calling for even greater flexibility from company and
workforce alike. However, the prudent leadership of the Board of Management and
the tremendous hard work of our employees helped make 2021 a highly successful
financial year for the BMW Group. With a new record of over 2.5 million BMW brand
vehicles delivered, we are now the leading manufacturer in the premium segment
worldwide. With great resolve, the Board of Management continued to develop the
key strategies that will shape the future of the BMW Group and create the ideal
conditions for an attractive product portfolio precisely tailored to meet the needs
of our customers as we move forward. The fact that we are on the right track with
our strategy was amply borne out by the enthusiastic media response to the BMW i
Vision Circular at the IAA Mobility in Munich and the presentation of the BMW iX and
BMW 14 models. Even in these uncertain times we therefore look to 2022 with confi-
dence and will remain firmly focused on our mission of moving people with products
that evoke emotions.
DEAR SHAREHOLDERS,
REPORT OF THE
SUPERVISORY BOARD
Report of the Supervisory Board
← = Q
Other Information
Remuneration Report
13
Corporate Governance
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
12
6 Figures from 2017 and 2018 are audited with limited assurance.
5 Efficiency ratio calculated on the basis of energy consumption, adjusted for CHP losses, of vehicle production (BMW Group manufacturing sites incl. joint venture BMW Brilliance Automotive Ltd., excluding motorcycles and contract manufacturers) divided by the total number of vehicles produced (BMW Group
manufacturing sites incl. joint venture BMW Brilliance Automotive Ltd., excluding motorcycles and contract manufacturing).
1 Training for BMW Group employees and temporary staff at consolidated companies worldwide. Data are collated on the basis of direct inputs of participants and, to a small extent, by extrapolation. Data also include e-learning formats.
² Delivery figures presented for 2020 and 2021 are not directly comparable to those of previous years. See sales figures for deliveries in the section Comparison of Forecasts with Actual Outcomes for further information.
3 Deliveries including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2017: 385,705 units, 2018: 455,581 units, 2019: 538,612 units, 2020: 602,247 units, 2021: 651,236 units).
"Production volume including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2017: 396,749 units, 2018: 491,872 units, 2019: 536,509 units, 2020: 602,935 units, 2021: 700,777 units).
6.0
1,956,514
Group Financial Statements
Other Information
BMW Group Report 2021
Combined Management Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
14
On the basis of a thorough examination, we considered the impact of changes in
legislation and regulations on the BMW Group, in particular the Act on Corporate
Due Diligence in Supply Chains, the Act on Strengthening Financial Market Integrity
(FISG) and the new European exhaust emissions standard (Euro 7).
It also kept us well informed about current topics of significance, including the
establishing of QUATAC, a consortium promoting the use of quantum computing in
industrial settings, the successful presentation of the BMW Group at the IAA Mobility
in Munich, the highly encouraging results of the employee survey, the BMW Group's
participation in the start-up company Solid Power, which specialises in solid-state
battery cells, and the expansion of the IONITY network for premium charging sta-
tions using 100% green power.
The monitoring of corporate strategy remained high on the Supervisory Board's
agenda. The Board of Management provided a comprehensive account of its
strategy with a particular focus on sustainability, including detailed key objectives,
regionally differentiated approaches and specific strategies for each of the Group's
divisions. It also briefed us on the state of progress in terms of electrification, digital-
isation, sustainability and circularity and explained the customer-centric, future-ori-
ented strategy adopted for the BMW brand. Against the backdrop of stricter carbon
emissions regulations across all major markets, the Board of Management provided
us with details of the BMW Group's ambitious decarbonisation targets up to the
year 2030. The latest aspects of vehicle digitalisation, ranging from digital operating
systems and driver assistance technologies to personalised digital experiences, were
also thoroughly explained to us in a presentation, which also focused on differing
customer expectations in various markets as well as the importance of digital fea-
tures as a key purchasing criterion, particularly in the strategically important market
of China. We also held a detailed discussion on the technological challenges posed
for vehicle, environment and drivers when developing automated driving beyond Lev-
el 3. A Supervisory Board member with in-depth expertise in this field provided us
with additional insight into the future of automated driving as well as the importance
of agile software integration in BMW Group vehicles. At each meeting, the Board of
Management reported on its strategy-related work as well as on the current status of
implementation.
To Our Stakeholders
In its regular reports on the BMW Group's position, the Board of Management kept
us well informed regarding current developments and performance, including an
in-depth presentation of current sales trends based on figures analysed by market,
model and drive system for both the BMW Group and its competitors, with a sharp fo-
cus on electrified models and developments on the Chinese market. The reports also
contained regular updates on the performance and risk profile of the Financial Ser-
vices segment as well as the development of key performance indicators and liquidity
for the BMW Group as a whole, highlighting deviations from the original forecast and
presenting a range of scenarios for future potential developments. Updates on the
current status of semiconductor supply issues were also provided at every meeting.
Based on in-depth reports presented by the Board of Management, we continuously
and diligently monitored the quality of management in the BMW Group and advised
the Board of Management on matters relating to the strategic development and
leadership of the BMW Group. We focused in particular on the technological trans-
formation of the BMW Group's drive system technology. At each of its five meetings
(including two two-day meetings), the Supervisory Board held detailed discussions
with the Board of Management on the BMW Group's current position. The Board of
Management also kept the Supervisory Board informed of any matters of significance
outside the framework of formal meetings whenever necessary. I also discussed key
current matters personally with the Chairman of the Board of Management between
meetings on an ongoing basis, as did the Chairman of the Audit Committee with the
Board of Management member responsible for Finance.
The Supervisory Board performed the duties incumbent upon it with the utmost dili-
gence in the financial year 2021.
Focus of Supervisory Board activities during the past financial year
Report of the Supervisory Board
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Within the Supervisory Board and its committees, dialogues were always conduct-
ed in an open and constructive spirit, both internally and together with members of
the Board of Management. Members of the Supervisory Board and its committees
had adequate opportunity to prepare in advance for the topics to be discussed at
meetings with the aid of well-documented information provided to them. Moreover,
shareholder representatives and employee representatives generally prepared for
meetings in separate preliminary discussions.
← = Q
21
The Quarterly Statements were presented by the Board of Management and dis-
cussed with the Audit Committee prior to their publication. Representatives of the
external auditors were present when the Half-Year Financial Report was discussed
at the beginning of August 2021. In conjunction with the implementation of the
requirements of the Act on Strengthening Financial Market Integrity, an executive
session was also held with the external auditor without the members of the Board of
Management being present.
1
100
Dr. Dominique Mohabeer
5
100
Brigitte Rödig
4
3
75
Anke Schäferkordt
5
5
100
Prof. Dr. Christoph Schmidt²
4
4
100
Dr. Vishal Sikka
5
1
Simone Menne¹
100
3
3
100
Prof. Dr. Reinhard Hüttl¹
1
1
100
Susanne Klatten
7
7
5
100
2
2
100
Horst Lischka¹
1
1
100
Willibald Löw4
3
Jens Köhler5
100
Dr. Thomas Wittig
5
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Report of the Supervisory Board
Based on a thorough examination conducted by the Audit Committee and the Super-
visory Board, we concurred with the results of the external audit. In accordance with
the final result of this examination, no objections were raised. The Group and Com-
pany Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the
financial year 2021 drawn by the Board of Management were subsequently approved
at our meeting held on 10 March 2022. The Company Financial Statements for the
year ended 31 December 2021 have therefore been adopted.
We also examined the proposal of the Board of Management to use the unappro-
priated profit to pay a dividend of € 5.80 per share of common stock and € 5.82 per
share of non-voting preferred stock, in each case on shares entitled to receive a divi-
dend. We consider the proposal appropriate and have therefore given it our approval.
To Our Stakeholders
For the financial year 2021, the Supervisory Board and the Board of Management
have prepared the Remuneration Report for the first time in accordance with §162
AktG (ARUG II / Act Implementing the Second EU Shareholder Rights Directive). At
the request of the Audit Committee, PwC reviewed the content of the Remuneration
Report, reported to both the Audit Committee and the Supervisory Board on the
results of the review, and confirmed that the Remuneration Report complies in all
material respects with the financial reporting provisions contained in §162 AktG.
Expression of appreciation by the Supervisory Board
We would like to express our thanks and appreciation to the members of the Board
of Management and all employees of the BMW Group worldwide for their outstand-
ing performance in the financial year 2021. With their unbending commitment, even
under adverse conditions, and a fine collective performance, they have taken the
BMW Group to the top of the global premium segment over the past 12-month period
and additionally enhanced the Group's profile as a guarantor of first-class individual
and sustainable mobility.
We are confident that the Board of Management and the Group's entire workforce,
with their courage and confidence, will write the next chapter of the BMW Group's
unique success story in 2022.
Munich, March 2022
On behalf of the Supervisory Board
Yours
ла
Norbert Reithofer
Chairman of the Supervisory Board
The Audit Committee and the Supervisory Board also considered at length the com-
bined Non-financial (Group) Statement for the year ended 31 December 2021, which
was drawn up by the Board of Management as part of the integrated BMW Group
Report. Following an in-depth explanation of the statement by the Board of Man-
agement, representatives of the external auditor presented key findings of their audit
and answered additional questions posed by the members of the Supervisory Board.
Based on the "limited assurance" audit performed by PwC on those parts of the
Management Report that were not subject to a reasonable assurance engagement,
PWC issued an unqualified opinion, signed for the sixth time by Andreas Fell and for
the second time by Nicolette Behncke. The Supervisory Board acknowledged and
approved the combined Non-financial (Group) Statement drawn up by the Board of
Management.
3
BMW Group Report 2021
20
5
100
5
5
100
Werner Zierer
1 Member of the Supervisory Board until 12 May 2021.
2 Member of the Supervisory Board since 12 May 2021.
3 Member of the Supervisory Board since 14 May 2021.
20
4 Member of the Supervisory Board until 16 July 2021.
6 Member of the Supervisory Board until 1 October 2021.
7 Member of the Supervisory Board since 8 October 2021.
8 Member of the Supervisory Board until 31 December 2021.
(Wirtschaftsprüfer) as independent auditor responsible for the performance of the
engagement.
At its meeting held on 24 February 2022, the Audit Committee initially considered in
detail the preliminary version of the Company and Group Financial Statements, the
Combined Management Report (including the Combined Non-financial (Group) State-
ment), the Statement of Corporate Governance, the draft versions of the auditor's
reports and the Board of Management's proposal for the appropriation of profit.
Immediately after authorising their issue, the Board of Management submitted the
Company and Group Financial Statements for the financial year 2021 and the Com-
bined Management Report (including the Combined Non-financial (Group) State-
ment), the Statement of Corporate Governance and the proposal for the appropri-
ation of profit to the Supervisory Board. The auditor's long-form audit reports were
also made available to the Supervisory Board in a prompt manner.
At its meeting on 9 March 2022, the Audit Committee diligently examined and de-
liberated on these documents before they were considered in detail at the plenary
session of the Supervisory Board on 10 March 2022.
At the two respective meetings, the Board of Management provided the Audit Com-
mittee and the Supervisory Board with detailed explanations of the financial reports
presented. The representatives of the external auditor present at the meetings
reported on the main findings of their audit and answered additional questions put
by members of the Audit Committee and the Supervisory Board. The focus of these
meetings was on key audit matters as well as the related audit procedures, which
were discussed at length by the Audit Committee and the Supervisory Board.
The representatives of the external auditor confirmed that the risk management
system established by the Board of Management is capable of identifying at an early
stage any developments that might threaten the Company's going-concern status.
They also confirmed that that no material weaknesses in the internal control system
and risk management system were identified with regard to the financial reporting
process. Similarly, in the course of their audit work they did not identify any facts
inconsistent with the contents of the Declaration of Compliance pursuant to § 161 of
the German Stock Corporation Act (AktG) issued by the Board of Management and
the Supervisory Board.
5 Member of the Supervisory Board since 3 August 2021.
Report of the Supervisory Board
Johann Horn³
5
The Annual General Meeting elected Dr. Marc Bitzer, Rachel Empey and Prof. Dr. Dr.
h.c. Christoph M. Schmidt as new members. Ms. Empey and Dr. Bitzer both have
extensive experience and expertise in capital markets and customer requirements.
Ms. Empey also has specialised knowledge in financial services and IT, Dr. Bitzer in
the fields of technologies and supply chains. Prof. Schmidt has extensive expertise in
the areas of science, sustainability and resources. With their broad range of exper-
tise, the three newly elected members complement the composition of the Supervi-
sory Board in an excellent manner.
The employee representatives Horst Lischka, Willibald Löw, Brigitte Rödig and
Verena zu Dohna left the Supervisory Board at their own request during the financial
year 2021. We wish to thank them for their constructive work and faithful cooperation
during their periods of office, in some cases stretching over many years. Our spe-
cial thanks go to Mr. Löw, who has been loyally connected with the BMW Group for
decades as an employee, Chairman of the Works Council at the Landshut site, and
member of the Supervisory Board. By court order, and to replace members of the Su-
pervisory Board for their respective remaining terms of office, Johann Horn, District
Manager of IG Metall Bavaria, was appointed in May 2021, Jens Köhler, Chairman
of the Works Council at the Leipzig site, in August 2021, Bernhard Ebner, Chairman
of the Works Council at the Landshut site, in October 2021 and Sibylle Wankel, First
Authorized Representative of IG Metall Munich, in January 2022.
Dr. Kurt Bock, member of the Supervisory Board since 2018 and Chairman of the
Audit Committee since 2020, was elected to succeed Dr. Kley as a member of the
Presiding Committee and the Personnel and Nomination Committees. An overview of
the composition of the Supervisory Board and its committees is provided both in this
report (Corporate Governance) and in the separate Statement on Corporate Governance,
which is available on the BMW Group website together with the curricula vitae of
Supervisory Board members.
Disclosure of attendance at meetings by individual members
The attendance rate at Supervisory Board meetings was around 99%, and 100% for
the meetings and conference calls held by the various committees and the Presid-
ing Board. The meetings were all held on a face-to-face basis. In individual cases,
however, members participated virtually due to the coronavirus pandemic. The table
below shows attendance by individual members:
Examination of financial statements and the profit distribution proposal
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft ("PwC") was ap-
pointed as external auditor for the financial year 2021. PwC conducted a review of the
condensed interim Group Financial Statements and the Interim Group Management
Report for the six-month period ended 30 June 2021 and presented its findings to
both the Audit Committee and the Supervisory Board in separate executive sessions.
No issues were identified that might indicate that the condensed Interim Group Fi-
nancial Statements and Interim Group Management Report had not been prepared in
accordance with the applicable provisions in all material respects.
PwC audited the Company and Group Financial Statements for the financial year
2021 authorised for issue by the Board of Management on 8 March 2022 and is-
sued an unqualified audit opinion, signed for the third consecutive financial year by
Petra Justenhoven as independent auditor (Wirtschaftsprüferin) and Andreas Fell
19
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Report of the Supervisory Board
Member of the Supervisory Board
The shareholder representatives Dr. Karl-Ludwig Kley, Prof. Reinhard Hüttl and
Simone Menne left the Supervisory Board with effect from the end of the Annual
General Meeting 2021. We would like to thank them for their constructive input and
faithful cooperation during their periods of office, which stretched over many years in
some cases. Our special thanks go to Dr. Kley: as a member of the Presiding Board
and various committees, but especially as Chairman of the Audit Committee, he drew
on his many years of broad business experience to make valuable contributions and
provided invaluable impetus for the BMW Group in corporate discussions.
Composition of the Supervisory Board, the Presiding Board and the Supervisory
Board's committees
The Supervisory Board extended the mandates of four Board of Management mem-
bers during the year under report.
The Supervisory Board appointed Dr.-Ing. Joachim Post as his successor with effect
from 1 January 2022. Dr. Post has worked for the BMW Group since 2002, most
recently as head of the "Product Line Midsize Class BMW" unit. He was previously
the manager responsible for the BMW Group's vehicle strategy and, as the head of
various BMW model lines, was responsible for promoting the electrification of the
vehicle fleet.
The Audit Committee again dealt extensively with the topic of compliance within
the BMW Group during the year under report. The Chief Compliance Officer of the
BMW Group presented the annual report on compliance, including compliance targets
and a number of other selected topics, focusing in particular on measures and pro-
cesses aimed at improving the Group's compliance management system on a contin-
uous basis. The Head of Corporate Quality also reported on the subject of technical
compliance. We also received a report on the status of tax and customs compliance
management from the relevant head of department.
The Audit Committee was kept informed of major legal disputes and proceedings.
During the first two quarters of 2021, the Committee spent considerable time dealing
with the antitrust proceedings instigated by the EU Commission in connection with
the former working groups of several German automobile manufacturers, carefully
monitoring the progress of proceedings based on various inputs, including direct
reports drawn up by a lawyer appointed to represent the BMW Group. After the pro-
ceedings were concluded, with the assistance of the consultant attorney and based
on his detailed report, the Audit Committee drew up a recommendation to the Super-
visory Board on the question of whether to assert claims against former members of
the Board of Management.
The Audit Committee also received reports on the further development of the internal
control system and the main findings of the internal audits performed by Corporate
Audit, as well as details of advance audit planning. The BMW Group's risk profile and
risk management system were discussed on a number of occasions.
In its report on the audit of over-the-counter derivatives entered into by BMW AG
during the financial year 2020, the external auditor confirmed to the Audit Committee
the effectiveness of the system in place at BMW AG in complying with the regulatory
requirements of the European Market Infrastructure Regulation.
The Audit Committee concurred with the decision of the Board of Management to
raise the Company's share capital in accordance with Article 4 (5) of the Articles of
Incorporation (Authorised Capital 2019) by € 1,715,000 and issue a corresponding
number of new non-voting bearer shares of preferred stock in conjunction with the
Employee Share Programme.
At its four meetings, the Personnel Committee focused primarily on succession
planning for the Board of Management, preparing personnel-related decisions and
dealing with Board of Management remuneration issues. The Committee reviewed
the appropriateness of Board of Management remuneration for the financial years
2020 and 2021 and considered all relevant developments during that period, includ-
ing the impact of the coronavirus pandemic, when determining the corporate earn-
ings and performance factors applicable for Board of Management remuneration in
2020 and 2021. In addition, the Committee deliberated on targets for the financial
year 2022. The Personnel Committee also prepared reappointments, performed the
groundwork for the Supervisory Board to appoint a Board of Management member
responsible for the Purchasing and Supplier Network, and granted approval for one
member of the Board of Management to assume a mandate outside the Group. A
resolution to approve loans granted by and transactions concluded by BMW Bank
GmbH with members of the representative bodies of BMW AG was renewed, and
updated contracts of Board of Management members were prepared.
The Nomination Committee convened twice during the financial year 2021. Taking
into account the German Corporate Governance Code (GCGC) and the composition
requirements adopted by the Supervisory Board, the Nomination Committee ad-
dressed the issue of the composition of the Supervisory Board regarding shareholder
representatives.
The Mediation Committee, which is prescribed by law, did not need to convene
during the financial year 2021.
Composition of the Board of Management
Meetings
Dr.-Ing. Andreas Wendt, Board of Management member for the Purchasing and
Supplier Network, retired on 31 December 2021. We would like to thank Dr. Wendt for
his many years of loyal and dedicated work for BMW AG, most recently for guiding the
BMW Group successfully through the ongoing semiconductor shortage.
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Report of the Supervisory Board
18
Attendance
Attendance in %
Dr.-Ing. Norbert Reithofer
5
100
Dr. Marc Bitzer²
4
4
100
Verena zu Dohna³
5
5
5
100
1
1
100
Rachel Empey²
4
4
100
Dr.-Ing. Heinrich Hiesinger
5
Bernhard Ebner
100
Christiane Benner
20
23
23
100
Manfred Schoch
21
21
100
Stefan Quandt
23
100
23
Stefan Schmid
21
100
Dr. Karl-Ludwig Kley¹
4
4
100
Dr. Kurt Bock
20
100
5
After thorough deliberation, the Audit Committee concluded that PwC's fee proposal
for the audit of the Company and Group Financial Statements and the integrated
BMW Group Report 2021 as well as for the review of the Half-Year Report 2021 was
appropriate in light of the growing scope of tasks and issued the corresponding
contracts to PwC following their election at the Annual General Meeting in May 2021.
The Audit Committee also specified supplementary audit focus areas and approved
the scope of non-audit services to be provided by PwC and subsequently received
regular reports on the relevant matters. The Audit Committee discussed the quality of
the audit in detail on several occasions at its meetings. In particular, it requested the
relevant department to report on the Group's perception of the audits of the financial
statements for the financial year 2020 as well as on the results of the survey con-
ducted within the Group in this context. Based on this report, the auditor's description
of the quality assurance measures undertaken and the Audit Committee's own expe-
rience with the auditor, the audit was found to be of good quality.
The Board of Management presented the combined Non-financial Statement of
BMW AG and the BMW Group for the financial year 2020 to us. Subsequently, the
representatives of PwC reported to us orally on the results of their "limited assur-
ance" audit. We have engaged PwC again to conduct a "limited assurance" audit of
the Non-financial (Group) Statement for the financial year 2021, to the extent that
it relates to parts of the management report that are not subject to a “reasonable
assurance" audit. Going beyond the formal review required by law, the Audit Commit-
tee also engaged PwC to perform additional review procedures on the content of the
Remuneration Report for the financial year 2021.
BMW Group Report 2021
-54
2,714
241
6,131
Statutory and voluntary warranty obligations, product guarantees
thereof due
Reversal of
discounting
Additions
Utilised
-2,220
Translation
differences
in € million
Other provisions changed during the year as follows:
33 Other provisions
Financial Statements
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
1.1.2021*
Reversed
31.12.2021
within one year
1,421
2,589
-1,334
-994
-9
1,219
41
3,666
Other obligations
2,196
3,317
-40
- 1,299
-23
2,083
14
2,582
Obligations for personnel and social expenses
1,798
6,600
-212
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
196
- 2.7
- 721
-2.3
- 586
decrease of 0.25 %
Pension level trend
2.9
766
2.4
610
increase of 0.25 %
17.2
4,585
13.2
3,311
-13.2
-3,514
in %
in € million
in %
-10.6
-2,650
increase of 1 year
Other obligations for ongoing operational expenses
896
1,078
-62
decrease of 0.10 %
Career trend
63
increase of 0.10 %
- 0.8
-210
-3
decrease of 0.25 %
Pension entitlement trend
0.8
218
3
increase of 0.25 %
- 4.1
- 1,081
-3.6
-910
decrease of 1 year
Average life expectancy
4.1
3.6
increase of 0.75 %
decrease of 0.75 %
Other provisions
1,603
Provisions for obligations for personnel and social expenses
comprise mainly obligations relating to performance-related
remuneration components, workforce measures as well as
Depending on when claims occur, it is possible that the
BMW Group may be called upon to fulfil the warranty or
guarantee obligations over the whole period of the warranty
or guarantee. Warranty provisions include amounts recog-
nised in connection with the exhaust gas recirculation cooler.
Expected reimbursement claims at 31 December 2021
amounted to € 1,112 million (2020: € 1,046 million) and are
disclosed within other assets (see note 28].
7,494
13,982
-663
- 5.549
186
7.232
-433
pre-retirement part-time working arrangements and
long-service awards.
13.209
1,516
- 171
- 1.399
1.288
-94
1.892
2,794
3,753
-337
1,486
The provisions for other obligations cover numerous specific
risks and uncertain obligations, in particular for litigation and
liability risks. Further information on the reversal of the pro-
vision relating to EU Commission antitrust proceedings is
provided in note 10.
Other obligations for ongoing operational expenses include
in particular expected payments for bonuses and other price
deductions.
34 Income tax liabilities
Current income tax liabilities totalling € 921 million (2020:
€ 747 million) include € 44 million (2020: € 40 million) which
are expected to be settled after more than twelve months.
Liabilities may be settled earlier than this depending on the
timing of the underlying proceedings.
Maturity later
Maturity between
one and five years
Maturity within
one year
Asset-backed financing transactions
Bonds
in € million
31.12.2020
31.12.2021
Financial Statements
Financial liabilities of the BMW Group comprise the follow-
ing:
35 Financial liabilities
Notes to the Group
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
197
- 508
9
1.361
-43
1.1.2020
Other provisions
Other obligations for ongoing operational expenses
Other obligations
Obligations for personnel and social expenses
Statutory and voluntary warranty obligations, product guarantees
in € million
6,748
13,954
- 1,800
- 5,621
-86
7,127
352
13,982
1,333
1,448
-214
- 1,108
1,111
56
Translation
differences
* Prior year's figures adjusted.
Additions
thereof due
3.271
1,483
2,582
-31
- 1.288
19
1.405
- 19
2.496
1,731
6,131
- 124
- 2.354
158
3.178
-277
5.550
within one year
31.12.2020
Reversed
Utilised
Reversal of
discounting
Discount rate
in € million
31.12.2020
646
455
472
thereof mixed funds (funds without a rating)
328
324
328
thereof investment grade
1,453
673
1,451
5
673
646
779
800
Debt instruments
17,726
19,226
733
1
1,118
1,128
thereof non-investment grade
742
645
709
Absolute return funds
159
56
1
159
55
Cash and cash equivalents
1,084
1,280
656
786
428
494
Real estate
1
5
1
5
806
7,373
7,580
9,620
3,151
7
7
624
704
2,285
2,440
thereof non-investment grade
thereof mixed funds (funds without a rating)
11,982
12,332
625
653
6,316
6,377
5,041
5,302
thereof investment grade
2,588
15,483 14,898
632
660
2,916
643
Real estate funds
19
10,840
Total with quoted market price
134
227
6
4
I
128
223
Other
Absolute return funds
87
194
2
37
85
157
Money market funds
19
191
20
20
than five years
10
1,461
Defined benefit obligation
7.2
7.9
57.8
49.6
6.4
7.4
Former employees with vested benefits
29.9
100.0
32.2
50.4
27.4
30.6
Pensioners
62.9
59.9
-
66.2
62.0
42.2
100.0
100.0
100.0
31.12.2021
Change in defined benefit obligation
In the UK, the sensitivity analysis for the pension level trend
also takes account of restrictions due to caps and floors.
It is only possible to aggregate sensitivities to a limited
extent. Since the change in obligation follows a non-linear
pattern, estimates made on the basis of the specified sensi-
tivities are only possible with this restriction. The calculation
of sensitivities using ranges other than those specified could
result in a disproportional change in the defined benefit obli-
gation.
-
The sensitivity analysis provided below shows the extent to
which changes in individual factors – independently of each
other could influence the defined benefit obligation at the
end of the reporting period.
-
Financial Statements
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
195
= Q
↑
100.0
100.0
Current employees
31.12.2020
31.12.2021
31.12.2020
14,105
Total plan assets
5,184
5,785
137
132
2,216
2,388
2,831
3,265
Total without quoted market price
1,177
1,537
113
116
244
214
820
1,207
Other
1,311
12,451
23
9,968
938
31.12.2021
31.12.2020
31.12.2021
in %
Other
United Kingdom
Germany
The defined benefit obligation relates to current employees,
pensioners and former employees with vested benefits as
follows:
The BMW Group is exposed to risks arising both from
defined benefit plans and defined contribution plans with a
minimum return guarantee. The discount rates used to cal-
culate pension obligations are subject to market fluctuations
and therefore influence the level of the obligations. Further-
more, changes in other actuarial parameters, such as
expected rates of inflation, also have an impact on pension
obligations. In order to reduce currency exposures, a sub-
stantial portion of plan assets is either invested in the same
currency as the underlying plan or hedged by means of cur-
rency derivatives. As part of the internal reporting proce-
dures and for internal management purposes, financial risks
relating to the pension plans are reported using a value-at-
risk approach by reference to the pension deficit. The invest-
ment strategy is also subject to regular review together with
external consultants, with the aim of ensuring that invest-
ments are structured to match the timing of pension pay-
ments and the expected development of pension obliga-
tions. In this way, fluctuations in pension funding shortfalls
are reduced.
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
194
In the financial year 2021, disbursements out of the
plan assets are expected to exceed the employer's contribu-
tions to plan assets by € 225 million. Plan assets of the
BMW Group include own transferable financial instruments
amounting to € 2 million (2020: € 1 million).
22,910
25,011
870
9,589
Total
Maturity within
one year
Maturity between
one and five years
fixed
0.9
3.0
USD 500 million
variable
0.5
4.0
SEK 1,500 million
variable
EUR 22,900 million
-0.6
EUR 300 million
BMW Finance N. V.
2.3
3.0
NOK 1,730 million
variable
0.1
16
BMW US Capital, LLC USD 1,220 million
26
6.9
0.8
fixed
GBP 600 million
fixed
2.3
4.0
NOK 750 million
fixed
2.5
5.6
USD 1,750 million
fixed
2.7
6.1
HKD 1,759 million
fixed
0.6
5.6
JPY 13,400 million
fixed
3.4
2.6
CNY 17,000 million
0.0
2.2
EUR 2,000 million
variable
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
199
105,540
185
787
- 3,573
- 6,336
114,477
Liabilities relating to financing activities
752
-34
-78
864
Other (excluding interest payable)
740
-48
492
Remuneration Report
6.0
Other Information
Bonds comprise:
BMW Finance N. V.
rate (in %)
(in days)
maturity period nominal interest
currency
(ISO Code)
Issuer
(in %)
Weighted
average
Weighted
average
in relevant
nominal interest rate
maturity period
(in years)
in relevant currency
(ISO Code)
Interest
Issuer
Issue volume
Weighted average
Weighted average
Issue volume
The following details apply to commercial paper:
Financial Statements
← = Q
296
0.9
AUD 273 million
814
2,367
Payables to other companies in which an investment is held
3,926
3,108
Refund liabilities for future leased products
2,911
3,123
3,546
Other taxes
3,820
5,955
31.12.2020
31.12.2021
Bonuses and sales aides
Deferred income
Contract liabilities
in € million
Other liabilities comprise the following items:
36 Other liabilities
5,485
1,143
1,484
Deposits received
As in the previous year, trade payables are due within one
year.
37 Trade payables
Grants comprise mainly public sector funds to promote
regional structures and which have been invested in the pro-
duction plants in Brazil, China, Germany, Mexico, Austria
and South Africa amongst others. The grants are partly sub-
ject to holding periods for the assets concerned of up to five
years and/or minimum employment figures or minimum
production figures. Grant income is recognised in the income
statement over the useful lives of the assets to which it
relates.
Deferred income includes down payments received on
leases with customers as well as deferred grants.
Contract liabilities relate to obligations for service and repair
work as well as telematics services and roadside assistance
agreed to be part of the sale of a vehicle (in some cases mul-
ti-component arrangements). An amount of € 3,035 million
(2020: € 2,604 million) was released from contract liabilities
in the financial year and recognised as revenues from con-
tracts with customers.
21,187
1,550
1,546
22,420
133
123
139
160
180
180
Other liabilities
Sundry
Social security
Other advance payments received for orders
Payables to subsidiaries
1,019
895
← = Q
Other Information
Remuneration Report
Corporate Governance
fixed
0.0
2.0
GBP 200 million
variable
BMW International Investment B. V.
0.8
8.7
EUR 1,500 million
fixed
3.0
6.7
USD 15,400 million
fixed
0.4
3.4
USD 2,138 million
variable
BMW US Capital, LLC
3.2
10.0
GBP 1,550 million
fixed
4.1
fixed
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
200
1.4
3.3
CAD 800 million
fixed
0.2
3.0
JPY 10,000 million
fixed
Other
0.5
6.8
CHF 600 million
fixed
3.3
10.0
NOK 1,000 million
1.4
6,940
Financial liabilities towards companies in which an investment is held
-40
49,626
41,121
Financial liabilities
1,180
399
248
533
1,153
342
12,716
75
550
550
1,374
1,374
1,148
38
517
593
1,875
736
103,463
38,986
52,771
in € million
Changes
Changes due to
disposal
Cash inflows /
the acquisition or
Changes due to
Liabilities related to financing activities can be reconciled as
follows:
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
198
Similarly, potential future cash outflows amounting to
€ 1,262 million (2020: € 1,252 million) (undiscounted) have
not been taken into account in the measurement of lease
liabilities as it is not reasonably certain that the leases will be
renewed (or not terminated). These cash outflows relate to
periods of up to 62 years (2020: up to 74 years). The decrease
in the period under report was due to a contractual adjust-
ment.
Planned future cash outflows from variable lease payments,
which are not taken into account in the measurement of
lease liabilities, are expected to amount to € 48 million
(2020: € 57 million).
106,376
14,619
148
581
1,146
Other
20
3,507
13,175
Liabilities from customer deposits (banking)
18,819
11,956
6,863
19,362
12,471
6,891
56,665
12,022
32,001
12,642
51,498
10,417
28,675
12,406
Total
than five years
Maturity later
16,702
Bonds
12,735
22
Commercial paper
Derivative instruments
2,511
838
1,181
492
2,420
814
1,131
475
Lease liabilities
9,037
1,300
3,159
4,578
9,079
975
3,186
4,918
Liabilities to banks
16,466
3,709
550
Asset-backed financing transactions
outflows
12
766
- 1,972
- 4,306
62,165
31.12.2020
Other changes
in fair values
of companies exchange rate factors
56,665
Changes
disposal
Cash inflows/
outflows
1. 1. 2020
Asset-backed financing transactions
Bonds
in € million
the acquisition or
Changes due to
103,347
Changes due to
19,549
-82
-648
-2,025
2,615
Commercial paper
2,511
173
-63
- 494
2,895
Lease liabilities
9,037
21
- 248
-2,172
11,436
Liabilities to banks
16,466
- 520
2,329
14,657
Liabilities from customer deposits (banking)
18,819
325
- 846
3,672
724
-357
9,037
Liabilities to banks
16,702
465
-229
16,466
Liabilities from customer deposits (banking)
19,362
874
-331
18,819
51,498
-6
31.12.2021
Other changes
in fair values
-787
1,647
- 6,021
56,665
of companies exchange rate factors
458
1.1.2021
-59
Lease liabilities
-10
- 18
- 5,344
105,540
Liabilities relating to financing activities
752
Other (excluding interest payable)
2,188
153
1,295
740
Financial liabilities towards companies in which an investment is held
1,374
43
781
550
Commercial paper
2,420
331
42
-464
2,511
9,079
7,081
324
-524
2,726
2,726
2,726
- 239
- 144
- 239
- 239
-144
-144
1
-1,880
1
- 524
84
- 84
-645
639
-6
-6
- 618
26,587
582
-524
-36
- 1,880
- 54
← = Q
Defined
benefit obligation
Plan assets
24,652
-21,340
Total
3,312
488
488
-1,880
337
34
-54
- 54
Effect of limitation
of the net defined
benefit asset to the
asset ceiling
Net defined
benefit liability
2
3,314
488
34
- 303
Other Information
-36
3,677
Other Information
← = Q
Depending on the cash flow profile and risk structure of the
pension obligations involved, plan assets relating to defined
benefit plans are invested in a diversified portfolio.
Plan assets in Germany, the UK and other countries com-
prised the following:
Germany
Financial Statements
United Kingdom
Other
Total
Remuneration Report
in € million
31.12.2021 31.12.2020 31.12.2021 31.12.2020 31.12.2021 31.12.2020 31.12.2021 31.12.2020
2,875
2,166
342
348
85
74
3,302
Debt instruments
Equity instruments
-22,910
Corporate Governance
Combined Management Report
3
3,680
3,693
-13
192
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Group Financial Statements
Notes to the Group
Corporate Governance
Other Information
← = Q
In conjunction with a measure aimed at modernising the
pension model in Germany, employees were given the choice
of remaining in the previous defined benefit plan or switch-
ing to the defined contribution plan. The fixed amounts to
which employees were previously entitled in the defined
benefit plan remain unchanged going forward and therefore
this is one factor which results in a plan amendment in
accordance with IAS 19. The previous pension entitlement
trend (Festbetragstrend) was converted – with the exception
of one remaining component - into a career trend. Further-
more, an employee switching to the defined contribution
plan received an entitlement deemed to be equivalent in
legal terms to their previous rights.
This gave rise to an overall positive impact of € 562 million
on past service cost, which was recognised in the income
statement, primarily in the form of reductions to cost of sales
as well as to selling and administrative expenses.
Actuarial gains arising in the financial year 2021 resulted in a
surplus of plan assets over liabilities for one of the pension
plans in the United Kingdom. However, because there is no
right of reimbursement or right to reduce future contributions
to the fund, the amount of plan assets recognised has been
limited to the amount of the obligations.
In the previous financial year, employment contract termina-
tion agreements were agreed with employees, resulting in
the persons concerned leaving the BMW Group with vested
pension benefits. Past service cost resulted mainly from dif-
fering assumptions used to calculate statutory pension enti-
tlements on the one hand and for the ongoing accounting for
active employees on the other.
193
BMW Group Report 2021
To Our Stakeholders
Remuneration Report
7,742
Remuneration Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
To Our Stakeholders
Combined Management Report
in € million
1 January 2020
EXPENSE / INCOME
Current service cost
Interest expense (+)/income (-)
Past service cost
Gains (-) or losses (+) arising from settlements
REMEASUREMENTS
7,326
Gains (-) or losses (+) arising from changes in financial assumptions
Gains (-) or losses (+) on plan assets, excluding amounts included in interest income
thereof pension provisions
thereof assets
Translation differences and other changes
Pensions and other benefits paid
31 December 2020
Transfers to fund
Changes in the limitation of the net defined benefit asset to the asset ceiling
Gains (-) or losses (+) arising from experience adjustments
Gains (-) or losses (+) arising from changes in demographic assumptions
Employee contributions
Other derivative instruments
390
Marketable securities and investment funds
20
3,238
985
Cash and cash equivalents
35
23
Other
1,012
Trade receivables
216
Loans to third parties
1,596
64,795
22,622
Derivative instruments
Cash flow hedges
Fair value hedges
Financial Statements
31.12.2021
At amortised cost
At fair value through
other comprehensive
income
At fair value
through profit or loss
Not allocated to an
IFRS 9 category
At amortised cost
At fair value through
other comprehensive
income
At fair value
through profit or loss
15,983
947
294
63,104
26
31.12.2020
2,261
88,036
Receivables from companies in which an
investment is held
2,190
2,048
Collateral assets
546
295
Remaining other assets
1,547
5,517
1,504
5,774
Total
454
2,298
915
12,622
Other assets
Receivables from subsidiaries
694
Not allocated to an
IFRS 9 category
477
258
21,173
851
1,992
115
3,245
866
49
22
199
46
413
2021
Financial assets
250
1,153
10,932
Trade payables
Other
Lease liabilities
18,819
619
550
9,037
56,665
1,006
Other derivative instruments
Fair value hedges
Cash flow hedges
16,466
2,420
1,180
8,644
Other liabilities
116,976
4,621
15,017
18,693
619
117,503
Total
4,856
Remaining other liabilities *
814
2,367
investment is held
Payables to other companies in which an
180
180
Payables to subsidiaries
Derivative instruments
3,238
19,362
1,374
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
← = Q
BMW Group Report 2021
30,048
2,693
3,245
82,939
31,041
2,371
203
in € million
LIABILITIES
Financial liabilities
Commercial paper
16,702
Liabilities from customer deposits (banking)
9,079
Liabilities to banks
51,498
Bonds
At amortised cost
Not allocated to an
IFRS 9 category
At fair value
through profit or loss
income
At amortised cost
At fair value through
other comprehensive
31.12.2021
Financial Statements
Asset-backed financing transactions
Receivables from sales financing
34
ASSETS
85
85
- 29
-2
- 31
397
31 December 2020
22
- 5
417
Gains and losses recognised in the income statement are
reported within the line item "Other financial result". Gains
and losses recognised in the income statement in the finan-
cial year 2021 included an unrealised net positive amount of
€ 352 million (2020: € 84 million).
208
BMW Group Report 2021
To Our Stakeholders
3
Combined Management Report
Currency translation differences
-7
5
374
Additions
73
17
90
Gains (+)/losses (-) recognised in the income
statement
Disposals
-7
-2
2
-94
Gains (+)/losses (-) recognised in accumulated
other equity
-7
- 87
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
1,148
-1,118
1,880
-1,118
757
- 790
2,466
- 790
3,256
31.12.2020
358
Net gains and losses arising on financial instruments meas-
ured at fair value through other comprehensive income
mainly relate to changes in the fair value of marketable secu-
rities. Further details are provided in the disclosures relating
to the statement of comprehensive income ( note 19). Total
interest income arising on financial assets measured at fair
value through other comprehensive income amounted to
€ 31 million (2020: € 37 million) and total interest expense to
€ 18 million (2020: € 30 million).
Net gains and losses arising on financial instruments meas-
ured at fair value through profit and loss mainly include
results from the fair value measurement of stand-alone
derivatives, marketable securities and shares in investment
funds, as well as other financial assets.
Net gains and losses arising on financial assets measured at
amortised cost comprise mainly exchange rate gains / losses
and impairment losses/reversals.
Net gains and losses arising on financial liabilities measured
at amortised cost comprise mainly exchange rate gains/
losses as well as fair value gains/losses on hedged items in
designated hedging relationships that are recognised in the
income statement.
Total interest income arising on financial assets measured at
amortised cost relates mainly to the interest income earned
on credit financing and reported within revenues. Total inter-
est expenses arising on financial instruments measured at
amortised cost amounted to € 1.6 billion (2020: € 1.8 billion).
Reported on
equity and
liabilities side
1,875
2,998
Reported on
assets side
Other Information
← = Q
Financial Statements
Offsetting of financial instruments
Derivative financial instruments of the BMW Group are sub-
ject to legally enforceable master netting agreements or
similar contracts. However, receivables and payables relat-
ing to derivative financial instruments are not netted due to
non-fulfilment of the stipulated criteria. Offsetting would
have the following impact on the carrying amounts of deriv-
atives:
in € million
Balance sheet amounts as reported
Gross amount of derivatives which can be offset in case of insolvency
Net amount after offsetting
Non-derivative financial assets and liabilities are only offset
if a legally enforceable right currently exists and it is actually
intended to offset the relevant amounts. No financial assets
and liabilities have been netted in the BMW Group due to the
fact that the necessary requirements for netting have not
been met.
Gains and losses on financial instruments
The following table shows the net gains and losses arising
on financial instruments in accordance with IFRS 9:
31.12.2021
Reported on
Reported on
equity and
assets side liabilities side
14
355
1 January 2020
Financial
instruments
Level 3
Purchase commitments for
intangible assets
Purchase commitments for property,
plant and equipment
in € million
In addition to liabilities, provisions and contingent liabilities,
the following commitments exist for the BMW Group at the
end of the reporting period:
Other financial commitments
On 22 January 2020, the U.S. Securities and Exchange Com-
mission (SEC) opened an investigation into possible viola-
tions of U.S. securities laws by the BMW Group relating to
disclosures regarding the BMW Group's unit sales of new
vehicles. This matter was settled with the SEC, without admit-
ting or denying the allegations, and the BMW Group con-
sented to the entry of an Order finding violations of the U.S.
Securities Act and agreed to pay a penalty of US $18 million.
Certain BMW Group entities and their officers are defendants
in private securities litigation following the SEC Order. Possi-
ble risks for the BMW Group cannot be quantified at present.
Further disclosures pursuant to IAS 37.86 cannot be provided
at present.
31.12.2021
future recall actions going forward. Further disclosures pur-
suant to IAS 37.86 cannot be provided at the present time.
With respect to the Korean investigation, BMW AG recog-
nised a provision during the financial year. The Turkish anti-
trust authority issued its decision in January 2022, abstain-
ing from issuing a fine. Possible risks for the BMW Group in
connection with the antitrust proceedings in China cannot be
currently foreseen, either in terms of their outcome nor the
amounts involved. Further disclosures pursuant to IAS 37.86
cannot be provided at present.
In addition, the Chinese State Administration for Market
Regulation opened antitrust proceedings against BMW AG
in March 2019, followed by the Korea Fair Trade Commission
in May 2020 and the Turkish Competition Authority in July
2020.
The class action lawsuits in Canada and the private lawsuits
in South Korea remain at an early stage. Further civil law-
suits based on the allegations are possible going forward.
been brought in the USA and Canada as well as several pri-
vate lawsuits in South Korea. In the USA, the customer class
actions were withdrawn and the dealer class action was dis-
missed.
The EU Commission's antitrust proceedings (see note 10 for
additional information) was settled on 8 July 2021. In relation
to these allegations, numerous class action lawsuits have
The BMW Group determines its best estimate of contingent
liabilities based on the information available at the date of
preparing the Group Financial Statements. This assessment
may change over time and is adjusted regularly on the basis
of new information and circumstances. A part of the risks is
covered by insurance.
Regulatory authorities have ordered the BMW Group to recall
various vehicle models in conjunction with airbags supplied
by the Takata group of companies. Provision for the costs
involved has been recognised within warranty provisions. In
addition to the risks already covered by warranty provisions,
further BMW Group vehicles may possibly be affected by
31.12.2020
3,350
3,264
in € million
to IFRS 9 categories in the following table:
The carrying amounts of financial instruments are assigned
39 Financial instruments
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
202
2,787
2,190
Other contingent liabilities mainly comprise risks relating to
taxes and customs duties.
Other investments
1,292
1,067
OTHER DISCLOSURES
491
* Prior year's figures adjusted.
-49
67
814
38 Contingent liabilities and other financial
Options on
unquoted equity
in € million
instruments
Convertible bonds
instruments
Derivative
instruments
Unquoted equity
commitments
Contingent liabilities
The following contingent liabilities existed at the balance
sheet date:
1,202
43
77
105
131
77
56
31.12.2020
31.12.2021
Contingent liabilities
Other
Guarantees
Litigation
Investment subsidies
in € million
1,466
31.12.2020
19,362
At fair value
through profit or loss
-220
24
76
-5
3
Derivative
instruments
-30
instruments
397
Options on
unquoted equity
Unquoted equity
instruments
31 December 2021
Level transfer
Currency translation differences
Convertible bonds
22
Gains (+)/losses (-) recognised in the income
statement
488
210
Financial Statements
Further disclosures relating to credit risk - in particular with
regard to the amounts of impairment losses recognised -
are provided in the explanatory notes to the relevant catego-
ries of receivables in notes 25 and 730.
Gross carrying amount of financial assets with good credit ratings
Gross carrying amount of financial assets with medium credit ratings
Gross carrying amount of financial assets with poor credit ratings
Total
in € million
The classification into creditworthiness levels is based on
default probabilities. The related gross carrying amounts in
accordance with IFRS 9 are allocated as follows:
Receivables from sales financing are allocated to internally
defined rating categories based on credit risk.
2,345
← = Q
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
Other Information
Gains (+)/losses (-) recognised in accumulated
other equity
Disposals
Additions
As part of the process of analysing valuations, the external
fund manager reviews the investment-specific milestones,
including an analysis of financial, technical and liquidity-spe-
cific performance indicators. Based on this analysis, it is
considered whether the price of the most recent financing
round is acceptable as a reasonable market valuation, in
particular for early-stage or growth-phase investments. Key
performance indicators used for the purpose of milestone
analysis are highly dependent on the business model under-
lying the investment. Typical technical key performance indi-
cators relate to licenses and patents held, the stage of tech-
nology development such as evidence of feasibility and
prototypes, market entries, customer and user growth and
appointments to key management positions. Key financial
performance indicators used are revenues, EBITDA and the
corresponding growth rate and/or development of specific
contribution margins. Key liquidity-specific performance
indicators are cash on hand, cash burn rates and prospects
for future financing rounds.
-
Financial instruments allocated to Level 3 relate mainly to
investments in a private-equity fund. The valuation of
unlisted equity instruments is determined primarily using the
market-based approach. In particular, the financing rounds
that take place within the private equity sector - usually on a
regular basis at intervals of approximately 12 to 24 months
represent a significant input factor for these purposes. In
addition, the investment advisor provides the external fund
manager with relevant, investment-specific information on
an ongoing basis (at least quarterly). The latter subsequently
assesses the underlying individual companies in accordance
with the guidelines for International Private Equity and Ven-
ture Capital Valuations (IPEV).
3
-5
67
Options on unquoted equity instruments
Derivative instruments
Since the pricing from the financing rounds is considered to
be the decisive input factor for the valuation, increases or
decreases in valuation give rise to a similar change in the
equity instrument that is recognised in the income state-
22
Convertible bonds
397
724
Unquoted equity instruments
31.12.2020
Fair value
31.12.2021
Fair value
23
ment.
In addition, equity instruments that are held outside the pri-
vate equity fund are measured using the income approach.
This involves discounting cash flows on the basis of current
business cases using the weighted average cost of capital to
determine the fair value of the financial instrument. Changes
in fair values determined in connection with adjustments to
significant input factors are not material for the BMW Group.
The convertible bonds that have been classified to Level 3
are primarily used as instruments in advance of future
financing rounds relating to private equity investments. Val-
uations are therefore performed in accordance with the IPEV
guidelines.
1 January 2021
in € million
The balance sheet carrying amount of Level 3 financial
instruments developed as follows:
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
207
For selected derivatives, a complete set of data relevant for
valuation purposes is not available due to their limited mar-
ket maturity. In order to model forward curves, data are col-
lated and updated on the basis of regular bank and trader
inquiries. The valuation methodology applied is in line with
the general valuation principles for derivatives used within
the treasury management system of the BMW Group.
Changes in fair values resulting from shifts in forward curves
within a range of +/-10% are not material for the
BMW Group.
The exercise price for share options in such companies is
generally low, verging towards zero. Consequently, financing
rounds have a direct impact on the fair value of the options.
In this respect, the valuation of options and assessment of
their impact on sensitivity is similar to the approach taken to
unquoted equity instruments, as described above.
Mandatory conversions are usually structured in such a way
that the number of shares to be received depends on the
future share price. Due to the generally short maturities, the
instruments are subject to only insignificant fluctuations in
value. Irrespective of this fact, impairment tests are per-
formed at regular intervals.
31.12.2021
in € million
31.12.2020
1
1,633
367
78,356
406
3,310
2,671
76,356
44
517
3,778
1,653
38
5,469
431
6,025
71
377
374
Stage 1
Stage 2
Stage 3
Expected
General
Simplified
81,084
Total
General
Simplified
Total
Expected
credit loss
79,639
1,071
credit loss
769
13
1,054
1,639
32
52
-49
724
23
85,916
Financial
instruments
417
100
-4
-254
75
75
Level 3
1,019
422
4,223
1,907
705
118
937
17
1,019
2,091
802
83,020
4,511
431
1,054
89,016
1,599
80,252
Stage 1
Financial instruments measured at fair value using input fac-
tors not based on observable market prices are allocated to
Level 3. The fair values of these financial instruments are
shown in the following table:
← = Q
Other Information
20
20
21,173
23,116
22,622
24,675
116
63,104
64,795
67,158
Carrying
amount
Fair value
amount
Fair value
65,326
Carrying
115
51,498
9,037
9,209
9,079
9,177
16,466
16,599
53,022
16,702
18,819
18,818
in € million
19,602
56,665
58,136
16,732
31.12.2020
31.12.2021
Liabilities to banks
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
204
Remuneration Report
18,443
15,572
2,511
788
248
112
Not allocated to an
IFRS 9 category
788
Other Information
← = Q
Disclosures relating to financial instruments measured at
amortised cost
Liabilities from customer deposits (banking)
Asset-backed financing transactions
Bonds
Financial liabilities
Financial assets - Marketable securities and investment funds
Receivables from sales financing - finance and operating leases
-
Receivables from sales financing credit financing
in € million
For all other financial instruments not listed here that are
measured at amortised cost, the carrying amount corre-
sponds to the fair value. For this reason, they are not pre-
sented separately.
In the case of financial liabilities, own credit risk is taken into
account based on credit default swaps available on the mar-
ket, so that the fair values of these items are also allocated
to Level 2.
IFRS 13. The fair values of the financial assets shown in the
table exist with financial institutions and are also measured
using the discounted cash flow method, taking into account
the risk of default. Given that these financial institutions all
have excellent credit ratings, the risk of default is low and
can be observed on the market. The fair values of these
items are therefore allocated to Level 2.
The fair values of receivables from sales financing are meas-
ured using the discounted cash flow method, taking into
account customer-specific credit risk. In view of the fact that
these allowances are calculated in part on the basis of inter-
nal information, receivables from sales financing are allo-
cated to Level 3 in the level hierarchy in accordance with
The fair values are generally determined using the dis-
counted cash flow method, taking into account the relevant
risk of default. For the purposes of fair value measurement
using the discounted cash flow method, expected future
cash flows are discounted on the basis of up-to-date interest
curves observable on the market.
The following table shows the fair values and carrying
amounts of financial assets and liabilities that are measured
at amortised cost and whose carrying amounts differ from
their fair value.
205
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
729
40
67
1,092
I
466
Currency risks
1,373
Derivative instruments (liabilities)
Other risks
Raw material market price risks
Currency risks
Interest rate risks
223
Interest rate risks
1,045
Raw material market price risks
101
Remuneration Report
Group Financial Statements Corporate Governance
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
206
6
52
171
919
3
1
573
335
2,344
23
At fair value through
other comprehensive
income
Derivative instruments (assets)
915
Level hierarchy in accordance with IFRS 13
In the previous year, an amount of € 275 million relating to
marketable securities, investment funds and collateral was
reclassified from Level 1 to Level 2, in view of the fact that the
fair values of the marketable securities concerned were
derived on the basis of comparable instruments in the form
of a theoretical price. Furthermore, money market funds
amounting to € 915 million were reclassified from Level 2 to
Level 1 due to the fact that corresponding market or stock
exchange prices became available.
At 31 December 2021, equity instruments amounting to
€ 49 million were reclassified from Level 3 to Level 1, due to
the fact that quoted market prices became available for the
instruments concerned for the first time.
As a general rule, any transfers between fair-value hierarchy
levels are made at the end of the relevant reporting period.
397
31.12.2020
Level hierarchy in accordance with IFRS 13
31.12.2021
Disclosures relating to financial instruments measured at fair
value
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
The carrying amounts of financial instruments measured at
fair value are allocated to the measurement levels pursuant
to IFRS 13 as described below:
in € million
Level 1
Level 2
26
Cash equivalents
80
724
223
Other investments
503
3,608
548
3,675
Marketable securities, investment funds and collateral
assets
Level 3
Level 2
Level 1
Level 3
Loans to third parties
Stage 3
Stage 2
Financial instruments measured at fair value through other comprehensive income
Not overdue
1-30 days overdue
31-60 days overdue
61-90 days overdue
More than 90 days overdue
Total
31.12.2021
31.12.2020
2,113
2,002
120
229
12
31
14
23
34
60
2,293
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
2020
← = Q
in € million
The credit risk on trade receivables is assessed mainly on
the basis of information relating to overdue amounts. The
gross carrying amounts of these receivables are allocated in
accordance with IFRS 9 to overdue ranges used for manage-
ment purposes as follows:
201
The credit risk relating to cash deposits and derivative finan-
cial instruments is minimised by the fact that the Group only
enters into such contracts with parties of first-class credit
standing.
7
Within the financial services business, items financed for
retail customers and dealerships (such as vehicles, facilities
and property) serve as first-ranking collateral with a recover-
able value. Security is also put up by customers in the form
of collateral asset pledges, asset assignment and first-rank-
ing mortgages, supplemented where appropriate by warran-
ties and guarantees. Items previously held as collateral that
are subsequently acquired relate mainly to vehicles. As a
rule, these assets can be converted into cash at short notice
through the dealership organisation. Creditworthiness test-
ing is an important aspect of the BMW Group's credit risk
management. Every borrower's creditworthiness is tested
for all credit financing and lease contracts entered into by the
BMW Group. In the case of retail customer financing, credit-
worthiness is assessed using validated scoring systems
integrated in the purchasing process. In the area of dealer-
ship financing, creditworthiness is assessed by means of
ongoing credit monitoring and an internal rating system that
takes account not only of the material credit standing of the
borrower, but also of qualitative factors, such as past reliabil-
ity in business relations.
-45
Financial instruments measured at fair value through profit or loss
-35
310
803
- 1,050
Financial liabilities measured at amortised cost
818
-350
209
Financial assets measured at amortised cost
To Our Stakeholders
Notwithstanding the existence of collateral accepted, the
carrying amount of financial assets (with the exception of
derivative financial instruments) generally represents the
maximum credit risk. In addition, the credit risk is increased
by additional unutilised loan commitments in the dealership
financing line of business. Total dealership financing credit
risk at the end of the reporting period therefore amounted to
€ 31,508 million (2020: € 30,682 million).
BMW Group Report 2021
In the case of trade receivables, customers are regularly
assessed with regard to their credit risk. Depending on con-
tractual status, necessary measures, such as dunning pro-
cedures, are initiated in good time.
The BMW Group is exposed to counterparty credit risks if
contractual partners, for example a retail customer or a deal-
ership, are unable or only partially able to meet their contrac-
tual obligations. Information on the management of credit
risk for receivables from financial services is provided in the
Combined Management Report (see section Outlook, Risk
and Opportunity Management).
In the case of all relationships underlying non-derivative
financial instruments, in order to minimise the credit risk and
depending on the nature and amount of exposure, collateral
is required, credit information and references obtained or
historical data based on the existing business relationship,
in particular payment behaviour, reviewed.
← = Q
Credit risk
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
Nominal amounts of
1,792
21,470
1,449
Raw material price risks
hedging instruments
12,373
Palladium (EUR/oz)
Platinum (EUR/oz)
8,082
Interest rate risks
4,530
11,939
Currency risks
34,535
Nickel (EUR/t)
28,213
12,373
701
31.12.2020
Maturity
later than
five years
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
216
Information on average interest hedge rates is not provided,
since interest rate derivatives designated as hedging instru-
ments are used exclusively to hedge items in fair value
hedges. The hedge rates therefore correspond in each case
to current market interest rate level. Most of the hedges used
676
1,350
1,822
11,188
14,475
4,568
5,389
1,573
1,730
31.12.2021
one year and five years
Raw material price risks
Maturity
between one
2,442
2,669
Remuneration Report
11,251
25,145
9,474
Interest rate risks
Nominal amounts of
11,996
Currency risks
Maturity
later than
five years
Maturity Maturity
within between one
one year and five years
in € million
31.12.2021
EUR/JPY
EUR/KRW
21,670
hedging instruments
33,813
39,583
within
Maturity
Copper (EUR/t)
31.12.2020
Aluminium (EUR/t)
Raw material price risks
in this context relate to variable yield curves relating to the
euro, US dollar and British pound currency areas.
A cash-flow-at-risk approach to risk management involves
making use of portfolio effects. No JPY-denominated hedg-
ing transactions were in hedging relationships at the end of
the year under report (2020: no USD-denominated hedging
transactions).
1,334.86
124.20
0.87
0.87
1,341.73
1.23
8.05
7.99
31.12.2020
31.12.2021
11,251
in € million
Other Information
31.12.2020
Financial Statements
Change in
value of
Liabilities hedged items
Assets
Balances in accumulated
other equity
Carrying amounts
Balances in accumulated
other equity
Carrying amounts
31.12.2020
Continuing
hedge
relationships
31.12.2021
248
1,992
59,774
-1,138
250
1,012
57,920
723
Terminated
hedge
relationships
Assets
Change in
value of
Liabilities hedged items
BMW Group Report 2021
217
-720
58,714
8,483
510
532
-1,169
-467
1,141
56,985
10,611
1,057
- 820
-274
795
Terminated
hedge
relationships
Continuing
hedge
relationships
466
← = Q
58
1,169
Carrying amounts
The accumulated amount of hedge-related fair value adjust-
ments is a negative amount of € 9 million (2020: positive
amount of € 10 million) for assets and a positive amount of
€ 577 million (2020: positive amount of € 1,680 million) for
liabilities.
Interest rate risks
Fair Value Hedges
Raw material price risks
Currency risks
Cash Flow Hedges
31.12.2021
in € million
Interest rate risks
Fair Value Hedges
Raw material price risks
Currency risks
Cash Flow Hedges
in € million
The following table provides information on the nominal
amounts, carrying amounts and fair value changes of con-
tracts designated as hedging instruments:
The following table shows key information on hedged items
for each risk category as well as the balances of designated
components within accumulated other equity:
Carrying amounts
Nominal
amounts
Assets
54
277
16,469
3,241
-795
820
101
1,159
5,111
905
437
33,666
Change in
fair value of
designated
components
EUR/GBP
Liabilities
Assets
Nominal
amounts
Change in
fair value of
designated
components
Liabilities
574
EUR/USD
31.12.2021
Currency risks
Market risks
Further information is provided in the Combined Manage-
ment Report.
As a further reduction of risk, a syndicated credit line totalling
€ 8 billion (2020: € 8 billion) from a consortium of interna-
tional banks is available to the BMW Group. Intra-group
cash flow fluctuations are balanced out by the use of daily
cash pooling arrangements.
The resulting funding requirements are covered by a variety
of instruments placed on the world's financial markets, with
the aim to minimise risk by matching maturities with financ-
ing requirements and in alignment with a dynamic target
debt structure.
← = Q
Other Information
Remuneration Report
The principal market risks to which the BMW Group is
exposed are currency risk, interest rate risk and raw materi-
als market price risk.
Corporate Governance
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
212
Solvency is assured at all times by managing and monitoring
the liquidity situation on the basis of a rolling cash flow fore-
cast.
fair value, an overall positive cash flow can arise due to the
various yield curves used. At 31 December 2021 credit com-
mitments available at short notice to dealerships which had
not been called upon at the end of the reporting period
amounted to € 18,334 million (2020: € 14,367 million).
The cash flows from non-derivative liabilities comprise prin-
cipal repayments and the related interest. The amounts dis-
closed for derivative instruments comprise only cash flows
relating to derivatives that have a negative fair value at the
balance sheet date. In the case of derivatives with a negative
Group Financial Statements
Notes to the Group
Financial Statements
Protection against such risks is provided in the first instance
though natural hedging which arises when the values of
non-derivative financial instruments have matching maturi-
ties and amounts (netting). Derivative financial instruments
are used to reduce the risk remaining after netting.
Currency, interest rate and raw materials market price risks
of the BMW Group are managed at a corporate level.
Further information is provided in the "Outlook, Risk and
Opportunity Management" section of the Combined Man-
agement Report.
33,975
38,134
31.12.2020
31.12.2021
The following table shows the potential negative impact for
the BMW Group for the following year resulting from unfa-
vourable changes in exchange rates, measured on the basis
of the cash-flow-at-risk approach.
The potential negative impact on earnings is calculated at
the reporting date for each currency for the following finan-
cial year on the basis of current market prices and exposures
with a confidence level of 95%. The risk mitigating effect of
correlations between the various currencies is taken into
account when the risks are aggregated.
This exposure is compared to all hedges that are in place.
The net cash flow surplus represents an uncovered risk posi-
tion. The cash-flow-at-risk approach involves showing the
impact of potential exchange rate fluctuations on operating
cash flows on the basis of probability distributions. Volatili-
ties and correlations serve as the main input factors to deter-
mine the relevant probability distributions.
Currency exposures include short positions amounting to
€ 2,715 million (2020: € 5,222 million). In addition, a cur-
rency risk exposure existed at the reporting date on the pur-
chase price payable arising in connection with the increase
in the BMW Group's stake in the BMW Brilliance joint ven-
ture for a euro-equivalent amount of € 3,857 million. The
transaction was completed in February 2022. Further infor-
mation is provided in a note 3 Increased shareholding in BMW
Brilliance Automotive Ltd.
Currency exposure
in € million
The BMW Group measures currency risk using a cash-flow-
at-risk model. The analysis of currency risk is based on fore-
cast foreign currency transactions which could result in
exposures to surpluses of foreign currency cash inflows and
cash outflows. At the end of the reporting period, the overall
currency exposure – in each case for the following year and
determined by aggregating the individual currency expo-
sures based on their absolute amount - was as follows:
Causes of hedge ineffectiveness are seen potentially only for
counterparty credit risk. However, in view of the processes
that have been established for credit risk management, inef-
fectiveness is not expected to arise.
The economic relationship between the hedged item and
the hedging instrument is based essentially on the fact that
they are denominated in the same currency and have the
same maturities. Items are hedged on the basis of a con-
stant ratio of one to one between hedging instrument and
risk exposure.
As part of the implementation of the risk management strat-
egy, the extent to which risk exposures should be hedged is
decided at regular intervals.
cial instruments mostly in the form of forward currency con-
tracts and currency swaps.
As an enterprise with worldwide operations, the BMW Group
conducts business in a variety of currencies, from which cur-
rency risks arise. In order to hedge currency risks, the
BMW Group holds, as at 31 December 2021, derivative finan-
Currency risk
118,629
in € million
14,767
49,264
- 617
-5,296
- 14,478
-42,203
- 157
-14,180
-27,866
-20,391
21,085
5,544
14,910
44,583
166
15,117
29,300
Total financial liabilities
631
219
216
88
118,643
13,256
52,053
53,334
552
28
144
380
523
88
216
219
552
28
144
380
523
54,598
EUR/CNY
Cash flow at risk
31.12.2020
6,872
in € million
31.12.2020
To Our Stakeholders
The following table shows the potential negative impact for
the BMW Group resulting from fluctuations in prices across
all categories of raw materials, measured on the basis of the
cash-flow-at-risk approach. The risk at each reporting date
for the following financial year was as follows:
Raw material price exposures
in € million
4,204
The starting point for analysing raw materials price risk is to
identify planned purchases of raw materials or components
containing raw materials, the so-called "exposure". At each
reporting date, the exposure for the following financial year
amounted to:
Causes of hedge ineffectiveness are seen potentially only for
counterparty credit risk. However, in view of the processes
that have been established for credit risk management, inef-
fectiveness is not expected to arise.
The BMW Group is exposed to market price risks on raw
materials. In order to hedge these risks, the Group mainly
uses forward commodity contracts. As part of the implemen-
tation of the risk management strategy, the extent to which
risk exposures should be hedged is decided at regular inter-
vals and the corresponding hedging ratio defined. Items are
hedged on the basis of a constant ratio of one to one
between hedging instrument and risk exposure.
Raw materials price risk
← = Q
Other Information
Remuneration Report
Corporate Governance
The economic relationship between the hedged item and
the hedging instrument is based essentially on the fact that
they have the same basis and term. The BMW Group desig-
nates only the commodity price index-linked raw material
surcharge, which is specified in the purchase contracts of
vehicle components, as a hedged item. The proportion of the
hedged risk component as a percentage of the total fair
value depends on the specific types of vehicle component
involved. Other price components contained in the contract
are not designated as being part of the hedge relationship
as no effective hedging instruments exist for these compo-
nents.
Cash flow at risk
This exposure is compared to all hedges that are in place.
The net cash flow surplus represents an uncovered risk posi-
tion.
The cash-flow-at-risk approach involves showing the impact
of potential raw materials market price fluctuations on oper-
ating cash flows on the basis of probability distributions. Vol-
atilities and correlations serve as input factors to assess the
relevant probability distributions.
The following table shows the most significant average
hedging rates of hedging transactions used by the
BMW Group:
The nominal amounts of hedging instruments were as
follows:
The following disclosures on hedging measures include
derivatives of fully consolidated companies that are desig-
nated as a hedging instrument. The amounts shown in the
table are stated before deferred taxes and take account of
additional effects arising from the application of the modified
closing rate method.
Disclosures on hedging measures
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
215
310
597
31.12.2021 31.12.2020
The potential negative impact on earnings is calculated at
the reporting date for each raw materials category for the
following financial year on the basis of current market prices
and exposure with a confidence level of 95%. The risk miti-
gating effect of correlations between the various categories
of raw materials is taken into account when the risks are
aggregated.
Group Financial Statements
Notes to the Group
Financial Statements
31.12.2021
Combined Management Report
BMW Group Report 2021
Fair values of interest rate portfolios
in € million
The fair value of the Group's interest rate portfolios was as
follows at the end of the reporting period:
Interest rate risks arise when funds are borrowed and
invested with differing fixed-rate periods or differing terms.
At the BMW Group, all items subject to, or bearing, interest
are exposed to interest rate risk and can therefore affect
both the assets and liabilities side of the balance sheet.
Interest rate risk
← = Q
Other Information
31.12.2021
Remuneration Report
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
213
531
564
Corporate Governance
31.12.2020
63,835
58,545
214
1,160
1,237
31.12.2021 31.12.2020
Value at risk
in € million
In the following table the potential volumes of fair value fluc-
tuations measured on the basis of the value-at-risk
approach are compared with the expected value for the
interest-rate-sensitive exposures of the BMW Group:
The BMW Group applies a value-at-risk approach through-
out the Group for internal reporting purposes and to manage
interest rate risk. This approach is based on a historical sim-
ulation in which the potential future fair value losses of the
interest rate portfolios are compared across the Group with
expected amounts on the basis of a holding period of 250
days and a confidence level of 99.98 %. The risk mitigating
effect of correlations between the various portfolios is taken
into account when the risks are aggregated.
In the case of USD LIBOR and CAD CDOR, uncertainty
remains as to the exact timing and nature of the changes.
The notional amount of financial derivatives not yet con-
verted to an alternative interest rate at 31 December 2021 is
€ 12,522 million (USD LIBOR € 12,522 million). The nominal
amount of non-derivative financial liabilities not yet con-
verted to an alternative interest rate is € 700 million (thereof
USD LIBOR € 387 million and CAD CDOR € 313 million).
that have been transferred with effect from 31 December
2021 to an alternative benchmark interest rate in accordance
with the IBOR Fallbacks Protocol totals € 6,890 million
(mainly GBP LIBOR € 4,229 million and JPY LIBOR
€ 2,279 million).
The BMW Group's fair value hedges affected by the reform
are mainly based on the benchmark interest rates relating to
the British pound (GBP), the US dollar (USD) and the Japan
yen (JPY). Fair value hedges for which GBP LIBOR and JPY
LIBOR were previously designated as the hedged risk were
converted during the financial year 2021, with GBP LIBOR
replaced by the SONIA benchmark interest rate and JPY
LIBOR replaced by the TONA benchmark interest rate. The
BMW Group continues to see the economic link and has
therefore continued to account the pertinent items as fair
value hedges. The notional amount of financial derivatives
The transition to the newly created or revised benchmark
interest rates is being managed, monitored and assessed
with regard to risk management implications as part of a
multidisciplinary project. The tasks of the conversion project
includes the continual monitoring of regulatory develop-
ments, the initiation of necessary changes to systems, pro-
cesses, risk and measurement models as well as the clarifi-
cation of the associated accounting and financial reporting
implications. The uncertainty triggered by the benchmark
interest rate reform, in the meantime relating primarily to the
USD and CAD, is expected to be eliminated during the finan-
cial
year 2022.
In light of the reform and replacement of certain benchmark
interest rates, some of the BMW Group's hedging relation-
ships have been redesignated to take account of alternative
benchmark interest rates.
In this case, swaps are used as the hedging instrument.
Hedge relationships are terminated and redesignated on a
monthly basis at the end of each reporting period, thereby
taking account of the constantly changing content of each
portfolio.
For selected fixed-interest assets, part of the interest rate
risk is hedged on a portfolio basis.
In view of the fact that own credit risk is excluded from the
hedging relationship, ineffectiveness is expected to be low.
Interest rate risk is managed through the use of interest rate
derivatives. As part of the implementation of the risk man-
agement strategy, interest rate risks are monitored and
managed at regular intervals. The interest rate contracts
used for hedging purposes comprise mainly swaps, which, if
hedge accounting is applied, are accounted for as fair value
hedges. The economic relationship between the hedged
item and the hedging instrument is based on the fact that
the main parameters of the hedged item and the related
hedging instrument, for example start date, term and cur-
rency, are the same. Items are hedged on the basis of a con-
stant ratio of one to one between hedging instrument and
risk exposure.
To Our Stakeholders
Combined Management Report
Hedge ineffectiveness
recognised in income
statement
Corporate Governance
8
2021
2020
Payables at 31 December
5
64
2021
15
2020
70
32
2021
2020
27
2021
Supplies and services received
Receivables at 31 December
Supplies and services performed
2020
Cash inflows
738
120
288
357
765
DERIVATIVE FINANCIAL LIABILITIES
With gross settlement
9
1,434
9
2,380
432
248
14
694
Cash outflows
937
For disclosures relating to key management personnel,
please see note 43 and the Remuneration Report.
The BMW Foundation Herbert Quandt, Munich, is an inde-
pendent corporate foundation and due to the BMW Group's
significant influence, qualifies as a related party according to
IAS 24. The BMW Group made donations to the BMW Foun-
dation Herbert Quandt during the financial year 2021 total-
ling € 5.9 million (2020: € 6.4 million). No other significant
transactions arose.
BMW Trust e. V., Munich, administers assets on a trustee
basis to secure obligations relating to pensions in Germany
and is therefore a related party of the BMW Group in accord-
ance with IAS 24. This entity has no assets of its own. It had
no income or expenses during the period under report.
BMW AG bears expenses on an immaterial scale and per-
forms services for BMW Trust e. V., Munich.
2021
2020
2021
2020
2021
2020
2021
11,500
2020
Payables at 31 December
Supplies and services received
Supplies and services performed
For the most part, this involves the sale of vehicle compo-
nents to BMW Brilliance Automotive Ltd. for further process-
ing. BMW Brilliance Automotive Ltd. also provides services
and vehicles to BMW Group entities.
BMW Brilliance Automotive Ltd.
in € million
A significant proportion of the BMW Group's transactions
with related parties relates to the joint venture BMW Bril-
liance Automotive Ltd.
510
Receivables at 31 December
9,701
1,030
155
Business relationships with non-consolidated companies
are small in scale.
Other joint ventures and associated companies
in € million
In total, the following amounts of goods and services were
supplied to or received from other joint ventures and associ-
ated companies:
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
220
804
2,345
2,045
2,158
301
116
321
Other financial liabilities
Maturity between
one year one and five years
Maturity later
than five years
Total
NON-DERIVATIVE FINANCIAL LIABILITIES
Bonds
13,266
30,071
Total
10,821
13,456
33,224
11,930
58,610
Asset-backed financing transactions
6,964
12,622
54,158
Maturity within
Maturity later
than five years
one year one and five years
211
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Notes to the Group
Liquidity risk
The following table shows the maturity structure of expected
contractual cash flows (undiscounted) for financial liabilities:
in € million
Financial Statements
31.12.2021
31.12.2020
Maturity within Maturity between
19,586
337
7,067
19,436
8,644
8,644
Lease liabilities
483
1,167
990
2,640
10,932
512
1,028
2,767
Commercial paper
1,374
1,374
550
550
1,227
10,932
Trade payables
16,611
Liabilities to banks
5,130
3,350
1,027
9,507
5,295
3,317
1,388
10,000
Liabilities from customer deposits (banking)
13,211
3,574
20
16,805
12,808
3,781
22
12,369
80
49
243
1,170
820
20
-307
-795
Change in fair value during the reporting period
5
-443
1
Designated
component Costs of hedging
component Costs of hedging Costs of hedging
-497
-22
Designated
Designated
component Costs of hedging
510
-2
- 299
-4
5
466
1
-273
Reclassification to acquisition costs for inventories
-29
84
- 104
7
-7
for terminated hedge relationships
3
With net settlement
557
-512
-3
355
-4
for continuing hedge relationships
Reclassification to profit or loss
532
72
component Costs of hedging Costs of hedging
in € million
547
-806
Change of designated
components in other
comprehensive income
Financial Statements
mulated other equity changed as follows:
Designated components and costs of hedging within accu-
Interest rate risks
Change in costs of
hedging in other
comprehensive income
Fair Value Hedges
Currency risks
Cash Flow Hedges
in € million
Hedge relationships give rise to following effects:
← = Q
Other Information
Remuneration Report
Raw material price risks
55
2021
Hedge ineffectiveness
recognised in income
statement
Designated
Raw material price risk
Currency risks Interest rate risk
Raw material price risk
Currency risks Interest rate risk
2020
2021
3
2
- 5
198
554
509
Change in costs of
hedging in other
comprehensive income
2020
3
17
Change of designated
components in other
comprehensive income
Opening balance at 1 January
Group Financial Statements
Notes to the Group
6
-274
1,090
DELTON Logistics S.à r.l.
1
1,950
1,821
DELTON Health AG (formerly DELTON AG)
2020
1,235
2021
2021
2020
2021
2020
2021
in € thousand
Payables at 31 December
2020
19,450
19,068
SOLARWATT GmbH
315
273
1,310
809
37
UnternehmerTUM GmbH
251
2,425
2,572
ALTANA AG
287
1,574
3,362
5
65
1,369
49
2,363
8,827
Receivables at 31 December
Closing balance at 31 December
Supplies and services received
Seen from the perspective of BMW Group entities, the vol-
ume of transactions with the above-mentioned entities was
as follows:
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
← = Q
218
510
- 2
- 299
532
1,057
15
-244
The nominal amount of hedging instruments that continue
to be directly affected by the reform of the benchmark inter-
est rates and USD LIBOR totals € 7,257 million.
40 Related party relationships
The following individuals and entities are related parties in
accordance with IAS 24:
Stefan Quandt and Susanne Klatten, as well as compa-
nies controlled by them
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
219
Susanne Klatten, Germany, is also the sole shareholder and
Chairwoman of the Supervisory Board of UnternehmerTUM
GmbH, Garching. In 2021, the BMW Group bought in services
from UnternehmerTUM GmbH, Garching, mainly in the form
of consultancy and workshop services.
Susanne Klatten, Germany, is a shareholder and member of
the Supervisory Board of BMW AG and also a shareholder
and Deputy Chairwoman of the Supervisory Board of
ALTANA AG, Wesel. In 2021, ALTANA AG, Wesel, acquired
vehicles from the BMW Group, mainly by way of leasing.
Stefan Quandt, Germany, is also the indirect majority share-
holder of SOLARWATT GmbH, Dresden. Cooperation
arrangements are in place between BMW Group and
SOLARWATT GmbH, Dresden, within the field of electric
mobility. The focus of this collaboration is on the provision of
complete photovoltaic solutions for rooftop systems and car-
ports to BMW i customers. In addition, SOLARWATT GmbH
purchases battery cells and related components for home
battery storage applications as part of a supply project. In
addition to the deliveries of goods described above, SOLAR-
WATT GmbH, Dresden, also purchased vehicles from the
BMW Group by way of leasing during the financial year 2021.
Stefan Quandt, Germany, is a shareholder and Deputy Chair-
man of the Supervisory Board of BMW AG. He is also the
sole shareholder and Chairman of the Supervisory Boards of
DELTON Health AG, Bad Homburg v.d.H., and DELTON
Technology SE, Bad Homburg v.d.H., as well as the sole
shareholder of DELTON Logistics S.à.r.I., Grevenmacher,
which via its subsidiaries, performed logistic-related ser-
vices for the BMW Group during the financial year 2021. In
addition, the DELTON companies held by Stefan Quandt
acquired vehicles from the BMW Group by way of leasing.
During the year under report, members of the Board of Man-
agement and the Supervisory Board concluded vehicle pur-
chase contracts and related service contracts as well as
vehicle rental, vehicle leasing and vehicle financing contracts
with BMW Group entities at market conditions.
Transactions of Group entities with related parties were car-
ried out, without exception, in the normal course of business
of each of the parties concerned and conducted at market
conditions, i. e. conditions that are also granted to other
third-party manufacturers.
Associated companies, joint ventures, non-consolidated
subsidiaries, BMW Trust e. V. and BMW Foundation Her-
bert Quandt
The Board of Management and the Supervisory Board of
the BMW Group
Supplies and services performed
Cash outflows
― € 1.035 million (from second period of office or fourth year of mandate)
BMW Group Report 2021
920
1,520
Result from equity accounted investments
5,222
16,060
1,467
1,679
- 235
531
1,725
3,753
103
227
2,162
9,870
Segment result
98,990
2
- 19,857
- 14,194
Total revenues
95,476
80,853
1,520
2,748
32,867
30,044
5
3
- 19,857
-14,194 111,239
2,284
920
Capital expenditure on non-current assets
7,329
11,976
in € million
Segment assets
Investments accounted for using the equity method
Reconciliation
Automotive
11,758
Motorcycles
Other Entities
31.12.2021
31. 12. 2020 31.12.2021
31. 12. 2020 31.12.2021
17,466
5,112
15,779
3,585
Financial Services
4
-6,175
25,983
6,041
169
146
24,936
24,146
Depreciation and amortisation on non-current assets
24,042
6,341
119
119
10,567
12,054
-6,451
-5,269
- 6,291
5,978
619
1,454
- 9
Segment information by operating segment is as follows:
The success of the Other Entities segment is assessed on
the basis of profit or loss before tax. The corresponding
measure of segment assets used to manage the Other Enti-
ties segment is total assets less asset-side income tax items
and intragroup investments.
The success of the Financial Services segment is measured
on the basis of return on equity (RoE). Profit before tax there-
fore represents the relevant measure of segment earnings.
The measure of segment assets in the Financial Services
segment corresponds to net assets, defined as total assets
less total liabilities.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
221
BMW Group Report 2021
229
With effect from the reporting year 2022, a simplified defini-
tion of capital employed will be applied to make the RoCE
calculation more comprehensible and transparent for users.
Further information is provided in the section "Managing
operational performance at segment level" within the Com-
bined Management Report.
The Automotive and Motorcycles segments are managed on
the basis of return on capital employed (ROCE). The relevant
measure of segment results used is therefore profit before
financial result. Capital employed is the corresponding meas-
ure of segment assets used to determine how to allocate
resources and comprises all current and non-current opera-
tional assets after deduction of liabilities used operationally
which are generally not subject to interest (e. g. trade payables).
The role of "chief operating decision maker" with respect to
resource allocation and performance assessment of the
reportable segment is embodied in the full Board of Man-
agement. For this purpose, different measures of segment
performance as well as segment assets are taken into
account in the operating segments.
accordance with IFRS 8, do not give rise to any changes in
the presentation of segment information. Inter-segment
receivables and payables, provisions, income, expenses and
profits are eliminated upon consolidation. Inter-segment
revenues are based on market prices. Centralised cost com-
ponents are included in the respective segments, without
resulting in cash settlement.
Segment information is prepared as a general rule in con-
formity with the accounting policies adopted for preparing
and presenting the Group Financial Statements. Exceptions
to this general principle include the treatment of inter-seg-
ment warranties, the earnings impact of which is allocated to
the Automotive and Financial Services segments on the
basis used internally to manage the business. In addition,
intragroup repurchase agreements between the Automotive
and Financial Services segments pursuant to IFRS 15,
impairment allowances on intragroup receivables and
changes in the value of consolidated other investments pur-
suant to IFRS 9 are also excluded. Intragroup leasing
arrangements are not reflected in the internal management
and reporting system on an IFRS 16 basis and therefore, in
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
SEGMENT INFORMATION
Write-downs on inventories to their net realisable value
amounting to € 41 million (2020: € 59 million) were recog-
nised by the Automotive segment in the financial year 2021.
The reversal of impairment losses had a positive impact of
€ 5 million (2020: € 2 million) on the segment result of the
Automotive segment.
45 Explanatory notes to segment information
Information on reportable segments
The activities of the BMW Group are broken down into the
operating segments Automotive, Motorcycles, Financial Ser-
vices and Other Entities.
Within the Automotive segment, the BMW Group develops,
manufactures, assembles and sells automobiles powered
with all-electric drive systems, plug-in hybrid systems and
highly efficient combustion engines, as well as spare parts,
accessories and mobility services under the BMW, MINI and
Rolls-Royce brands. BMW and MINI brand products are sold
in Germany through branches of BMW AG and by independ-
ent, authorised dealers. Sales outside Germany are handled
mainly by subsidiary companies and by independent import
companies in some markets. Rolls-Royce brand vehicles are
sold in selected markets via subsidiary companies and else-
where by independent, authorised dealers.
Activities relating to the development, manufacture, assem-
bly and sale of motorcycles as well as spare parts and acces-
sories are reported in the Motorcycles segment.
Automobile leasing, retail and dealership financing, mul-
ti-brand fleet business, customer deposit business and
insurance activities are the main activities allocated to the
Financial Services segment.
Holding and Group financing companies are reported in the
Other Entities segment. This segment also includes the
operating companies BMW (UK) Investments Ltd. and
Bavaria Lloyd Reisebüro GmbH, which are not allocated to
one of the other segments.
Internal management and reporting
For the purposes of presenting segment information, the
activities of the BMW Group are divided into operating seg-
ments in accordance with IFRS 8. The segmentation follows
the internal management and reporting system and takes
account of the organisational structure of the BMW Group
based on the various products and services of the reportable
segments.
The result of the Financial Services segment was negatively
impacted by impairment losses totalling € 390 million (2020:
€ 362 million) recognised on leased products. Income from
the reversal of impairment losses on leased products
amounted to € 134 million (2020: € 126 million).
Automotive
Motorcycles
77,173
68,106
2,761
2,293
31,304
28,590
2020
1
111,239
98,990
Inter-segment revenues
18,303
12,747
-13
1
1,563
2021
2021
Financial Services
Other Entities
Reconciliation
to Group figures
Group
in € million
External revenues
2020
2021
2021
2020
2021
2020
2021
2020
2020
681
17,324
31. 12. 2020 31.12.2021
15,555
17,630
19,134
30,258
32,920
Rest of Europe
216,658
229,527
Total Group assets
24,042
25,983
non-current assets
19,487
20,878
17,837
21,522
USA
Total Group capital expenditure on
14,206
13,638
7,676
Elimination of inter-segment items
-6,451
- 6,291
Reconciliation of depreciation and amortisa-
Elimination of inter-segment items
7,007
- 148,919
China
25,333
21,315
2021
41,202
308
2020*
40,254
213
-152,215
Rest of Asia
10,875
10,433
- 6,175
Eliminations
-7,317
- 6,764
Total Group depreciation and amortisation
on non-current assets
-5,269
11,758
Group
111,239
98,990
80,070
76,187
* Prior year's figures adjusted
11,976
2020
Elimination of inter-segment items
328
2,315
1,821
tion on non-current assets
Rest of the Americas
3,821
3,379
354
3,222
Total for reportable segments
17,027
18,151
Other regions
2,562
2,130
3,192
2021
region in E million
Germany
Non-operating assets - Other Entities
segment
Financial Statements
The reconciliation of segment figures to the corresponding
total Group figures shows the inter-segment items. Reve-
nues with other segments result mainly from the sale of
vehicles, for which the Financial Services segment has con-
cluded a financing or lease contract. Eliminations of
inter-segment items in the reconciliation to the Group profit
before tax, capital expenditure and depreciation and amorti-
sation mainly result from the sale of vehicles in the Automo-
tive segment, which are subsequently accounted for as
leased products in the Financial Services segment. In the
reconciliation of segment assets to Group assets, elimina-
tions relate mainly to intragroup financing balances.
In the information by region, external revenues are based on
the location of the customer. The information disclosed for
non-current assets relates to property, plant and equipment,
intangible assets and leased products. Eliminations dis-
closed for non-current assets relate to leased products.
in € million
2021
2020
The total of the segment figures can be reconciled to the cor-
responding Group figures as follows:
in € million
Reconciliation of segment result
Total for reportable segments
14,381
3,755
Reconciliation of segment assets
Total for reportable segments
133,326
31.12.2021 31.12.2020
Financial result of Automotive segment
The information disclosed for capital expenditure and depre-
ciation and amortisation relates to non-current property,
plant and equipment, intangible assets and leased products.
← = Q
97,917
98,226
96,201
to Group figures
Group
31.12.2020 31.12.2021 31.12.2020 31.12.2021 31.12.2020
86,417 229,527 216,658
5,112
3,585
The Other Entities' segment result includes interest and sim-
ilar income amounting to € 875 million (2020: € 1,169 mil-
lion) and interest and similar expenses amounting to
€ 974 million (2020: € 1,232 million).
230
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
Other Information
BMW Group Report 2021
Combined Management Report
1,935
Non-operating assets - Automotive
Liabilities of Motorcycles segment not
subject to interest
735
782
External revenues
Non-current assets
Reconciliation of capital expenditure on
5,222
non-current assets
Information by
136,113
132,062
Total for reportable segments
32,434
30,333
Total liabilities - Financial Services
segment
560
16,060
39
66,942
130,241
59,677
Financial result of Motorcycles segment
1
- 3
Liabilities of Automotive segment
Group profit before tax
not subject to interest
35,769
Elimination of inter-segment items
-257
910
Non-operating assets - Motorcycles
40
36,910
To Our Stakeholders
To Our Stakeholders
228
600,000
2.00
400,000
Chairman of the Audit Committee
2.25
450,000
3.00
2.00
2.00
400,000
1.50
300,000
Chairman of another committee
Member of the Audit Committee
Member of another committee
* If a Supervisory Board member performs several additional remuneration-relevant functions, their re-
muneration is measured only on the basis of the function that is remunerated with the highest amount.
400,000
No loans or advances were granted to members of the Board
of Management and the Supervisory Board by BMW AG or
its subsidiaries in the financial year 2021, nor were any con-
tingent liabilities entered into in their favour. During the year
under report, members of the Board of Management and the
Supervisory Board concluded vehicle leasing contracts and
related service contracts (service and repair) with BMW Group
entities at market conditions.
Chairman of the Supervisory Board
Deputy Chairman of the Supervisory Board
1.00
50.9
27.6
For the financial years 2018 up to and including the financial
year 2020, variable cash remuneration was supplemented
by a multi-year and future-oriented Performance Cash Plan
(PCP). The PCP assessment period comprises three years,
the grant year and the two subsequent years. The PCP is
paid out after the end of the three-year assessment period.
No further shares were granted to active current members of
the Board of Management during the financial year under
report (2020: 7,001 shares). In the previous year, the fair
value of the shares granted amounted to € 0.5 million.
The expense recognised for the current members of the
Board of Management for the share-based remuneration
arrangements in place up to and including 2020 amounted
to € 0.5 million (2020: € 0.6 million). At 31 December 2021,
the provision for the share-based remuneration component
amounted to € 1.6 million (2020: € 1.6 million).
The total remuneration of former members of the Board of
Management and their dependants amounted to € 14.2 mil-
lion (2020: € 13.1 million).
200,000
Pension obligations to current members of the Board of
Management are covered by provisions amounting to
€ 18.9 million (2020: € 14.7 million), determined in accord-
ance with IAS 19.
The remuneration arrangements applicable for members of
the Supervisory Board do not include any stock options,
value appreciation rights comparable to stock options or any
other share-based remuneration components.
In accordance with the Articles of Incorporation, each mem-
ber of the Supervisory Board of BMW AG who does not per-
form any additional remuneration-relevant functions receives
a fixed remuneration of € 200,000 p. a. plus an attendance
fee of € 2,000 per plenary meeting in addition to the reim-
bursement of reasonable expenses.
Supervisory Board members who perform remuneration-rel-
evant functions, such as the Chairman or Deputy Chairman
of the Supervisory Board, as well as chairs and members of
committees (provided the committee has met on at least
three days of the financial year) receive higher remuneration
due to the additional requirements.
REMUNERATION SUPERVISORY BOARD*
Factor Amount in € p. a.
Member of the Supervisory Board
Pension obligations to former members of the Board of Man-
agement and their surviving dependants, also determined in
accordance with IAS 19, amounted to € 114.3 million (2020:
€ 118.8 million).
5.6
224
To Our Stakeholders
VARIABLE REMUNERATION COMPONENTS
(SHORT-TERM BENEFITS)
Bonus
Member of the Board of Management:
BMW Group Report 2021
― € 1.05 million p. a. (from second period of office or fourth year of mandate)
Chairman of the Board of Management:
Remuneration linked to corporate strategy
- € 1.95 million p. a.
Contractual agreement, main points: non-cash benefits from the use of company cars and the BMW chauffeur service, insurance premiums, contributions towards security systems, em-
ployee discounts
The Supervisory Board may award payments to compensate for loss of salary from a previous employment relationship and to cover relocation costs in the case of new entrants.
Defined contribution system with a guaranteed minimum return
Benefits based on amounts credited to individual savings accounts for contributions paid and interest earned, various forms of disbursement
Pension contribution p. a.:
Member of the Board of Management: € 400,000
Chairman of the Board of Management: € 700,000
― Monthly payment on time-apportioned basis
BMW Group Report 2021
Retirement benefits
(other long-term benefits)
Fringe benefits
Combined Management Report
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
Other Information
← = Q
Compensation payments
Financial Statements
and the Supervisory Board is structured as follows:
REMUNERATION BOARD OF MANAGEMENT AND SUPERVISORY BOARD
COMPONENT
FIXED REMUNERATION COMPONENTS
(SHORT-TERM BENEFITS)
Base remuneration
Parameters/measurement base, applicable amounts
The remuneration of members of the Board of Management
5.5
Total expense
Current compensation
In the event of death or invalidity, special rules apply for early
payment of share-based remuneration components based
on the target amounts. Insofar the service contract is prema-
turely terminated and the Company has an extraordinary
right of termination, or if the Board member resigns without
the Company's agreement, entitlements to amounts as yet
unpaid relating to share-based remuneration are forfeited.
The members of the Board of Management in office at the
end of the reporting period hold 58,560 shares of BMW
common stock based on holding requirements arising from
share-based remuneration for the financial years 2017 to
2020 (2020: 44,037).
222
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Up to and including 2020, the members of the Board of
Management received an earmarked cash amount (invest-
ment component) amounting to 45% of the gross amount of
the bonus, which, net of taxes and deductions, was required
to be invested in BMW common stock, also subject to a four-
year holding period, after which the member of the Board of
Management received, at BMW AG's discretion, one addi-
tional share of common stock for every three shares held or,
alternatively, the equivalent value in cash (matching compo-
nent).
Group Financial Statements
Notes to the Group
Financial Statements
Remuneration Report
Other Information
← = Q
The share-based remuneration component is measured at
its fair value at each balance sheet date between grant and
settlement date, and on the settlement date. The amounts
are recognised as personnel expense on a straight-line basis
over the vesting period and reported in the balance sheet as
a provision.
The remuneration system for Board of Management mem-
bers no longer provides for a matching component for finan-
cial years from 2021 onwards.
The cash-settlement obligation for the share-based remu-
neration component is measured at its fair value at the bal-
ance sheet date (based on the closing price of BMW AG
common stock in Xetra trading at 31 December 2021).
Corporate Governance
The total carrying amount of the provision for the share-
based remuneration component of current and former Board
of Management members and senior heads of department
at 31 December 2021 was € 8,347,245 (2020: € 6,383,766).
ponent is determined on the basis of at least two strategic
focus targets that are required to be defined before the start
of the financial year. Minimum, target and maximum values
are defined and factors stipulated for the Automotive seg-
ment's RoCE as well as for each strategic focus target. After
the end of the financial year, the relevant factors are deter-
mined on the basis of target achievement.
The share-based remuneration programme in place in 2021
for qualifying departmental heads is aimed at rewarding a
long-term, entrepreneurial approach to running the business
on a sustainable basis. Under the terms of the programme,
participants give a commitment to invest an amount equiva-
lent to 26% of their performance-based bonus in BMW com-
mon stock and to hold the shares so acquired for a minimum
of four years. In return for the investment requirement,
BMW AG pays 100% of the investment amount as a net
subsidy. Once the four-year holding period requirement has
been fulfilled, the participants receive - for each three com-
mon stock shares held and at the Company's option - one
additional share of common stock or the cash equivalent, to
be decided at BMW AG's discretion.
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
With effect from the financial year 2021, the members of the
Board of Management receive an earmarked cash amount
(personal investment cash amount), net of taxes and deduc-
tions to be invested in BMW AG common stock. The personal
investment cash amount is paid after the end of the Annual
General Meeting, at which the separate financial statements
of BMW AG for the relevant financial year are presented. The
shares of common stock are purchased immediately after
the personal investment cash amount has been paid out,
and, with effect from the date of purchase, are subject to a
holding period of four years. The target amount for the per-
sonal investment cash amount comprises a ROCE compo-
nent (50%) and a strategic focus targets component (50%).
The RoCE component is determined on the basis of a RoCE
factor that depends on the RoCE achieved in the Automotive
segment in the grant year. The strategic focus targets com-
← = Q
The BMW Group provides three share-based programmes:
one for eligible employees, one for senior heads of depart-
ment and one for members of the Board of Management.
Employee Share Programme
In connection with the Employee Share Programme Share
Programme, non-voting shares of preferred stock in BMW AG
were granted in 2021 to qualifying employees at favourable
conditions (see note 31 Equity for the number and price of
issued shares). Participants in the programme were entitled
in 2021 to acquire packages of 10, 20, 30, 40 or 90 shares of
preferred stock (2020: 8, 18 or 28) with a discount in each
case of € 13.50 (2020: € 11.50) per share compared to the
market price (average closing price in Xetra trading in the
period from 28 October to 3 November 2021: € 74.28). The
programme was open to employees who have been in an
employment relationship with BMW AG or a wholly-owned
BMW AG subsidiary in Germany, provided that the manage-
ment of the subsidiary concerned has decided to participate
in the programme. At the date of the announcement of the
programme, there was a requirement for the employment
relationship to have existed without interruption for at least
one year and for it to continue until the transfer of the shares
of preferred stock. Shares of preferred stock acquired in con-
junction with the Employee Share Programme are subject to
a vesting period of four years, starting from 1 January of the
year in which the shares were acquired.
In the financial year under report, 1,718,070 (2020: 822,124)
shares of preferred stock were acquired by employees. This
figure includes 1,715,000 (2020: 822,000) shares out of
Authorised Capital 2019, with the remainder bought back via
the stock exchange. Every year the Board of Management of
BMW AG decides whether the scheme is to be continued.
In the financial year 2021, the BMW Group recorded a per-
sonnel expense of € 23 million (2020: € 9 million) for the
Employee Share Programme, corresponding to the differ-
ence between the market price and the reduced price of the
shares of preferred stock purchased by employees.
Programme for senior heads of department and members of the
Board of Management
41 Share-based remuneration
The total expense recognised in 2021 for the share-based
remuneration component of current and former Board of
Management members and senior heads of department
was € 2,743,398 (2020: € 1,820,265).
The fair value of the programmes for senior heads of depart-
ment at the date of grant of the share-based remuneration
components was € 1,317,984 (2020: € 987,759), based on a
total of 18,341 shares (2020: 13,444 shares) of BMW AG
common stock or a corresponding cash-based settlement
measured at the relevant market share price prevailing on
the grant date.
The previous year's value includes the fair value of the pro-
grammes at grant date as well as the shares granted to
members of the Board of Management.
35.3
16.9
Other long-term benefits
8.5
3.9
Benefits in conjunction with the termina-
Short-term benefits
tion of board activity
0.6
Share-based remuneration component
0.5
0.6
Compensation to members of the
Supervisory Board
1.1
Board of Management
Compensation to members of the
2020
42 Declaration with respect to the
Corporate Governance Code
The Board of Management and the Supervisory Board of
Bayerische Motoren Werke Aktiengesellschaft have issued
the prescribed Declaration of Compliance pursuant to § 161
of the German Stock Corporation Act. It is included in the
Corporate Governance Statement, which is on BMW Group
website at www.bmwgroup.com/entsprechenserklaerung.
223
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
43 Remuneration of members of the Board of
Management and Supervisory Board
The total remuneration of the current members of the Board
of Management and the Supervisory Board of BMW AG
expensed for the financial year 2021 in accordance with IFRS
comprised the following:
in € million
2021
Base remuneration has the effect of discouraging unduly high levels of risk being taken to achieve short-term targets, thus contributing to the long-term development of the Company
- Fixed remuneration components are a prerequisite for competitive levels of remuneration to attract and retain Board of Management members with the right qualifications
Bonus
― € 0.90 million p. a. (first period of office)
Requirement for Board of Management members to invest an earmarked cash amount (personal investment cash amount), net of tax and deductions, in shares of BMW common stock
- Requirement for Board of Management members to hold the acquired shares of BMW common stock for at least four years (share ownership)
― € 2.35 million (Chairman of the Board of Management)
-50% of target amount depends on ROCE achieved in the Automotive segment (ROCE component)
- 50% of the target amount depends on the achievement of predefined strategic focus targets (strategic focus target component)
- Capped at 180 % of target amount
― Payment after the Annual General Meeting at which the Company Financial Statements are presented for the relevant financial year
- Target amount RoCE component p. a. (50% of target amount of the personal investment cash amount):
- € 0.55 million (first period of office)
― € 0.264 million (from second period of office or fourth year of mandate)
― € 1.175 million (Chairman of the Board of Management)
― Formula: 50% of target amount x RoCE factor
- ROCE factor is derived from the ROCE achieved in the Automotive segment for the grant year
Minimum, target and maximum values for ROCE are defined before the start of the financial year
― ROCE factor may not exceed 1.8
- Maximum amount of RoCE component p. a.:
- € 0.990 million (first period of office)
· € 1.152 million (from second period of office or fourth year of mandate)
― € 1.28 million (from second period of office or fourth year of mandate)
― € 2.115 million (Chairman of the Board of Management)
- € 1.10 million (first period of office)
― Assessment period of five years in total (one year for determining the personal investment cash amount, four years holding requirement)
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Remuneration Report
Other Information
↑
= Q
COMPONENT
SHARE-BASED REMUNERATION
(SHORT-TERM BENEFITS)
Personal investment cash amount
Basis of computation
RoCE component (at 100 % target achievement
corresponds to 50% of target amount)
Strategic focus target component (at 100 %
target achievement corresponds to 50% of
target amount)
Remuneration linked to corporate strategy
Parameters/measurement base, applicable amounts
- Target amount p. a. (at 100 % target achievement):
BMW Group Report 2021
― Target amount strategic focus target component p. a. (50% of target amount of personal investment cash amount):
― € 0.64 million (from second period of office or fourth year of mandate)
Corporate Governance
Remuneration Report
Other Information
← = Q
COMPONENT
MALUS AND CLAWBACK RULES
Malus
Clawback
Parameters/measurement base, applicable amounts
Agreement to withhold variable remuneration in the event of specified serious compliance violations or (withholding amounts provisionally) in the event of reasonable suspicions of such
― Amounts may also be withheld in principle after a member has left the Board
― Agreement entitling the BMW Group to reclaim variable remuneration already paid out in the event of specified incidences of non-compliance, incorrect calculation bases or incorrect
financial statements
― Amounts may also be clawed back in principle after a member has left the Board
44 Events after the end of the reporting period
On 11 February 2022, the BMW Group acquired a further 25%
of the shares in the previous joint venture BMW Brilliance
Automotive Ltd. Further information is provided in 7 note 3
Increased shareholding in BMW Brilliance Automotive Ltd.
The war in Ukraine had no impact on the Consolidated
Financial Statements for the year ended 31 December 2021.
Any potential effects on the BMW Group's business perfor-
mance are being monitored on an ongoing basis. Due to the
current situation, local production in Russia as well as the
export of automobiles and motorcycles to the Russian mar-
ket have been discontinued for the foreseeable future. The
war in Ukraine is having a substantial negative effect on the
country's automotive suppliers. The resulting supply restric-
tions have led to production schedule adjustments and
interruptions at a number of BMW Group plants, which in
turn is likely to have a negative impact on automobile sales
figures. For this reason, the corresponding key performance
indicators reported by the Automotive segment are now
forecast to be down on the previous year. The war in Ukraine
is not currently expected to have a significant impact on the
business performance of the Motorcycles and Financial Ser-
vices segments.
Current estimates and assumptions for the financial year
2022, to the extent already known, have been taken into
account and described in the outlook. However, the outlook
does not factor in a significant tightening of sanctions
against Russia and/or an escalation of the conflict outside
Ukraine. Similarly, additional major price hikes for energy
and raw materials, including rises triggered by the war in
Ukraine and/or the related sanctions, have not been taken
into account.
Apart from this, no other events have occurred since the end
of the financial year which could have a major impact on the
results of operations, financial position and net assets of
BMW AG and the BMW Group.
Group Financial Statements
Notes to the Group
Financial Statements
- € 0.55 million (first period of office)
Combined Management Report
BMW Group Report 2021
― € 1.175 million (Chairman of the Board of Management)
- At least two strategic focus targets derived from the strategic plan
- Weighting of the strategic focus targets is decided before the start of the financial year
- Formula in event of two strategic focus targets with equal weighting p. a.:
25% of target amount for personal investment cash amount x factor for strategic focus target 1 + 25% of target amount for personal investment cash amount x factor for strategic
focus target 2
― Minimum, target and maximum values are defined before the start of the financial year
- Factor for each strategic focus target may not exceed 1.8
- Maximum amount of strategic focus target component p. a.:
- € 0.990 million (first period of office)
― € 1.152 million (from second period of office or fourth year of mandate)
― € 2.115 million (Chairman of the Board of Management)
― personal investment cash amount is 50 % dependent on key performance indicator RoCE and is therefore directly linked to a key measure of corporate strategy and reflects BMW AG's
aspiration to generate a significant premium on the cost of capital
―The remaining 50% of the personal investment cash amount is beneficial for the attainment of strategic focus targets and therefore contributes to the BMW Group's operational suc-
cess in strategically important areas
-Commitment to purchase shares of BMW AG common stock and four-years holding requirement is beneficial for the long-term development of the BMW Group
227
To Our Stakeholders
226
Corporate Governance
― Earnings component of bonus rewards attainment of financial targets and is beneficial for earnings-related aspects of business strategy
- € 0.475 million (first period of office)
― Base amount p. a. (50% of target bonus amount):
Assessment period one year
Parameters/measurement base, applicable amounts
Remuneration linked to corporate strategy
(at 100% target achievement corresponds to
50% of target amount)
Performance component
― Performance component of bonus motivates the pursuit of non-financial strategic targets and is therefore beneficial for the long-term development of the BMW Group
Earnings component
Bonus
VARIABLE REMUNERATION COMPONENTS
(SHORT-TERM BENEFITS)
COMPONENT
= Q
↑
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
225
― Payment after the Annual General Meeting at which the Company Financial Statements are presented for the relevant financial year
― Capped at 180% of target amount
— € 2.10 million (Chairman of the Board of Management)
- € 1.15 million (from second period of office or fourth year of mandate)
- € 0.95 million (first period of office)
— Target amount p. a. (at 100 % target achievement):
(sum of earnings component and performance
component)
― € 0.575 million (from second period of office or fourth year of mandate)
― € 1.050 million (Chairman of the Board of Management)
(at 100 % target achievement corresponds to
50% of target amount)
― Earnings factor is derived from a predefined allocation based on the parameters
― € 1.890 million (Chairman of the Board of Management)
- € 0.855 million (first period of office)
- Maximum amount of performance component p. a.:
- Formula: 50% of target amount x performance factor
― Measurement parameters and target values are determined before the start of the financial year
- Criteria for the other cross-divisional targets include in particular: market position compared to competitors, innovation performance (economic), development of the BMW Group's
reputation based on non-ESG-related aspects (e. g. perception on capital markets, brand strength), customer orientation
― Criteria for the cross-divisional targets with ESG criteria include in particular: innovation performance (environmental, e. g. reduction of carbon emissions), development of the
BMW Group's reputation based on ESG aspects (e. g. corporate culture, promotion of integrity and compliance), adaptability, attractiveness as an employer, leadership performance
-10% individual targets
-40% other cross-divisional targets
- 50% cross-divisional targets with ESG criteria
- Composition of performance factor:
― Additional trend analysis over at least three financial years
-Relevant period is the vesting year
― Primarily qualitative, non-financial criteria, expressed in terms of a performance factor aimed at measuring the Board member's contribution to sustainable and long-term performance
and corporate orientation
- Performance factor may not exceed 1.8
― The earnings factor is 1.5 in case of a profit attributable to shareholders of BMW AG amounting to € 6.9 billion and a Group post-tax return on sales of 7.3%
―The earnings factor is 0 in case of a profit attributable to shareholders of BMW AG below € 3.0 billion or a Group post-tax return on sales of below 3.0%
-Profit attributable to shareholders of BMW AG and Group post-tax return on sales in grant year
― The earnings factor is 1.0 in case of a profit attributable to shareholders of BMW AG amounting to € 5.3 billion and a Group post-tax return on sales of 5.6%
- Earnings factor may not exceed 1.8
- Maximum amount of earnings component p.a.:
― € 1.035 million (from second period of office or fourth year of mandate)
- € 0.855 million (first period of office)
- Assessment period one year
― Base amount p. a. (50% of target bonus amount):
- € 0.475 million (first period of office)
― € 0.575 million (from second period of office or fourth year of mandate)
― € 1.050 million (Chairman of the Board of Management)
― € 1.890 million (Chairman of the Board of Management)
- Formula: 50% of target amount x performance factor
100
John Cooper Garages Ltd., Farnborough
John Cooper Works Ltd., Farnborough
000 BMW Leasing, Moscow
100
BMW Poland sp. z o. o., Warsaw
100
100
BMW Russland Automotive 000, Kaliningrad
100
100
100
BMW Drivers Club Ltd., Farnborough
Alphabet Insurance Services Polska Sp. z o. o., Warsaw
BMW (GB) Ltd., Farnborough
BMW (UK) Pensions Services Ltd., Hams Hall
BMW Car Club Ltd., Farnborough
BMW China Capital B. V., The Hague
BMW Financial Services Czech Republic s. r.o., Prague
BMW Financial Services Slovakia s. r.o., Bratislava
BMW Group Benefit Trust Ltd., Farnborough
BMW Manufacturing Hungary Kft., Debrecen
BMW Manufacturing Russland 000, Kaliningrad
BMW Mobility Development Center s. r.o., Prague
BMW Motorsport Ltd., Farnborough
100
Europe
100
Corporate Governance
100
Remuneration Report
Other Information
← = Q
Financial Statements
LIST OF INVESTMENTS
AT 31 DECEMBER 2021
AFFILIATED COMPANIES (SUBSIDIARIES) OF BMW AG AT 31 DECEMBER 2021
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
231
Group Financial Statements
Notes to the Group
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
☐
100
100
100
BMW France S. A., Montigny-le-Bretonneux
BMW Financial Services Scandinavia AB, Sollentuna
Companies
Financial Statements
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
234
100
100
100
100
100
100
BMW (UK) Manufacturing Ltd., Farnborough
BMW (UK) Investments Ltd., Farnborough
BMW (UK) Capital plc, Farnborough
BLMC Ltd., Farnborough
BiV Carry II SCS, Senningerberg⁹
BiV Carry ISCS, Senningerberg
Bavaria Reinsurance Malta Ltd., Floriana
Alphabet Polska Fleet Management Sp. z o. o., Warsaw
Alphabet Nederland B. V., Breda
Alphabet Luxembourg S. A., Leudelange
Companies
Financial Statements
← = Q
Other Information
Remuneration Report
BMW Austria GmbH, Salzburg
BMW Hungary Kft., Vecsés ⁹
BMW Austria Leasing GmbH, Salzburg
BMW Bank 000, Moscow
100
100
100
Profit / loss in € million Capital investment in %
Equity in € million
BMW Financial Services Belgium S. A./ N. V., Bornem
BMW Financial Services Denmark A/S, Copenhagen
BMW Financial Services Polska Sp. z o. o., Warsaw
BMW Financial Services B. V., The Hague
BMW Financial Services (Ireland) DAC, Dublin
BMW España Finance S. L., Madrid
BMW Distribution S. A.S., Vélizy-Villacoublay
BMW Danmark A/S, Copenhagen
BMW Czech Republic s. r.o., Prague
BMW Central Medical Trustees Ltd., Farnborough
BMW Bulgaria EOOD, Sofia
BMW Belgium Luxembourg S. A./ N. V., Bornem
BMW Automotive (Ireland) Ltd., Dublin
Corporate Governance
BMW Iberica S. A., Madrid
BMW Italia Retail S. r.I., Rome
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
235
0
100
Group Financial Statements
Notes to the Group
Financial Statements
100
100
100
100
100
100
100
100
Corporate Governance
Remuneration Report
Other Information
0
0
Bavarian Sky UK 4 plc, London 11
Bavarian Sky S. A., Compartment German Auto Leases 5, Luxembourg 11
Bavarian Sky S. A., Compartment German Auto Leases 6, Luxembourg
Bavarian Sky S. A., Compartment German Auto Loans 10, Luxembourg 11
Bavarian Sky S. A., Compartment German Auto Loans 9, Luxembourg 11
Bavarian Sky UK 3 plc, London 11
11
0
Bavarian Sky S. A., Compartment B, Luxembourg 11
0
0
Bavarian Sky FTC, Compartment French Auto Leases 4, Paris 11
Bavarian Sky S. A., Compartment A, Luxembourg 11
Profit / loss in € million Capital investment in %
Equity in € million
Companies
= Q
↑
100
100
100
100
Park Lane Ltd., Farnborough
Oy BMW Suomi AB, Helsinki
BMW Vertriebs GmbH, Salzburg
BMW Slovenská republika s. r.o., Bratislava
BMW Slovenia distribucija motornih vozil d. o.o., Ljubljana
BMW Services Ltd., Farnborough
BMW Romeania S. R.L., Bucharest
BMW Renting (Portugal) Lda., Porto Salvo
BMW Portugal Lda., Porto Salvo
BMW Northern Europe AB, Stockholm
BMW Norge AS, Fornebu
BMW Nederland B. V., The Hague
BMW Malta Ltd., Floriana
BMW Madrid S. L., Madrid
BMW Italia S. p.A., San Donato Milanese
Riley Motors Ltd., Farnborough
BMW International Investment B. V., The Hague
Swindon Pressings Ltd., Farnborough
Triumph Motor Company Ltd., Farnborough
100
100
100
100
100
100
100
100
100
100
100
100
Profit / loss in € million Capital investment in %
Equity in € million
Bavarian Sky Europe S. A. Compartment A, Luxembourg 11
The British Motor Corporation Ltd., Birmingham
0
Group Financial Statements
Notes to the Group
To Our Stakeholders
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
232
51
Corporate Governance
100
100
100
100
100
100
100
100
Remuneration Report
Other Information
← = Q
3,286
BMW Österreich Holding GmbH, Steyr
100
2,185
4,055
BMW International Holding B. V., The Hague
100
2,049
17,535
BMW Holding B. V., The Hague
Profit / loss in € million Capital investment in %
Equity in € million
Europe
FOREIGN²
Companies
100
100
100
100
Equity in € million
BAVARIA-LLOYD Reisebüro GmbH, Munich
Rolls-Royce Motor Cars GmbH, Munich 4,5,6
LARGUS Grundstücks-Verwaltungsgesellschaft mbH, Munich
Bürohaus Petuelring GmbH, Munich
BMW Vermögensverwaltungs GmbH, Munich
BMW M GmbH Gesellschaft für individuelle Automobile, Munich 3,5,6
BMW High Power Charging Beteiligungs GmbH, Munich 4,6
BMW Hams Hall Motoren GmbH, Munich 4,5,6
BMW Finanz Verwaltungs GmbH, Munich
BMW Anlagen Verwaltungs GmbH, Munich 3,6
BMW Vertriebszentren Verwaltungs GmbH, Munich
Parkhaus Oberwiesenfeld GmbH, Munich
Alphabet Fuhrparkmanagement GmbH, Munich 4
Alphabet International GmbH, Munich 4,5,6
Bavaria Wirtschaftsagentur GmbH, Munich 3,5,6
BMW Fahrzeugtechnik GmbH, Eisenach 3,5,6
Munich 3
BMW Beteiligungs GmbH & Co. KG, Munich 6
BMW INTEC Beteiligungs GmbH, Munich 3,6
BMW Bank GmbH,
DOMESTIC 1, 10
46 List of investments at 31 December 2021
The List of Investments of BMW AG pursuant to § 285 and
§ 313 HGB is presented below. Disclosures for equity and
earnings and for investments are not made if they are of "mi-
nor significance" for the results of operations, financial posi-
tion and net assets of BMW AG pursuant to § 286 (3) sen-
tence 1 no. 1 HGB and § 313 (3) sentence 4 HGB. It is also
shown in the list which subsidiaries apply the exemptions
available in § 264 (3) and § 264 b HGB with regard to the
publication of annual financial statements and the drawing
up of a management report and/or notes to the financial
statements (footnotes 5 and 6). The Group Financial State-
ments of BMW AG serve as exempting consolidated finan-
cial statements for these companies.
Companies
Profit / loss in € million Capital investment in %
1,167
8,390
100
27
106
100
4
173
100
179
100
3
213
100
251
2,075
100
4,515
1,494
Combined Management Report
100
1,116
BMW Finanzdienstleistungen (Schweiz) AG, Dielsdorf
Rolls-Royce Motor Cars Ltd., Farnborough
100
189
181
100
132
82
100
8
203
100
46
251
198
92
100
118
BMW Group Report 2021
233
100
100
100
I
100
100
Alphabet Italia S. p.A., Trento
Alphabet Fuhrparkmanagement (Schweiz) AG, Dielsdorf
Alphabet France Fleet Management S. A.S., Saint-Quentin-en-Yvelines
Alphabet Belgium Long Term Rental NV, Aartselaar
Alphabet Austria Fuhrparkmanagement GmbH, Salzburg
100
19
100
97
251
ALPHABET (GB) Ltd., Farnborough
BMW i Ventures SCS SICAV-RAIF, Senningerberg
100
5
806
BMW Hellas Trade of Cars A. E., Kifissia
100
8
879
BMW (Schweiz) AG, Dielsdorf
100
192
937
BMW Motoren GmbH, Steyr
100
488
515
BMW Financial Services (GB) Ltd., Farnborough
387
Alphabet España Fleet Management S. A.U., Madrid
BMW (UK) Ltd., Farnborough
BMW Austria Bank GmbH, Salzburg
BMW Finance S. N.C., Guyancourt
BMW Finance N. V., The Hague
100
313
315
BMW Russland Trading 000, Moscow
100
779
316
BMW (UK) Holdings Ltd., Farnborough
100
19
417
100
0
100
0
To Our Stakeholders
BMW Group Report 2021
238
100
BMW Credit (Malaysia) Sdn Bhd, Kuala Lumpur
100
100
BMW China Services Ltd., Beijing
Combined Management Report
BMW China Automotive Trading Ltd., Beijing
BMW Asia Technology Centre Sdn Bhd, Kuala Lumpur
100
I
BMW Asia Pte. Ltd., Singapore
100
BMW Asia Pacific Capital Pte Ltd., Singapore
100
BMW (Thailand) Co. Ltd., Bangkok
100
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
2020-1 ABL, Tokyo 11
2019-3 ABL, Tokyo 11
2019-2 ABL, Tokyo 11
2019-1 ABL, Tokyo 11
2018-3 ABL, Tokyo 11
2018-2 ABL, Tokyo 11
2018-1 ABL, Tokyo 11
2017-3 ABL, Tokyo 11
BMW Malaysia Sdn Bhd, Kuala Lumpur
PT BMW Indonesia, Jakarta
BMW Tokyo Corp., Tokyo
BMW Leasing (Thailand) Co. Ltd., Bangkok
BMW Lease (Malaysia) Sdn Bhd, Kuala Lumpur
BMW India Financial Services Private Ltd., Gurgaon
BMW India Private Ltd., Gurgaon
0
Companies
Financial Statements
← = Q
Other Information
100
94
116
BMW Manufacturing (Thailand) Co. Ltd., Rayong
BMW China Investment Ltd., Beijing⁹
58
306
2,561
BMW Automotive Finance (China) Co. Ltd., Beijing
Asia
0
SuperDrive Investments (RF) Ltd., Cape Town¹¹
100
100
13
104
BMW Financial Services (South Africa) (Pty) Ltd., Midrand
BMW (South Africa) (Pty) Ltd., Pretoria
Africa
0
0
0
0
0
559
2021-1 ABL, Tokyo 11
559
BMW Japan Finance Corp., Tokyo
100
100
128
BMW Japan Corp., Tokyo
58
51
210
Herald International Financial Leasing Co. Ltd., Tianjin
100
119
269
BMW Korea Co. Ltd., Seoul
100
71
279
BMW Financial Services Korea Co. Ltd., Seoul
100
66
527
100
2021-2 ABL, Tokyo 11
Bavarian Sky China 2019-2, Beijing 11
Bavarian Sky China 2019-3, Beijing 11
100
100
100
100
100
100
0
0
Profit / loss in € million Capital investment in %
Equity in € million
BMW Australia Trust 2011-2, Mulgrave 11
Bavarian Sky Australia Trust A, Mulgrave 11
BMW Sydney Pty. Ltd., Sydney
BMW New Zealand Ltd., Auckland
BMW Melbourne Pty. Ltd., Melbourne
BMW Financial Services New Zealand Ltd., Auckland
BMW Australia Ltd., Melbourne
BMW Australia Finance Ltd., Mulgrave
Oceania
0
Bavarian Sky Korea 2021-1, Seoul 11
0
BMW Group Report 2021
Profit / loss in € million Capital investment in %
Equity in € million
FOREIGN7
IDEALworks GmbH, Munich
BMW i Ventures GmbH, Munich
BMW Car IT GmbH, Munich'
Automag GmbH, Munich
Alphabet Fleetservices GmbH, Munich 4
DOMESTIC'
Companies
BMW AG'S NON-CONSOLIDATED COMPANIES AT 31 DECEMBER 2021
Financial Statements
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Combined Management Report
To Our Stakeholders
240
Profit / loss in € million Capital investment in %
11
Companies
0
0
0
0
51
100
100
100
100
100
100
100
Profit / loss in € million Capital investment in %
Equity in € million
Bavarian Sky China Leasing 2020-1, Tianjin 11
Bavarian Sky China 2021-3, Beijing 11
Bavarian Sky China 2021-2, Beijing 11
11
Bavarian Sky China 2020-1, Beijing 11
Bavarian Sky China 2020-2, Beijing
Bavarian Sky China 2021-1, Beijing
0
Bavarian Sky China Leasing 2021-1, Tianjin
0
0
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
239
0
0
0
0
0
0
0
0
0
0
0
Equity in € million
BMW Holding Malaysia Sdn Bhd, Kuala Lumpur
↑
BMW de Mexico S. A. de C. V., Mexico City
I
100
100
100
100
236
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
Other Information
BMW de Argentina S. A., Buenos Aires
← = Q
Companies
BMW do Brasil Ltda., Araquari
BMW Extended Service Corporation, Wilmington, Delaware
BMW Facility Partners LLC, Wilmington, Delaware
BMW Financeira S. A. Credito, Financiamento e Investimento, São Paulo
BMW Financial Services de Mexico S. A. de C. V. SOFOM, Mexico City
BMW Financial Services NA LLC, Wilmington, Delaware
BMW FS Funding Corporation, Wilmington, Delaware
BMW FS Receivables Corporation, Wilmington, Delaware
BMW FS Securities LLC, Wilmington, Delaware
BMW Insurance Agency Inc., Wilmington, Delaware
BMW Leasing do Brasil S. A., São Paulo
BMW Manufacturing Indústria de Motos da Amazônia Ltda., Manaus
BMW Manufacturing LP, Woodcliff Lake, New Jersey
Financial Statements
BMW of Manhattan Inc., Wilmington, Delaware
BMW Consolidation Services Co. LLC, Wilmington, Delaware
100
Bavarian Sky UK A Ltd., London 11
Bavarian Sky UK B Ltd., London 11
Bavarian Sky UK C Ltd., London 11
Bavarian Sky UK D Ltd., London"
0
0
0
0
The Americas 10
BMW Manufacturing Co. LLC, Wilmington, Delaware
BMW Bank of North America Inc., Salt Lake City, Utah
2,042
389
100
1,473
BMW Auto Leasing LLC, Wilmington, Delaware
= Q
BMW of North America LLC, Wilmington, Delaware
948
549
100
Financial Services Vehicle Trust, Wilmington, Delaware
698
405
100
BMW Canada Inc., Richmond Hill, Ontario
663
324
BMW (US) Holding Corp., Wilmington, Delaware
100
BMW Acquisitions Ltda., São Paulo
100
BMW Receivables 1 Inc., Richmond Hill, Ontario
202
100
100
100
100
100
100
100
0
0
100
| |
0
0
237
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
0
Remuneration Report
100
BMW Receivables Ltd. Partnership, Richmond Hill, Ontario
100
100
100
100
100
100
100
100
BMW Receivables 2 Inc., Richmond Hill, Ontario
100
Profit / loss in € million Capital investment in %
Equity in € million
BMW Canada Auto Trust 2019-1, Richmond Hill, Ontario 11
BMW Canada Auto Trust 2020-1, Richmond Hill, Ontario¹
BMW 2020- A Lease Conduit, Wilmington, Delaware 11
BMW 2021- A Lease Conduit, Wilmington, Delaware 11
BMW Canada 2018-A, Richmond Hill, Ontario 11
SB Acquisitions LLC, Wilmington, Delaware
Rolls-Royce Motor Cars NA LLC, Wilmington, Delaware
BMW US Capital LLC, Wilmington, Delaware
BMW SLP, S. A. de C. V., Villa de Reyes
100
100
Other Information
BMW Canada Auto Trust 2021-1, Richmond Hill, Ontario 11
BMW Vehicle Lease Trust 2021-2, Wilmington, Delaware11
BMW Vehicle Lease Trust 2021-1, Wilmington, Delaware 11
BMW Vehicle Owner Trust 2019-A, Wilmington, Delaware¹¹
BMW Vehicle Owner Trust 2020-A, Wilmington, Delaware¹¹
Companies
100
248
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
247
Frank Weber
Dr.-Ing. Joachim Post
Corporate Governance
Dr. Nicolas Peter
Dr.-Ing. Milan Nedeljković
Ilka Horstmeier
Oliver Zipse
The Board of Management
Aktiengesellschaft
Bayerische Motoren Werke
Munich, 8 March 2022
Pieter Nota
Remuneration Report
Other Information
To Our Stakeholders
GOVERNANCE
CORPORATE
267 Independent Practitioner's Report
259 Independent Auditor's Report
Representatives
258 Responsibility Statement by the Company's Legal
256 Overview of Supervisory Board Committees and their
Composition
255 Outgoing Members of the Supervisory Board
252 Current Members of the Supervisory Board
251 Outgoing Members of the Board of Management
251 Current Members of the Board of Management
250 Declaration of Compliance
250 Shareholders and Annual General Meeting
249 Supervisory Board
248 Board of Management
248 Information on the Company's Governing Constitution
248 Fundamental Aspects of Corporate Governance
(Part of the Combined Management Report)
BMW Group Report 2021
← = Q
- 108
← = Q
BMW AG's Supervisory Board is composed of ten share-
holder representatives (elected by the Annual General Meet-
ing) and ten employee representatives (elected in accord-
ance with the Co-Determination Act). The ten Supervisory
Board members representing employees comprise seven
Company employees, including one executive staff repre-
sentative, and three members elected following nomination
by unions. The Supervisory Board is charged with the task of
advising and supervising the Board of Management in its
management of BMW AG. It is involved in decisions of fun-
damental importance for BMW AG. The Supervisory Board
appoints the members of the Board of Management and
decides upon the level of remuneration they receive. The
Supervisory Board can revoke appointments for important
reasons.
Members of the Supervisory Board of BMW AG are obliged
to act in the best interest of the enterprise as a whole. They
may not pursue personal interests in their decisions or take
advantage of business opportunities intended for the benefit
of the Company.
The members of the Supervisory Board are required to re-
port any conflicts of interest immediately to the Chairman of
the Supervisory Board. The Supervisory Board reports on
the handling of such conflicts of interest to the Annual Gen-
eral Meeting. Conflicts of interest requiring to be disclosed
include, in particular, conflicts of interest that may result from
a directorship function or advisory role with clients, suppli-
ers, lenders or other business partners. If a Supervisory
Board member has significant and non-temporary conflicts
of interest, this will lead to the termination of the mandate.
The Supervisory Board regularly assesses the effectiveness
of its activities and the activities carried out by its commit-
tees by means of a questionnaire as well as discussions with
the Chairman. The findings and conclusions resulting from
this self-assessment process are subsequently discussed in
plenary.
The Supervisory Board has stated specific targets for its
composition, agreed to a diversity concept and determined a
competency profile. Members of the Supervisory Board are
responsible for undertaking any training required for the per-
formance of their duties, appropriately assisted by the
Company.
Taking into account the specific circumstances of the
BMW Group and the number of Board members, the Super-
visory Board has set up a Presiding Board and four commit-
tees, namely the Personnel Committee, the Audit Commit-
tee, the Nomination Committee and the Mediation
Committee. These serve to raise the effectiveness of the Su-
pervisory Board's work and facilitate the handling of com-
plex issues.
The composition of the Presiding Board and the committees
is based on legal requirements, the Articles of Incorporation,
the rules of procedure and corporate governance principles,
particularly taking into account the professional expertise of
their members.
BMW AG ensures that the Supervisory Board and its com-
mittees are appropriately equipped to carry out their duties.
This includes providing a central Supervisory Board office to
support the chairpersons in their coordination work.
More information about the composition of the Supervisory
Board, and how it operates and its individual committees, is
provided in the Statement on Corporate Governance at
7 www.bmwgroup.com/statement on corporate governance.
7 GRI-Index: 102-23
250
BMW Group Report 2021
SUPERVISORY BOARD
To Our Stakeholders
Group Financial Statements
Corporate Governance
Fundamental Aspects of
Corporate Governance
Remuneration Report
Other Information
← = Q
SHAREHOLDERS AND
ANNUAL GENERAL
MEETING
The shareholders of BMW AG exercise their rights at the An-
nual General Meeting. The Annual General Meeting decides
in particular on the utilisation of unappropriated profit, the
ratification of the activities of the members of the Board of
Management and of the Supervisory Board, the appoint-
ment of the external auditor, changes to the Articles of Incor-
poration and certain capital-related measures, as well as
electing the shareholders' representatives to the Supervis-
ory Board.
Moreover, the remuneration systems for members of the
Board of Management and the Supervisory Board are pre-
sented to the Annual General Meeting for approval whenever
they undergo significant changes, but at least every four
years. They were last presented at the 2021 Annual General
Meeting. From the 2022 Annual General Meeting onwards,
the Annual General Meeting will also vote on whether to ap-
prove the Remuneration Report.
Shareholders may exercise their voting rights at the Annual
General Meeting either in person, by proxy, or via a repre-
sentative designated by BMW AG. Voting rights may also be
exercised via postal vote.
Due to the Covid-19 pandemic, the 2021 Annual General
Meeting was held as a virtual meeting, i. e. without share-
holders and proxies being physically present with the excep-
tion of the Company representatives bound by instructions
issued by shareholders. The Company enabled shareholders
in this situation to exercise their voting rights by issuing in-
structions to Company representatives or by postal vote
(both in writing and online).
The Board of Management and the Supervisory Board of
BMW AG issue an annual Declaration of Compliance pursu-
ant to §161 of the German Stock Corporation Act (AktG) with
regard to recommendations of the Government Commission
on the German Corporate Governance Code as officially pub-
lished and valid at the date of the declaration. The current
and previous Declarations of Compliance of BMW AG are
available online at www.bmwgroup.com/compliance declaration. In
the Declaration of Compliance issued in December 2021, the
Board of Management and the Supervisory Board declared
that BMW Group would continue to comply with all recom-
mendations of the German Corporate Governance Code
(version dated 16 December 2019) going forward.
DECLARATION OF
COMPLIANCE
Combined Management Report
Combined Management Report
Governance).
The Board of Management has issued terms of procedure for
itself. The allocation of areas of responsibility and business
segments among the members of the Board of Management
is set out in the Board's Schedule of Responsibilities.
Group Financial Statements
Corporate Governance
Fundamental Aspects of
Corporate Governance
Remuneration Report
Other Information
← = Q
FUNDAMENTAL ASPECTS OF CORPORATE GOVERNANCE
(PART OF THE COMBINED MANAGEMENT REPORT)
-
Good corporate governance acting in accordance with
the principles of responsible management aimed at cre-
ation of value on a sustainable basis - is an essential re-
quirement for the BMW Group, embracing all areas of the
business. Transparent reporting and corporate communi-
cation, corporate governance that is aligned with the inter-
ests of all stakeholders, cooperation based on trust be-
tween the Board of Management, Supervisory Board and
employees, and compliance with applicable law are essen-
tial cornerstones of the corporate culture within the
BMW Group.
The Board of Management and the Supervisory Board re-
port below on the main features of corporate governance.
A detailed report on corporate governance can be found in
the Statement on Corporate Governance, available at
www.bmwgroup.com/statement on corporate governance (Corporate
Governance).
INFORMATION ON THE
COMPANY'S GOVERNING
CONSTITUTION
The designation BMW Group comprises Bayerische Motor-
en Werke Aktiengesellschaft (BMW AG) and its Group en-
tities. BMW AG is a stock corporation (Aktiengesellschaft)
within the meaning of the German Stock Corporation Act
(Aktiengesetz) and has its registered office in Munich, Ger-
many. It has three representative bodies, namely the Annual
General Meeting, the Supervisory Board and the Board of
Management. The duties and authorities of those bodies de-
rive from the Stock Corporation Act and the Articles of Incor-
poration of BMW AG. Shareholders, as the owners of the
business, exercise their rights at the Annual General Meet-
ing. The Board of Management is fully responsible for man-
aging the enterprise and is monitored and advised by the
Supervisory Board. The Supervisory Board appoints the
members of the Board of Management and can, at any time,
revoke an appointment for good cause. The Board of Man-
agement informs the Supervisory Board and reports to it
regularly, promptly and comprehensively, in line with the
principles of conscientious and faithful accountability and in
accordance with the law and the reporting duties determined
by the Supervisory Board. The Board of Management re-
quires the approval of the Supervisory Board for certain
major proceedings. The Supervisory Board is not, however,
authorised to undertake management measures itself.
More information about the composition of the Board of
Management, and how it operates and its individual commit-
tees is provided in the Statement on Corporate Governance
at www.bmwgroup.com/statement on corporate governance (Corporate
The close interaction between the Board of Management
and the Supervisory Board in the interests of the enterprise
as described above is also known as a "two-tier board
structure".
The Board of Management manages the enterprise under its
own responsibility, acting in the best interests of the enter-
prise with the aim of achieving sustainable creation of value.
The interests of shareholders, employees and other stake-
holders are also taken into account in the pursuit of this aim.
7 GRI 102-43
In accordance with §7 of the Articles of Association, the
Board of Management of BMW AG comprises two or more
persons; other than that, the number of members of the
Board of Management is determined by the Supervisory
Board. At 31 December 2021, the Board of Management
comprised seven members. The Board of Management de-
cides on the principal guidelines for managing the enter-
prise, determines and agrees upon the strategic orientation
with the Supervisory Board, and ensures its implementation.
The Board of Management is responsible for ensuring that
249
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Fundamental Aspects of
Corporate Governance
Remuneration Report
Other Information
← = Q
all provisions of law and internal regulations are complied
with. You can find more details about compliance at
BMW Group in the section Compliance and human rights at
BMW Group. The Board of Management is responsible for
ensuring that appropriate risk management, risk controlling
and compliance management systems are in place through-
out the Company.
Members of the Board of Management are required to act in
the enterprise's best interests and may not pursue personal
interests in their decisions or take advantage of business op-
portunities intended for the benefit of the Company. Individual
members of the Board of Management of BMW AG are re-
quired to disclose any conflicts of interest to the Supervisory
Board without delay, and to inform the other members of the
Board of Management accordingly.
Deliberations are held and decisions taken by the Board of
Management as a collegiate body at full. Board meetings as
well as at "Product and Customer Board Meetings". The
Board of Management also deliberates and makes decisions
at meetings of its three committees "Customer", "Oper-
ations" and "Senior Executives". The overall framework for
developing business strategies, the use of resources, the im-
plementation of strategies and matters of particular impor-
tance to BMW AG are decided upon at Board of Management
meetings.
BOARD OF MANAGEMENT
Other Information
6 Exemption from publication of financial statements applied in accordance with § 264 (3) and § 264b HBG.
Corporate Governance
245
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
Corporate Governance
Remuneration Report
Other Information
BMW AG'S PARTICIPATIONS AT 31 DECEMBER 2021
Companies
DOMESTIC
Deutsches Forschungszentrum für Künstliche Intelligenz GmbH, Kaiserslautern
GSB Sonderabfall-Entsorgung Bayern GmbH, Baar-Ebenhausen
Hubject GmbH, Berlin
IVM Industrie-Verband Motorrad GmbH & Co. Dienstleistungs KG, Essen
Joblinge gemeinnützige AG Berlin, Berlin
Joblinge gemeinnützige AG Leipzig, Leipzig
BMW Albatha Finance PSC, Dubai
Bavarian & Co Co. Ltd., Incheon
FOREIGN
PDB - Partnership for Dummy Technology and Biomechanics GbR, Gaimersheim
The Retail Performance Company GmbH, Munich
Encory GmbH, Unterschleißheim
50
50
50
40
30
7
50
50
50
Further information on corporate management and govern-
ance, including the Declaration of Compliance pursuant to
§161 of the German Stock Corporation Act, can be found in
the Statement on Corporate Governance (§ 289f and § 315d
HGB) at www.bmwgroup.com/statement on corporate governance.
20
40
244
BMW Group Report 2021
To Our Stakeholders
DOMESTIC
Combined Management Report
Corporate Governance
Remuneration Report
Other Information
← = Q
Financial Statements
Companies
BMW Albatha Leasing LLC, Dubai
BMW ArcherMind Information Technology Co. Ltd., Nanjing
BMW AVTOTOR Holding B. V., Amsterdam
Critical TechWorks S. A., Porto
Equity in € million Profit loss in € million Capital investment in %
Group Financial Statements
Notes to the Group
Remuneration Report
Not equity accounted or proportionately consolidated entities
FOREIGN
5 Exemption from drawing up a management report applied in accordance with § 264 (3) and § 264b HBG.
1,090
7 These entities are neither consolidated nor accounted for using the equity method due to their overall immateriality for the Group Financial Statements.
The amounts shown for entities accounted for using the equity method and for proportionately consolidated entities correspond to the annual financial statements drawn up in accordance with uniform IFRS rules.
Equity not denominated in euro is translated into euro using the closing exchange rate at the balance sheet date, earnings are translated using the average rate.
9 First-time consolidation.
10 Deconsolidation in the financial year 2021: BMW Verwaltungs GmbH (merger), BMW Leasing de Mexico S. A. de C. V. (merger).
11 Control on basis of economic dependence.
5
3
16
22
10
17
6
10
9
18
3
246
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Financial Statements
4 Profit and Loss Transfer Agreement with a subsidiary of BMW AG.
3 Profit and Loss Transfer Agreement with BMW AG.
2 The amounts shown for the foreign affiliated companies correspond to the annual IFRS statements drawn up in accordance with uniform IFRS rules. Equity and earnings not denominated in euro are translated in
euro using the closing exchange rate at the balance sheet date.
1 The amounts shown for the German affiliated companies correspond to the annual financial statements drawn up in accordance with German accounting rules (HGB).
Joint operations - proportionately consolidated entities
Solid Power, Inc., Wilmington, Delaware
THERE Holding B. V., Amsterdam 8
FOREIGN
Associated companies - equity accounted
50
3,596
11,176
BMW Brilliance Automotive Ltd., Shenyang 8
Joblinge gemeinnützige AG Munich, Munich
FOREIGN
Spotlight Automotive Ltd., Zhangjiagang 8
20
209
50
-337
897
Equity in € million Profit / loss in € million Capital investment in %
SGL Carbon SE, Wiesbaden
FOREIGN
Northvolt AB, Stockholm
↑
= Q
Equity in € million Profit / loss in € million Capital investment in %
-35
20
Racer Benchmark Group GmbH, Landsberg am Lech
100
100
100
100
100
100
100
100
100
BMW Mobility Services LLC, Wilmington, Delaware
BMW Operations Corp., Wilmington, Delaware
BMW Shared Services LLC, Wilmington, Delaware
BMW Technology Corp., Wilmington, Delaware
Designworks/USA Inc., Newbury Park, California
MINI Business Innovation LLC, Wilmington, Delaware
Toluca Planta de Automoviles S. A. de C. V., Mexico City
Urban X Accelerator SPV LLC, Wilmington, Delaware
BMW i Ventures Inc., Wilmington, Delaware
BMW i Ventures LLC, Wilmington, Delaware
100
BMW Experience Centre Inc., Richmond Hill, Ontario
The Americas
Profit / loss in € million Capital investment in %
Equity in € million
Companies
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Notes to the Group
Financial Statements
Combined Management Report
217-07 Northern Boulevard Corporation, Wilmington, Delaware
To Our Stakeholders
100
Africa
100
100
100
100
100
100
100
100
100
100
100
100
BMW Parts Manufacturing (Thailand) Co., Ltd., Rayong Province
BMW Mobility Services Ltd., Sichuan Tianfu New Area (Chengdu Section)
BMW Middle East Retail Competency Centre DWC-LLC, Dubai
BMW Insurance Services Korea Co. Ltd., Seoul
BMW India Leasing Private Ltd., Gurgaon
BMW India Foundation, Gurgaon
BMW Hong Kong Services Ltd., Hong Kong
BMW Finance (United Arab Emirates) Ltd., Dubai
BMW Financial Services Singapore Pte Ltd., Singapore
Asia
BMW Automobile Distributors (Pty) Ltd., Midrand
BPF Midrand Property Holdings (Pty) Ltd., Midrand
Multisource Properties (Pty) Ltd., Midrand
BMW Technology Office Israel Ltd., Tel Aviv
BMW Group Report 2021
241
THEPSATRI Co. Ltd., Bangkok
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group
Corporate Governance
Remuneration Report
Other Information
← = Q
Companies
Financial Statements
Herald Hezhong (Beijing) Automotive Trading Co. Ltd., Beijing
242
Remuneration Report
BMW Philippines Corp., Manila
BMW Financial Services Hong Kong Ltd., Hong Kong
Equity in € million
Profit / loss in € million Capital investment in %
100
100
70
51
243
BMW Group Report 2021
To Our Stakeholders
Corporate Governance
100
100
Other Information
Mobimeo GmbH, Berlin
Combined Management Report
YOUR NOW Holding GmbH, Munich 8
DOMESTIC
IONITY Holding GmbH & Co. KG, Munich 8
Companies
Joint ventures - equity accounted
← = Q
Financial Statements
Group Financial Statements
Notes to the Group
BMW AG'S ASSOCIATED COMPANIES, JOINT VENTURES AND JOINT OPERATIONS AT 31 DECEMBER 2021
Mandates
1 Employees of the enterprise.
Oracle Corporation
Mandates
DR. DOMINIQUE MOHABEER¹ (b. 1963)
Member since 2012, elected until the AGM 2024
Member of the Works Council, Munich
Member since 2019, elected until the AGM 2024
CEO & Founder, Vianai Systems, Inc.
DR. VISHAL SIKKA (b. 1967)
Chairman of the Works Council, Leipzig
Member since 3 August 2021, appointed until the
AGM 2024
JENS KÖHLER¹ (b. 1964)
ZF Friedrichshafen AG*
Mandates
Basalt-Actien-Gesellschaft*
Deutsche Post AG
Thyssen Vermögensverwaltung GmbH*
(Chairman since 1 January 2022)
Mandates
PROF. DR. DR. H. C. CHRISTOPH M. SCHMIDT (b. 1962)
Member since 12 May 2021, elected until the AGM 2025
President of the RWI - Leibniz Institute for Economic
Research, University Professor
BASF SE (until 29 April 2022)
Serviceplan Group Management SE*
Wayfair Inc.
RACHEL EMPEY (b. 1976)
Member since 12 May 2021, elected until the AGM 2025
Member of the Board of Management of Fresenius Man-
agement SE (finance division)
SUSANNE KLATTEN (b. 1962)
Member since 1997, elected until the AGM 2024
Entrepreneur
Mandates
Fresenius Kabi AG***, Deputy Chairwoman
Fresenius Medical Care Management AG****
DR.-ING. HEINRICH HIESINGER (b. 1960)
Member since 2017, elected until the AGM 2022
Chairman of the Supervisory Board of ZF
Friedrichshafen AG
Mandates
-
Member since 2020, elected until the AGM 2025
Member of supervisory boards
ALTANA AG ****, Deputy Chairwoman
UnternehmerTUM GmbH*, Chairwoman
2 Union representative.
ANKE SCHÄFERKORDT (b. 1962)
EDAG Engineering GmbH* (until 28 May 2021)
Siemens Healthcare GmbH*
Mandates
Member since 14 May 2021, appointed until the AGM 2024
Head of Bavaria Region, IG Metall
JOHANN HORN² (b. 1958)
Chairman of the Works Council, Landshut
Member since 8 October 2021, appointed until the AGM
2024
BERNHARD EBNER¹ (b. 1978)
← = Q
Other Information
SGL Carbon SE, Chairwoman
SprinD GmbH*
3 Executive employee of the enterprise.
Fresenius Management SE*
"Group mandate.
2 Union representative.
3 Executive employee of the enterprise.
Not listed on the stock exchange.
"Group mandate.
- Memberships of other statutory supervisory boards.
-Memberships of comparable boards of business enterprises in Germany and abroad.
Corporate Governance
Fundamental Aspects of
Corporate Governance
Remuneration Report
Other Information
← = Q
255
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Combined Management Report
Group Financial Statements
Corporate Governance
Fundamental Aspects of
Corporate Governance
Remuneration Report
Other Information
← = Q
OUTGOING MEMBERS
OF THE SUPERVISORY
BOARD
1 Employees of the enterprise.
Not listed on the stock exchange.
31 October 2021)
Member since 2001, elected until the AGM 2024
- Memberships of other statutory supervisory boards.
-Memberships of comparable boards of business enterprises in Germany and abroad.
254
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To Our Stakeholders
Combined Management Report
Group Financial Statements
SIBYLLE WANKEL² (b. 1964)
Member since 4 January 2022, appointed until the
AGM 2024
1. Authorised Representative and Head of IG Metall's
Munich Office
Mandates
KraussMaffei Group GmbH*, Deputy Chairwoman (since
31 May 2021)
DR. THOMAS WITTIG³ (b. 1960)
Member since 2019, elected until the AGM 2024
Senior Vice President Financial Services
Mandates
BMW Bank GmbH ****, Chairman
Remuneration Report
BMW Automotive Finance (China) Co. Ltd.***,
Chairman
WERNER ZIERER¹ (b. 1959)
Member of the Works Council, Regensburg (Chairman until
Corporate Governance
Fundamental Aspects of
Corporate Governance
Member since 1997, elected until the AGM 2024
Deputy Chairman of the Supervisory Board
Entrepreneur
Combined Management Report
PIETER NOTA (b. 1964)
Customer, Brands, Sales
Mandates
Rolls-Royce Motor Cars Limited ****, Chairman
Not listed on the stock exchange.
**Group mandate.
- Memberships of other statutory supervisory boards.
-Memberships of comparable boards of business enterprises in Germany and abroad.
OUTGOING MEMBERS
OF THE BOARD OF
MANAGEMENT
DR.-ING. ANDREAS WENDT (b. 1958)
Purchasing and Supplier Network
(until 31 December 2021)
General Counsel:
DR. ANDREAS LIEPE
252
BMW Group Report 2021
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Combined Management Report
Group Financial Statements
Corporate Governance
Fundamental Aspects of
Corporate Governance
Remuneration Report
FRANK WEBER (b. 1966)
Development
Other Information
BMW (South Africa) (Pty) Ltd. ****, Chairman
BMW Motoren GmbH ***, Chairman
Purchasing and Supplier Network (since 1 January 2022)
251
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Combined Management Report
Group Financial Statements
Corporate Governance
Fundamental Aspects of
Corporate Governance
Remuneration Report
Other Information
← = Q
CURRENT MEMBERS
OF THE BOARD OF
MANAGEMENT
OLIVER ZIPSE (b. 1964)
Chairman
ILKA HORSTMEIER (b. 1969)
Human Resources, Labour Relations Director
DR. NICOLAS PETER (b. 1962)
Finance
Mandates
―
BMW Brilliance Automotive Ltd. ****,
Chairman (until 10 February 2022 Deputy Chairman)
DR.-ING. MILAN NEDELJKOVIĆ (b. 1969)
Production
DR.-ING. JOACHIM POST (b. 1971)
Mandates
Group Financial Statements
← = Q
DR.-ING. DR.-ING. E. H. NORBERT REITHOFER (b. 1956)
Member since 2015, elected until the AGM 2025
Chairman of the Supervisory Board
Deputy Chair of IG Metall
1 Employees of the enterprise.
2 Union representative.
3 Executive employee of the enterprise.
Not listed on the stock exchange.
"Group mandate.
- Memberships of other statutory supervisory boards.
- Memberships of comparable boards of business enterprises in Germany and abroad.
Mandates
Continental AG, Deputy Chairwoman
STEFAN SCHMID1 (b. 1965)
Member since 2007, elected until the AGM 2024
Deputy Chairman of the Supervisory Board
Chairman of the Works Council, Dingolfing
DR. MARC BITZER (b. 1965)
Member since 12 May 2021, elected until the AGM 2025
Chairman and Chief Executive Officer of Whirlpool
Corporation
Mandates
Whirlpool Corp. **, Chairman
Simex Trading AG*
253
BMW Group Report 2021
To Our Stakeholders
Member since 2014, elected until the AGM 2024
CURRENT MEMBERS OF
THE SUPERVISORY BOARD
CHRISTIANE BENNER² (b. 1968)
Mandates
Former Chairman of the Board of Management of BMW AG
STEFAN QUANDT (b. 1966)
DR. JUR. KARL-LUDWIG KLEY (b. 1951)
Member from 2008 to 12 May 2021
DR. RER. POL. KURT BOCK (b. 1958)
Member since 2018, elected until the AGM 2023
Deputy Chairman of the Supervisory Board
(since 12 May 2021)
Chairman of the Supervisory Board of BASF SE
Mandates
Siemens Aktiengesellschaft
Henkel Management AG*
Henkel AG & Co. KGaA (Shareholders' Committee)
MANFRED SCHOCH (b. 1955)
Member since 1988, elected until the AGM 2024
Deputy Chairman of the Supervisory Board
Chairman of the European and General Works Council
Industrial Engineer
Mandates
DELTON Health AG ***, Chairman
DELTON Technology SE***, Chairman
Frankfurter Allgemeine Zeitung GmbH*
AQTON SE***, Chairman
SOLARWATT GmbH ***
-
Entrust Corp.*.**
** Note: Mr Quandt is the sole shareholder of DELTON Health AG, DELTON Technology SE and AQTON
SE. Mr Quandt holds majority interests in Entrust Corp. and SOLARWATT GmbH.
FUCHS PETROLUB SE, Chairman (until 3 May 2022)
Deputy Chairman of the Supervisory Board (until 12 May
2021)
Member from 2013 to 1 October 2021
Member of the Works Council, Dingolfing
Mandates
Bayerische Motoren Werke
Aktiengesellschaft
The Board of Management
Oliver Zipse
Ilka Horstmeier
Dr.-Ing. Milan Nedeljković
Pieter Nota
Dr. Nicolas Peter
Dr.-Ing. Joachim Post
Frank Weber
259
BMW Group Report 2021
To Our Stakeholders
Chairman of the Supervisory Boards of E.ON SE and
Deutsche Lufthansa Aktiengesellschaft
Group Financial Statements
Corporate Governance
INDEPENDENT AUDITOR'S REPORT
Independent Auditor's Report
Munich, 8 March 2022
"To the best of our knowledge, and in accordance with the
applicable reporting principles, the Group Financial State-
ments give a true and fair view of the assets, liabilities, finan-
cial position and results of operations of the Group, and the
Group Management Report includes a fair review of the
development and performance of the business and position
of the Group, together with a description of the principal
opportunities and risks associated with the expected devel-
opment of the Group."
Statement pursuant to § 117 No.1 of the 1, AktG Trading Act
(WpHG) in conjunction with § 297 (2) sentence 4 and § 315
(1) sentence 5 of the German Commercial Code (HGB)
RESPONSIBILITY STATEMENT BY THE
COMPANY'S LEGAL REPRESENTATIVES
Members
Norbert Reithofer*, Kurt Bock (since 12 May 2021), Susanne Klatten, Karl-Ludwig Kley (until 12 May
2021), Stefan Quandt
(In line with the recommendation of the German Corporate Governance Code, the Nomination Committee
comprises only shareholder representatives.)
MEDIATION COMMITTEE
― Submitting a proposal to the Supervisory Board if a resolution to appoint a member of the Board of Management has not been
carried by the necessary two-thirds majority of Supervisory Board members' votes
- Established as required by law
Norbert Reithofer, Manfred Schoch, Stefan Quandt, Stefan Schmid
(In accordance with statutory requirements, the Mediation Committee comprises the Chairman and Dep-
uty Chairman of the Supervisory Board and one member each selected by shareholder representatives
and employee representatives.)
Remuneration Report
⚫ Chair.
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Responsibility Statement by the
Company's Legal Representatives
Remuneration Report
Other Information
← = Q
258
― Established in accordance with recommendation in the German Corporate Governance Code, activities based on terms of proce-
dure
Other Information
To Bayerische Motoren Werke
Aktiengesellschaft, Munich
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the con-
solidated financial statements for the financial year from Jan-
uary 1 to December 31, 2021. These matters were addressed
in the context of our audit of the consolidated financial state-
ments as a whole, and in forming our audit opinion thereon;
we do not provide a separate audit opinion on these matters.
In our view, the matters of most significance in our audit were
as follows:
1 Measurement of leased products
2 Valuation of receivables from sales financing
3 Valuation of provisions for statutory and
non-statutory warranty obligations and product
guarantees
4 Presentation of the acquisition of BMW Brilliance
Automotive Ltd., Shenyang, China, after the
balance sheet date in the notes
Our presentation of these key audit matters has been struc-
tured in each case as follows:
1 Matter and issue
2 Audit approach and findings
3 Reference to further information
Hereinafter we present the key audit matters:
1 Measurement of leased products
The BMW Group leases vehicles to end customers under
operating leases (leased products). At the balance sheet
date, the figure reported under the "leased products" line
item for operating leases was EUR 44,700 million (ap-
proximately 19.5% of total assets). Leased products are
measured at cost, which is depreciated on a straight-line
basis over the lease term to the expected residual value
(recoverable amount). A key estimated value for subse-
quent measurement of leased products is the expected
residual value at the end of the lease term. The
BMW Group uses internally available data on historical
empirical values, current market data and market esti-
mates as well as forecasts by external market research
institutes. The estimation of future residual values is
subject to judgment due to the large number of assump-
tions to be made by the executive directors and the
amount of data included in the determination.
Against this background and due to the resulting signifi-
cant uncertainties with regard to estimates in the context
of measuring the residual values of the leased products,
this matter was of particular significance in the context of
our audit.
2 As part of our audit we obtained an understanding of the
development of operating leases, the underlying residu-
al value risks as well as the business processes for the
identification, management, monitoring and measure-
ment of residual value risks, among other things by in-
quiries and inspection of documents related to the inter-
nal calculation methods. Furthermore, we evaluated the
appropriateness and effectiveness of the internal control
system, particularly regarding the determination of ex-
pected residual values. This included the evaluation of
the propriety of the relevant IT systems as well as the
implemented interfaces therein by our IT-specialists. In
addition, we evaluated the appropriateness of the fore-
casting methods, the model assumptions as well as the
parameters used for the measurement of the residual
values based on the validations carried out by the
BMW Group. For this purpose, we inquired with the
BMW Group's experts responsible for the management
and monitoring of residual value risks and inspected the
internal analysis on residual value developments and re-
sidual value forecasts as well as the validation results.
We examined the mathematically correctness of the
forecast values using the key calculation steps.
Based on our audit procedures, we were able to satisfy
ourselves that the methods and processes for determin-
ing the expected residual values of leased products un-
derlying the valuation are appropriate and the assump-
tions and parameters included in the forecast model for
the residual value are appropriate as a whole.
3 The Company's disclosures on the applied "Accounting
policies, assumptions, judgments and estimations" are
contained in the notes to the consolidated financial
statements under note 6 and on leased products are
contained under note 23.
Key Audit Matters in the Audit of the Consolidated Fi-
nancial Statements
and of the Group Management Report" section of our audi-
tor's report. We are independent of the group entities in ac-
cordance with the requirements of European law and Ger-
man commercial and professional law, and we have fulfilled
our other German professional responsibilities in accordance
with these requirements. In addition, in accordance with Arti-
cle 10 (2) point (f) of the EU Audit Regulation, we declare that
we have not provided non-audit services prohibited under
Article 5 (1) of the EU Audit Regulation. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinions on the consolidated
financial statements and on the group management report.
← = Q
Other Information
Report on the Audit of the
Consolidated Financial Statements and
of the Group Management Report
Audit Opinions
We have audited the consolidated financial statements of
Bayerische Motoren Werke Aktiengesellschaft, Munich, and
its subsidiaries (the Group), which comprise the Balance
Sheet for Group at 31 December 2021, and the Income State-
ment for Group, Statement of Comprehensive Income for
Group, Cash Flow Statement for Group and Statement of
changes in Equity for Group for the financial year from 1 Jan-
uary to 31 December 2021, and Notes to the Group Financial
Statements, including a summary of significant accounting
policies. In addition, we have audited the combined man-
agement report of Bayerische Motoren Werke Aktienge-
sellschaft, which is combined with the Company's manage-
ment report, for the financial year from 1 January to 31
December 2021. In accordance with the German legal re-
quirements, we have not audited the content of those parts
of the group management report listed in the "Other Infor-
mation" section of our auditor's report.
In our opinion, on the basis of the knowledge obtained in the
audit,
the accompanying consolidated financial statements
comply, in all material respects, with the IFRSS as adopt-
ed by the EU, and the additional requirements of German
commercial law pursuant to § [Article] 315e Abs. [para-
graph] 1 HGB [Handelsgesetzbuch: German Commercial
Code] and, in compliance with these requirements, give a
true and fair view of the assets, liabilities, and financial
position of the Group as at December 31, 2021, and of its
financial performance for the financial year from Janu-
ary 1 to December 31, 2021, and
the accompanying group management report as a whole
provides an appropriate view of the Group's position. In
all material respects, this group management report is
consistent with the consolidated financial statements,
complies with German legal requirements and appropri-
ately presents the opportunities and risks of future devel-
opment. Our audit opinion on the group management
report does not cover the content of those parts of the
group management report listed in the "Other Informa-
tion" section of our auditor's report.
← = Q
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
that our audit has not led to any reservations relating to the
legal compliance of the consolidated financial statements
and of the group management report.
We conducted our audit of the consolidated financial state-
ments and of the group management report in accordance
with § 317 HGB and the EU Audit Regulation (No. 537/2014,
referred to subsequently as “EU Audit Regulation”) in compli-
ance with German Generally Accepted Standards for Finan-
cial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany]
(IDW). Our responsibilities under those requirements and
principles are further described in the "Auditor's Responsibil-
ities for the Audit of the Consolidated Financial Statements
260
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Independent Auditor's Report
Remuneration Report
Basis for the Audit Opinions
- Identifying suitable candidates as shareholder representatives on the Supervisory Board to be put forward for inclusion in the
Supervisory Board's proposals for election at the Annual General Meeting
Combined Management Report
Principal duties, basis for activities
Mandates
ABB AG
WILLIBALD LÖW¹ (b. 1956)
Member from 1999 to 16 July 2021
Member of the Works Council, Landshut (Chairman until 13
July 2021)
1 Employees of the enterprise.
2 Union representative.
3 Executive employee of the enterprise.
Not listed on the stock exchange.
"Group mandate.
-Memberships of other statutory supervisory boards.
Memberships of comparable boards of business enterprises in Germany and abroad.
256
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Head of Industrial Relations Regulations and
Co-determination Policy at the Executive Board of
IG Metall (In-house) Counsel
Member from 2019 to 31 December 2021
VERENA ZU DOHNA² (b. 1975)
BRIGITTE RÖDIG¹ (b. 1963)
E.ON SE, Chairman
Deutsche Lufthansa Aktiengesellschaft, Chairman
PROF. DR. DR. H. C. REINHARD HÜTTL (b. 1957)
Member from 2008 to 12 May 2021
Scientific Director and Managing Partner of EUREF Energy
Innovation GmbH
NOMINATION COMMITTEE
Member from 2009 to 12 May 2021
Former Secretary to the Executive Board of IG Metall
Mandates
Corporate Governance
Fundamental Aspects of
Corporate Governance
-
Deputy Chairman (until 10 May 2021)
MAN Truck & Bus SE*
SIMONE MENNE (b. 1960)
Member from 2015 to 12 May 2021
Member of supervisory boards
-
Mandates
Deutsche Post AG
Henkel AG & Co. KGaA
Johnson Controls International plc
Russell Reynolds Associates Inc.*
KraussMaffei Group GmbH *,
Remuneration Report
HORST LISCHKA² (b. 1963)
← = Q
-― Making decisions on approval for utilisation of the Authorised Capital 2019 and determinations concerning the form of share
certificates and dividend coupons
- Amendments to Articles of Incorporation only affecting wording
― Established in accordance with recommendation in the German Corporate Governance Code, activities based on
rules of procedure
Kurt Bock 1,2, Norbert Reithofer 3³, Manfred Schoch, Stefan Quandt, Stefan Schmid
1 Chair.
2 Special knowledge and experience according to recommendation D.4 of the DCGK
and expertise in accounting and auditing within the meaning of § 100 (5) AktG.
3 Expertise in auditing within the meaning of § 100 (5) AktG.
257
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Fundamental Aspects of
Corporate Governance
Other Information
← = Q
Other Information
― Supervising compliance as well as analysing and supervising any needs for action related to possible violations of duties by members
of the Board of Management in preparation of a resolution at the Supervisory Board
- Supervising the effectiveness of the internal control system, the risk management system and the internal audit system as well as
the performance of Supervisory Board duties in connection with audits pursuant to § 32 of the German Securities Trading Act (WpHG)
Remuneration Report
PRESIDING BOARD
- Preparing the Supervisory Board's audit of the non-financial reporting, preparing the selection of the auditor for non-financial
reporting, and engaging the auditor
Principal duties, basis for activities
– Preparing Supervisory Board meetings where the subject matter to be discussed does not fall within the remit of a committee
- Activities based on rules of procedure
PERSONNEL COMMITTEE
― Preparing decisions relating to the appointment (and revocation of appointment) of members of the Board of Management,
remuneration, and the regular review of the Board of Management's remuneration system
― Concluding, amending and revoking employment contracts (in conjunction with the resolutions taken by the Supervisory Board
regarding the remuneration of the Board of Management) and other contracts with members of the Board of Management
― Taking decisions relating to the approval of ancillary activities of Board of Management members, including the assumption of
non-BMW Group supervisory board mandates, as well as the approval of transactions requiring Supervisory Board approval by
law (e. g. loans to Board of Management or Supervisory Board members)
- Activities based on rules of procedure
OVERVIEW OF SUPERVISORY BOARD COMMITTEES AND THEIR COMPOSITION
Norbert Reithofer¹, Manfred Schoch, Stefan Quandt, Stefan Schmid, Karl-Ludwig Kley (until 12 May
2021), Kurt Bock (since 12 May 2021)
Norbert Reithofer 1, Manfred Schoch, Stefan Quandt, Stefan Schmid, Karl-Ludwig Kley (until 12 May
2021), Kurt Bock (since 12 May 2021)
AUDIT COMMITTEE
― Auditing the accounts and supervising the financial reporting process
- Preparing the Supervisory Board's resolution on Company and Group Financial Statements and discussing interim reports and
notifications with the Board of Management prior to publication
- Supervising the external audit, in particular selecting the auditor and ensuring the independence and quality of the external
audit and any additional work performed by the external auditor
- Preparing the proposal for the election of the external auditor at the Annual General Meeting,
Members
― Engaging and signing the fee agreement with the external auditor as well as determining areas of audit emphasis
Remuneration Report
Other Information
← = Q
Independent Auditor's Report
Management Report Prepared for Publication Purposes in
Accordance with § 317 Abs. 3a HGB" and our assurance
opinion contained therein are to be used solely together
with the assured ESEF documents made available in elec-
tronic form.
GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE
ENGAGEMENT
The German Public Auditor responsible for the engagement
is Andreas Fell.
(German Public Auditor)
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
(sgd. Petra Justenhoven)
Wirtschaftsprüferin
(sgd. Andreas Fell)
Wirtschaftsprüfer
(German Public Auditor)
267
BMW Group Report 2021
Corporate Governance
To Our Stakeholders
Munich, March 9, 2022
BMW Group Report 2021
We were elected as group auditor by the annual general
meeting on May 12, 2021. We were engaged by the supervi-
sory board on June 24, 2021. We have been the group auditor
of Bayerische Motoren Werke Aktiengesellschaft, Munich,
without interruption since the financial year 2019.
Combined Management Report
Combined Management Report
Evaluate whether the tagging of the ESEF documents
with Inline XBRL technology (iXBRL) in accordance with
the requirements of Articles 4 and 6 of the Delegated
Regulation (EU) 2019/815, in the version in force at the
date of the consolidated financial statements, enables
an appropriate and complete machine-readable XBRL
copy of the XHTML rendering.
In determining the disclosures in accordance with Article 8 of
the EU Taxonomy Regulation, the executive directors are
required to interpret undefined legal terms. Due to the imma-
nent risk that undefined legal terms may be interpreted dif-
ferently, the legal conformity of their interpretation and,
accordingly, our assurance engagement thereon are subject
to uncertainties.
Evaluation of the presentation of the disclosures
Inquiries on the relevance of climate-risks
Evaluation of the process to identify taxonomy-eligible
economic activities and the corresponding disclosures in
the Combined Non-financial Statement
Analytical evaluation of selected disclosures in the Inte-
grated Group Report
Testing of processes for the collection, control, analysis
and aggregation of selected data from various Group
sites on a sample basis
Further Information pursuant to Article 10 of the EU
Audit Regulation
We declare that the audit opinions expressed in this audi-
tor's report are consistent with the additional report to the
audit committee pursuant to Article 11 of the EU Audit Regu-
lation (long-form audit report).
REFERENCE TO AN OTHER MATTER - USE OF THE
AUDITOR'S REPORT
Our auditor's report must always be read together with the
audited consolidated financial statements and the audited
group management report as well as the assured ESEF
documents. The consolidated financial statements and the
group management report converted to the ESEF format -
including the versions to be published in the Federal Ga-
zette are merely electronic renderings of the audited con-
solidated financial statements and the audited group
management report and do not take their place. In particu-
lar, the "Report on the Assurance on the Electronic Render-
ing of the Consolidated Financial Statements and the Group
266
BMW Group Report 2021
To Our Stakeholders
Group Financial Statements
Group Financial Statements
Group Financial Statements
Other Information
← = Q
Independence and Quality Control of the Audit Firm
We have complied with the German professional provisions
regarding independence as well as other ethical require-
ments.
Our audit firm applies the national legal requirements and
professional standards in particular the Professional Code
for German Public Auditors and German Chartered Auditors
("Berufssatzung für Wirtschaftsprüfer und vereidigte Buch-
prüfer": "BS WP/vBP") as well as the Standard on Quality
Control 1 published by the Institut der Wirtschaftsprüfer
(Institute of Public Auditors in Germany; IDW): Requirements
to quality control for audit firms (IDW Qualitätssicherungs-
standard 1: Anforderungen an die Qualitätssicherung in der
Wirtschaftsprüferpraxis - IDW QS 1) - and accordingly main-
tains a comprehensive system of quality control including
documented policies and procedures regarding compliance
with ethical requirements, professional standards and appli-
cable legal and regulatory requirements.
Responsibility of the Assurance Practitioner
Our responsibility is to express a conclusion with limited
assurance on the Disclosures on Non-financial Reporting
denoted with the symbol "[[ ... ]]" of the Combined Non-fi-
nancial Statement and the Sustainability Disclosures in the
sections "Dialog with stakeholders" and "Further GRI infor-
mation" of the Integrated Group Report based on the assur-
ance engagement we have performed.
We conducted our assurance engagement in accordance
with International Standard on Assurance Engagements
(ISAE) 3000 (Revised): Assurance Engagements other than
Audits or Reviews of Historical Financial Information, issued
by the IAASB. This Standard requires that we plan and per-
form the assurance engagement to obtain limited assurance
about whether any matters have come to our attention that
cause us to believe that
the Disclosures on Non-financial Reporting denoted with
the symbol "[[ ... ]]" of the Company's Combined Non-fi-
nancial Statement, contained in the Integrated Group
Report, other than the external sources of documentation
or expert opinions mentioned in the disclosures denoted
with the symbol "[[ ... ]]" in the Combined Non-financial
Statement, are not prepared, in all material respects, in
accordance with §§ 315c in conjunction with 289c to
289e HGB and the EU Taxonomy Regulation and the
Delegated Acts issued thereunder as well as the inter-
pretation by the executive directors disclosed in section
"EU-Taxonomy" of the Combined Non-financial State-
ment, or
the Sustainability Disclosures in the sections "Dialog
with stakeholders" and "Further GRI information" of the
Company's Integrated Group Report have not been pre-
pared, in all material aspects, in accordance with the rel-
evant GRI-Criteria.
In a limited assurance engagement the procedures per-
formed are less extensive than in a reasonable assurance
engagement, and accordingly a substantially lower level of
assurance is obtained. The selection of the assurance proce-
dures is subject to the professional judgement of the assur-
ance practitioner.
In the course of our assurance engagement, we have,
amongst other things, performed the following assurance
procedures and other activities:
Obtaining an understanding of the structure of the sus-
tainability organization and of the stakeholder engage-
ment
- Inquiries of personnel involved in the preparation of the
Integrated Group Report regarding the preparation pro-
cess, the internal control system relating to this process
and selected disclosures in the Integrated Group Report
Identification of the likely risks of material misstatement
of the Integrated Group Report
To Our Stakeholders
Other Information
Remuneration Report
Corporate Governance
Independent Practitioner's Report
Combined Management Report
← = Q
Corporate Governance
Independent Practitioner's Report
INDEPENDENT PRACTITIONER'S REPORT
Independent Practitioner's Report on a Limited As-
surance Engagement on Disclosures on Non-financial
Reporting and Sustainability Discloures¹
To BMW AG, Munich
We have performed a limited assurance engagement on the
disclosures in the "BMW Group Report 2021" of BMW AG,
Munich, (hereinafter the "Company") for the period from 1
January to 31 December 2021 (hereinafter the “Integrated
Group Report") denoted with "[... ]]" of the Combined
Non-financial Statement, which is integrated into the com-
bined management report (hereinafter the "Disclosures on
Non-financial Reporting") contained in the Integrated Group
Report, as well as the sustainability disclosures contained in
the sections "Dialog with stakeholders" and "Further GRI
information" of the Integrated Group Report (hereinafter
referred to as "Sustainability Disclosures"). Our engagement
in this context relates solely to the disclosures denoted with
the symbol "[...]" and the disclosures in the sections "Dia-
log with stakeholders" and "Further GRI information".
"
Remuneration Report
Not subject to our assurance engagement are the external
sources of documentation or expert opinions mentioned in
the Integrated Group Report.
The executive directors of the Company are responsible for
the preparation of the Combined Non-financial Statement in
accordance with §§ (Articles) 315c in conjunction with 289c
to 289e HGB ("Handelsgesetzbuch": "German Commercial
Code") and Article 8 of REGULATION (EU) 2020/852 OF
THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of
18. June 2020 on establishing a framework to facilitate sus-
tainable investment and amending Regulation (EU)
2019/2088 (hereinafter the "EU Taxonomy Regulation") and
the Delegated Acts adopted thereunder, as well as for mak-
ing their own interpretation of the wording and terms con-
tained in the EU Taxonomy Regulation and the Delegated
Acts adopted thereunder, as set out in section "EU-Taxon-
omy" of the Combined Non-financial Statement and the
Sustainability Disclosures in accordance with the principles
stated in the Sustainability Reporting Standards of the
Global Reporting Initiative (hereinafter the "GRI-Criteria”).
This responsibility includes the selection and application of
appropriate methods of non-financial reporting and sustain-
ability reporting as well as making assumptions and esti-
mates related to individual non-financial disclosures and
sustainability disclosures of the Group that are reasonable in
the circumstances. Furthermore, the executive directors are
responsible for such internal control as the executive direc-
tors consider necessary to enable the preparation of an Inte-
grated Group Report that is free from material misstatement
whether due to fraud or error.
The EU Taxonomy Regulation and the Delegated Acts issued
thereunder contain wording and terms that are still subject
to considerable interpretation uncertainties and for which
clarifications have not yet been published in every case.
Therefore, the executive directors have disclosed their inter-
pretation of the EU Taxonomy Regulation and the Delegated
Acts adopted thereunder in section "EU-Taxonomy" of the
Combined Non-financial Statement. They are responsible for
the defensibility of this interpretation. Due to the immanent
risk that indeterminate legal terms may be interpreted differ-
ently, the legal conformity of the interpretation is subject to
uncertainties.
1 PricewaterhouseCoopers GmbH has performed a limited assurance engagement on
the German version of the,,BMW Group Report 2021" and issued an independent
practitioner's report in German language, which is authoritative. The following text
is a translation of the independent practitioner's report
268
BMW Group Report 2021
To Our Stakeholders
Responsibility of the Executive Directors
Combined Management Report
The executive directors of the Company are responsible for
the preparation of the ESEF documents including the elec-
tronic renderings of the consolidated financial statements
and the group management report in accordance with § 328
Abs. 1 Satz 4 Nr. [number] 1 HGB and for the tagging of the
consolidated financial statements in accordance with § 328
Abs. 1 Satz 4 Nr. 2 HGB.
Corporate Governance
Independent Practitioner's Report
Other Information
← = Q
In connection with our audit, our responsibility is to read the
other information mentioned above and, in so doing, to con-
sider whether the other information
—
is materially inconsistent with the consolidated financial
statements, with the group management report disclo-
sures audited in terms of content or with our knowledge
obtained in the audit, or
otherwise appears to be materially misstated.
Responsibilities of the Executive Directors and the Su-
pervisory Board for the Consolidated Financial State-
ments and the Group Management Report
The executive directors are responsible for the preparation of
the consolidated financial statements that comply, in all ma-
terial respects,
with IFRSS as adopted by the EU and the ad-
ditional requirements of German commercial law pursuant to
§ 315e Abs. 1 HGB and that the consolidated financial state-
ments, in compliance with these requirements, give a true
and fair view of the assets, liabilities, financial position, and
financial performance of the Group. In addition the executive
directors are responsible for such internal control as they
have determined necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the exec-
utive directors are responsible for assessing the Group's
ability to continue as a going concern. They also have the
responsibility for disclosing, as applicable, matters related to
going concern. In addition, they are responsible for financial
reporting based on the going concern basis of accounting
unless there is an intention to liquidate the Group or to cease
operations, or there is no realistic alternative but to do so.
Furthermore, the executive directors are responsible for the
preparation of the group management report that, as a
whole, provides an appropriate view of the Group's position
and is, in all material respects, consistent with the consoli-
dated financial statements, complies with German legal re-
quirements, and appropriately presents the opportunities
and risks of future development. In addition, the executive
directors are responsible for such arrangements and meas-
ures (systems) as they have considered necessary to enable
the preparation of a group management report that is in ac-
cordance with the applicable German legal requirements,
and to be able to provide sufficient appropriate evidence for
the assertions in the group management report.
The supervisory board is responsible for overseeing the
Group's financial reporting process for the preparation of the
consolidated financial statements and of the group manage-
ment report.
Auditor's Responsibilities for the Audit of the Consoli-
dated Financial Statements and of the Group Manage-
ment Report
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or
error, and whether the group management report as a whole
provides an appropriate view of the Group's position and, in
all material respects, is consistent with the consolidated fi-
nancial statements and the knowledge obtained in the audit,
complies with the German legal requirements and appropri-
ately presents the opportunities and risks of future develop-
ment, as well as to issue an auditor's report that includes our
audit opinions on the consolidated financial statements and
on the group management report.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with
§ 317 HGB and the EU Audit Regulation and in compliance
with German Generally Accepted Standards for Financial
Statement Audits promulgated by the Institut der Wirtschaft-
sprüfer (IDW) will always detect a material misstatement.
Misstatements can arise from fraud or error and are con-
sidered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated
financial statements and this group management report.
We exercise professional judgment and maintain profession-
al skepticism throughout the audit. We also:
Remuneration Report
Identify and assess the risks of material misstatement of
the consolidated financial statements and of the group
management report, whether due to fraud or error, design
and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropri-
ate to provide a basis for our audit opinions. The risk of
not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls.
Corporate Governance
Independent Auditor's Report
Combined Management Report
2 As part of our audit of the presentation of the acquisition
of BMW Brilliance Automotive Ltd. Shenyang, China, we
first inspected the contractual agreements and, based
on this, evaluated the acquisition date, with the involve-
ment of our specialists in international accounting. Fur-
thermore, we examined the determination of the appre-
ciation effect. In view of the special features of
determining the fair values in the context of the prelimi-
nary purchase price allocation, our valuation specialists
assisted us in the process. Together, we examined the
appreciation effect and, by using checklists, evaluated
the completeness and accuracy of the disclosures in the
notes to the consolidated financial statements required
under IFRS 3 and IAS 10.
Overall, we were able to satisfy ourselves that, taking into
consideration the information available, the acquisition is
properly presented in the notes to the consolidated fi-
nancial statements and that the estimates and assump-
tions made by the executive directors are appropriate
overall for the presentation of the acquisition.
3 The Company's disclosures relating to the acquisition
are contained in the notes to the consolidated financial
statements under note 3 "Increase of share in BMW Bril-
liance Automotive Ltd.".
Other Information
The executive directors are responsible for the other infor-
mation. The other information comprises the following
non-audited parts of the group management report:
the "Corporate Governance" section of the group man-
agement report
the disclosures marked with "[[ ... ]]" of the non-financial
statement pursuant to § 289b Abs. 1 HGB and § 315b
Abs. 1 HGB
The other information comprises further
the statement on corporate governance pursuant to
§ 289f HGB and § 315d HGB
the remuneration report pursuant to § 162 AktG [Aktien-
gesetz: German Stock Corporation Act], for which the
supervisory board is also responsible
=
-
all remaining parts of the annual report excluding
cross-references to external information with the excep-
tion of the audited consolidated financial statements, the
audited group management report and our auditor's report
Our audit opinions on the consolidated financial statements
and on the group management report do not cover the other
information, and consequently we do not express an audit
opinion or any other form of assurance conclusion thereon.
263
BMW Group Report 2021
To Our Stakeholders
Group Financial Statements
Obtain an understanding of internal control relevant to
the audit of the consolidated financial statements and of
arrangements and measures (systems) relevant to the
audit of the group management report in order to design
audit procedures that are appropriate in the circumstanc-
es, but not for the purpose of expressing an audit opinion
on the effectiveness of these systems.
Evaluate the appropriateness of accounting policies used
by the executive directors and the reasonableness of es-
timates made by the executive directors and related dis-
closures.
Conclude on the appropriateness of the executive direc-
tors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a materi-
al uncertainty exists related to events or conditions that
may cast significant doubt on the Group's ability to con-
tinue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in
Report on the Assurance on the Electronic Rendering of
the Consolidated Financial Statements and the Group
Management Report Prepared for Publication Purposes
in Accordance with § 317 Abs. 3a HGB
Assurance Opinion
We have performed assurance work in accordance with
§ 317 Abs. 3a HGB to obtain reasonable assurance as to
whether the rendering of the consolidated financial state-
ments and the group management report (hereinafter the
"ESEF documents") contained in the electronic file BMW_
AG_KA+KLB_ESEF-2021-12-31.zip and prepared for publi-
cation purposes complies in all material respects with the
requirements of § 328 Abs. 1 HGB for the electronic report-
ing format ("ESEF format"). In accordance with German
legal requirements, this assurance work extends only to
the conversion of the information contained in the consoli-
dated financial statements and the group management re-
port into the ESEF format and therefore relates neither to
the information contained within these renderings nor to
any other information contained in the electronic file identi-
fied above.
In our opinion, the rendering of the consolidated financial
statements and the group management report contained in
the electronic file identified above and prepared for publica-
tion purposes complies in all material respects with the re-
quirements of § 328 Abs. 1 HGB for the electronic reporting
format. Beyond this assurance opinion and our audit opin-
ion on the accompanying consolidated financial statements
and the accompanying group management report for the
financial year from January 1 to December 31, 2021 con-
265
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Independent Auditor's Report
Remuneration Report
Other Information
← = Q
tained in the "Report on the Audit of the Consolidated
Financial Statements and on the Group Management Re-
port" above, we do not express any assurance opinion on
the information contained within these renderings or on the
other information contained in the electronic file identified
above.
Basis for the Assurance Opinion
We conducted our assurance work on the rendering of the
consolidated financial statements and the group manage-
ment report contained in the electronic file identified above
in accordance with § 317 Abs. 3a HGB and the IDW Assur-
ance Standard: Assurance Work on the Electronic Render-
ing of Financial Statements and Management Reports,
Prepared for Publication Purposes in Accordance with
§ 317 Abs. 3a HGB (IDW ASS 410 (10.2021)) and the Inter-
national Standard on Assurance Engagements 3000 (Re-
vised). Our responsibility in accordance therewith is further
described in the "Group Auditor's Responsibilities for the
Assurance Work on the ESEF Documents" section. Our au-
dit firm applies the IDW Standard on Quality Management
1: Requirements for Quality Management in the Audit Firm
(IDW QS 1).
Responsibilities of the Executive Directors and the Su-
pervisory Board for the ESEF Documents
REQUIREMENTS
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial state-
ments of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report
unless law or regulation precludes public disclosure about
the matter.
We also provide those charged with governance with a
statement that we have complied with the relevant inde-
pendence requirements, and communicate with them all re-
lationships and other matters that may reasonably be
thought to bear on our independence, and where applicable,
the related safeguards.
We communicate with those charged with governance re-
garding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any sig-
nificant deficiencies in internal control that we identify during
our audit.
264
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Independent Auditor's Report
Remuneration Report
Other Information
Due to the estimates made by the executive directors in
determining the appreciation effect on the previously
held shares and the associated uncertainties as well as
the significance of this matter for an assessment of the
future net assets and liabilities, financial position and fi-
nancial performance of the Group, this matter was of par-
ticular significance during our audit.
← = Q
Evaluate the overall presentation, structure and content
of the consolidated financial statements, including the
disclosures, and whether the consolidated financial
statements present the underlying transactions and
events in a manner that the consolidated financial state-
ments give a true and fair view of the assets, liabilities,
financial position and financial performance of the Group
in compliance with IFRSS as adopted by the EU and the
additional requirements of German commercial law pur-
suant to § 315e Abs. 1 HGB.
Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business activ-
ities within the Group to express audit opinions on the
consolidated financial statements and on the group
management report. We are responsible for the direction,
supervision and performance of the group audit. We re-
main solely responsible for our audit opinions.
Evaluate the consistency of the group management re-
port with the consolidated financial statements, its con-
formity with German law, and the view of the Group's
position it provides.
Perform audit procedures on the prospective information
presented by the executive directors in the group man-
agement report. On the basis of sufficient appropriate
audit evidence we evaluate, in particular, the significant
assumptions used by the executive directors as a basis
for the prospective information and evaluate the proper
derivation of the prospective information from these as-
sumptions. We do not express a separate audit opinion
OTHER LEGAL AND
on the prospective information and on the assumptions REGULATORY
used as a basis. There is a substantial unavoidable risk
that future events will differ materially from the prospec-
tive information.
the auditor's report to the related disclosures in the con-
solidated financial statements and in the group manage-
ment report or, if such disclosures are inadequate, to
modify our respective audit opinions. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor's report. However, future events or conditions
may cause the Group to cease to be able to continue as
a going concern.
lication of the consolidated financial statements for
financial year 2021, disclosures in the notes to the
financial statements are already required for the busi-
ness combination (a as is the case for acquisitions
during the reporting period) in accordance with IFRS 3
and IAS 10.
The BMW Group held so far 50% of shares in BMW Bril-
liance Automotive Ltd., Shenyang, China. On October 11,
2018, a purchase agreement was concluded for the ac-
quisition of a further 25% of the shares in BMW Brilliance
Automotive Ltd. Shenyang, China. The acquisition was
subject to the removal of the joint venture obligation for
automotive production in China, which occurred in Jan-
uary 2022. The closing of the transaction was on Feb-
ruary 11, 2022. The acquisition date therefore falls with-
in the preparation phase of the consolidated financial
statements for financial year 2021. The previously held
shares will be measured at fair value as at the acquisi-
tion date, which will result in an appreciation effect
amounting to EUR 7.0 billion to EUR 8.0 billion in the
financial year 2022. Due to the gain of control after the
balance sheet date but prior to the approval of the pub-
4 Presentation of the acquisition of BMW Brilliance
Automotive Ltd., Shenyang, China, after the balance
sheet date in the notes
Corporate Governance
271 I.
Review of the past financial year from a remuneration
perspective
272 II.
Remuneration of the members of the Board of
Management
310 III.
Remuneration of the members of the Supervisory Board
314 IV.
Comparison of change in remuneration and earnings
pursuant to § 162 (1) Sentence 2 No. 2 of the German
Stock Corporation Act (AktG)
Other considerations
Remuneration Report
Other Information
← = Q
318 V.
318 VI.
Outlook for the 2022 financial year
319 VII. Auditor's Report
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
Remuneration Report
Other Information
← = Q
Assurance Opinion
Based on the assurance procedures performed and evi-
dence obtained, nothing has come to our attention that
causes us to believe that
the Disclosures on Non-financial Reporting denoted with
the symbol "[[ ... ]]" of the Company's Combined Non-fi-
nancial Statement for the period from 1 January to 31
December 2021, which is integrated into the combined
management report contained in the Integrated Group
Report, have not been prepared, in all material aspects,
in accordance with the requirements of §§ 315c in con-
junction with 289c to 289e HGB relevant to these disclo-
sures and the EU Taxonomy Regulation and the Dele-
gated Acts issued thereunder as well as the interpretation
by the executive directors disclosed in section "EU-Tax-
onomy" of the Non-financial Statement, or
the Sustainability Disclosures in the sections "Dialog
with stakeholders" and "Further GRI information" of the
Company's Integrated Group Report for the period from 1
January to 31 December 2021 have not been prepared, in
all material aspects, in accordance with the relevant
GRI-Criteria.
We do not express an assurance opinion on the external
sources of documentation or expert opinions mentioned in
the Disclosures on Non-financial Reporting denoted with the
symbol "[[ ]]" of the Company's Combined Non-financial
Statement.
REMUNERATION
Restriction of Use
Munich, 9 March 2022
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Andreas Fell
Wirtschaftsprüfer
Nicolette Behncke
Wirtschaftsprüferin
[German public auditor] [German public auditor]
270
We draw attention to the fact that the assurance engage-
ment was conducted for the Company's purposes and that
the report is intended solely to inform the Company about
the result of the assurance engagement. Consequently, it
may not be suitable for any other purpose than the afore-
mentioned. Accordingly, the report is not intended to be used
by third parties for making (financial) decisions based on it.
Our responsibility is to the Company. We do not accept any
responsibility to third parties. Our assurance opinion is not
modified in this respect.
Group Financial Statements
REPORT
Evaluate the technical validity of the ESEF documents,
i.e., whether the electronic file containing the ESEF doc-
uments meets the requirements of the Delegated Regu-
lation (EU) 2019/815 in the version in force at the date of
the consolidated financial statements on the technical
specification for this electronic file.
3 The Company's disclosures on the applied "Accounting
policies, assumptions, judgments and estimations" are
contained in the notes to the consolidated financial
statements under note 6 and on "receivables from sales
financing" are contained under note 25.
3 Valuation of provisions for statutory and non-statu-
tory warranty obligations and product guarantees
Provisions for statutory and non-statutory warranty ob-
ligations as well as product guarantees are included in
the consolidated financial statements of BMW Group as
a material amount in other provisions. The obligations
amounted to EUR 6,600 million (approximately 2.9% of
total assets) as at December 31, 2021. BMW Group is re-
sponsible for the legally required warranty and product
guarantees in the respective sales market. In order to
estimate the liabilities arising from statutory and
non-statutory warranty obligations and product guar-
antees for vehicles sold, information on the type and
volume of damages arising and on remedial measures
is recorded and analyzed at vehicle model level. The ex-
pected amount of obligations is extrapolated from costs
of the past and recognized as a provision in the corre-
sponding amount, if the criteria of IAS 37 have been
met. For specific or anticipated individual circumstanc-
es, for example recalls, additional provisions are recog-
nized provided they have not already been taken into
account.
The determination of provisions is associated with una-
voidable estimation uncertainties and is subject to a high
risk of change, depending on factors such as notification
of detected defects as well as claims made by vehicle
owners. Against this background, this matter was of par-
ticular significance during our audit.
In order to assess the appropriateness of the valuation
method used for the determination of the provisions for
statutory and non-statutory warranty obligations as well
as product guarantees including the assumptions and
parameters, we primarily obtained an understanding of
the process for determining the assumptions and pa-
rameters through discussions with the responsible em-
ployees of the BMW Group. We also evaluated the ap-
propriateness as well as effectiveness of controls for
determining the assumptions and parameters. With the
involvement of our IT specialists, we checked the IT sys-
tems used regarding their compliance. We compared the
expenses for claims and technical actions with actual
costs incurred in order to draw conclusions on the fore-
cast accuracy. Based on a targeted sample of vehicle
models, the mathematically correctness of the valuation
model used across the Group was examined. We exam-
ined and evaluated the assumptions used by the
BMW Group concerning the extent to which the past val-
ues were representative of the expected susceptibility of
damage, the expected value of damage per vehicle
262
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Independent Auditor's Report
Remuneration Report
Other Information
← = Q
(comprising parts and labor input) as well as the expect-
ed assertion of claims from statutory and non-statutory
warranties.
In our view, the method for the valuation of provisions for
statutory and non-statutory warranty obligations as well
as product guarantees is overall appropriate. Taking into
consideration the information available, we believe that,
overall, the measurement parameters and assumptions
used by the executive directors are appropriate.
3 The Company's disclosures on the applied "Accounting
policies, assumptions, judgments and estimations" are
contained in the notes to the consolidated financial
statements under note 6 and on "Other provisions" are
contained under note 33.
In our view, the assumptions and parameters used in the
measurement of receivables from sales financing were
appropriate overall.
sessment by our IT-specialists of the appropriateness
of the systems concerned and associated interfaces to
ensure the completeness of data as well as the audit of
automated controls for data processing. As part of our
audit we assessed in particular the appropriateness of
the risk classification procedures as well as the risk
provisioning parameters used. For this purpose, we
analyzed in particular the validations of parameters
that are regularly conducted by the Company. To as-
sess the default risk, we also used targeted sampling of
individual cases to examine whether the attributes for
assignment to the respective risk categories were suit-
ably available and the impairment losses had been cal-
culated using the parameters defined for these risk cat-
egories.
2 As part of our audit we obtained a comprehensive un-
derstanding of the development of receivables from
sales financing, the associated default-related risks as
well as the business processes for the identification,
management, monitoring and measurement of default
risks, among other things by inquiries and inspection of
documents on the internal calculation methods. Fur-
thermore, we evaluated the appropriateness and effec-
tiveness of the internal control system regarding the
determination of the impairment loss to recognize. In
this context, we also evaluated the relevant IT systems
and internal processes. The evaluation included an as-
The determination of the valuation allowances by the
executive directors is subject to a significant degree of
judgment due to several value-influencing factors such
as the estimation of creditworthiness, the determina-
tion of probabilities of default and loss ratios and was
therefore of particular significance in the context of our
audit.
Obtain an understanding of internal control relevant to
the assurance work on the ESEF documents in order to
design assurance procedures that are appropriate in the
circumstances, but not for the purpose of expressing an
assurance opinion on the effectiveness of these controls.
Identify and assess the risks of material non-compliance
with the requirements of § 328 Abs. 1 HGB, whether due
to fraud or error, design and perform assurance proce-
dures responsive to those risks, and obtain assurance
evidence that is sufficient and appropriate to provide a
basis for our assurance opinion.
Our objective is to obtain reasonable assurance about
whether the ESEF documents are free from material
non-compliance with the requirements of § 328 Abs. 1 HGB,
whether due to fraud or error. We exercise professional judg-
ment and maintain professional skepticism throughout the
assurance work. We also:
Group Auditor's Responsibilities for the Assurance Work
on the ESEF Documents
The supervisory board is responsible for overseeing the pro-
cess for preparing the ESEF documents as part of the finan-
cial reporting process.
In addition, the executive directors of the Company are re-
sponsible for such internal control as they have considered
necessary to enable the preparation of ESEF documents
that are free from material non-compliance with the require-
ments of § 328 Abs. 1 HGB for the electronic reporting for-
mat, whether due to fraud or error.
261
5
BMW Group Report 2021
Combined Management Report
Group Financial Statements
Corporate Governance
Independent Auditor's Report
Remuneration Report
Other Information
← = Q
2 Valuation of receivables from sales financing
1 The BMW Group offers end customers, dealerships and
importers various financing models for vehicles. In this
context, current and non-current receivables from sales
financing totaling EUR 87,417 million are reported in the
consolidated statement of financial position as at the
balance sheet date (approximately 38.1% of total as-
sets). Impairment losses amounting to EUR 1,599 mil-
lion were recognized on these receivables as at the bal-
ance sheet date. In order to determine the amount of the
necessary valuation allowances to be recognized with
respect to receivables from sales financing, the
BMW Group, among others, evaluates the creditworthi-
ness of the dealers, importers and end customers, as
well as any loss ratios, and risk provisioning parameters
are derived based on historical default probabilities and
loss ratios.
To Our Stakeholders
269
consolidated financial statements and to the audited
group management report.
Evaluate whether the ESEF documents provide an
XHTML rendering with content equivalent to the audited
BMW Group Report 2021
(-)
595,000
18
Earnings component of bonus 2021
475,000
14
(-)
(-)
575,000
15
(-)
(-)
Performance component of bonus 2021
475,000
14
(-)
(-)
575,000
15
(-)
18
595,000
(-)
Total
1,343,237
40
1,251,973
37
1,468,525
38
1,168,408
35
PERFORMANCE CASH PLAN
BONUS
(-)
Performance component of bonus 2020
CC
(-)
255,000
8
(-)
255,000
8
Earnings component of bonus 2020
Variable
PCP 2020-2022
(-)
382,500
12
(-)
62,790
2
(-)
62,790
2
550,000
16
(-)
(-)
640,000
16
550,000
16
(-)
(-)
640,000
(-)
(-)
11
382,500
850,000
25
Τ
850,000
26
remuneration
SHARE-BASED PAYMENT
Cash remuneration component
(investment component) 2020 for holding obligation 2021-2025
11
Share-based remuneration component
Personal cash investment amount 20214
RoCE component
Strategic focus target component
Total
Target total remuneration
1 Remuneration system as of financial year 2021.
2 Remuneration system applicable until financial year 2020.
(-)
(-)
(matching component) 2020 for holding obligation 2021-20253
350,000
10
400,000
4,450,000
63
4,333,873
65
2,050,000
60
7,119,355
100
6,700,129
100
3,397,633
100
2,145,290
3,382,664
63
100
3 Provisional monetary value calculated as of 2 January 2021 in accordance with German Accounting Standard 17, as amended. The final number of matching shares and/or the final cash
value will only be determined when the investment obligation is fulfilled in shares of common stock of the company.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
279
BMW Group Report 2021
(-)
(-)
16
550,000
(-)
(-)
382,500
11
(-)
123,873
2
(-)
62,790
To Our Stakeholders
2
17
(-)
(-)
550,000
16
1,175,000
17
(-)
(-)
1,175,000
Combined Management Report
Group Financial Statements
Corporate Governance
24
1,050,000
27
800,000
24
Fixed
remuneration
Fringe benefits (other remuneration)
43,237
1
800,000
101,973
18,525
0.5
18,408
1
Contribution to the company pension scheme
400,000
12
350,000
10
3
16
27
Fixed remuneration (basic remuneration)
Remuneration Report
Other Information
← = Q
TARGET REMUNERATION FOR THE FINANCIAL YEAR 2021 (2020)
MILAN NEDELJKOVIĆ
Production
since 1 October 2019
PIETER NOTA
Customer, Brands, Sales
since 1 January 2018
900,000
FY 20211
FY 20211
in €
in %
in €
in %
in €
in %
in €
FY 2020²
in %
FY 20202
(-)
(-)
2,050,000
remuneration
SHARE-BASED PAYMENT
Cash remuneration component
(investment component) 2020 for holding obligation 2021-2025
(-)
Share-based remuneration component
(matching component) 2020 for holding obligation 2021-20253
Personal cash investment amount 20214
RoCE component
Strategic focus target component
Total
Target total remuneration
1 Remuneration system as of financial year 2021.
2 Remuneration system applicable until financial year 2020.
(-)
950,000
25
に
450,000
PCP 2020-2022
Variable
PERFORMANCE CASH PLAN
(-)
8
297,500
18
Earnings component of bonus 2021
575,000
15
(-)
(-)
475,000
12
14
(-)
Performance component of bonus 2021
575,000
15
(-)
(-)
475,000
14
(-)
(-)
127,500
(-)
68,802
(-)
2,430,000
62
2,468,802
65
2,050,000
59
1,072,610
64
3,902,746
100
3,793,033
100
3,447,833
100
1,676,203
100
3 Provisional monetary value calculated as of 2 January 2021 in accordance with German Accounting Standard 17, as amended. The final number of matching shares and/or the final cash
value will only be determined when the investment obligation is fulfilled in shares of common stock of the company.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
(-)
16
550,000
(-)
2
I
I
425,000
25
191,250
11
(-)
31,360
(-)
2
16
(-)
(-)
550,000
16
(-)
640,000
16
(-)
640,000
C C
(-)
18
Remuneration Report
Other Information
← = Q
TARGET REMUNERATION FOR THE FINANCIAL YEAR 2021 (2020)
NICOLAS PETER
Finance
since 1 January 2017
FRANK WEBER
Development
since 1 July 2020
FY 20211
FY 2020²
FY 20211
FY 2020²
in €
in %
in €
in %
in €
in %
in €
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
60
2,145,290
63
2,430,000
3,393,237
100
3,397,263
100
3,898,525
in %
100
62
2,145,290
65
3,313,698
100
3 Provisional monetary value calculated as of 2 January 2021 in accordance with German Accounting Standard 17, as amended. The final number of matching shares and/or the final cash
value will only be determined when the investment obligation is fulfilled in shares of common stock of the company.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
280
BMW Group Report 2021
68
Fixed remuneration (basic remuneration)
1,050,000
27
10
Total
1,472,746
38
1,324,231
35
1,397,833
41
603,593
175,000
36
Earnings component of bonus 2020
(-)
(-)
300,000
8
(-)
Performance component of bonus 2020
(-)
700,000
BONUS
12
12
9
950,000
25
900,000
26
400,000
24
Fixed
remuneration
Fringe benefits (other remuneration)
22,746
400,000
1
1
97,833
3
28,593
2
Contribution to the company pension scheme
400,000
10
350,000
24,231
810,000
(-)
(-)
- € 0.475 million (first period of office)
€ 0.575 million (from second period of office or fourth year of mandate)
― € 1.050 million (Chairman of the Board of Management)
- Formula: 50% of target amount x performance factor
― Earnings factor is derived from a predefined allocation based on the parameters
― Profit attributable to shareholders of BMW AG and Group post-tax return on sales in grant year
―The earnings factor is 1.0 in case of a profit attributable to shareholders of BMW AG amounting to € 5.3 billion and a Group post-tax return on sales of 5.6%
— The earnings factor is 1.5 in case of a profit attributable to shareholders of BMW AG amounting to € 6.9 billion and a Group post-tax return on sales of 7.3%
― The earnings factor is 0 in case of a profit attributable to shareholders of BMW AG below € 3.0 billion or a Group post-tax return on sales of below 3.0%
-Earnings factor may not exceed 1.8
- Maximum amount of earnings component p. a.:
- € 0.855 million (first period of office)
― € 1.035 million (from second period of office or fourth year of mandate)
- € 1.890 million (Chairman of the Board of Management)
>
275
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
― Base amount p. a. (50% of target bonus amount):
- Assessment period one year
― Payment after the Annual General Meeting at which the Company Financial Statements are presented for the relevant financial year
― Capped at 180% of target amount
€ 0.90 million p.a. (first period of office)
― € 1.05 million p.a. (from second period of office or fourth year of mandate)
Chairman of the Board of Management:
- € 1.95 million p.a.
- Monthly payment on a pro rata basis
Contractual agreement, main points: non-cash benefits from the use of company cars and the BMW chauffeur service, insurance premiums, contributions towards security systems, employee discounts
The Supervisory Board may award payments to compensate for loss of salary from a previous employment relationship and to cover relocation costs in the case of new entrants.
Defined contribution system with a guaranteed minimum return
Benefits based on amounts credited to individual savings accounts for contributions paid and interest earned, various forms of disbursement
Pension contribution p. a.:
Member of the Board of Management: € 400,000
Remuneration Report
Chairman of the Board of Management: € 700,000
Bonus
Bonus
(sum of earnings component and performance
component)
Earnings component
(at 100% target achievement corresponds to
50% of target amount)
- Target amount p. a. (at 100% target achievement):
- € 0.95 million (first period of office)
― € 1.15 million (from second period of office or fourth year of mandate)
- € 2.10 million (Chairman of the Board of Management)
― Base remuneration has the effect of discouraging unduly high levels of risk being to achieve short-term targets, thus contributing to the long-term development of the Company
- Fixed remuneration components are a prerequisite for competitive levels of remuneration to attract and retain Board of Management members with the right qualifications
Other Information
← = Q
COMPONENT
― Performance factor may not exceed 1.8
- Maximum amount of performance component p. a.:
- € 0.855 million (first period of office)
― € 1.035 million (from second period of office or fourth year of mandate)
― € 1.890 million (Chairman of the Board of Management)
― Earnings component of bonus rewards attainment of financial targets and is beneficial for earnings-related aspects of business strategy
- Performance component of bonus motivates the pursuit of non-financial strategic targets and is therefore beneficial for the long-term development of the BMW Group
- Requirement for Board of Management members to invest an earmarked cash amount (personal cash investment amount), net of tax and deductions, in shares of BMW common stock
― Requirement for Board of Management members to hold the acquired shares of common stock for at least four years (share ownership guideline)
― Assessment period of five years in total (one year for determining the personal cash investment amount, four years holding requirement)
― Measurement parameters and target values are determined before the start of the financial year
— Target amount p. a. (at 100% target achievement):
― € 1.28 million (from second period of office or fourth year of mandate)
― € 2.35 million (Chairman of the Board of Management)
- 50% of target amount depends on ROCE achieved in the Automotive segment (ROCE component)
- 50% of the target amount depends on the achievement of predefined strategic focus targets (strategic focus target component)
- Capped at 180% of target amount
― Payment after the Annual General Meeting at which the Company Financial Statements are presented for the relevant vesting year
1 See below for the set targets for the 2021 financial year (Variable remuneration for the 2021 financial year).
>
276
- € 1.10 million (first period of office)
Member of the Board of Management:
― Criteria for the other cross-divisional targets include in particular: market position compared to competitors, innovation performance (economic), development of the BMW Group's
reputation based on non-ESG-related aspects (e.g. perception on capital markets, brand strength), customer orientation
-10% individual targets
VARIABLE REMUNERATION COMPONENTS
Bonus
Performance component
(at 100% target achievement corresponds to
50% of target amount)
Remuneration linked to corporate strategy
Share-based remuneration
Personal investment cash amount
Basis of computation
Parameters/measurement base, applicable amounts
Assessment period one year
― Criteria for the cross-divisional targets with ESG criteria include in particular: innovation performance (environmental, e.g. reduction of carbon emissions), development of the BMW
Group's reputation based on ESG aspects (e.g. corporate culture, promotion of integrity and compliance), adaptability, attractiveness as an employer, leadership performance
- Base amount p. a. (50% of target bonus amount):
― € 0.575 million (from second period of office or fourth year of mandate)
- € 1.050 million (Chairman of the Board of Management)
- Formula: 50% of target amount x performance factor
― Primarily qualitative, non-financial criteria, expressed in terms of a performance factor aimed at measuring the Board members contribution to sustainable and long-term performance
and corporate orientation
- Relevant period is the vesting year
- Additional trend analysis over at least three financial years
- Composition of performance factor:1
- 50% cross-divisional targets with ESG criteria
-40% other cross-divisional targets
- € 0.475 million (first period of office)
BMW Group Report 2021
Parameters/measurement base, applicable amounts
Remuneration linked to corporate strategy
The Board of Management and the Supervisory Board have
prepared this Remuneration Report in accordance with the
requirements of § 162 of the German Stock Corporation Act
(AktG). As a result of the implementation of the second EU
Shareholder Rights Directive via §162 AktG, the reporting
standard applicable to Bayerische Motoren Werke Aktienge-
sellschaft (BMW AG) has changed as of the reporting year
2021. The report shows and explains the remuneration
granted and owed to the individual current and former mem-
bers of the Board of Management and the Supervisory
Board of BMW AG in the financial year 2021.1
In order to facilitate understanding, the basic features of the
remuneration systems applicable to the members of the
Board of Management and the members of the Supervisory
Board, as applied in the 2021 financial year, are also set out
below. In view of the fact that individual members of the Board
of Management also received remuneration components from
earlier remuneration systems during the 2021 financial year
(specifically the remuneration systems for the 2016 financial
year and for 2019 financial year) elements of these systems
are also explained to the extent necessary for comprehension.
The auditing firm PricewaterhouseCoopers GmbH has
audited the remuneration report beyond the requirements of
§162 (3) Sentences 1 and 2 AktG.
I.
Review of the past financial year from a remunera-
tion perspective
The Supervisory Board adopted the current remuneration
system for the members of the Board of Management with
effect from 1 January 2021. The Annual General Meeting
approved it on 12 May 2021 with a majority of 91.60% of the
valid votes cast.
Despite the challenges posed by supply shortages and the
ongoing coronavirus pandemic, 2021 was a very successful
financial year for the BMW Group, with solid sales growth for
its BMW, MINI and Rolls-Royce brands. The BMW brand set
a new sales record and took over the top position in the
global premium segment. In 2021, the BMW Group also con-
sistently pushed ahead with the expansion of its range of
electrified models, increasing the share of electrified vehicles
sold by the BMW and MINI brands by more than 70 per cent
compared to 2020. The launch of the BMW iX and the BMW
14 also marked the entry of two products at the forefront of
innovation to the market.
Under the leadership of the Board of Management, the
BMW Group's management continued to steer the company
in a prudent fashion through the volatile and challenging
environment that characterised last year. For example, the
production, sales and purchasing networks successfully
managed the challenges associated with the coronavirus
pandemic and supply bottlenecks, demonstrating genuine
flexibility in the process. As a result, the impact of Covid-19
was limited over the past financial year.
1 Due to rounding, it is possible that individual figures in this report may not add up
exactly to the totals provided, and that the percentages presented here may not be
an exact reflection of the absolute values to which they relate.
272
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
REMUNERATION REPORT
318 VI. Outlook for the 2022 financial year
319 VII. Auditor's Report
318 V. Other considerations
314 IV. Comparison of change in remuneration
and earnings pursuant to § 162 (1)
Sentence 2 No. 2 of the German Stock
Corporation Act (AktG)
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
REMUNERATION REPORT
271 I. Review of the past financial year from a
remuneration perspective
At the same time, the Board of Management of the
BMW Group worked very constructively and intensively on
the core strategic course for the future, in order to create the
conditions for an attractive and future-oriented product port-
folio, and to achieve a significant improvement in profitabil-
ity. The strategic decisions taken in this regard focused in
particular on strategic issues related to electrification.
272 II. Remuneration of the members of the
272 1. Principles of the remuneration system
and the contribution of remuneration to
the promotion of the company's business
strategy and its long-term development
274 2. Overview of remuneration system from
the financial year 2021 onwards
277 3. Determination and review of the remuner-
ation system and individual remuneration
284 4. Remuneration for the 2021 financial year
294 5. Shareholding rules
294 6. Retirement benefits
295 7. Malus and clawback provisions
295 8. Regulations in the event of death, inva-
lidity and post-contractual non-competition
clause
295 9. Remuneration granted and owed to mem-
bers of the Board of Management pursuant
to § 162 of the German Stock Corporation
Act (AktG)
306 10. Remuneration granted and owed to
former members of the Board of Manage-
ment pursuant to § 162 of the German Stock
Corporation Act (AktG)
310 III. Remuneration of the members of the
Supervisory Board
310 1. Articles of Incorporation and procedure
310 2. Principles and elements of remuneration
310 3. Remuneration granted and owed to
members of the Supervisory Board pursuant
to § 162 of the German Stock Corporation
Act (AktG)
Board of Management
In December 2020, the Supervisory Board set ambitious tar-
gets linked to the variable remuneration of the members of
the Board of Management for the 2021 financial year. Of the
total variable target remuneration available, approximately
38% is linked to environmental, social or governance (ESG)
targets. It set targets for fleet carbon emissions in the EU
and sales targets for electrified vehicles in the 2021 financial
year as strategic focus targets for long-term variable remu-
neration (share-based remuneration). In doing so, it attached
particular significance to the strategic importance of acceler-
ating market penetration for electrified vehicles and sustain-
ability targets in determining remuneration.
Thanks to its strong overall performance, the Board of Man-
agement exceeded both the financial and non-financial tar-
gets for short-term variable remuneration (bonuses) 7 "Bonus
for the 2021 financial year". The financial target regarding long-
term variable remuneration (share-based remuneration)
was also exceeded with regard to the return on capital
employed (ROCE) in the Automotive segment. The Board of
Management achieved (or nearly achieved) the ambitious
non-financial strategic focus targets for long-term variable
remuneration. At 115.9 g/km, fleet carbon emissions came
in under the EU legal limit of 125.8 g/km "Share-based remuner-
ation for the 2021 financial year".
If necessary, and in the interest of the long-term success of
BMW AG, the Supervisory Board may temporarily deviate
from the remuneration system - as provided for in § 87a (2)
Sentence 2 AktG. In accordance with G.11 of the German Cor-
porate Governance Code dated 16 December 2019, the
Supervisory Board has also reserved the right to make
adjustments if extraordinary developments occur, such as
significant acquisitions and disposals, or changes in
accounting standards or tax regulations that have a signifi-
cant impact. After due examination, the Supervisory Board
did not make use of these options for the 2021 financial year.
The fixed basic remuneration counteracts the temptation
to take disproportionately high risks in order to achieve
short-term goals, and thus contributes to the long-term
development of the company.
The variable bonus is divided into two parts, which influ-
ence behaviour in different ways. The earnings-related
component of the bonus rewards recipients for achieving
the company's financial targets in the vesting year, and
promotes the earnings-related parts of the business
strategy. In contrast, the performance component of the
bonus is based on non-financial performance criteria,
which are also derived from the business strategy. In this
respect, the performance component of the bonus also
offers particular incentives to encourage individuals con-
sistently to pursue the goals of the business strategy for
the long-term development of the company. These goals
do not have to be directly reflected in the key financial
indicators for a given vesting year.
The amount of the variable share-based remuneration
also depends on the fulfilment of financial and non-fi-
nancial objectives derived from the business strategy,
since 50% of the target cash amount earmarked for
share purchases is linked to a financial key indicator
(ROCE in the Automotive segment), and 50% is linked to
strategic focus targets. The obligation to use the net
amount to purchase shares of common stock in the com-
pany and to hold these shares for at least four years also
motivates the members of the Board of Management to
strive to ensure the long-term positive development of
the company, as this in turn promotes sustainable posi-
tive developments in the price of BMW shares.
274
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
The BMW Group aims to be the most successful and sus-
tainable premium provider of individual mobility. The busi-
ness strategy focuses on the customer and the provision of
sustainable individual mobility in the premium segment, tak-
ing into account high profitability, in order to secure the com-
pany's independence in the future. The remuneration sys-
tem contributes to the implementation of the business
strategy and the sustainable and long-term development of
the company. It also takes into account the concerns of the
company's important stakeholders (in particular, sharehold-
ers, customers, and employees). The incentive effects of the
various remuneration components have a complementary
effect.
Corporate Governance
Other Information
← = Q
2.
Overview of remuneration system from the financial year 2021 onwards
The table below shows an overview of the remuneration system applicable from the financial year 2021 onwards.
COMPONENT
FIXED REMUNERATION COMPONENTS
Base remuneration
Fringe benefits
Compensation payments
Retirement benefits
Remuneration Report
VARIABLE REMUNERATION COMPONENTS
The total remuneration is in line with market practice
both in terms of amount and structure, and takes into
account the size, complexity and economic situation of
the company.
Other Information
The composition of the Board of Management did not
change during the year. For Dr. Wendt, the target remunera-
tion applicable to Members of the Board of Management
from the second mandate period onwards was applied at
the beginning of his second mandate period, from 1 October
2021 onwards.
The remuneration system for the members of the Supervi-
sory Board is set out in Article 15 of the Articles of Incorpora-
tion. It was confirmed by the Annual General Meeting on 12
May 2021 with a majority of 99.40% of the valid votes cast,
and implemented for the 2021 financial year in accordance
with the provisions of the Articles of Incorporation.
In the 2021 financial year, there were several changes to the
composition of the Supervisory Board, meaning that the
Supervisory Board remuneration for individual Supervisory
Board members had to be calculated pro rata temporis. With
effect from the end of the 2021 Annual General Meeting, Dr.
Kley resigned from the Supervisory Board and the Personnel
Committee, which, among other things, is responsible for
preparing decisions in connection with Board of Manage-
ment remuneration. The Supervisory Board elected Dr. Bock
as his successor on the Personnel Committee, with effect
from 12 May 2021.
II. Remuneration of the members of the Board of
Management
1.
Principles of the remuneration system and the contribution
of remuneration to the promotion of the company's business
strategy and its long-term development
The remuneration system in place since the 2021 financial
year is easy to understand and clearly structured. It complies
with the provisions of the German Stock Corporation Act
(AktG) and the recommendations and suggestions of the
German Corporate Governance Code. The Supervisory
Board has applied the following principles in designing the
remuneration system for the Board of Management:
The remuneration structure is geared towards the sus-
tainable and long-term development of the company.
Therefore, variable remuneration components are pre-
dominantly granted on the basis of a multi-year assess-
ment.
← = Q
The total remuneration of the members of the Board of
Management is commensurate with their tasks and per-
formance as well as the company's situation.
The remuneration system takes into account both the
performance of the entire Board of Management and the
achievement of individual targets.
The remuneration system observes the principle of con-
sistency between the remuneration systems in the com-
pany: The remuneration systems for the Board of Man-
agement, executives and employees of BMW AG are all
designed in a similar way.
273
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
The remuneration system ensures that both positive and
negative developments are appropriately reflected in the
remuneration ("pay for performance").
271
To Our Stakeholders
Group Financial Statements
12
350,000
10
Total
2,669,355
37
2,366,256
35
1,347,633
40
1,237,374
37
BONUS
Earnings component of bonus 2020
Performance component of bonus 2020
Earnings component of bonus 2021
(-)
(-)
540,000
8
(-)
400,000
7
500,000
10
Fixed
remuneration
Fixed remuneration (basic remuneration)
Fringe benefits (other remuneration)
1,950,000
27
1,800,000
27
900,000
26
in €
800,000
(-)
FY 20202
in %
19,355
0.3
66,256
1
47,633
1
87,374
Contribution to the company pension scheme
700,000
24
1,260,000
19
(-)
PCP 2020-2022
remuneration
SHARE-BASED PAYMENT
Cash remuneration component
(investment component) 2020 for holding obligation 2021-2025
Share-based remuneration component
(matching component) 2020 for holding obligation 2021-20253
Personal cash investment amount 20214
RoCE component
Variable
Strategic focus target component
Target total remuneration
1 Remuneration system as of financial year 2021.
2 Remuneration system applicable until financial year 2020.
(-)
1,600,000
24
Τ
850,000
25
Total
FY 20211
in %
PERFORMANCE CASH PLAN
14
CC
255,000
8
(-)
595,000
18
1,050,000
15
(-)
CC
(-)
14
(-)
(-)
Performance component of bonus 2021
1,050,000
15
(-)
(-)
475,000
475,000
Combined Management Report
in €
in €
€ 0.64 million (from second period of office or fourth year of mandate)
― € 1.175 million (Chairman of the Board of Management)
- At least two strategic focus targets derived from the strategic plan
― Weighting of the strategic focus targets is decided before the start of the financial year
- Formula in event of two strategic focus targets with equal weighting p. a.:
25% of target amount for personal investment cash amount x factor for strategic focus target 1 + 25% of target amount for personal investment cash amount x factor for strategic
focus target 2
― Minimum, target and maximum values are defined before the start of the financial year
― Factor for each strategic focus target may not exceed 1.8
Maximum amount of strategic focus target component p. a.:
- € 0.990 million (first period of office)
― € 1.152 million (from second period of office or fourth year of mandate)
― € 2.115 million (Chairman of the Board of Management)
― personal investment cash amount is 50% dependent on key performance indicator RoCE and is therefore directly linked to a key measure of corporate strategy and reflects BMW AG's
aspiration to generate a significant premium on the cost of capital
―The remaining 50% of the personal investment cash amount is beneficial for the attainment of strategic focus targets and therefore contributes to the BMW Group's operational suc-
cess in strategically important areas
― Commitment to purchase shares of BMW AG common stock and four-years holding requirement is beneficial for the long-term development of the BMW Group
Malus and clawback rules
Malus
Clawback
- Agreement to withhold variable remuneration in the event of specified serious compliance violations or (withholding amounts provisionally) in the event of reasonable suspicions of such
― Amounts may also be withheld in principle after a member has left the Board
― Agreement entitling the BMW Group to reclaim variable remuneration already paid out in the event of specified incidences of serious non-compliance, incorrect calculation bases or
incorrect financial statements
― Amounts may also be clawed back in principle after a member has left the Board
- € 0.55 million (first period of office)
— Target amount strategic focus target component p. a. (50% of target amount of personal investment cash amount):
― € 2.115 million (Chairman of the Board of Management)
― € 1.152 million (from second period of office or fourth year of mandate)
Corporate Governance
Remuneration Report
Other Information
← = Q
COMPONENT
VARIABLE REMUNERATION COMPONENTS
Share-based remuneration
RoCE component (at 100% target achievement
corresponds to 50% of target amount)
Strategic focus target component (at 100%
target achievement corresponds to 50% of
target amount]
Remuneration linked to corporate strategy
277
Parameters/measurement base, applicable amounts
- € 0.55 million (first period of office)
― € 0.264 million (from second period of office or fourth year of mandate)
― € 1.175 million (Chairman of the Board of Management)
- Formula: 50% of target amount x ROCE factor
― ROCE factor is derived from the RoCE achieved in the Automotive segment for the vesting year
― Minimum, target and maximum values for ROCE are defined before the start of the financial year
- ROCE factor may not exceed 1.8
- Maximum amount of RoCE component p. a.:
- € 0.990 million (first period of office)
- Target amount RoCE component p. a. (50% of target amount of the personal investment cash amount):
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Excluding a possible payment to new members of the Board of Management to compensate for salary
losses from a previous employment relationship and/or to cover relocation costs.
278
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To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
Bonus
27-30%
← = Q
OLIVER ZIPSE
Chairman of the Board of Management since 16 August 2019
Member of the Board of Management since 13 May 2015
ILKA HORSTMEIER
Human Resources, Labour Relations Director
since 1 November 2019
FY 20211
FY 20202
in €
in %
TARGET REMUNERATION FOR THE FINANCIAL YEAR 2021 (2020)
in %
Variable
remuneration
58-66%
remuneration
25-30%
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
3.
Determination and review of the remuneration system and
individual remuneration
Determining the system and structure of Board of Manage-
ment remuneration, and reviewing it regularly, is a task of the
full Supervisory Board, as is determining the individual level
of remuneration of members of the Board of Management.
The Personnel Committee of the Supervisory Board assumes
a preparatory function in the determination and review of the
remuneration system as a whole, and of the individual remu-
neration paid to members of the Board of Management.
The Supervisory Board reviews the remuneration system
annually to ensure it is appropriate in terms of structure, tar-
get and maximum remuneration, as well as actual remuner-
ation. The Supervisory Board also takes remuneration stud-
ies into account when assessing the market conformity of
the target and maximum remuneration, as well as when
assessing actual remuneration in horizontal terms. Due to
the size and structure of the BMW Group, DAX companies
are used as a comparison group and the remuneration data
from this group is compared with the remuneration paid to
members of the Board of Management at BMW AG. Verti-
cally, the Supervisory Board compares the remuneration of
members of the Board of Management with the remunera-
tion of senior executives and with the average remuneration
of employees employed by BMW AG in Germany in areas
inside and outside the scope of collective bargaining agree-
ments, including in terms of how they have changed over a
period of several years. Recommendations from independ-
ent external remuneration experts, as well as suggestions
from investor and analyst circles, may also be included in the
deliberations. For the 2021 financial year, the review has
shown that the target and maximum remuneration as well as
actual remuneration are appropriate.
Share-based
payment
31-36%
-
The total target remuneration is composed of the fixed remu-
neration and the variable remuneration. Within the variable
remuneration, the proportion of share-based remuneration
as long-term variable remuneration exceeds the share of the
bonus as short-term variable remuneration. The share of the
individual remuneration components is within the ranges
specified by the remuneration system.
a) Target remuneration for the 2021 financial year
The following tables show the individual target remuneration
of the members of the Board of Management and the rela-
tive share of the respective remuneration component in the
total target remuneration.
OVERVIEW OF TOTAL TARGET
REMUNERATION FOR MEMBERS OF THE
BOARD OF MANAGEMENT
in %
Fringe benefits
1-4%
Contributions to
retirement
benefit plans
7-12%
Basic
In accordance with the remuneration system, the Supervi-
sory Board acting on the proposal of the Personnel Com-
mittee sets specific target remuneration for each individual
member of the Board of Management for the upcoming
financial year, as well as the performance criteria associated
with the variable remuneration components provided for in
the remuneration system.
3
281
FY
575,000
1.800
575,000
Frank Weber
475,000
Andreas Wendt
500,000
Pieter Nota
475,000
Nicolas Peter
cated to the departmental targets. Departmental targets can
be department-specific targets or contributions to shared tar-
gets measured individually for each department. The remain-
der of the target amount for the performance bonus (amount-
ing to approximately 90%) should be associated with
interdepartmental, non-financial targets. In this regard,
around 50% of the target amount should be connected to the
achievement of non-financial targets relating to environmen-
tal, social and governance (i.e., ESG targets).
Targets set and extent of achievement - performance component
of the bonus for the financial year 2021
The targets set by the Supervisory Board for the 2021 vesting
year as part of the performance component of the bonus, the
weighting of the relevant criteria and the individual target
achievement are summarised in the tables below.
In order to determine the extent to which targets were
achieved in 2021, the Supervisory Board assessed the
departmental targets, on the one hand, and the interdepart-
mental targets, on the other hand, within a target achieve-
ment corridor with a partial performance factor between 0
(corresponding to a target being 0% achieved) and 1.80
(corresponding to a target being 180% achieved, the high-
est possible percentage). The performance factor for the
bonus was determined from the two partial performance
factors, with a weighting of 10% for the departmental tar-
gets and 90% for the interdepartmental targets. With regard
to the interdepartmental targets, 50% of the weighting is for
non-financial environmental, social and governance (ESG)
targets, and 40% is for other non-financial targets.
In order to determine the extent to which targets were
achieved, the Supervisory Board assessed the leadership
performance of the individual members of the Board of Man-
agement and the overall performance of the Board of Man-
agement as a whole. With regard to the departmental tar-
gets, the Supervisory Board assessed the individual
performance of each member of the Board of Management.
287
BMW Group Report 2021
To Our Stakeholders
1,890,000
855,000
855,000
1,035,000
1,035,000
855,000
900,000
475,000
1,050,000
Earnings factor
3.0
5.3
11.0
12.4
180%
1,800
Group post-tax return on sales in %
3.0
5.6
9.0
11.2
OVERVIEW OF EARNINGS COMPONENT OF THE BONUS FOR THE FINANCIAL YEAR 2021
Member of the Board of Management
Oliver Zipse
Ilka Horstmeier
of bonus in €
Proportionate target bonus
Earnings component
amount in €
Combined Management Report
Profit attributable to shareholders of BMW AG in € billion
Group Financial Statements
Remuneration Report
Interdepartmental ESG targets
Interdepartmental other
non-financial targets
Entire Board of Management¹
Joint departmental targets
All members of the Board
of Management²
Oliver Zipse
Target set
Innovation performance (environmental)
OVERVIEW OF DEPARTMENTAL TARGETS FOR THE PERFORMANCE COMPONENT OF THE BONUS FOR FINANCIAL YEAR 2021
Develop the Company's reputation e.g. (corporate culture, promoting integrity and ensuring compliance)
Transformability (investment in training and further education, sustainability)
Leadership performance (employee satisfaction)
Expand market position
Innovation performance (economic)
Customer orientation (product, customer service quality)
Development of reputation (e.g. awareness in the capital market, brand strength)
Contribution to meeting growth and profitability targets
Leadership performance in the department
Achievement of departmental diversity targets
Preventive activities in ensuring compliance
Employer attractiveness
← = Q
Other Information
Remuneration Report
Other Information
← = Q
With regard to the interdepartmental targets, the Supervi-
sory Board deliberately considered the Board of Manage-
ment as a team and assessed the performance of all the
members of the Board of Management as a whole. The
Supervisory Board's decision-making process is based on a
detailed, documented analysis of performance as measured
against all the agreed criteria, as well as in-depth discus-
sions at Personnel Committee and full Supervisory Board
level. As a basis for its assessment, the Supervisory Board
was guided, in particular, by the quantitative and qualitative
metrics defined in the corporate planning that had been
done before the beginning of the financial year. These met-
rics include, for example, key indicators such as vehicle
sales, segment shares and the share of sales for electrified
vehicles, as well as other metrics for assessing sustainability
performance, R&D rate, the quality of the customer experi-
ence compared to the competition, investments in training
and further education, targets for diversity in the workforce
and the results of employee surveys. The results of compar-
ative studies and calculations were also used to assess indi-
vidual metrics. In addition to a review of performance in
2021, the Supervisory Board carried out a trend review cov-
ering several financial years. In doing so, it assessed the
effects of decisions, measures and the overall course set in
previous financial years on the financial year 2021 and, by
way of a forecast, also estimated the significance of the per-
formance in 2021 for the future development of the company.
OVERVIEW OF TARGETS OF THE PERFORMANCE
COMPONENT OF THE BONUS FOR THE FINANCIAL
YEAR 2021
10%
Departmental
targets¹
40%
Other
interdepartmental
non-financial
targets²
1 Individual assessment for each member of the Board of Management.
2 Collective assessment of the Board of Management as a team.
50%
Interdepartmental
ESG targets²
288
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Corporate Governance
Corporate Governance
Earnings
factor
Actual achievement
value
in %
value
EARNINGS COMPONENT
Share-based
payment
Strategic
focus target
component²
PERFORMANCE COMPONENT
50% OF TARGET AMOUNT
EARNINGS FACTOR
50% OF TARGET AMOUNT
Share-based
payment
RoCE component²
PERFORMANCE FACTOR
x
-
Earnings factor is derived from an allocation matrix based on
the parameters "profit attributable to shareholders of BMW AG"
and "Group post-tax return on sales" in the vesting year.
- Earnings factor may not exceed 1.8.
- Performance factor consists of
-50% cross-divisional targets with ESG criteria,
-40% other cross-divisional targets,
-10% individual departmental targets.
- Performance factor may not exceed 1.8.
(1) Bonus for the 2021 financial year
Overview
BONUS
(MAX. 180% OF
TARGET AMOUNT)
² Each represents approx. 26-27% of variable target remuneration.
1 Each represents approx. 23-24% of variable target remuneration.
Earnings
component¹
60,303
997,803
The amount of the basic remuneration depends on the indi-
vidual's respective function on the Board of Management
and the duration of their tenure on the Board of Manage-
ment or their appointment period, as applicable.
The fringe benefits include, in particular, insurance benefits,
non-cash benefits from vehicle use and use of telephones
and computers, health care, employee discounts and subsi-
dies for safety equipment. In addition, the Supervisory Board
can approve payments to newly appointed members of the
Board of Management in order to compensate them for loss
of salary from a previous employment relationship and/or to
cover relocation costs. No such approvals were issued in the
2021 financial year.
b) Variable remuneration for the 2021 financial year
The variable remuneration for the 2021 financial year con-
sists of the bonus and the share-based remuneration. The
bonus consists of the earnings and performance compo-
nents, and the share-based remuneration (personal cash
investment amount) consists of the RoCE component and
the strategic focus targets component. The performance cri-
teria for the variable remuneration paid to members of the
Board of Management are based on the Group's key strate-
gic financial and non-financial targets and performance indi-
cators, and sustainably promote the Group's development.
When determining specific target values, the Supervisory
Board takes into account, in particular, long-term corporate
planning and business development planning for the follow-
ing year. These plans are prepared by the Board of Manage-
ment and submitted to the Supervisory Board for approval.
For details of the strategic relevance of the individual remu-
neration components, see also above Overview of remuneration
system.
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Corporate Governance
Remuneration Report
Other Information
← = Q
OVERVIEW OF VARIABLE TARGET REMUNERATION
OVERVIEW OF THE COMPOSITION OF THE BONUS
Bonus
Performance
component¹
Bonus
The bonus consists of an earnings component and a perfor-
mance component. If 100% of the target is achieved, the
share of the bonus attached to each component is 50% of
the individual target amount of the bonus. The bonus amount
is capped at 180% of the individual target amount. The
bonus is paid following the Annual General Meeting at which
the annual financial statements for the vesting year are pre-
sented.
Earnings component of the bonus
The earnings component of the bonus rewards the perfor-
mance of the business in the vesting year, as measured by
the financial indicators "Profit attributable to shareholders of
BMW AG" and "Group post-tax return on sales". For this pur-
pose, the Supervisory Board adopts an allocation matrix
before the start of the vesting year, from which an earnings
factor is derived based on the values achieved.
For both indicators, the Supervisory Board defines a mini-
mum value, a target value and a maximum value before the
start of the vesting year. If one of the minimum values is not
reached, the earnings factor is zero (corresponding to a tar-
get achievement of 0%). If both target values are reached,
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Targets set and extent of achievement - earnings component of
the bonus for the 2021 financial year
The targets set and the extent to which they have been
achieved, as well as the specific amounts associated with
the earnings component of the bonus for the 2021 financial
year, are shown in the following tables. In the financial year
2021, BMW AG's share of profit attributable to shareholders
was € 12.4 billion, and the Group post-tax return on sales
was 11.2%. Both key indicators exceeded the maximum val-
ues defined for the assessment of the earnings component,
so the earnings factor has been capped at the maximum
value of 1.800 (corresponding to a target achievement of
180%, the highest possible percentage).
Performance component of the bonus
The performance component of the bonus rewards the
achievement of certain non-financial targets. Before the
beginning of the financial year, the Supervisory Board sets
these targets in the form of various non-financial perfor-
mance criteria and associated metrics. The performance cri-
teria are derived primarily from the corporate strategy, long-
term corporate planning and the business development
planning done for the following year. The targets are divided
into individual targets for the individual members of the Board
of Management (departmental targets) and collective targets
for the entire Board of Management (interdepartmental tar-
gets). The Supervisory Board has discretion in weighting the
performance criteria. Approximately 10% of the target
amount for the performance bonus is intended to be allo-
TARGETS SET AND ACHIEVED EARNINGS COMPONENT OF BONUS FOR THE FINANCIAL YEAR 2021
Target
Minimum
Performance criteria
value
Target
value
Maximum
286
Coordination of the work of the Board of Management
maximum value
Profit attributable to
shareholders in € billion
the earnings factor is 1.000 (corresponding to a target
achievement of 100 %). As of the achievement of both max-
imum values, the earnings factor is 1.800 (corresponding to
a target achievement of 180%, the highest possible per-
centage). For intermediate values, the earnings factor is
derived from the matrix.
EARNINGS COMPONENT OF THE BONUS: ALLOCATION MATRIX¹
Group post-tax return
on sales in %
9.0
maximum value
5.6
target value
1.000
0.135
3.0
minimum value
3.0
5.3
minimum value
target value
1 Simplified depiction
2 Earnings factor 2021
1.800²
11.0
Positioning with regard to proposed legislation
Continue to develop the Compliance Management System
Present and promote new products
Promote employer attractiveness
50%
107.0%
40%
102.5 %
1.06
500,000
530,000
10%
115.6%
115.6%
cash investment amounts (less taxes and duties) in BMW
shares of common stock, and to hold these shares for a
period of at least four years (Share Ownership Guideline).
The obligation to purchase BMW shares of common stock
and the multi-year holding period strengthens the entrepre-
neurial long-term orientation of the Board of Management.
Implementing the corporate strategy sustainably by taking
appropriate decisions also creates lasting value for the
shareholders, and thus regularly provides the basis for posi-
tive long-term capital market performance. Due to the sub-
stantial investment and the fixed holding period associated
with these shares, members of the Board of Management
participate in the long-term positive (and negative) develop-
ment of the company, as reflected in the share price, even
after their departure.
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To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
(2) Share-based remuneration for the 2021 financial year
As part of the share-based remuneration as a variable long-
term component of remuneration, the members of the Board
of Management receive a cash payment earmarked for
investment in BMW shares of common stock (the "personal
cash investment amount"). This amount depends on the
achievement of certain financial and non-financial targets in
the past financial year (vesting year). The members of the
Board of Management are obliged to invest their personal
10%
503,500
475,000
Frank Weber
Andreas Wendt
Interdepartmental targets - ESG
Interdepartmental targets - Other
Departmental targets
Interdepartmental targets - ESG
Interdepartmental targets - Other
Departmental targets
Interdepartmental targets - ESG
Interdepartmental targets - Other
Departmental targets
50%
107.0%
40 %
102.5 %
1.06
575,000
609,500
10%
116.3%
50%
107.0%
40%
102.5 %
1.06
Remuneration Report
Other Information
← = Q
Personal cash investment amount
Taxes
FY
n+1
Acquisition of shares¹
(amounting to 100 % of the
payment amount)
Total performance period: 5 years
هلر
Share performance over 4 years
при
FY
FY
FY
n+2
n+3
n+4
n+5
Performance period: 4 years
Freely available
shares
1 Simplified depiction. Payment, acquisition of shares and the start of the four-year holding period occur following the Annual General Meeting at which the annual financial statements for the
vesting year are presented.
Performance period: 1 year
Nicolas Peter
Payment amount
50%
The personal cash investment amount is paid out after the
Annual General Meeting at which the annual financial state-
ments for the vesting year are presented. The size of this
amount depends on the target amount, the RoCE achieved
in the Automotive segment and the degree to which certain
strategic focus targets were achieved in the vesting year. The
personal cash investment amount is limited to a maximum
of 180% of the target amount and is calculated as follows:
Personal cash investment amount =
RoCE component + strategic focus targets component
Target amount for the personal cash investment amount
The target amounts for the individual members of the Board
of Management for the 2021 financial year are presented in
the table "Overview of share-based remuneration for the
2021 financial year", below.
RoCE component of the personal cash investment amount
Before the beginning of the relevant vesting year, the Super-
visory Board sets minimum, target and maximum values for
the ROCE in the Automotive segment in the vesting year on
the basis of corporate planning, and assigns a RoCE factor
to each of these values. If the minimum value is not reached,
the RoCE factor is 0. If the target value is reached, the RoCE
factor is 1.00. As of the achievement of the maximum value,
the ROCE factor is 1.80. The RoCE component of the per-
sonal investment cash amount is determined by multiplying
the ROCE factor for the vesting year by 50% of the individual
target amount.
Strategic focus targets component of the personal cash invest-
ment amount
The Supervisory Board sets at least two strategic focus tar-
gets before the start of the vesting year. It derives these tar-
gets from the corporate strategy and corporate planning. It
then sets a minimum, target and maximum value for each
strategic focus target, and assigns a factor to each of these
values. If the minimum value is not reached, the factor for
that target is 0. If the target value is reached, the factor for
that target is 1.00. As of the achievement of the maximum
value, the factor for that target is 1.80. The strategic focus
targets component of the personal cash investment amount
is determined in a two-step process. In the first step, the fac-
tor for the vesting year achieved for the relevant strategic
focus target is multiplied by the share of the individual target
amount attributable to this target. In the second step, the
OVERVIEW OF SHARE-BASED REMUNERATION
Target amount
FY
values determined for the individual strategic focus targets
using this calculation are added together. If two strategic
focus targets are set, each strategic focus target accounts
for 25% of the individual target amount, unless the Supervi-
sory Board decides on a different weighting. If more than
two strategic focus targets are set, the Supervisory Board
determines the weighting of each target.
Personal cash investment
amount
(Cap: 180% of the target
amount)
Overall target achievement
Weighting
Target
50%
ROCE
Strategic Focus
targets
937,500
113.1%
609,500
Maintain an efficient and flexible supplier network during the Covid-19 pandemic
Meet quality requirements and cost targets in the supplier network
Establish a CO₂ management system in the supply chain
1 Collective assessment of the Board of Management as a team. 2 Individual assessment for each member of the Board of Management.
Weighting
50%
40%
10%
Ensure production flexibility for vehicle components
289
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Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
OVERVIEW OF TARGET ACHIEVEMENT FOR THE PERFORMANCE COMPONENT OF THE BONUS FOR FINANCIAL YEAR 2021
BMW Group Report 2021
Continue to develop automated driving and hydrogen technology
Develop new vehicle architecture
Ensure planned new products are handed over to production on time
Staff restructuring and qualification
Ilka Horstmeier
Milan Nedeljković
Pieter Nota
Specific departmental targets
Nicolas Peter
Frank Weber
Andreas Wendt
Implement the diversity strategy
Promote the strategic development of real estate management
Ensure the production network is managed effectively
Deliver dynamic alignment of the production structure in line with strategic factors
Achieve quality targets in production
Reduce carbon emissions in production
Plan sales and prices, realise potential in our sales markets
Prepare and successfully deliver launches of new products
Expand the digital marketing and sales concepts
Expand the internal control system (ICS) with regard to sales management and reporting
Ensure reliable communication with capital markets
Prepare the first Integrated Annual Report and further develop the ICS for non-financial key indicators
Manage financial risk and secure Group financing during and after the Covid-19 pandemic
Coordinate the delivery of Performance NEXT financial targets
Develop attractive and exciting vehicle models
Oliver Zipse
Targets
Interdepartmental targets - ESG
Interdepartmental targets - Other
Departmental targets
Weighting
50%
Milan Nedeljković
Interdepartmental targets - ESG
Interdepartmental targets - Other
Departmental targets
50%
107.0%
40 %
102.5 %
1.06
475,000
503,500
10%
113.1%
Pieter Nota
Interdepartmental targets - ESG
Interdepartmental targets - Other
Departmental targets
50%
107.0%
40 %
102.5 %
1.06
575,000
113.8%
10%
10%
475,000
Average target
achievement
Performance factor
Proportionate target
bonus amount in €
Performance component
of bonus in €
107.0%
40 %
102.5 %
1.06
1,050,000
1,113,000
10%
118.1%
Ilka Horstmeier
Interdepartmental targets - ESG
Interdepartmental targets - Other
Departmental targets
50%
107.0%
40 %
102.5 %
1.06
503,500
997,833
Milan Nedeljković
900,000
MAXIMUM AND MINIMUM REMUNERATION FOR THE FINANCIAL YEAR 2021
OLIVER ZIPSE
Chairman of the Board of Management
since 16 August 2019
Member of the Board of Management
since 13 May 2015
in €
Fixed
Fixed remuneration (basic remuneration]
Fringe benefits
remuneration
Total
BONUS
In addition to the maximum limits for the individual compo-
nents of overall remuneration, the Supervisory Board also set
minimum thresholds that had to be exceeded in order for a tar-
get to be achieved. If these minimum thresholds are not
reached, the relevant component of the variable remuneration
is not paid.
ILKA HORSTMEIER
Human Resources,
Labour Relations Director
Member of the Board of Management
since 1 November 2019
PIETER NOTA
Customer, Brands, Sales
Member of the Board of Management
since 1 January 2018
Max
Min
1,950,000
1,950,000
Max
900,000
Min
MILAN NEDELJKOVIĆ
Production
Board of the Board of Management
since 1 October 2019
The total fixed maximum remuneration is less than the sum of
the maximum amounts for the individual components.
to cover relocation costs for new appointments are also cov-
ered by the maximum remuneration.
The maximum remuneration of the Members of the Board of
Management for the vesting year 2021, as determined in
accordance with § 87a (1) Sentence 2 No. 1 AktG includes, as
fixed components, the basic remuneration for 2021, other fixed
remuneration for 2021, the pension contribution, and any ser-
vice cost in excess of that contribution for 2021. The maximum
remuneration includes the bonus for the vesting year 2021 and
the share-based remuneration as variable components for the
vesting year 2021. Any special payments to compensate for
loss of salary from a previous employment relationship and/or
64
3,542,803
100
3,351,609
100
3 Provisional monetary value calculated as of 2 January 2021 in accordance with German Accounting Standard 17, as amended. The final number of matching shares and/or the final cash
value will only be determined when the investment obligation is fulfilled in shares of common stock of the company.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
282
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
b)
Maximum and minimum remuneration for the financial year
2021
The Supervisory Board has set upper limits on the remunera-
tion of Members of the Board of Management for the 2021
financial year (vesting year) in two ways: It has set maximum
limits in terms of the amount paid for all variable remuneration
components and, additionally, for the total remuneration of the
Board of Management members in each case. Both compo-
nents of the bonus and both components of the share-based
remuneration (the personal cash investment amount) are lim-
ited to a maximum of 180% of the respective target amount.
Max
Min
Max.
Min.
1,890,000
0
855,000
0
855,000
0
1,035,000
Variable
SHARE-BASED REMUNERATION
remuneration
(PERSONAL CASH INVESTMENT AMOUNT) 1
RoCE component
2,115,000
0
990,000
0
990,000
0
1,152,000
Performance component of bonus
2,145,290
0
0
900,000
19,355
19,355
47,633
47,633
1,969,355
1,969,355
947,633
947,633
900,000
43,237
943,237
900,000
43,237
943,237
1,050,000
18,525
1,068,525
1,050,000
18,525
1,068,525
Earnings component of bonus
1,890,000
0
855,000
0
855,000
1,035,000
0
61
(-)
24
60,303
2
56,319
2
Contribution to the company pension scheme
400,000
11
800,000
350,000
Total
1,397,803
39
1,206,319
36
BONUS
Earnings component of bonus 2020
(-)
10
26
937,500
Fixed remuneration (basic remuneration)
Fringe benefits (other remuneration)
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
TARGET REMUNERATION FOR THE FINANCIAL YEAR 2021 (2020)
ANDREAS WENDT
Purchasing and Supplier Network
from 1 October 2018 until 31 December 2021
FY 20211
FY 2020²
in €
in %
in €
in %
Fixed
remuneration
255,000
8
Performance component of bonus 2020
Earnings component of bonus 2021
(-)
11
Share-based remuneration component
(matching component) 2020 for holding obligation 2021-20253
(-)
97,833
2
Personal cash investment amount 20214
RoCE component
Strategic focus target component
Total
Target total remuneration
1 Remuneration system as of financial year 2021.
2 Remuneration system applicable until financial year 2020.
572,500
16
(-)
572,500
16
(-)
382,500
2,145,000
(-)
(investment component) 2020 for holding obligation 2021-2025
(-)
595,000
18
500,000
14
(-)
Performance component of bonus 2021
500,000
14
(-)
PERFORMANCE CASH PLAN
Variable
PCP 2020-2022
(-)
850,000
25
remuneration
SHARE-BASED PAYMENT
Cash remuneration component
(-)
Strategic focus target component
62,790
0
1,152,000
0
990,000
0
1,030,500
0
4,374,000
0
0
3,690,000
3,861,000
0
5,446,746
1,072,746
4,687,833
997,833
401,099
401,099
0
1,030,500
0
990,000
1,072,746
997,833
997,833
997,803
997,803
1,035,000
0
855,000
0
900,000
0
1,035,000
0
855,000
0
900,000
0
1,152,000
0
402,075
5,500,000
1,473,845
4,925,000
Pieter Nota
Nicolas Peter
Frank Weber
Andreas Wendt
remuneration) Total fixed remuneration
19,355
1,969,355
947,633
943,237
Fringe benefits (other
Base salary
1,950,000
900,000
47,633
900,000
43,237
1,050,000
18,525
1,068,525
1,050,000
22,746
1,072,746
2,115,000
Milan Nedeljković
60,303
Ilka Horstmeier
OVERVIEW OF FIXED REMUNERATION FOR THE 2021 FINANCIAL YEAR (IN €)
402,075
1,399,908
4,858,803
401,099
5,068,750
997,803
401,099
1,398,902
1 Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
2 The pension contribution and any service cost in excess of this contribution represent the cost to the Company. This amount is not paid out to the relevant member of the Board of Management.
3 Maximum remuneration within the meaning of § 87 a (1) Sentence 2 no. 1 German Stock Corporation Act (AktG). This total upper limit is lower than the sum of the maximum amounts from the individual components.
Any special payments to compensate for loss of salary from a previous employment relationship and/or to cover relocation costs for new appointments are also covered by the maximum remuneration.
284
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
The maximum limits for each individual element of the varia-
ble remuneration in the 2021 vesting year and the stipulated
maximum remuneration limits were complied with in all
cases Remuneration granted and owed.
The remuneration granted and owed pursuant to § 162 Ger-
man Stock Corporation Act (AktG) for financial year 2021
7 Remuneration granted and owed includes a payout from the Per-
formance Cash Plan 2019-2021 for members of the Board of
Management who were in office back in the 2019 financial
year. This variable component of the remuneration system
applicable for the financial years 2018 to 2020 falls under
the overall caps set by the Supervisory Board for the vesting
year 2019. A final assessment of compliance with the overall
caps set for the 2019 vesting year will only be possible when
the matching component of the share-based remuneration
for the 2019 vesting year is paid out after the expiry of the
four-year shareholding period in the 2024 financial year.
The remuneration granted and owed for the 2021 financial
year pursuant to § 162 AktG Remuneration granted and owed also
includes the payment of the matching component of the
share-based remuneration for the 2016 vesting year to the
members of the Board of Management who were in office in
that financial year. This payment was made in May 2021,
after the expiry of the four-year shareholding period. This
component is subject to the overall cap set for the vesting
year 2016, which was complied with for the members of the
Board of Management in office at that time.
4.
Remuneration for the 2021 financial year
Following a proposal by the Personnel Committee, the
Supervisory Board determined in December 2020 the target
remuneration for the members of the Board of Management
for the 2021 financial year, as well as the performance crite-
ria for the variable remuneration components provided for in
the remuneration system. In March 2022, at the suggestion
of the Personnel Committee, the Supervisory Board set or
confirmed the amount of the variable remuneration compo-
nents due to the members of the Board of Management for
the 2021 financial year after reviewing and assessing the
extent to which the targets had been achieved.
a) Fixed remuneration for the 2021 financial year
Each member of the Board of Management receives a fixed
basic remuneration, which is paid monthly on a pro rata
basis. The fixed basic remuneration ensures a minimum
income appropriate to the tasks and responsibilities of a
member of the Board of Management. It counteracts the
temptation to take disproportionately high risks in order to
achieve short-term goals, and thus contributes to the com-
pany's long-term development.
Oliver Zipse
60,303
BMW Group Report 2021
97,833
702,274
9,850,000
702,274
401,765
401,765
401,466
2,671,629
4,925,000
1,349,398
Maximum remuneration ³ / Minimum remuneration
4,925,000
5,442,525
402,852
5,500,000
1,068,525
402,852
1,471,377
1 Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
2 The pension contribution and any service cost in excess of this contribution represent the cost to the Company. This amount is not paid out to the relevant member of the Board of Management.
3 Maximum remuneration within the meaning of § 87 a (1) Sentence 2 no. 1 German Stock Corporation Act (AktG). This total upper limit is lower than the sum of the maximum amounts from the individual components.
Any special payments to compensate for loss of salary from a previous employment relationship and/or to cover relocation costs for new appointments are also covered by the maximum remuneration.
283
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
943,237
401,466
1,344,703
Pension expense²
4,633,237
4,637,633
990,000
97,833
0
990,000
0
1,152,000
0
Total
8,010,000
0
3,690,000
0
3,690,000
0
4,374,000
0
Total fixed and variable remuneration
9,979,355
1,969,355
Group Financial Statements
Corporate Governance
947,633
Other Information
Member of the Board of Management
since 1 January 2017
FRANK WEBER
Development
Member of the Board of Management
since 1 July 2020
ANDREAS WENDT
Purchasing and Supplier Network
Member of the Board of Management
from 1 October 2018 to
31 December 2021
Max
Min
Min
Max
Min
1,050,000
1,050,000
900,000
900,000
937,500
937,500
Remuneration Report
22,746
1,072,746
22,746
Finance
NICOLAS PETER
Max
Pension expense²
in €
Maximum remuneration ³ / Minimum remuneration
Fixed remuneration (basic remuneration)
Fixed
← = Q
Fringe benefits
remuneration
MAXIMUM AND MINIMUM REMUNERATION FOR THE FINANCIAL YEAR 2021
BONUS
Earnings component of bonus
Total
Variable
SHARE-BASED REMUNERATION
remuneration (PERSONAL CASH INVESTMENT AMOUNT) 1
RoCE component
Strategic focus target component
Total
Performance component of bonus
Total fixed and variable remuneration
Your Company is financially and economically stronger than ever. This allows us to
operate independently and invest in our own future. This is certainly something we
can continue to build on.
Oliver Zipse
V.fiume
Yours
Together, we will continue to make a difference in the future, as a global Impact
Company that creates values and generates added value. We hope you will continue
to support us on our BMW way.
Many people benefit from our success: you, our shareholders, our global team and
society. This year, we will be hiring new staff, both worldwide and at our home base
in Germany - something a company only does when it is full of confidence.
I would like to say a sincere thank you for the financial year 2021: to you, our share-
holders, all our customers, our retail organisation and suppliers - and, above all, to
our 118,909 associates. The feedback we received in our Employee Survey clear-
ly reflected back to us that the team stands behind the Company. Our associates
believe BMW has found the right balance between stability and disruption. We see
transformation as an opportunity.
Dear Shareholders,
In February 2022, the BMW Group increased its share in the joint venture BMW
Brilliance Automotive Ltd. (BBA) to a 75% majority stake. With full consolidation of
BBA in the BMW Group Financial Statements, we are taking your Company into the
next dimension as a global company. The Chinese market is a driving force for digital
trends. This move will bring us even closer to customers there and enable us to keep
our finger on the pulse.
the Board of Management
Chairman of the Board of Management
BMW
GROUP
we will continue to
make a difference in
the future."
27
27
BMW Group Report 2021
To Our Stakeholders
The Board of Management
Pieter Nota
Milan Nedeljković
Statement of the Chairman of
Member of the Board of Management,
Production
"We see transform-
ation as an oppor-
tunity. As a global
Impact Company,
← = Q
By 2025
Remuneration Report
New BMW 7 Series: the only luxury sedan to offer drivetrain variety.
All of us at BMW are looking forward to the market launch of the new BMW 7 Series
this year: progressive, digital and innovative, it is also the only luxury sedan to offer
customers a choice of drivetrain variants. By the way, the most powerful variant - the
BMW i7 - is fully electric. In April, we will present it in New York, Munich and Beijing,
representing the major regions of the world.
Combined Management Report
Our intelligent vehicle architectures enable us to offer different drivetrain variants
efficiently. This benefits customers and the climate alike. We serve markets according
to their individual circumstances and pace of change. In the mid-term, this will also
include hydrogen fuel cell technology - because hydrogen makes it possible to store
sustainably produced energy and release it just as quickly as conventional fuels.
_
E-mobility shifts into sport mode.
Our new BMW iX and BMW i4 models are already winning over customers with their
innovations and an electric range of up to 600 kilometres. With the BMW iX, we are
also the first premium manufacturer to introduce the 5G mobile telecommunications
standard in a production vehicle that is available worldwide. Both models are among
the eight fully electric vehicle models we will have on the roads this year; by 2023,
there will be a dozen.
We already aim to at least double our sales of battery-electric vehicles this year com-
pared to 2021.
the end of Phase II of our transformation - we aim to increase the total
share of our electrified vehicles, that means battery-electric and plug-in hybrids,
to more than 30%. By 2030 - the end of Phase III - more than 50% of our global
deliveries to customers should be fully electric. We are gearing up the Company and
our supply chains for this exponential growth in electromobility.
MINI and Rolls-Royce will be exclusively all-electric from the early 2030s onwards,
while all BMW Motorrad's urban models will be released with e-drives only from
2030. BMW M GmbH has also unveiled its first fully electric model, the BMW iX M60.
Merging the digital and the physical experience.
The modern car is not only one of the most complex items we use as consumers; it is
also becoming a true digital device. It should therefore come as no surprise that digi-
tal business models will account for a growing share of value creation. This applies, in
particular, to the Chinese market, with its many young, technophile customers.
Over-the-air updates: BMW has the largest fleet.
Your Company has around 10,000 IT and software specialists working on research
and development for vehicle digitalisation at ten locations in Europe, Asia and the
Americas. We are collaborating in the regions with major tech players, who are also
our competitors.
At the CES tech show in Las Vegas in January 2022, our BMW iX Flow, featuring E
Ink, received rave reviews from the media and on social media. This unique technol-
ogy allows the exterior to change colour.
Focused on the customer and their mobility experience.
By 2025, a quarter of our sales will probably be conducted online. That is why our
Sales and Marketing is seamlessly integrating all customer touchpoints, online and
offline. We are implementing future-oriented sales structures in conjunction with our
retailers. That is our culture at BMW.
26
26
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Other Information
Group Financial Statements
Responsible leadership
Remuneration Report
Dialogue with Stakeholders
DIALOGUE WITH STAKEHOLDERS
Stakeholder engagement
The BMW Group operates on a global scale in a highly inter-
connected world. Its business activities have a major impact
on the environment in which it operates and can have both a
direct and an indirect bearing on the interests of a wide var-
iety of stakeholders. Conversely, societal trends and devel-
opments can influence many aspects of the Group's busi-
ness activities. Against this backdrop, the BMW Group
maintains a continuous dialogue with its stakeholders world-
wide.
Our commitment to stakeholder engagement is set out in the
7 BMW Group Stakeholder Engagement Policy, which outlines both the
dialogue objectives and the criteria for identifying and priori-
tising stakeholders. A variety of suitable dialogue formats
and forms of communication are described in internal guide-
lines. Key topics and formats are summarised below
7 GRI 102-42, 102-43, 102-46.
Material topics in 2021
The BMW Group's interaction with stakeholders includes top-
ics brought to its attention by stakeholders as well as those in
which it proactively engages in dialogue. This combination
gives rise to a comprehensive range of interlinked topics:
7 GRI 102-44
The Paris Climate Agreement and climate neutrality of
the BMW Group by 2050
Circularity and circular design, the use of secondary ma-
terials, particularly in relation to battery recycling
Social responsibility for employees
Environmental and social standards and respect for human
rights in the supply chain, particularly regarding the pro-
curement of raw materials for electric mobility applications
Sustainable financing and the EU taxonomy
Emissions limits without excluding individual drive tech-
nologies and vehicle concepts
Continued development of the regulatory framework for
automated driving and digital networks
· Support for new efficiency-enhancing technologies
Realistic relationship between emissions targets and
emissions measurement methods
Consistency between supply-side and demand-side de-
carbonisation policies
Ensuring a sufficient supply of critical raw materials
BMW Group Xchange
The BMW Group Xchange encompasses all the well-estab-
lished forms of events organised by the Group, such as the
BMW Group Dialogues, the rad°hub and the FUTURE
FORUM, providing the appropriate platforms to encourage
an intensive dialogue with a variety of target groups.
7 BMW Group Dialogues are one of the main formats for interact-
ing with stakeholders and have been held regularly since
2011. Major topics covered in recent years have included
electric mobility, corporate citizenship, urban mobility, envir-
onmental and social standards within the supply chain, and
circularity, i. e. the transformation from a linear to a circular
economy with increasingly closed material cycles Resource
efficiency, circular economy and renewable energy.
BMW Group Dialogues are usually held in the BMW Group's
key sales regions of North America, Europe and Asia on an
annual basis. The results of these stakeholder dialogues are
documented and incorporated in the Group's strategic
considerations GRI-Index: 102-21.
Your Company is leveraging the opportunities and potential of global auto-
motive markets.
29
← = Q
Other Information
Remuneration Report
Corporate Governance
Other Information
← = Q
M
MINI
ROLLS-ROYCE
MOTOR CARS LTD
Frank Weber
Member of the Board of Management,
Development
Oliver Zipse
Joachim Post
Member of the Board of Management,
Purchasing and Supplier Network
Corporate Governance
Chairman of the Board of Management
Nicolas Peter
Member of the Board of Management,
Finance
Member of the Board of Management,
Human Resources, Labour Relations Director
Member of the Board of Management,
Customer, Brands, Sales
THE BOARD OF MANAGEMENT
28
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Ilka Horstmeier
The NEUE KLASSE is our exclusively fully electric product range, which will usher
in Phase III of our transformation towards emissions-free mobility. It will be built on
our New Cluster Architecture (NCAR), with the three core forward-looking elements:
“electric”, “digital” and “circular”. This will be the next milestone in BMW history for
future products, technologies and new ways of working. The NEUE KLASSE makes a
significant contribution to sustainability, by relying on the concept of circularity.
22
Statement of the Chairman of
the Board of Management
the Board of Management
DEAR SHAREHOLDERS,
LADIES AND GENTLEMEN:
A company needs to know what it stands for.
That is what enables it to stay the course, to rely on its own strengths, to withstand
the headwinds and to constantly reinvent itself. This applies in particular, and in its
own unique way, to the current transformation.
-
Your Company has held its own in the marketplace for over 100 years. Yet, far more
important than that is staying resolutely focused on the future – with the support and
backing of a motivated team, shareholders and stakeholders. All of you want to know
why the BMW Group should continue to exist 100 years from now.
We want to make a difference. To create the values our customers ask for. To gener-
ate meaningful added value. That is part of our responsibility - because our society
depends on people's mobility and benefits from it.
The BMW Group exists because we move body, heart and mind.
That is our internal compass. It guides us - even now, through the many changes we
must navigate as a BMW Group team - with focus and self-assurance. Transform-
ation is part of our DNA - and we all aspire to lead the way. We presented our most
recent example of this last year at the IAA Mobility in Munich: the BMW i Vision Cir-
cular, a car that moves body, heart and mind. With this extraordinary Vision Vehicle,
BMW has clearly defined the next big future topic of "circularity" for itself. Imagine
what we could achieve if we begin thinking consequently about circularity at both
business and macroeconomic levels - and across industries.
Your Company presents its second Integrated Report.
We lead the way in the German automotive industry with our integrated reporting of
the Company's financial and non-financial performance.
This is a new step for us - consistent and irreversible. Integrated reporting is a pro-
cess that involves and challenges the whole Company. It requires integrated thinking:
what is the impact of a decision as a whole – from both a business and an
environmental perspective, in the short term, mid-term and in the long term?
"BMW has clearly
defined the next big
future topic of
circularity for
itself with the BMW i
Vision Circular."
23
23
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Statement of the Chairman of
← = Q
Other Information
Remuneration Report
29
21
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
←三〇
Statement of the Chairman of
Remuneration Report
the Board of Management
OF MANAGEMENT
BMW Group: The Impact Company.
We make a difference.
Oliver Zipse
Chairman of the
Board of Management
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
STATEMENT OF THE
CHAIRMAN OF THE BOARD
NEUE KLASSE for a new age.
Other Information
Statement of the Chairman of
the Board of Management
← = Q
Statement of the Chairman of
the Board of Management
"We have mastered
both competence
development from
the ground up and
how to transform
existing plants
into cutting-edge
locations for
electromobility."
Dealing with the effects of the coronavirus pandemic demanded a lot of us in 2021.
In typical BMW tradition, and in the spirit of Herbert Quandt, the Company and its
employee representatives once again found flexible solutions. The vaccination cam-
paign we launched together is a good example of this. For our locations in Germany,
we have made the BMW pension scheme even more attractive and increased the
level of benefits. At the plant in Leipzig, work hours have been brought into line with
our Bavarian locations. This shows our sense of community at BMW in difficult times.
We also responded extremely flexibly to semiconductor supply bottlenecks. This is a
stress test we have withstood together. All business units are working hand in hand
to minimise the impact and adjust production to the situation. Our stable and trust-
based relationships with suppliers have proved especially valuable in this respect. We
can expect, and are preparing for, the global supply situation for vehicle components
to remain difficult in 2022.
Transformation takes place not just on greenfield sites or around the confe-
rence table - but on the ground at our plants.
We are expanding our production network globally and in a targeted manner. For
instance in China: in Shenyang, we will be opening a new plant in Tiexi this year and
expanding the plant in Dadong.
We have mastered both competence development from the ground up and how to
transform existing plants into cutting-edge locations for electromobility. Examples of
this are our two "bookends": our oldest plant, Munich, and our future plant in Hungary.
Our main plant in Munich will be 100 years old this year. To mark the centenary, we
are smoothly transitioning to 100% electric during ongoing production. With its new
vehicle assembly, the plant will be capable of producing only fully electric models
from 2026 onwards in line with demand. In parallel, we are also working on emis-
sions-free transport logistics. That is what transformation looks like on the ground.
In 2022, as a sort of counterpart to our main plant in Munich, we will also be laying
the foundation stone for our newest plant in Hungary. The first vehicles for the NEUE
KLASSE will come off the production line in Debrecen in 2025.
25
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
This is a complex task, and we will continue to learn. Our second Integrated Report
for the financial year 2021 reflects this learning process. The "Integrated Strategy of
the BMW Group" section provides a qualified insight into how strategy and our man-
agement of the Company are intertwined.
Holistic sustainability based on concrete targets.
We have announced clearly defined targets for 2030 that show how we will continue
to lower CO₂ emissions. As our shareholders, you know that your Company always
takes a holistic approach. We are therefore substantially reducing our environmen-
tal footprint in a measurable way throughout the entire value chain - during the use
phase, in production and in the upstream supply chain. Here, we are adopting a ten-
year perspective because this is a manageable time frame, in which we can take
responsibility for measures ourselves. We do not believe in empty promises. We are
able to report at any given time on how we are performing in all three sustainability
scopes.
_
We are the first German automotive manufacturer to join the "Business Ambition for
1.5° C" campaign launched by the Science-Based Targets initiative (SBTI).
This means our road to climate neutrality follows a scientifically validated and trans-
parent path.
Since most of our CO₂ emissions today are produced during the use phase, we have
raised the bar in this area: By 2030, we will reduce CO2 emissions by more than 50%
from 2019 levels. Our targets apply worldwide, including the extra 10% from the
SBTi framework added to fuel consumption figures and including CO₂ emissions from
fuel production and electricity generation. This will in turn also reduce our life cycle
carbon footprint – from the ore mine to kilometres driven on the road – by more than
40%.
Building credibility by keeping promises.
-
We deliver on our promises - and can back them up. In 2021, your Company once
again met the European Union's CO₂ targets – even clearly outperforming the legal
requirements by approximately 10 g/km. You can rest assured that we will also meet
our CO, requirements for 2030.
In production, well-designed individual steps ultimately contribute to overall sustain-
ability as well: as promised, production at all our locations has been carbon neutral
on balance since 2021. Our electric motors no longer require rare earths. We use
only green power to produce batteries for our electrified vehicles - as do our battery
cell suppliers. Our batteries are also almost fully recyclable. All of this is relevant for
ramping up electromobility. After all, this year, every one of our plants in Germany will
already be producing electric vehicles.
Change makes us resilient.
← = Q
We never stand still – because we are constantly refining our business model. This
strengthens our resilience, building on a solid foundation created by profitability and
sustainable action. We believe the two go hand in hand and are mutually dependent.
Looking forward confidently even in uncertain times. This characterises your Com-
pany. Our products are in high demand: More than 2.52 million customers took
delivery of a BMW Group vehicle in 2021 - 8.4% more than the previous year. This
number includes almost 330,000 electrified vehicles – an increase of 70 %.
-
The BMW brand is back on top of the global premium segment - and we intend
to keep it that way. BMW and Rolls-Royce achieved new all-time highs, as well as
BMW Motorrad. Global market share is also an important currency in our industry. As
a premium manufacturer, we increased our share of the global market to 3.4% during
the coronavirus pandemic – and with a further increase in profitability. Sales in key
individual markets and regions – China, Europe and the US grew significantly in
some cases. Our Financial Services Segment also made a major contribution to our
success.
Staying flexible and pivoting quickly.
-
Your Company operates at the intersection of conflicting forces, where conditions are
not only demanding, but also highly complex. The situation is becoming more and
more differentiated from one region of the world to another, with a highly dynamic
rate of change. In this context, it is more important than ever to anticipate require-
ments in the early stages, plan for various scenarios and manage risks effectively.
24
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Confident even in uncertain times.
BMW Group Report 2021
Dialogue with Stakeholders
Combined Management Report
Moreover, plans are in place for the coming year to expand
the scope of recording the carbon emissions associated with
our investments, with the primary aim of reliably assessing
and transparently documenting the compatibility of our in-
vestments with the climate goals enshrined in the Paris
Agreement. To the extent possible, our aim is to take account
of non-liquid investments in the Group's reporting on sus-
tainability, or at least for all such investments to be reviewed
from a sustainability perspective.
The BMW Group will continue developing its own dialogue
options on an ongoing basis. We also intend to broaden the
scope of internal dialogue with employees in 2022 (Employ-
ees and society). In addition, we plan to participate in a variety
of public discussion formats going forward.
BMW
Group
in
dialogue
7 GRI 102-40, 102-43
Surveys (including a corporate reputation study), social media, trade fairs, mass media
Customers
Dialogue with employees and managers, employee surveys, idea management,
internal media
Dialogue, conferences and technology workshops with investors and analysts
Dialogue in the context of industry initiatives, joint events, training courses,
presentations, supplier risk assessments
Dialogue with sales organisations and coordinating units of importers
The continual dialogue with investors and financial analysts
on sustainability-related topics will be continued. Apart from
direct dialogue, the BMW Group's participation in (virtual)
SRI/ESG roadshows and conferences is again planned.
Participation of Company experts in committees and working groups, memberships
of initiatives and associations
Visiting universities and colleges, talks, discussions, dialogue events with students
Dialogue within the context of press trips, press releases, information events
on new products, test drives, trade fairs
Discussions with local residents, plant tours, press engagements
Face-to-face meetings / dialogue, responding to enquiries
Employees
Capital market
Suppliers
Business partners
Networks
Political
decision makers
Academia
Media
Local stakeholders
Civil society and NGOs
To Our Stakeholders
Available to answer questions from policymakers and provide information to political
decision makers on relevant topics from the company's perspective
The BMW Group will continue to interact closely with its
stakeholders in 2022.
and associations
STAKEHOLDER GROUPS AND FORMS OF DIALOGUE
Group Financial Statements
Outlook
Corporate Governance
Remuneration Report
Other Information
Participation in public policy development and work in
associations
The BMW Group maintains an active, open and transparent
dialogue with representatives of politics, trade unions, asso-
ciations and non-governmental organisations (NGOs). The
aim is to play a constructive and transparent role in helping
shape the general political framework regarding the Group's
business activities.
Apart from its own activities in the area of public policy de-
velopment, the BMW Group is a member of numerous asso-
ciations in various countries. Membership is voluntary in the
majority of cases, although there are some situations in
which it is necessary to join associations in order to comply
with legal requirements.
7 BMW Group Lobbying Policy
At the beginning of 2021, the BMW Group assumed the
presidency of ACEA, the Association of European Automo-
bile Manufacturers (Association des Constructeurs Eu-
ropéens d'Automobiles). In December 2021, it was confirmed
that the BMW Group will continue to chair the association for
a further year (2022).
In the interest of transparency, the BMW Group always dis-
closes the most important association memberships on its
website BMW Group List of Memberships.
Financial market presence with sustainability credentials
Regular, in-depth communication with the capital market
has always been given a high priority within the BMW Group.
In the meantime, sustainability has become a decisive cri-
terion on financial markets. Furthermore, investors and fi-
nancial analysts alike are increasingly considering environ-
mental, social and governance (ESG) aspects in their
investment recommendations and decision-making pro-
cesses.
Against the background of the Paris Climate Agreement, pol-
icymakers in Europe are also increasingly addressing the is-
sues of climate protection and sustainability. For example,
the EU Action Plan for Sustainable Finance aims to direct
capital flows towards sustainable economic activities. A key
element of the EU Action Plan is the introduction of a stand-
ardised system to classify what is sustainable and what is
not.EU Taxonomy
← = Q
We currently record carbon emissions associated with all our
equity investments and a significant proportion of our
fixed-income assets. The relevant emissions data are includ-
ed in the TCFD Report relating to our UK pension plan, which
is required to be prepared annually in line with legislation that
came into force in 2021 for larger-scale UK pension schemes.
Since 2019, sustainability criteria have also been a major
factor for the BMW Group's pension fund investment strate-
gy. The current focus is on measuring the carbon footprint of
significant parts of these assets on the one hand and the
risks attached to their future performance on the other. The
BMW Group aims to achieve carbon neutrality with respect
to its pension plan assets by 2050 at the latest.
Other Information
Remuneration Report
Dialogue with Stakeholders
Group Financial Statements
Corporate Governance
To Our Stakeholders
In addition, standard benchmarks for measuring the invest-
ment performance of liquid assets were revised again in
2021 with the aid of ESG-oriented indices.
Combined Management Report
The volume of non-liquid pension plan assets invested in our
various impact funds continues to grow according to sched-
ule. The investments made to date in this area relate not
only to climate protection, but also to other Sustainable De-
velopment Goals (SDGs) set by the UN. In 2021, the focus of
investment was on making cities more sustainable and ad-
dressing the consequences of climate change.
30
← = Q
BMW Group Report 2021
1,174
(782)
2,285
(782)
(-)
3,067
2,285
782
(16,637)
(-)
4,508
(6,696)
(11,938)
18,374
2,771
16,637
period in the Share portfolio as at
financial year
31 December 2021
Additions in the
financial year²
Share portfolio as at
1 January 2021
(-)
End of the holding
Ilka Horstmeier
(1,997)
3,459
2,504
(1,174)
Oliver Zipse
(-)
(-)
1,142
1,142
0
(11,110)
(-)
(4,374)
(6,736)
13,614
(-)
11,110
(8,650)
(-)
(4,696)
(3,954)
10,935
(-)
2,285
8,650
(1,174)
(-)
(-)
SHARES OF BMW COMMON STOCK HELD BY INDIVIDUAL MEMBERS OF THE BOARD OF MANAGEMENT SUBJECT
TO HOLDING REQUIREMENTS IN CONNECTION WITH SHARE-BASED REMUNERATION FOR THE FINANCIAL YEARS
2017-20201
141,625
The members of the Board of Management in office as at 31
December 2021 hold a total of 58,560 BMW shares of com-
mon stock which they are required to hold in accordance with
the terms of the share-based remuneration programmes for
the financial years 2017-2020.
(-)
137,500
250,250
275,000
990,000
550,000
Frank Weber
1,745,600
137,600
160,000
164,800
160,000
291,200
320,000
1,152,000
640,000
Nicolas Peter
1,745,600
137,600
0.86
160,000
164,800
1.03
137,500
The share-based remuneration (investment component) for
the vesting year 2020 was paid out in 2021, immediately
after which the BMW shares of common stock were acquired.
118,250
Andreas Wendt
Shareholding rules
5.
Milan Nedeljković
Retirement benefits
6.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
294
1,561,494
123,088
143,125
147,419
143,125
260,488
286,250
1,030,500
572,500
1,500,125
(-)
To Our Stakeholders
2,285
402,075
Frank Weber
(3,134,163)
(351,746)
3,731,163
401,099
Nicolas Peter
(1,157,145)
(354,680)
1,632,365
402,852
Pieter Nota
(1,830,168)
(352,121)
2,441,046
401,466
Milan Nedeljković
(1,391,936)
(352,433)
1,953,670
401,765
(502,626)
702,274
1,100,507
4,644,382
(3,701,016)
(175,000)
Andreas Wendt
Performance Cash Plan 2019-2021, due to the expiry of
the three-year assessment period in the 2021 financial
year (payments for the vesting year 2019 to be paid out in
2022)
Share-based remuneration (personal cash investment
amount) for the 2021 financial year (to be paid out in
2022)
Bonus for the 2021 financial year (to be paid out in 2022)
Thus, in addition to the fixed remuneration components, the
following variable remuneration components are reported as
remuneration granted for the 2021 financial year within the
meaning of $162 of the German Stock Corporation Act
(AktG):
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
296
accrual of entitlement (e.g. the expiry of assessment peri-
ods or the non-occurrence of forfeiture conditions) have
occurred.
1 Disclosures for the previous year include amounts relating to members of the Board of Management
who left office during the financial year 2020.
Total1
(18,289,989)
(2,615,352)
18,883,016
(2,863,441)
(351,746)
3,379,883
401,099
(655,460)
Cash value of entitle-
ments to pension benefits
in accordance with IFRS
as at 31 December 2021
Service cost in
accordance with
IFRS for the
financial year 2021
Ilka Horstmeier
rence of the insured event, a surviving spouse or registered
partner is entitled to a survivor's benefit; otherwise, surviv-
ing children are entitled to a survivor's benefit depending on
their age and level of education. In the event of death or
invalidity, a minimum benefit in the amount of the potential
annual pension contributions that could have been made up
to the age of 60 is approved. This benefit cannot exceed ten
years of contributions.
1 Includes only shares of BMW common stock acquired using the cash remuneration component of the share-based remuneration programme for members of the Board of Management, for which the four-year holding
period has not yet expired.
2 Payment of the 2020 cash remuneration component (investment component) in May 2021 with subsequent acquisition of reported BMW shares of common stock, for which the four-year holding period until 2025 applies.
3 Disclosures for the previous year on the share portfolio as at 31 December include shares held by a member of the Board of Management who left office during the financial year 2020.
Total
Andreas Wendt
Frank Weber
Nicolas Peter
Pieter Nota
As regards pension commitments, retired members of the
Board of Management are entitled to retirement benefits at
the age of 62 at the earliest. The amount of the benefits to
be paid is determined on the basis of the amount accrued in
each Board member's individual pension savings account.
This figure is in turn based on the annual contributions and
an annual interest rate depending on the form of investment.
The payment is made as a lump sum or in annual instal-
ments at the discretion of the member of the Board of Man-
agement. For entitlements arising before 2016, there is an
option to receive payment as a lifelong pension or in a com-
bined form. In the event of the death of a member of the
Board of Management entitled to benefits before the occur-
The retirement benefits system provides for annual contribu-
tions by the company with a guaranteed minimum interest
rate equal to the maximum interest rate specified in the
German actuarial reserve regulation (Deckungsrückstel-
lungsverordnung). Commitments to pay annual contribu-
tions to the company pension scheme are linked to the term
of appointment as a member of the Board of Management.
Pension entitlements become vested when the employment
relationship has existed for one year. If a mandate is termi-
nated, the defined contribution system provides, in the case
of death or invalidity, for amounts accumulated on individual
pension accounts to be paid out as a one-off amount or in
instalments.
(59,341)³
(1,997)
(22,418)
(23,616)
58,560
2,771
17,294
44,037
(5,684)
(-)
(4,696)
(988)
7,969
(-)
Members of the Board of Management who retire immedi-
ately after their service on the Board, or who are deemed to
be in an equivalent position, are entitled to acquire vehicles
and other BMW Group products and services at conditions
that also apply to BMW pensioners and to lease BMW Group
vehicles in accordance with the guidelines applicable to sen-
ior heads of departments. Retired Chairmen of the Board of
Management also have the option of using the BMW car ser-
vice, subject to availability and at a charge.
For members of the Board of Management in office in the
financial year 2021, expenses for post-employment benefits
of € 3.1 million (2020: € 2.6 million) were incurred. These
295
in €
Oliver Zipse
PENSION ENTITLEMENTS
In addition to actual amounts received, "remuneration
granted" in the reporting year is also assumed if the activity
on which the remuneration component is based has been
fully performed by the member of the Board of Management
as of the balance sheet date, and if all conditions for the
The tables include all amounts received by the individual
members of the Board of Management in the reporting
period (“remuneration granted”) and all remuneration legally
due but not yet received ("remuneration owed").
The following tables ("Presentation of remuneration granted and
owed") show the fixed and variable remuneration granted and
owed to the members of the Board of Management in the
reporting year in accordance with § 162 AktG.
Remuneration granted and owed to members of the Board of
Management pursuant to § 162 of the German Stock Corpora-
tion Act (AktG)
9.
Dr. Wendt left the Board of Management on 31 December
2021. For the period from 1 January 2022 to 31 December
2022, the waiting allowance contractually owed to him
amounts to approximately € 1.1 million. A provision was
made for this.
circumstances against payment of a remuneration
amount. Contracts of employment provide for the pay-
ment of a monthly waiting allowance in the amount of
the applicable monthly basic remuneration for the dura-
tion of the post-contractual non-competition clause. In
accordance with the recommendation of the German
Corporate Governance Code dated 16 December 2019,
any severance payment is offset against the non-com-
petition clause remuneration amount. The same applies
to other income from third parties, except remuneration
for Supervisory Board appointments approved during the
term of office. The company may unilaterally waive the
requirement to comply with the post-contractual
non-competition clause.
A one-year post-contractual non-competition clause has
been agreed with the Board members under specified
In the event of death or invalidity, special regulations apply
regarding the early maturity of Performance Cash Plans and
share-based remuneration components (matching compo-
nents) based on target amounts. Where the contract of
employment is terminated prematurely and the company
has an extraordinary right of termination, or if the Board
member resigns without the company's agreement, entitle-
ments to amounts as yet unpaid relating to performance
cash plans and share-based remuneration (matching com-
ponents) are forfeited. The other variable remuneration com-
ponents (bonus, personal cash investment amount) are set-
tled on the basis of the target amounts.
5,684
8. Regulations in the event of death, invalidity and post-con-
tractual non-competition clause
The remuneration system applied since 2021 provides for the
possibility of withholding variable remuneration (malus) and
reclaiming variable remuneration already paid out (claw-
back) under certain conditions. The rules allow the Supervi-
sory Board to withhold or reclaim variable remuneration in
the event of certain serious compliance-related violations
(compliance malus and/or compliance clawback). These
provisions can also be applied where variable remuneration
components linked to the achievement of certain targets
have been paid out on the basis of incorrect calculation
bases or incorrect financial statements. Remuneration can
also be withheld or reclaimed after an individual's departure
from the Board of Management.
7. Malus and clawback provisions
benefits correspond to allocations to pension provisions in
accordance with IAS 19.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
160,000
BMW Group Report 2021
The Supervisory Board has not identified any reason to with-
hold or reclaim variable remuneration components in the
2021 financial year.
291,200
550,000
1,152,000
150%
100%
50%
0%
Actual value 2021
224,460
180,000
minimum value
241,000
target value
400,000
maximum value
→ Target achievement: 86%
PHEV sales in units
293
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
The following tables provide an overview of the targets set
and extent of achievement of share-based remuneration for
the 2021 financial year.
TARGETS SET AND TARGET ACHIEVEMENT OF SHARE-BASED REMUNERATION FOR FY 2021
Minimum
200%
180%
Performance criteria
TARGETS SET AND EXTENT OF ACHIEVEMENT PHEV SALES
→ Target achievement: 103 %
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
With regard to reducing fleet carbon emissions according to
WLTP, the Supervisory Board set the following values in CO₂
g/km under WLTP for fleet consumption in Europe as thresh-
old values relevant to remuneration for the vesting year 2021:
Minimum value: 125 CO₂ g/km, Target value: 114 CO₂ g/km,
Maximum value: 100 CO₂ g/km. The actual value for the 2021
financial year was 115.9 CO₂ g/km, so the target was 91%
achieved. The CO2 fleet value achieved (after setting an ambi-
tious original target), thus is below the legal limit of 125.8 CO₂
g/km by 9.9 CO₂ g/km in 2021.
For sales of all-electric vehicles (BEV), the Supervisory
Board set the following reference values in units for the vest-
ing year 2021: Minimum value: 75,000 units, Target value:
101,000 units, Maximum value: 170,000 units. The actual
value for the 2021 financial year was 103,854 units, so the
target was 103% achieved.
For sales of plug-in hybrid vehicles (PHEV), the Supervisory
Board set the following reference values in units for the 2021
vesting year: Minimum value: 180,000 units, Target value:
241,000 units, Maximum value: 400,000 units. The actual
value for the 2021 financial year was 224,460 units, so the
target was 86% achieved.
The personal investment cash amount for the vesting year
2021 will be paid out after the Annual General Meeting 2022,
at which the Financial Statements of BMW AG for the finan-
cial year 2021 will be presented.
TARGETS SET AND EXTENT OF ACHIEVEMENT BEV SALES
200%
180%
150%
100%
Actual value 2021
103,854
50%
0%
75,000
minimum value
101,000
target value
170,000
maximum value
BEV sales in units
Target achievement
BMW Group Report 2021
Weighting
Target
value
170,000
103,854
103 %
1.03
12.50%
180,000
241,000
400,000
224,460
86%
0.86
OVERVIEW OF SHARE-BASED REMUNERATION FOR THE 2021 FINANCIAL YEAR
RoCE component
Component - Strategic focus target (CO2)
Component Strategic focus target (BEV)
Component Strategic focus target (PHEV)
Total
Proportionate
Member of the Board
target amount
of Management
in €
RoCE factor
101,000
value
75,000
0.91
Maximum
value
Actual
Value
Target
achievement
Factor
RoCE in the Automotive
RoCE component
Component-
Strategic focus targets
segment (in %)
Reduction of fleet
CO2 emissions (in g/km)
Sales of all-electric vehicles
(BEV) in units
Sales of plug-in hybrid
vehicles (PHEV) in units
50%
10.00
16.00
45.00
59.90
180%
1.80
25%
125
114
100
115.9
91%
12.50%
292
Target achievement
1 According to the WLTP test procedure. With effect from September 2018, all vehicles in the EU must be approved in accordance with the new WLTP
testing cycle. However, the European Commission did not switch the calculation of fleet carbon emissions to WLTP until 2021. Therefore, up to and
including 2020, a recalculation of the WLTP fleet emissions to NEDC values was necessary for reporting purposes.
2,115,000
990,000
Ilka Horstmeier
1,175,000
Oliver Zipse
investment
amount
in €
PHEV in €
(PHEV)
in €
BEV in €
focus target
focus targets
Strategic
Personal cash
Component
Factor -
Strategic
Proportionate
target amount
focus target
focus targets
(BEV)
in €
CO₂ in €
(CO2)
Component
Strategic
Factor -
Strategic
587,500
Proportionate
target amount
534,625
302,563
1.80
640,000
Pieter Nota
1,500,125
118,250
137,500
141,625
137,500
250,250
275,000
990,000
550,000
Milan Nedeljković
1,500,125
118,250
137,500
141,625
137,500
250,250
275,000
3,204,813
252,625
293,750
293,750
focus target
focus targets
Component
Strategic
TARGETS SET AND EXTENT OF ACHIEVEMENT REDUCTION OF FLEET CARBON
EMISSIONS (EU)¹
200%
Actual value 2021
59.9
180%
150%
10
16
minimum value
target value
45
maximum value
ROCE in the Automotive segment in %
→ Target achievement: 180 %
Target achievement
100%
50%
0%
100
maximum value
Actual value 2021
115.9
114
target value
125
minimum value
CO₂g/km
→ Target achievement: 91 %
0%
50%
100%
150%
Factor -
Strategic
Proportionate
target amount
in €
RoCE -
component
in €
Share-based remuneration component (matching com-
ponent) for the vesting year 2016, due to the expiry of the
four-year holding period in the financial year 2021(paid
out in 2021)
291
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
320,000 0.91
Other Information
Targets set and extent of achievement for the ROCE component
for the 2021 financial year
ROCE in the Automotive segment for the financial year 2021
is defined as segment profit before financial result, divided
by the average capital employed in the segment. The Super-
visory Board has determined the following values for the
vesting year 2021: Minimum value: 10%, Target value: 16%,
Maximum value: 45%. The RoCE achieved for the 2021
financial year was 59.9%, meaning that the maximum value
set for the purposes of assessing the value of the RoCE com-
ponent was exceeded and the RoCE factor for the calculation
of the personal cash investment amount is 1.80 (its maxi-
mum value). The target was set by the Supervisory Board in
December 2020 on the basis of long-term corporate plan-
ning. RoCE for the Automotive segment increased signifi-
cantly in the 2021 financial year, to 59.9% (2020:
12.7%/+47.2 percentage points). This was driven in large
part by increasing EBIT compared to the previous year. A
reduction in capital employed, and specifically the reduction
in average inventory during the financial year, was another
contributing factor. This was due, in particular, to the rapid
recovery of operational business from the consequences of
the coronavirus pandemic and the positive price effects for
new and pre-owned vehicles caused by the shortage of sup-
ply due to the tense supply situation for semiconductors.
Targets set and extent of achievement for the strategic focus
targets component for the 2021 financial year
In December 2020, the Supervisory Board set the following
strategic focus targets for the vesting year 2021, in accord-
ance with the remuneration system:
―
Reduce CO2 fleet emissions in the EU according to WLTP;
weighting in relation to personal cash investment
amount: 25%.
Sales of all-electric vehicles (Battery Electric Vehicles,
BEV); weighting in relation to personal cash investment
amount: 12.5%.
Sales of plug-in hybrid vehicles (PHEV); weighting in
relation to personal cash investment amount: 12.5%.
TARGETS SET AND EXTENT OF ACHIEVEMENT ROCE
200%
180%
← = Q
Thus, the remuneration granted and owed includes all remu-
neration components earned through the activities of the
members of the Board of Management in the 2021 financial
year. In addition, it includes remuneration components
already earned as a result of activity in previous financial
years, but for which the respective member of the Board of
Management's payment entitlement only arose due to the
occurrence of conditions or at the end of the 2021 financial
3,112,630
In addition to the amount of remuneration, the relative share
of the relevant remuneration component in the total remu-
neration granted and owed is also shown. For the sake of
clarity, the service cost for the company pension scheme is
also shown, although this service cost is not classified as
remuneration within the meaning of § 162 AktG.
BMW Group Report 2021
300
^
9 An advance payment in the amount of € 566,666 was paid out from the PCP 2018-2020 in 2019.
8 An advance payment in the amount of € 712,900 was paid out from the PCP 2019-2021 in 2020.
7 Corresponds to the previous disclosure of amounts received in accordance with the model tables in the version of the German Corporate Governance Code dated 7 February 2017. For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the
vesting year are to be taken into account. The defined maximum remuneration for the vesting year 2021 is € 9,850,000; the remuneration for the vesting year 2021 including service cost is € 8,879,442, which is below the maximum remuneration.
6 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group; this amount is not paid out.
5 Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
4 The number of shares purchased in 2017 with the 2016 cash remuneration component (investment component) amounted to 2,771 (purchased on 12 May 2017 at a price of €87.50). The 2016 matching component was paid out in cash in May 2021. The number of mathematical matching shares for calculating
the equivalent value in cash amounts to 923 (holding period expired on 11 May 2021). Reference price for calculating the equivalent value of the matching shares: € 83.36.
3 Remuneration for prior vesting years if, as of the balance sheet date, the activity underlying the remuneration component has been fully performed, and all conditions for the entitlement are met.
2 Remuneration system applicable until financial year 2020.
1 Remuneration system from financial year 2021.
100
5,338,865
502,626
5,841,491
100
8,752,558
702,274
9,454,832
Total amount received incl. service cost?
Service cost
Target achievement
Remuneration according to § 162 German Stock Corporation Act (AktG)
81 or 19
1,023,907
4,314,958
To Our Stakeholders
93 or 7
Combined Management Report
Corporate Governance
Earlier vesting years
in €3
Vesting year 2021
in € 1
FY 2021
remuneration Cash remuneration component (investment component) 2020 for holding
obligation 2021-2025
SHARE-BASED PAYMENT
Variable
PCP 2019-2021
PCP 2018-2020
PERFORMANCE CASH PLAN
Performance component of bonus 2021
Earnings component of bonus 2021
Performance component of bonus 2020
Earnings component of bonus 2020
Fringe benefits (other remuneration)
Total
BONUS
Fixed remuneration
Fixed
remuneration
Member of the Board of Management since 1 November 2019
Human Resources, Labour Relations Director
ILKA HORSTMEIER
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 (2020)
← = Q
Other Information
Remuneration Report
Group Financial Statements
as a % of total
remuneration
575,390
Remuneration for vesting year 2021 or earlier vesting years
(-)
(-)
Share-based remuneration component (matching component) 2015 for holding
obligation 2016-2020
14
(-)
759,942
(-)
(-)
(-)
Cash remuneration component (investment component) 2020 for holding
obligation 2021-2025
remuneration
Variable
13
712,9008
(-)
6
498,4498
(-)
5
277,584⁹
(-)
(-)
13
(-)
8,177,168
(-)
1
65
3,472,609
77
6,783,203
Total variable remuneration
(-)
46 or 19
1,023,907
2,448,702
71 or 7
575,390
6,207,813
Total variable remuneration Vesting year 2021 or earlier vesting years
(-)
12
1,089,813
Strategic focus target component
24
2,115,000
RoCE component
Personal cash investment amount 20215
1
76,941
Share-based remuneration component (matching component) 2016 for holding
obligation 2017-20214
33,423
900,000
23
Vesting year 2020
in €²
800,000
72 or 4
(-)
(-)
(-)
13
(-)
143,650
2,858,625
Total variable remuneration Vesting year 2021 or earlier vesting years
510,125
Strategic focus target component
(-)
(-)
(-)
25
990,000
RoCE component
Personal cash investment amount 20214
I
(-)
(-)
(-)
Share-based remuneration component (matching component) 2016 for holding
obligation 2017-2021
Т
1,156,332
(-)
(-)
Total variable remuneration
6 Corresponds to the previous disclosure of amounts received in accordance with the model tables in the version of the German Corporate Governance Code dated 7 February 2017. For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the
vesting year are to be taken into account. The defined maximum remuneration for the vesting year 2021 is € 4,925,000; the remuneration for the vesting year 2021 including service cost is € 4,208,023, which is below the maximum remuneration.
5 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group; this amount was not paid out in the financial year.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
3 Remuneration for prior vesting years if, as of the balance sheet date, the activity underlying the remuneration component has been fully performed, and all conditions for the entitlement are met.
>
100
2,043,706
352,433
2,396,139
100
3,949,908
401,765
4,351,673
Total amount received incl. service cost 6
Service cost 5
Remuneration according to § 162 German Stock Corporation Act (AktG)
100
(-)
2,043,706
96 or 4
143,650
3,806,258
Remuneration for vesting year 2021 or earlier vesting years
57
1,156,332
76
3,002,275
57
(-)
(-)
(-)
684,250
(-)
(-)
(-)
6
(-)
113,220
(-)
(-)
4
43
887,374
24
947,633
(-)
87,374
1
(-)
47,633
39
(-)
FY 2020
as a % of total
remuneration
in €³
Earlier vesting years
(-)
33
855,000
(-)
Share-based remuneration component (matching component) 2015 for holding
obligation 2016-2020
18
(-)
358,862
(-)
(-)
(-)
4
143,650
(-)
(-)
1,113,000
(-)
(-)
(-)
(-)
(-)
(-)
13
(-)
503,500
(-)
(-)
22
(-)
year.
(-)
(-)
c)
margin for the Automotive segment and ROCE for the Auto-
motive segment, as well as the return on equity for the
Financial Services segment. For the financial years 2020
and 2021, the Supervisory Board has taken into account the
impact of the coronavirus pandemic and the semiconductor
crisis on these key indicators. It was not necessary to change
the assessments relating to individual contributions to profit-
ability or the status of compliance within Board members'
areas of responsibility.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
298
1 The PCP factor for Mr Krüger is 1.081. This differs from the PCP factor mentioned above, since a value of
1.0 was agreed for the earnings factor of the 2019 financial year.
Forecast trend in business development
Value between 0.9 and 1.1
Individual contribution to profitability
Status of compliance in each Board member's
area of responsibility
Trend in business development
-
=
PCP FACTOR
MULTI-YEAR PERFORMANCE FACTOR
Measurement based on
multi-year performance factor:
_
- Capped at 180 % of target amount
- Cash payment at end of evaluation period
Share-based remuneration component (matching compo-
nent) 2016
CASH PAYMENT
Share-based remuneration components have been included
in the remuneration of members of the BMW AG Board of
Management since 2011. In the financial year 2021, the
matching component of the share-based remuneration of
the vesting year 2016 was paid out.
The investment component for the 2016 financial year was
paid out immediately after the 2017 Annual General Meeting
on 11 May 2017, and the shares of common stock were
acquired on 12 May 2017. Therefore, the holding period for the
1.8004
5.0 5.3
3.9
3.0
(Lower limit)
(Lower limit)
ཥཊྛོ
3.0
0.135
3.9
0.4443
0.7982
4.8
5.6
7.3
8.0
(Upper limit)
9.0
on sales in %
Group post-tax return
EARNINGS COMPONENTS: ALLOCATION TABLE FOR CALCULATING EARNINGS FACTOR FOR 2019-20211
Presentation of remuneration granted and owed
The following tables show the remuneration granted and
owed to the members of the Board of Management.
d)
acquired shares of common stock expired on 11 May 2021.
The company settled the matching component in cash, and
paid out the equivalent value of the matching shares.
Under the share-based remuneration programme for the
financial year 2016, the members of the Board of Manage-
ment were each required to invest an amount equal to 20%
of the total bonuses they received from the company as
additional cash remuneration for the financial year 2016,
which were paid exclusive of taxes and social security contri-
butions (the investment component) in shares of the compa-
ny's common stock. In principle, the members of the Board
of Management must hold these shares of common stock for
at least four years. Under a matching plan, the member of
the Board of Management receives from the company - at
the company's discretion - either an additional share of
common stock or the equivalent in cash (share-based remu-
neration component/matching component) for every three
shares of common stock held after the four-year holding
period.
1.637
In determining the multi-year performance factor for the
members of the Board of Management in office for the 2019
financial year, the Supervisory Board assessed, in particular,
the trend in the development of the business over the assess-
ment period, the forecast trend in the development of the
business, the individual contribution made by each Board
member to earnings, and the status of compliance in the
individual Board member's area of responsibility. In assess-
ing the development of the business over the assessment
period and the forecast trend, the Supervisory Board
assessed, in particular, the development of certain key indi-
cators - such as the change in the number of deliveries, EBIT
PCP FACTOR
2026
2022
1 Simplified depiction.
Basic remuneration and fringe benefits
Contribution to company pension scheme -
11 May 2021
2020
2019
2018
2017
2016
Bonus 2021
Disbursement after AGM 2022
Four-year holding period for
acquired BMW shares
Present value of own investment 2021
Payment after AGM 2022,
Acquisition of BMW shares
Payment after AGM 2022
Disbursement matching component 2016
(assessment period 2019-2021)
Performance Cash Plan 2019-2021
Four-year holding period for acquired BMW shares
▼ 2
Share-based remuneration 2016
OVERVIEW OF REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 WITH PAYOUT PROFILE 1
2 Payment of 2016 cash remuneration component (investment component) in 2017, immediately following the acquisition of BMW shares of common stock subject to holding requirements for 2017-2021.
mance factor for all members of the Board of Management
holding office for the 2019 financial year is 1.0, resulting in a
PCP factor of 1.014 for the 2019-2021 Performance Cash
Plan¹.
a) Variable remuneration for the 2021 financial year
The variable remuneration for the 2021 financial year and the
extent to which targets were achieved are set out above in
7 Variable remuneration for the 2021 financial year.
The remuneration system applicable for the financial years
2018-2020 provided for the Performance Cash Plan (PCP)
as a long-term variable cash remuneration component.
-
MULTI-YEAR EARNINGS FACTOR
Average earnings factor
Based on Group net profit and
Group post-tax return on sales
Value between 0 and 1.8
PCP FACTOR OVERVIEW
TARGET AMOUNT
PERFORMANCE CASH PLAN OVERVIEW
In the 2021 financial year, a consolidated net profit of € 12.5
billion and a consolidated return on sales after tax of 11.2%
were achieved. For both indicators, the defined maximum
values were thus exceeded, meaning that the earnings factor
was capped at the maximum value of 1.800 (corresponding
to a target being 180% achieved, the maximum possible
percentage). Based on the earnings factors for the individual
years of the assessment period (financial year 2019: 0.798,
financial year 2020: 0.444, financial year 2021: 1.800), the
multi-year performance factor is 1.014. The multi-year perfor-
The Performance Cash Plan 2019-2021 was approved for
the performance of the Members of the Board of Manage-
ment in the 2019 financial year. As at the balance sheet date
of the reporting year, the three-year assessment period of
this remuneration component, which was subject to certain
forfeiture provisions, had expired.
The members of the Board of Management in office as at
1 January 2018 received an advance payment from the Per-
formance Cash Plan 2019-2021 in 2020. The advance pay-
ment amounted to € 0.5 million for a Board of Management
member in their first appointment period, and € 0.6 million
from the second appointment period or the fourth year of
appointment. For the Chairman of the Board of Manage-
ment, the advance payment was € 0.9 million. At the end of
the assessment period, the advance payments will be set off
or refunded, depending on the actual entitlement arising.
In addition to the multi-year earnings factor, the Supervisory
Board also sets a multi-year performance factor after the end
of the evaluation period. To this end, the Supervisory Board
takes account in particular of the development of the busi-
ness during the evaluation period, the forecast trend in the
development of the business, the Board member's individual
contribution to profitability and the status of compliance
within the Board member's area of responsibility. The mul-
ti-year performance factor can be between 0.9 and 1.1.
In order to determine the multi-year earnings factor, an earn-
ings factor is calculated for each year of the three-year eval-
uation period and an average is then calculated for the eval-
uation period. The earnings factor for the individual year of
the assessment period is determined on the basis of the
Group's consolidated net profit and the consolidated return
on sales after tax for the assessment year concerned, and
can amount to a maximum of 1.800. The underlying meas-
urement values are determined in advance for a period of
three financial years, and may not be changed retrospec-
tively.
In order to determine the PCP factor, a multi-year profit factor
is multiplied by a multi-year performance factor. The maxi-
mum amount that can be paid to a Board member is capped
at 180% of the PCP target amount p. a.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
297
PCP entitlements are paid in cash. The bonus is paid out
after the end of the Annual General Meeting, at which the
separate financial statements of BMW AG for the third year of
the evaluation period (consisting of the vesting year and the
following two years) are presented.
Board of Management's Performance Cash Plan (100%) in
the first appointment period is € 0.85 million p.a.; from the
second appointment period or the fourth year of mandate
onwards it is € 0.95 million p. a. For the Chairman of the
Board of Management, the target amount is € 1.6 million
p. a. For all members of the Board of Management, the max-
imum payout amount is limited to 180% of the target amount
of the Performance Cash Plan p. a.
For the purposes of calculating the Performance Cash Plan,
a fixed target amount is multiplied by a multi-year target
achievement factor (PCP factor) after the end of a three-year
assessment period. The target amount for a member of the
b) Performance Cash Plan 2019-2021
1.500
1.000
6.9
FY 2020
as a % of total
remuneration
in €3
Earlier vesting years
Vesting year 2020
in €2
FY 2021
as a % of total
remuneration
in €3
in €1
Earlier vesting years
Vesting year 2021
SHARE-BASED PAYMENT
PCP 2019-2021
PCP 2018-2020
PERFORMANCE CASH PLAN
Performance component of bonus 2021
Earnings component of bonus 2020
Performance component of bonus 2020
Earnings component of bonus 2021
Fringe benefits (other remuneration)
Total
BONUS
Fixed remuneration
Fixed
remuneration
Member of the Board of Management since 13 May 2015
Chairman of the Board of Management since 16 August 2019
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 (2020)
OLIVER ZIPSE
← = Q
Other Information
1,950,000
Remuneration Report
(-)
(-)
1,890,000
27
(-)
1,449,000
(-)
(-)
(-)
4
(-)
239,760
(-)
(-)
35
1,866,256
23
1,969,355
1
(-)
66,256
34
(-)
1,800,000
22
0.2
19,355
Corporate Governance
Group Financial Statements
Combined Management Report
143,650
1.014
141,667
498,449
Advance payment¹
712,900
1.014
2019-2021
PCP factor
Target amount
1,194,624
Total amount PCP
Remuneration
(payment amount
PCP 2019-2021)
1,211,349
11.0
(Upper limit)
9.0
1 The advance payment was paid out in 2020.
Andreas Wendt
Frank Weber
Pieter Nota
Ilka Horstmeier
Milan Nedeljković
Nicolas Peter
in €
Oliver Zipse
PERFORMANCE CASH PLAN 2019-2021
1Simplified depiction 2Earnings factor 2019 3 Earnings factor 2020 "Earnings factor 2021
Group net profit after tax
(in € billion)
143,650
212,500
1.014
215,475
To Our Stakeholders
BMW Group Report 2021
299
861,900
861,900
(-)
1.014
850,000
(-)
(-)
(-)
22
(-)
500,000
861,900
1.014
850,000
361,900
500,000
861,900
1.014
850,000
215,475
(-)
361,900
1 Remuneration system from financial year 2021.
2 Remuneration system applicable until financial year 2020.
Chairman of the Board of Management until 13 May 2015
Chairman of the Supervisory Board since 13 May 2015
Performance Cash Plan 2019-2021
32,950
32,950
Fixed Fringe benefits (other remuneration)
remuneration Total
years in €¹
Earlier vesting
Member of the Board of Management until 31 October 2019
Financial year 2021
MILAGROS CAIÑA CARREIRO-ANDREE
in €
^
Total remuneration for financial years 2021 or earlier vesting years
Total remuneration according to § 162 German Stock Corporation Act (AktG)
(Partial) capital payments
Total
ance/Pensions
Waiting allow- Pensions
Waiting allowance
(-)
363,300²
as a % of total
remuneration
4
Waiting allowance
Total
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Total remuneration for financial years 2021 or earlier vesting years
Total
ance/Pensions (Partial) capital payments
3 The number of shares purchased in 2017 with the 2016 cash remuneration component (investment
component) amounted to 3,470 (purchased on 12 May 2017 at a price of € 87.50). The 2016 matching
component was paid out in cash in May 2021. The number of mathematical matching shares for calcu-
lating the equivalent value in cash amounts to 1,156 (holding period expired on 11 May 2021). Reference
price for calculating the equivalent value of the matching shares: € 83.36).
100
1 Remuneration for prior vesting years is due if, as of the balance sheet date, the activity underlying the
remuneration component has been fully performed, and all conditions for the entitlement are met.
2 The target amount of the 2019-2021 Performance Cash Plan is € 950,000. An advance payment of
€ 600,000 was made from the PCP 2019-2021 in 2020.
96,3643
(-)
remuneration 2016 for holding obligation 2017-2021
Share-based remuneration component (matching component)
Variable
47
4
12
Waiting allow-
246,942
246,942
(-)
(-)
Performance Cash Plan 2019-2021
12
12
30,128
30,128
Fixed
Fringe benefits (other remuneration)
remuneration Total
as a % of total
remuneration
years in €1
in €
Earlier vesting
Member of the Board of Management until 31 March 2013
Financial year 2021
FRANK-PETER ARNDT
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021
For individual former members of the Board of Management,
the remuneration granted and owed also includes the Per-
formance Cash Plan 2019-2021 and/or the share-based
remuneration component (matching component) 2016. In
this regard, please refer to the statements on remuneration
granted and owed for the active members of the Board of
Management.
(-)
Variable
Share-based remuneration component (matching component)
remuneration 2016 for holding obligation 2017-2021
(-)
88
216,814
(-)
(-)
(-)
88
(-)
(-)
216,814
(-)
(-)
(-)
(-)
Total
(-)
(-)
(-)
The following tables show the fixed and variable remunera-
tion granted and owed to former members of the Board of
Management who have definitively terminated their service
within the last 10 financial years, in accordance with § 162
AktG.
Pensions
59
(-)
(-)
(-)
(-)
Performance Cash Plan 2019-2021
7
27,335
7
27,604
remuneration Total
7
27,335
7
27,604
Fringe benefits (other remuneration)
(-)
(-)
Variable
Share-based remuneration component (matching component)
19
72,273
24
96,3643
(-)
19
72,2732
Fixed
(-)
Total remuneration for financial years 2021 or earlier vesting years
Total
ance/Pensions (Partial) capital payments
Waiting allow- Pensions
Waiting allowance
remuneration 2016 for holding obligation 2017-2021
Total
Total remuneration according to § 162 German Stock Corporation Act (AktG)
459,664
as a % of total
remuneration
in €
100
777,615
459,664
317,950
37
285,000
(-)
(-)
(-)
(-)
(-)
(-)
37
(-)
285,000
307
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Earlier vesting
Member of the Board of Management until 31 December 2016
FRIEDRICH EICHINER
Financial year 2021
as a % of total
remuneration
years in €1
in €
years in €¹
Earlier vesting
KLAUS DRAEGER
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Member of the Board of Management until 30 September 2016
Financial year 2021
96,364
10. Remuneration granted and owed to former members of the
Board of Management pursuant to § 162 of the German Stock
Corporation Act (AktG)
Other Information
39
856,319
21
997,803
3
(-)
56,319
1
(-)
60,303
36
(-)
FY 2020
as a % of total
remuneration
in €3
in €2
800,000
(-)
(-)
113,220
(-)
(-)
(-)
(-)
11
530,000
(-)
(-)
19
19
900,000
31
(-)
684,250
(-)
(-)
5
(-)
195,713
(-)
Earlier vesting years
Other Information
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
305
6 Corresponds to the previous disclosure of amounts received in accordance with the model tables in the version of the German Corporate Governance Code dated 7 February 2017. For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the
vesting year are to be taken into account. The defined maximum remuneration for the vesting year 2021 is € 4,925,000; the remuneration for the vesting year 2021 including service cost is € 4,258,533, which is below the maximum remuneration.
5 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group; this amount was not paid out in the financial year.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
3 Remuneration for prior vesting years if, as of the balance sheet date, the activity underlying the remuneration component has been fully performed, and all conditions for the entitlement are met.
>
2 Remuneration system applicable until financial year 2020.
1 Remuneration system from financial year 2021.
100
← = Q
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 (2020)
ANDREAS WENDT
Purchasing and Supplier Network
Vesting year 2020
as a % of total
remuneration
in €3
in €1
Earlier vesting years
Vesting year 2021
FY 2021
937,500
Performance component of bonus 2021
Performance component of bonus 2020
Earnings component of bonus 2020
BONUS
Fringe benefits (other remuneration)
Total
Fixed remuneration
Fixed
remuneration
Member of the Board of Management from 1 October 2018 until 31 December 2021
Earnings component of bonus 2021
← = Q
9
861,900
91 or 9
195,713
2,012,651
82 or 18
861,900
3,989,297
Remuneration for vesting year 2021 or earlier vesting years
61
1,352,045
79
3,853,394
Total variable remuneration
(-)
52 or 9
195,713
(-)
Remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost 5
Total amount received incl. service cost 6
4,851,197
401,099
5,252,296
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
306
(-)
1,156,332
6 Corresponds to the previous disclosure of amounts received in accordance with the model tables in the version of the German Corporate Governance Code dated 7 February 2017. For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the
vesting year are to be taken into account. The defined maximum remuneration for the vesting year 2021 is € 5,068,750; the remuneration for the vesting year 2021 including service cost is € 4,390,396, which is below the maximum remuneration.
4 Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
3 Remuneration for prior vesting years if, as of the balance sheet date, the activity underlying the remuneration component has been fully performed, and all conditions for the entitlement are met.
2 Remuneration system applicable until financial year 2020.
1 Remuneration system from financial year 2021.
100
2,208,364
351,746
2,560,110
100
5 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group; this amount was not paid out in the financial year.
(-)
62 or 18
2,991,494
358,862
(-)
(-)
(-)
obligation 2021-2025
remuneration Cash remuneration component (investment component) 2020 for holding
Variable
SHARE-BASED PAYMENT
PCP 2019-2021
PCP 2018-2020
PERFORMANCE CASH PLAN
(-)
(-)
(-)
18
(-)
16
Share-based remuneration component (matching component) 2015 for holding
obligation 2016-2020
(-)
Total variable remuneration Vesting year 2021 or earlier vesting years
11
530,994
Strategic focus target component
(-)
21
1,030,500
861,900
RoCE component
(-)
Share-based remuneration component (matching component) 2016 for holding
obligation 2017-2021
(-)
(-)
(-)
(-)
(-)
Personal cash investment amount 20214
24
(-)
(-)
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
309
3 The number of shares purchased in 2017 with the 2016 cash remuneration component (investment
component) amounted to 5,542 (purchased on 12 May 2017 at a price of € 87.50). The 2016 matching
component was paid out in cash in May 2021. The number of mathematical matching shares for the
purposes of calculating the equivalent value in cash amounts to 1,847 (holding period expired on 11 May
2021). Reference price for calculating the equivalent value of the matching shares: € 83.36).
"The number of shares purchased in 2017 with the 2016 cash remuneration component (investment
component) amounted to 3,470 (purchased on 12 May 2017 at a price of € 87.50). The 2016 matching
component was paid out in cash in May 2021. The number of mathematical matching shares for calcu-
lating the equivalent value in cash amounts to 1,156 (holding period expired on 11 May 2021). Reference
price for calculating the equivalent value of the matching shares: € 83.36).
2 The target amount of the 2019-2021 Performance Cash Plan is € 1,600,000. The PCP factor is 1.081.
This differs from the PCP factor mentioned above, since a value of 1.0 was agreed for the earnings
factor of the 2019 financial year. An advance payment of € 900,000 was made from the PCP 2019-
2021 in 2020.
1 Remuneration for prior vesting years is due if, as of the balance sheet date, the activity underlying the
remuneration component has been fully performed, and all conditions for the entitlement are met.
100
309,002
96,364
212,638
62
Other Information
← = Q
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021
PETER SCHWARZENBAUER
Variable
9
1
1
as a % of total
remuneration
302,750²
(-)
(-)
Performance Cash Plan 2019-2021
years in €¹
(-)
19,451
remuneration Total
Fixed Fringe benefits (other remuneration)
in €
Earlier vesting
Member of the Board of Management until 31 October 2019
Financial year 2021
19,451
Share-based remuneration component (matching component)
(-)
191,038
191,038
ance/Pensions (Partial) capital payments
Waiting allow- Pensions
Waiting allowance
Total
remuneration 2016 for holding obligation 2017-2021
Share-based remuneration component (matching component)
Variable
Performance Cash Plan 2019-2021
remuneration Total
Fixed Fringe benefits (other remuneration)
100
(-)
363,847
363,847
100
1,370,807
Total
Total remuneration for financial years 2021 or earlier vesting years
Total remuneration according to § 162 German Stock Corporation Act (AktG)
IAN ROBERTSON
(-)
(-)
(-)
31
96,364
31
96,3644
62
(-)
as a % of total
remuneration
years in €1
Earlier vesting
21,600
21,600
in €
Member of the Board of Management until 31 December 2017
Financial year 2021
7
7
983,566
Total
Waiting allowance
Factor Amount in € p. a. ³
Deputy Chairman of the
Supervisory Board
Supervisory Board members did not receive any further
remuneration or benefits from the BMW Group for advisory
or agency services personally rendered.
OVERVIEW OF REMUNERATION 1
The following table shows the remuneration granted and
owed to the members of the Supervisory Board in the 2021
financial year pursuant to § 162 (1) Sentence 1 AktG. The
activities on which the remuneration for the 2021 financial
year is based were performed fully as at the balance sheet
date). Therefore, the remuneration for the Supervisory Board
activity is classified as granted for the 2021 financial year,
even if the payment of the Supervisory Board remuneration
(including the attendance fee) was only made after the end
of the 2021 financial year, in accordance with Article 15 of the
Articles of Incorporation.
Remuneration granted and owed to members of the Super-
visory Board pursuant to § 162 of the German Stock
Corporation Act (AktG)
3.
visory Board for their reasonable expenses. In order to be
able to perform his duties, the Chairman of the Supervisory
Board is provided with secretariat and chauffeur services.
In accordance with the provisions of the Articles of Incorpo-
ration, the remuneration and the attendance fee are only
paid after the end of the respective financial year. Further-
more, the company reimburses each member of the Super-
In addition, each member of the Supervisory Board receives
an attendance fee of € 2,000 per meeting for each meeting
of the Supervisory Board (plenary) in which he or she partic-
ipates. This also applies to participation by telephone or
video link. If they attend more than one meeting on the same
day, the meetings are not remunerated separately.
In the event of changes in the composition of the Supervi-
sory Board during the year, or if additional remuneration-rel-
evant functions are performed, remuneration is determined
on a proportionate basis.
ated with these positions. In view of the particular demands
placed on the members and, in particular, on the Chairman
of the Audit Committee and the increased scope of the Audit
Committee's tasks, a higher level of remuneration is pro-
vided for work on this committee than for work on other com-
mittees. Accordingly, the Articles of Incorporation of BMW
AG stipulate that the Chairman of the Supervisory Board
shall receive three times the amount and each Deputy Chair-
man twice the amount of remuneration paid to a Supervisory
Board member, excluding amounts relating to additional
remuneration-relevant functions. The Chair of the Audit
Committee receives two-and-a-quarter times the amount,
the Chair of other Supervisory Board committees twice the
amount, each member of the Audit Committee twice the
amount, and each member of another committee one-and-
a-half times the amount of the remuneration paid to a Super-
visory Board member, provided the relevant committee con-
vened on at least three days during the financial year. If a
member of the Supervisory Board exercises more than one
of the functions referred to above, their remuneration is
measured only on the basis of the function receiving the
highest amount.
The latest version of the GCCC, dated 16 December 2019,
recommends that exercising the functions of the chair and
deputy chair of Supervisory Board should also be considered
when determining the level of remuneration, along with any
committees an individual chairs or sits on (Suggestion G.17).
This is to take account of the extra time commitment associ-
In accordance with the Articles of Incorporation, each mem-
ber of the Supervisory Board of BMW AG who does not exer-
cise any additional function relevant to remuneration
receives in addition to the reimbursement of reasonable
expenses – fixed remuneration of € 200,000 p.a.
With effect from the 2020 financial year, remuneration for
members of the Supervisory Board has been structured as
purely fixed remuneration, and complies with Suggestion
G.18 of the German Corporate Governance Code as amended
on 16 December 2019. This strengthens the independence of
the Supervisory Board in advising and monitoring the Board
of Management. The structure and amount of the fixed
remuneration ensure that highly qualified individuals can
continue to be proposed to the Annual General Meeting for
membership of the Supervisory Board. This strengthens its
advisory and supervisory function, which contributes to the
company's sustainable and long-term development.
Principles and elements of remuneration
Member of the Supervisory Board
1.00
200,000
Chairman of the Supervisory Board
2 Provided the relevant committee convened for meetings on at least three days during the financial year.
3 Plus attendance fee of €2,000 per plenary session.
1 If a Supervisory Board member performs several additional remuneration-relevant functions, their
remuneration remuneration is measured only on the basis of the function that is remunerated with the
highest amount.
Chairman of the Audit
Committee 22
300,000
1.50
400,000
2.00
2.
400,000
Chairman of another committee 2
Member of the Audit Committee 2
Member of another committee 2
450,000
2.25
400,000
2.00
600,000
3.00
2.00
remuneration 2016 for holding obligation 2017-2021
The regulation governing remuneration for the Supervisory
Board applicable to the reporting year was adopted by the
Annual General Meeting on 14 May 2020. It is set out in Arti-
cle 15 of the Articles of Incorporation, and specifies both the
remuneration system to be used and the precise framework
for calculating the remuneration due to the members of the
Supervisory Board. The regulation was confirmed by the
Annual General Meeting on 12 May 2021 with a majority of
99.40% of the valid votes cast.
III. Remuneration of the members of the Supervisory Board
87
(-)
2,882,022
(-)
(-)
(-)
(-)
12
395,696
3
92,9463
(-)
Total
ance/Pensions (Partial) capital payments
Waiting allow- Pensions
2,882,022
87
Total remuneration for financial years 2021 or earlier vesting years
2,901,473
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
1. Articles of Incorporation and procedure
BMW Group Report 2021
3 The number of shares acquired in 2017 with the cash remuneration component (investment component)
2016 amounted to 3,346. The 2016 matching component was paid out in cash in May 2021. The number
of mathematical matching shares for the calculating the equivalent value in cash amounts to 1,115 (hold-
ing period expired on 11 May 2021). Reference price for calculating the equivalent value of the matching
shares: € 83.36).
2 The target amount of the PCP 2019-2021 is € 791,667. An advance payment of € 500,000 was made
from the PCP 2019-2021 in 2020.
1 Remuneration for prior vesting years is due if, as of the balance sheet date, the activity underlying the
remuneration component has been fully performed, and all conditions for the entitlement are met.
100
3,297,170
Total remuneration according to § 162 German Stock Corporation Act (AktG)
395,696
310
387,241
89
323,691
3
3
as a % of total
remuneration
363,3004
20,629
years in €¹
(-)
20,629
in €
Earlier vesting
5 The number of shares purchased in 2017 with the 2016 cash remuneration component (investment
component) amounted to 2,771 (purchased on 12 May 2017 at a price of € 87.50). The 2016 matching
component was paid out in cash in May 2021. The number of mathematical matching shares for the
purposes of calculating the equivalent value in cash amounts to 923 (holding period expired on 11 May
2021). Reference price for calculating the equivalent value of the matching shares: € 83.36).
"The target amount of the 2019-2021 Performance Cash Plan is € 950,000. An advance payment of
€ 600,000 was made from the PCP 2019-2021 in 2020.
3 The number of shares purchased in 2017 with the 2016 cash remuneration component (investment
component) amounted to 3,470 (purchased on 12 May 2017 at a price of € 87.50). The 2016 matching
component was paid out in cash in May 2021. The number of mathematical matching shares for calcu-
lating the equivalent value in cash amounts to 1,156 (holding period expired on 11 May 2021). Reference
price for calculating the equivalent value of the matching shares: € 83.36).
1 Remuneration for prior vesting years is due if, as of the balance sheet date, the activity underlying the
remuneration component has been fully performed, and all conditions for the entitlement are met.
2 The number of shares purchased in 2017 with the 2016 cash remuneration component (investment
component) amounted to 2,603 (purchased on 12 May 2017 at a price of € 87.50). The 2016 matching
component was paid out in cash in May 2021. The number of mathematical matching shares for calcu-
lating the equivalent value in cash amounts to 867 (holding period expired on 11 May 2021). Reference
price for calculating the equivalent value of the matching shares: € 83.36).
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Total remuneration for financial years 2021 or earlier vesting years
49
(-)
76,9415
10
100
745,870
440,241
305,629
38
285,000
(-)
Total
(-)
(-)
(-)
38
(-)
285,000
59
440,241
(-)
>
ance/Pensions (Partial) capital payments
Waiting allow-
(-)
(-)
(-)
(-)
(-)
279,984
69
(-)
272,727
74
(-)
279,984
(-)
(-)
(-)
(-)
74
272,727
(-)
69
307,588
Waiting allowance
Total
remuneration 2016 for holding obligation 2017-2021
Share-based remuneration component (matching component)
Performance Cash Plan 2019-2021
Variable
remuneration Total
Pensions
Fixed Fringe benefits (other remuneration)
KLAUS FRÖHLICH
100
96,364
300,062
396,427
100
379,861
72,273
Member of the Board of Management until 30 June 2020
Financial year 2021
308
BMW Group Report 2021
To Our Stakeholders
(-)
72
983,566
(-)
(-)
11
153,966³
(-)
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Total remuneration for financial years 2021 or earlier vesting years
Total
ance/Pensions (Partial) capital payments
Waiting allow- Pensions
Waiting allowance
remuneration 2016 for holding obligation 2017-2021
(-)
360,000
(-)
26
26
360,000
(-)
(-)
(-)
(-)
(-)
Total
89
323,691
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
Share-based remuneration component (matching component)
Variable
(-)
Earlier vesting
Financial year 2021
as a % of total
remuneration
years in €¹
in €
Earlier vesting
NORBERT REITHOFER
as a % of total
Chairman of the Board of Management until 15 August 2019
Financial year 2021
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
HARALD KRÜGER
1,006,759
175,000
1,181,759
in €
remuneration
(-)
61
829,6002
(-)
Performance Cash Plan 2019-2021
11
40,156
years in €¹
2
11
(-)
40,156
2
27,241
remuneration Total
Fixed Fringe benefits (other remuneration)
27,241
402,075
4,258,533
Remuneration Report
PERFORMANCE CASH PLAN
100
2,757,590
354,680
3,112,270
100
4,820,525
402,852
5,223,377
Total amount received incl. service cost 6
Service cost 5
Remuneration according to § 162 German Stock Corporation Act (AktG)
72 or 28
782,850
1,974,740
92 or 8
361,900
4,458,625
Remuneration for vesting year 2021 or earlier vesting years
70
1 Remuneration system from financial year 2021.
² Remuneration system applicable until financial year 2020.
>
3 Remuneration for prior vesting years if, as of the balance sheet date, the activity underlying the remuneration component has been fully performed, and all conditions for the entitlement are met.
Finance, Member of the Board of Management since 1 January 2017
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 (2020)
NICOLAS PETER
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
1,939,182
Combined Management Report
BMW Group Report 2021
303
8 An advance payment in the amount of € 500,000 was paid out from the PCP 2018-2020 in 2019.
7 An advance payment in the amount of € 500,000 was paid out from the PCP 2019-2021 in 2020.
6 Corresponds to the previous disclosure of amounts received in accordance with the model tables in the version of the German Corporate Governance Code dated 7 February 2017. For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the
vesting year are to be taken into account. The defined maximum remuneration for the vesting year 2021 is € 5,500,000; the remuneration for the vesting year 2021 including service cost is € 4,861,477, which is below the maximum remuneration.
5 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group; this amount was not paid out in the financial year.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
To Our Stakeholders
Fixed remuneration
78
Total variable remuneration
(-)
Share-based remuneration component (matching component) 2016 for holding
obligation 2017-2021
(-)
(-)
(-)
Share-based remuneration component (matching component) 2015 for holding
obligation 2016-2020
6
13
(-)
358,862
(-)
(-)
Cash remuneration component (investment component) 2020 for holding
obligation 2021-2025
remuneration
Variable
(-)
(-)
Personal cash investment amount 20214
RoCE component
(-)
42 or 28
782,850
(-)
(-)
1,156,332
70 or 8
12
(-)
361,900
3,752,000
3,390,100
593,600
Strategic focus target component
(-)
(-)
(-)
24
1,152,000
Total variable remuneration Vesting year 2021 or earlier vesting years
Fixed
remuneration
Fringe benefits (other remuneration)
Total
8
361,900
(-)
(-)
(-)
(-)
13
609,500
(-)
(-)
21
1,035,000
26
(-)
805,000
(-)
282,8508
500,0007
9
16
(-)
(-)
(-)
Share-based remuneration component (matching component) 2016 for holding
obligation 2017-2021
(-)
(-)
(-)
(-)
Share-based remuneration component (matching component) 2015 for holding
obligation 2016-2020
(-)
422,190
(-)
(-)
Cash remuneration component (investment component) 2020 for holding
obligation 2021-2025
remuneration
Variable
14
(-)
(-)
4
Vesting year 2020
in €2
950,000
22
(-)
FY 2021
as a % of total
remuneration
in €³
Earlier vesting years
Vesting year 2021
in €¹
1,050,000
Earlier vesting years
SHARE-BASED PAYMENT
PCP 2018-2020
(-)
Performance component of bonus 2021
Earnings component of bonus 2021
Performance component of bonus 2020
Earnings component of bonus 2020
BONUS
PCP 2019-2021
18
in €3
(-)
(-)
133,200
(-)
(-)
(-)
31
974,231
FY 2020
as a % of total
remuneration
22
1
(-)
24,231
0.5
(-)
22,746
30
1,072,746
500,0007
(-)
8
(-)
1,156,332
71 or 5
(-)
(-)
(-)
13
(-)
215,475
2,858,625
Total variable remuneration Vesting year 2021 or earlier vesting years
510,125
Strategic focus target component
(-)
(-)
(-)
56
Total variable remuneration
3,074,100
77
100
2,058,305
352,121
2,396,139
100
4,017,337
401,466
4,418,803
Total amount received incl. service cost 6
Service cost 5
Remuneration according to § 162 German Stock Corporation Act (AktG)
25
100
2,058,305
95 or 5
215,475
3,801,862
Remuneration for vesting year 2021 or earlier vesting years
56
1,156,332
(-)
990,000
RoCE component
Personal cash investment amount 20214
(-)
(-)
5
215,475
(-)
(-)
(-)
Variable
13
33
(-)
(-)
21
855,000
(-)
684,250
(-)
503,500
>
remuneration
(-)
Τ
(-)
(-)
(-)
Share-based remuneration component (matching component) 2016 for holding
obligation 2017-2021
(-)
(-)
Cash remuneration component (investment component) 2020 for holding
obligation 2021-2025
(-)
(-)
Share-based remuneration component (matching component) 2015 for holding
obligation 2016-2020
17
(-)
358,862
(-)
(-)
(-)
Personal cash investment amount 20214
3 Remuneration for prior vesting years if, as of the balance sheet date, the activity underlying the remuneration component has been fully performed, and all conditions for the entitlement are met.
5 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group; this amount was not paid out in the financial year.
(-)
113,220
(-)
(-)
(-)
30
818,408
22
1,068,525
1
(-)
18,408
0.4
(-)
18,525
4
(-)
(-)
(-)
361,900
(-)
10
282,8508
(-)
(-)
(-)
29
13
(-)
(-)
21
1,035,000
25
(-)
684,250
609,500
(-)
800,000
22
Fixed
remuneration
Fixed remuneration
Customer, Brands, Sales, Member of the Board of Management since 1 January 2018
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 (2020)
PIETER NOTA
← = Q
Other Information
Remuneration Report
Fringe benefits (other remuneration)
Total
Corporate Governance
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
302
² Remuneration system applicable until financial year 2020.
1 Remuneration system from financial year 2021.
6 Corresponds to the previous disclosure of amounts received in accordance with the model tables in the version of the German Corporate Governance Code dated 7 February 2017. For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the
vesting year are to be taken into account. The defined maximum remuneration for the vesting year 2021 is € 4,925,000; the remuneration for the vesting year 2021 including service cost is € 4,208,023, which is below the maximum remuneration.
Group Financial Statements
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
BONUS
Performance component of bonus 2020
(-)
FY 2020
as a % of total
remuneration
in €3
Earlier vesting years
Vesting year 2020
in €2
FY 2021
as a % of total
remuneration
in €³
Earnings component of bonus 2020
in €¹
1,050,000
Vesting year 2021
SHARE-BASED PAYMENT
PCP 2019-2021
PCP 2018-2020
PERFORMANCE CASH PLAN
Performance component of bonus 2021
Earnings component of bonus 2021
Earlier vesting years
(-)
RoCE component
(-)
(-)
(-)
13
(-)
(-)
(-)
Total variable remuneration Vesting year 2021 or earlier vesting years
2,858,625
(-)
74
578,166
(-)
(-)
1,152,000
2,858,625
74
578,166
57
Remuneration for vesting year 2021 or earlier vesting years
3,856,458
(-)
100
1,006,759
(-)
57
100
235
510,125
Variable
remuneration
Cash remuneration component (investment component) 2020 for holding
obligation 2021-2025
(-)
I
179,431
(-)
18
Share-based remuneration component (matching component) 2015 for holding
obligation 2016-2020
(-)
(-)
(-)
(-)
(-)
(-)
(-)
Т
Τ
Personal cash investment amount 20214
RoCE component
990,000
(-)
26
Strategic focus target component
Share-based remuneration component (matching component) 2016 for holding
obligation 2017-2021
Remuneration according to § 162 German Stock Corporation Act (AktG)
3,856,458
100
SHARE-BASED PAYMENT
PCP 2019-2021
PCP 2018-2020
PERFORMANCE CASH PLAN
Performance component of bonus 2021
Earnings component of bonus 2021
Performance component of bonus 2020
Earnings component of bonus 2020
BONUS
Fringe benefits (other remuneration)
Total
remuneration
Vesting year 2021
Fixed
Produktion, Member of the Board of Management since 1 October 2019
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 (2020)
MILAN NEDELJKOVIĆ
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
301
Fixed remuneration
Earlier vesting years
in €¹
900,000
in €³
Service cost 5
Total amount received incl. service cost 6
113,220
(-)
(-)
(-)
44
901,973
23
943,237
5
(-)
101,973
1
(-)
43,237
39
(-)
FY 2020
as a % of total
remuneration
in €3
Earlier vesting years
Vesting year 2020
in €²
800,000
22
(-)
FY 2021
as a % of total
remuneration
(-)
(-)
Total variable remuneration
(-)
Total amount received incl. service cost 6
4,824,746
401,099
5,225,845
100
3,117,471
351,746
3,469,217
100
1 Remuneration system from financial year 2021.
2 Remuneration system applicable until financial year 2020.
>
3 Remuneration for prior vesting years if, as of the balance sheet date, the activity underlying the remuneration component has been fully performed, and all conditions for the entitlement are met.
" Assessment period five years in total: One year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
5 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group; this amount was not paid out in the financial year.
Service cost 5
6 Corresponds to the previous disclosure of amounts received in accordance with the model tables in the version of the German Corporate Governance Code dated 7 February 2017. For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the
vesting year are to be taken into account. The defined maximum remuneration for the vesting year 2021 is € 5,500,000; the remuneration for the vesting year 2021 including service cost is € 4,863,945, which is below the maximum remuneration.
8 An advance payment in the amount of € 500,000 was paid out from the PCP 2018-2020 in 2019.
304
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
REMUNERATION GRANTED AND OWED IN FINANCIAL YEAR 2021 (2020)
FRANK WEBER
7 An advance payment in the amount of € 500,000 was paid out from the PCP 2019-2021 in 2020.
Remuneration according to § 162 German Stock Corporation Act (AktG)
75 or 25
782,850
24
Strategic focus target component
593,600
(-)
12
Total variable remuneration Vesting year 2021 or earlier vesting years
3,390,100
361,900
70 or 8
(-)
(-)
1,360,390
(-)
(-)
(-)
782,850
(-)
44 or 25
Total variable remuneration
3,752,000
78
2,143,240
69
Remuneration for vesting year 2021 or earlier vesting years
4,462,846
361,900
93 or 8
2,334,621
Development, Member of the Board of Management since 1 July 2020
Fixed remuneration
(-)
remuneration
3
997,833
26
428,593
43
(-)
(-)
(-)
56,610
(-)
6
(-)
(-)
(-)
342,125
(-)
34
855,000
22
(-)
(-)
503,500
13
(-)
Fixed
(-)
28,593
(-)
(-)
Fringe benefits (other remuneration)
Total
3
BONUS
Performance component of bonus 2020
Earnings component of bonus 2021
Performance component of bonus 2021
PERFORMANCE CASH PLAN
PCP 2018-2020
PCP 2019-2021
SHARE-BASED PAYMENT
FY 2021
Vesting year 2021
Earnings component of bonus 2020
in €¹
900,000
Earlier vesting years
97,833
FY 2020
as a % of total
remuneration
in €3
Earlier vesting years
(-)
23
(-)
as a % of total
remuneration
in €³
Vesting year 2020
in €²
400,000
40
(-)
220,000
(-)
86,258
(-)
Dominique Mohabeer¹
since June 2012
220,000
-5%
220,000
0%
210,000
210,000
0%
Anke Schäferkordt
since May 2020
(-)
(-)
0%
(-)
- 1%
Jens Köhler¹
(-)
(-)
(-)
(-)
(-)
Susanne Klatten
since May 1997
220,000
218,000
(-)
220,000
1 %
(-)
210,000
(-)
132,344
(-)
-5%
210,000
0%
since August 2021
(-)
135,419
(-)
since May 2019
139,532
(-)
210,000
Werner Zierer¹
since November 2001
220,000
220,000
Thomas Wittig
0%
0%
210,000
51% 210,000
-5% 210,000
0%
0%
FORMER MEMBERS OF THE SUPERVISORY BOARD IN €
Karl-Ludwig Kley³
from May 2008 to May 2021, Deputy Chairman
220,000
1%
210,000
49 %
134,344
(-)
210,000
56%
Christoph Schmidt
since May 2021
(-)
(-)
(-)
(-)
(-)
Vishal Sikka
since May 2019
(-)
(-)
(-)
139,532
(-)
208,000
(-)
(-)
- 64%
- 5%
Horst Lischka¹
- 62%
75,118
0%
200,000
0%
200,000
5%
200,000
189,780
from May 2009 to May 2021
Reinhard Hüttl
- 65%
148,237
0%
428,548
0%
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
318
from May 2009 to May 2021
3 Chairman of the Audit Committee until 2020 Annual General Meeting.
1 In line with the guidelines of the Deutscher Gewerkschaftsbund, these employee representatives have requested that their remuneration be paid into the Hans Bockler-Stiftung.
-25%
156,538
430,000
0%
428,000
2 Dr. Bock was elected Chairman of the Audit Committee after the 2020 Annual General Meeting.
220,000
220,000
0%
Brigitte Rödig¹
from May 2015 to May 2021
from July 2013 to October 2021
218,000
218,000
0%
220,000
Simone Menne
220,000
220,000
220,000
1 %
0%
210,000
210,000
-5%
75,118
0%
Remuneration Report
- 45%
- 5%
220,000
0%
210,000
-5%
75,118
- 64%
114,602
Willibald Löw¹
220,000
220,000
0%
220,000
0%
210,000
from May 1999 to July 2021
Other Information
← = Q
V. Other considerations
BMW Group Report 2021
320
Andreas Fell
Wirtschaftsprüfer
Petra Justenhoven
Wirtschaftsprüferin
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Munich, March 9, 2022
To Our Stakeholders
We issue this auditor's report on the basis of the engage-
ment agreed with Bayerische Motoren Werke Aktienge-
sellschaft. The audit has been performed only for purposes
of the company and the auditor's report is solely intended to
inform the company as to the results of the audit. Our
responsibility for the audit and for our auditor's report is only
towards the company in accordance with this engagement.
The auditor's report is not intended for any third parties to
base any (financial) decisions thereon. We do not assume
any responsibility, duty of care or liability towards third par-
ties; no third parties are included in the scope of protection of
the underlying engagement. Section 334 BGB [Bürgerliches
Gesetzbuch: German Civil Code], according to which objec-
tions arising from a contract may also be raised against third
parties, is not waived.
remuneration report, this audit opinion includes that the
information required by § 162 Abs. 1 and 2 AktG has been
disclosed in all material respects in the remuneration report.
The audit of the content of the remuneration report described
in this auditor's report includes the formal audit of the remu-
neration report required by § 162 Abs. [paragraph] 3 AktG,
including the issuance of a report on this audit. As we
express an unqualified audit opinion on the content of the
Reference to an Other Matter - Formal Audit of the Remuneration
Report according to § 162 AktG
In our opinion, based on the findings of our audit, the remu-
neration report for the financial year from January 1 to
December 31, 2021, including the related disclosures, com-
plies in all material respects with the accounting provisions
of § 162 AktG.
Audit Opinion
We believe that the audit evidence we have obtained is suffi-
cient and appropriate to provide a basis for our audit opinion.
Restriction on use
In making those risk assessments, the auditor considers
internal control relevant to the preparation of the remunera-
tion report including the related disclosures. The objective of
this is to plan and perform audit procedures that are appro-
priate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company's
internal control. An audit also includes evaluating the appro-
priateness of accounting policies used and the reasonable-
ness of accounting estimates made by the executive direc-
tors and the supervisory board, as well as evaluating the
overall presentation of remuneration report including the
related disclosures.
Combined Management Report
Corporate Governance
6
INFORMATION
OTHER
← = Q
Other Information
Remuneration Report
Group Financial Statements
352 Contacts
344 BMW Group Ten-year Comparison
346 Glossary and Explanation of Key Figures
342 Consumption and Carbon Disclosures
341 NFS-Index
337 TCFD-Index
332 SASB-Index
321 Further GRI Information
351 Financial Calendar
430,000
An audit involves performing procedures to obtain audit evi-
dence about the amounts including the related disclosures
stated in the remuneration report. The procedures selected
depend on the auditor's judgment. This includes the assess-
ment of the risks of material misstatement of the remunera-
tion report including the related disclosures, whether due to
fraud or error.
Auditor's Responsibilities
Chairman of the Board
of Management
Oliver Zipse
For the Board of
Management
Dr.-Ing. Dr.-Ing. E.h.
Norbert Reithofer
Chairman of the
Supervisory Board
For the Supervisory Board
Bayerische Motoren Werke Aktiengesellschaft
319
There are no plans to change the remuneration system for
members of the Supervisory Board for the 2022 financial
year,
Under this system, 50 % of the share-based remuneration
as a long-term component of the variable remuneration
depends on the RoCE achieved in the Automotive segment
in the relevant vesting year. For the financial year 2021, the
RoCE is defined as the segment profit before financial result,
divided by the average capital employed in the segment. The
definition of this key indicator has been adjusted for the
financial year 2022. Previously, "capital employed" com-
prised the sum of all current and non-current operating
assets, adjusted for deductible capital. The deductible capi-
tal corresponded to the capital shares that were available to
the operational business, largely without interest. This
included, for example, trade payables and other provisions.
In future, the definition of capital employed will include the
In principle, the current remuneration system for members of
the Board of Management will apply unchanged for the 2022
financial year.
VI. Outlook for the 2022 financial year
The company maintains a financial loss liability insurance
policy for company directors. The insurance provides cover
for legal liability claims and protects the private assets of
members of BMW AG's corporate entities if a claim is made
against them for financial loss in the course of exercising
their function as a corporate entity. A deductible is provided
for members of the Board of Management that complies
with the requirements of the German Stock Corporation Act
(AktG).
since May 2021
BMW AG did not grant any loans to members of the Board of
Management or the Supervisory Board in the financial year
2021, nor did it enter into any contingent liabilities in their
favour. In the year under review, members of the Board of
Management and the Supervisory Board concluded con-
tracts with BMW Group companies for vehicle leasing and
vehicle services (maintenance and repair work) at arm's
length conditions.
sum of intangible assets, property, plant and equipment and
net working capital. This simplified definition aims to make
this indicator more transparent and easier to understand. In
addition, the capital employed items taken into account
reflect the focus of operational segment management. The
new definition leads to an increase in capital employed com-
pared to the previous definition. The strategic target value for
the ROCE in the Automotive segment according to the new
definition will therefore be 18 % from the financial year 2022
onwards (previous year: 40 %). In terms of content, this
amounts to an even more ambitious objective compared to
the previous measurement of return on capital.
Our responsibility is to express an opinion on this remunera-
tion report, including the related disclosures, based on our
audit. We conducted our audit in accordance with German
generally accepted standards for the audit of financial state-
ments promulgated by the Institut der Wirtschaftsprüfer (Insti-
tute of Public Auditors in Germany) (IDW). Those standards
require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about
whether the remuneration report, including the related disclo-
sures, is free from material misstatement.
BMW Group Report 2021
Combined Management Report
The executive directors and the supervisory board of Bayer-
ische Motoren Werke Aktiengesellschaft are responsible for
the preparation of the remuneration report, including the
related disclosures, that complies with the requirements of
§ 162 AktG. The executive directors and the supervisory
board are also responsible for such internal control as they
determine is necessary to enable the preparation of a remu-
neration report, including the related disclosures, that is free
from material misstatement, whether due to fraud or error.
Board
Responsibilities of the Executive Directors and the Supervisory
We have audited the remuneration report of Bayerische
Motoren Werke Aktiengesellschaft, Munich, for the financial
year from January 1 to December 31, 2021 including the related
disclosures, which was prepared to comply with § [Arti-
cle] 162 AktG [Aktiengesetz: German Stock Corporation Act].
To Bayerische Motoren Werke Aktiengesellschaft, Munich
Auditor's Report
To Our Stakeholders
Remuneration Report pursuant to § 162 AktG for the Finan-
cial Year from January 1 to December 31, 2021
VII. Auditor's Report
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
To Bayerische Motoren Werke Aktiengesellschaft Munich
Johann Horn¹
410,000
210,000
624,731
97
20,000
3
644,731
100
(1,408,548)
(96)
(60,000)
(100)
(4)
(100)
5,311,827
(5,292,822)
96
196,000
4
5,507,827
100
(96)
(196,000)
(1,468,548)
(4)
(210,000)
(10,000)
73,118
97
2,000
3
75,118
100
(200,000)
(95)
(10,000)
(5)
(5)
(100)
150,538
96
6,000
4
156,538
100
(200,000)
(95)
(210,000)
(100)
(5,488,822)
1 These employee representatives have declared that they will transfer their remuneration to the Hans Böckler Foundation in accordance with the guidelines of the German Federation of Trade Unions.
Remuneration Report
Other Information
← = Q
COMPARISON OF CHANGES IN EARNINGS AND REMUNERATION FOR EMPLOYEES, THE BOARD OF MANAGEMENT AND THE SUPERVISORY BOARD
2017
2018 Change in %
2019 Change in %
2020 Change in %
2021
Corporate Governance
Change in %
Profit attributable to shareholders of BMW AG (in € million)
3,197
8,589
2,801
- 12 %
2,107
-25%
1,702
- 19%
7,117
Net income of BMW AG according to the German Commercial Code (HGB) (in € million)
(100)
Group Financial Statements
To Our Stakeholders
2 Member of the Supervisory Board until 14 May 2021.
3 Member of the Supervisory Board until 16 July 2021.
"Member of the Supervisory Board until 1 October 2021.
^
314
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Combined Management Report
Corporate Governance
Other Information
← = Q
IV. Comparison of change in remuneration and earnings
pursuant to § 162 (1) Sentence 2 No. 2 of the German
Stock Corporation Act (AktG)
Pursuant to § 162 (1) Sentence 2 No. 2 AktG, the following
table shows the change in earnings, the annual change in
the remuneration of the members of the Board of Manage-
ment and the Supervisory Board, and the annual change in
the average remuneration of the employees on a full-time
equivalent basis over the last five financial years.
For the members of the Board of Management and the
Supervisory Board, the remuneration granted and owed in
the relevant financial year is presented within the meaning of
§ 162 (1) Sentence 1 AktG. The remuneration granted and
owed to former members of the Board of Management
includes any variable remuneration from previous vesting
years and any remuneration from any contracts of employ-
ment that remained valid beyond the end of their mandate,
as well as retirement benefit plans (pension payments, pay-
ments from the capital account), other remuneration and any
waiting allowances paid.
The change in earnings is presented on the basis of BMW
AG's net profit for the year in accordance with the German
Commercial Code (HGB). In addition, the changes in the key
indicators "earnings attributable to shareholders of BMW
AG" and "Group post-tax return on sales" are reported, as
these key indicators are relevant to the calculation of the var-
iable remuneration of the members of the Board of Manage-
ment (earnings component of the bonus).
The presentation of average employee remuneration is
based on the average remuneration of all employees of
BMW AG on a full-time equivalent basis. In the 2021 financial
year, this was 78,144 people. As of 31 December 2021, BMW
Group employed 118,909 people worldwide. The compo-
nents of the average employee remuneration presented are
generally in line with the remuneration granted and owed to
the members of the Board of Management and the Supervi-
sory Board according to § 162 (1) Sentence 1 AktG.
315
BMW Group Report 2021
Remuneration Report
(210,000)
(5)
(10,000)
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
COMPENSATION PAID AND OWED TO SUPERVISORY BOARD MEMBERS ACCORDING
TO § 162 OF THE GERMAN STOCK CORPORATION ACT (AKTG) IN FISCAL YEAR 2021 (2020)
FORMER MEMBERS OF THE SUPERVISORY BOARD
BMW Group Report 2021
Karl-Ludwig Kley (Deputy Chairman)²
Horst Lischka 1,2
Willibald Löw 1,3
Simone Menne²
Brigitte Rödig 1,4
Total former members of the Supervisory Board
Total current and former members of the Supervisory Board
fixed remuneration
attendance fee
total remuneration
Reinhard Hüttl2
in €
146,237
313
3 Member of the Supervisory Board since 3 August 2021.
(95)
(10,000)
(5)
(210,000)
(100)
Total acting members of the Supervisory Board
4,687,096
96
176,000
4 Member of the Supervisory Board since 12 May 2021.
4
100
(3,884,274)
(97)
(136,000)
(3)
(4,020,274)
(100)
1 These employee representatives have declared that they will transfer their remuneration to the Hans Böckler Foundation in accordance with the guidelines of the German Federation of Trade Unions.
2 Member of the Supervisory Board since 14 May 2021.
4,863,096
as a % of total
remuneration
in €
as a % of total
remuneration
73,118
97
2,000
3
75,118
100
(200,000)
(95)
(10,000)
(100)
(5)
(100)
108,602
95
6,000
5
114,602
100
(200,000)
(95)
(210,000)
(200,000)
(5)
(10,000)
in €
as a % of total
remuneration
99
2,000
1
148,237
100
(418,548)
(98)
(10,000)
(2)
(428,548)
(100)
73,118
97
2,000
3
75,118
100
(190,000)
(95)
- 17%
Group post-tax return on sales (in %)
8.8
7.3
396,427
2%
-32%
-30%
10%
- 23%
745,870
- 69%
until August 2019
-36%
62%
10%
until May 2015, Chairman of the Supervisory Board since May 2015
- 1%
-10%
- 21%
1,370,807
363,847
- 64%
1 %
until December 2017
- 69%
- 34%
Peter Schwarzenbauer6
- 8%
379,861
Klaus Fröhlich²
Harald Krüger 4,5
Norbert Reithofer
lan Robertson
until March 2013
until October 2019
until September 2016
until December 2016
until June 2020
- 28%
0%
- 73%
4%
1 %
- 39%
8%
-25%
777,615
- 68%
- 1%
- 8%
2%
246,942
until October 2019
- 39%
- 83%
-2%
Change in %
Norbert Reithofer
since 2015, Chairman
640,000
640,000
0%
640,000
0%
610,000
2021
-5%
0%
Manfred Schoch¹
Stefan Quandt
since 1988, Deputy Chairman
430,000
430,000
0%
430,000
0%
610,000
2020 Change in %
2019 Change in %
2018 Change in %
10%
- 54%
309,002
7%
3,297,170
149 %
1 The reported remuneration for the years 2017-2020 has been recalculated in accordance with the requirements of § 162 German Stock Corporation Act (AktG).
2 For the financial years 2019 and 2020, the calculation of remuneration also took into account the advances in the amount of € 600,000 each from the Performance Cash Plan 2018-2020 and 2019-2021, which were paid out in 2019 and 2020, respectively.
3 Ms Caiña Carreiro-Andree's contract of employment ran until 30 June 2020.
"For the financial years 2019 and 2020, the calculation of remuneration also took into account the advances in the amount of € 900,000 each from the Performance Cash Plan 2018-2020 and 2019-2021, which were paid out in 2019 and 2020, respectively.
5 Mr Krüger's contract of employment ran until 30 April 2020.
6 For the financial years 2019 and 2020, the calculation of remuneration also included the advances paid in the amounts of € 600,000 and € 500,000 from the Performance Cash Plan 2018-2020 and 2019-2021, which were paid out in 2019 and 2020, respectively..
317
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
COMPARISON OF CHANGES IN EARNINGS AND REMUNERATION FOR EMPLOYEES, THE BOARD OF MANAGEMENT AND THE SUPERVISORY BOARD
IV. REMUNERATION OF THE SUPERVISORY BOARD IN €
2017
Klaus Draeger
Friedrich Eichiner
(200,000)
Frank-Peter Arndt
Milagros Caiña
Carreiro-Andree 2,3
Change in 2021 on
2020 in %
III. REMUNERATION OF THE BOARD OF MANAGEMENT IN €¹
Oliver Zipse²
since May 2015,
Chairman since 16 August 2019
Ilka Horstmeier
since November 2019
Milan Nedeljkovic
since October 2019
Pieter Nota3
14%
since January 2018
since January 2017
Frank Weber
Andreas Wendt
since July 2020
from October 2018 until December 2021
4,115,640
410,000
- 34%
(-)
(-)
Nicolas Peter³
3,923,856
384,435
99,169
86,715
- 17%
4,915
4.8
- 31 %
3,775
- 23%
4,978
12,382
192 %
228%
- 34%
3.9
-3%
- 19%
187 %
I. CHANGES IN EARNINGS
II. AVERAGE REMUNERATION OF EMPLOYEES IN €
Employees of BMW AG
90,771
93,522
3%
89,353
- 4%
11.2
45%
(-)
(-)
- 1%
3,856,458
4,851,197
283 %
120%
1 The reported remuneration for the years 2017-2020 has been recalculated in accordance with the requirements of § 162 German Stock Corporation Act (AktG).
2 For the financial years 2019 and 2020, the calculation of remuneration also included the advances paid in the amounts of € 566,667 and € 712,000 from the Performance Cash Plans 2018-2020 and 2019-2021, which were paid out in 2019 and 2020, respectively.
3 For the financial years 2019 and 2020, the calculation of remuneration also included the advances in the amount of € 500,000 each from the Performance Cash Plans 2018-2020 and 2019-2021, which were paid out in 2019 and 2020, respectively.
>
316
BMW Group Report 2021
55%
To Our Stakeholders
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
COMPARISON OF CHANGES IN EARNINGS AND REMUNERATION FOR EMPLOYEES, THE BOARD OF MANAGEMENT AND THE SUPERVISORY BOARD
Change in 2019 on
2018 in %
Change in 2018 on
2017 in %
Change in 2020 on
2019 in %
2021
Combined Management Report
75%
4% 4,820,525
17% 4,824,746
(-)
95%
(-)
537,696
(-)
(-)
2,487,689
(-)
4,182,138
2,435,932
(-)
(-)
612,359
- 42%
(-)
2,651,143
2,660,349
7%
(-) 2,233,062
5,338,865
2,043,706
2,058,305
2,757,590
9% 3,117,471
(-) 1,006,759
265 % 2,208,364
36%
432 %
283 %
8,752,558
64%
3,949,908
93%
4,017,337
FORMER MEMBERS OF THE BOARD OF MANAGEMENT IN €1
100
210,000
5
(610,000)
(100)
Manfred Schoch (Deputy Chairman)¹
400,000
98
10,000
2
410,000
100
(2)
(400,000)
(10,000)
(2)
(410,000)
(100)
Stefan Quandt (Deputy Chairman)
400,000
98
10,000
2
(98)
410,000
(10,000)
(600,000)
Other Information
← = Q
COMPENSATION PAID AND OWED TO SUPERVISORY BOARD MEMBERS ACCORDING
TO § 162 OF THE GERMAN STOCK CORPORATION ACT (AKTG) IN FISCAL YEAR 2021 (2020)
MEMBERS OF THE SUPERVISORY BOARD IN OFFICE AS OF DECEMBER 31, 2021
fixed remuneration
attendance fee
total remuneration
in €
as a % of total
remuneration
(98)
in €
in €
as a % of total
remuneration
Norbert Reithofer (Chairman)
600,000
98
10,000
2
610,000
100
as a % of total
remuneration
100
(400,000)
(98)
(97)
(10,000)
(3)
(367,930)
(100)
Christiane Benner¹
200,000
95
10,000
(357,930)
5
100
(200,000)
(95)
(10,000)
(5)
(210,000)
(100)
Marc Bitzer²
127,419
210,000
100
460,000
2
(10,000)
(2)
(410,000)
(100)
Stefan Schmid (Deputy Chairman)¹
400,000
98
10,000
2
410,000
100
(400,000)
(98)
(10,000)
(2)
(410,000)
(100)
Kurt Bock (Deputy Chairman, Chairman of the Audit Committee)
450,000
98
10,000
Remuneration Report
94
Corporate Governance
Combined Management Report
0%
210,000
51%
210,000
(-)
139,532
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
0%
210,000
135,419
-5%
(-)
(-)
-5%
210,000
0%
220,000
57%
220,000
140,355
since May 2017
Heinrich Hiesinger
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
48,237
(-)
(-) 135,419
210,000
1 %
220,000
0%
428,000
430,000
since 2007, Deputy Chairman
Stefan Schmid¹
0%
410,000
-5%
410,000
430,000
0%
0%
430,000
430,000
since 1997, Deputy Chairman
0%
-5%
311
BMW Group Report 2021
To Our Stakeholders
430,000
0%
410,000
- 5%
1 %
218,000
216,000
since 2014
since May 2021
since May 2019
since October 2021
since May 2021
Verena zu Dohna
Bernhard Ebner¹
Marc Bitzer
Christiane Benner¹
Rachel Empey
25%
460,000
67 %
367,930
58%
220,000
(-)
138,968
since May 2018, Deputy Chairman and Chairman of the Audit
Committee
Kurt Bock2
0%
410,000
Group Financial Statements
0%
8,000
135,419
(-)
Dominique Mohabeer¹
200,000
95
10,000
5
210,000
100
(200,000)
(-)
(95)
(5)
(210,000)
(100)
Anke Schäferkordt
200,000
95
10,000
5
210,000
(10,000)
100
(-)
(-)
200,000
95
10,000
5
210,000
100
(200,000)
(95)
(10,000)
(-)
(5)
(100)
Jens Köhler 1,3
82,258
95
4,000
5
86,258
100
(-)
(210,000)
(126,344)
(94)
(8,000)
(4)
(208,000)
(100)
Thomas Wittig
200,000
95
10,000
5
210,000
(8,000)
100
(95)
(10,000)
(5)
(210,000)
(100)
Werner Zierer¹
200,000
95
10,000
(200,000)
(96)
(200,000)
100
[6])
(134,344)
(100)
Christoph Schmidt 4
127,419
94
8,000
6
135,419
100
(-)
(-)
(-)
(-)
(-)
Vishal Sikka
200,000
95
10,000
5
210,000
Susanne Klatten
6
(-)
(-)
48,237
100
(-)
(-)
(-)
(-)
(-)
(-)
Rachel Empey²
4
127,419
8,000
6
135,419
100
(-)
(-)
(-)
(-)
(-)
94
(-)
2,000
46,237
100
(-)
(-)
(-)
(-)
(-)
Verena zu Dohna 1,4
200,000
95
96
10,000
210,000
100
(200,000)
(95)
(10,000)
(5)
(210,000)
(100)
Bernhard Ebner 1,3
5
Heinrich Hiesinger
200,000
95
MEMBERS OF THE SUPERVISORY BOARD IN OFFICE AS OF DECEMBER 31, 2021
fixed remuneration
attendance fee
total remuneration
in €
as a % of total
remuneration
in €
as a % of total
remuneration
in €
COMPENSATION PAID AND OWED TO SUPERVISORY BOARD MEMBERS ACCORDING
TO § 162 OF THE GERMAN STOCK CORPORATION ACT (AKTG) IN FISCAL YEAR 2021 (2020)
as a % of total
remuneration
126,344
95
6,000
5
132,344
100
(-)
(-)
(-)
Johann Horn 1,2
← = Q
Other Information
Remuneration Report
10,000
5
210,000
100
(200,000)
(95)
(10,000)
(5)
(210,000)
(100)
1 These employee representatives have declared that they will transfer their remuneration to the Hans Böckler Foundation in accordance with the guidelines of the German Federation of Trade Unions.
2 Member of the Supervisory Board since 12 May 2021.
3 Member of the Supervisory Board since 8 October 2021.
>
4 Member of the Supervisory Board until 31 December 2021.
312
BMW Group Report 2021
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Group Financial Statements
Corporate Governance
(-)
2,710,234
= Q
Motorcycle production
2.3
6.5
2.5
6.3
27.2
14.2
33.6
17.1
37.5
20.1
31.1
17.6
31.7
17.2
Rail in %
Road in %
51.1
77.2
52.0
74.7
47.8
73.0
50.3
6.3
75.0
2.6
3.8
Further GRI Information
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325
1 Use and modelling of emissions factors primarily in accordance with DIN EN 16258 as well as figures from CleanCargo and JEC5; in some cases, extrapolations have been used for individual months.
2 Figures relate to automobile production (BMW Group including the BMW Brilliance Automotive Ltd. joint venture and partner plants, excluding Rolls-Royce and contract manufacturing) and spare parts deliveries to parts distribution centres.
3 Figures relate to automobile production (BMW Group including the BMW Brilliance Automotive Ltd. joint venture, contract production and parts for partner plants) and spare parts deliveries to distribution centres in markets worldwide as well as to dealerships in certain markets.
" Scope expanded to include the Greer packaging plant (South Carolina, USA) to supply production and distribute Rolls-Royce vehicles. The figures for 2021 are therefore not directly comparable with previous years.
5 The CO₂e emission values for 2020 are not directly comparable with those of previous years, as the analysis has been expanded to include the local data of suppliers, who are in the production supply for certain plants and in the vehicle transportation to dealers in certain markets as well as the additional volume of part deliveries.
17.9
1.0
10.6
0.5
12.2
0.6
16.3
0.9
12.9
0.7
Air in %
3.8
7.6
7.7
52.9
75.8
Sea in %
26,489
25,777
25,881
Transport volume in million tkm
OUTBOUND³ (DISTRIBUTION OF VEHICLES AND SPARE PARTS)
23,244
820,226
13,623
472,290
15,634
577,077
589,730
537,928
14,491
14,545
CO₂e emissions in t
Transport volume in million tkm
SPARE PARTS DELIVERY)
INBOUND² (MATERIAL PROVISION OF THE PLANTS AND
2021
2020
2019
2018
2017
TRANSPORT LOGISTICS: CARRIERS AND CO2 EMISSIONS 1
Further GRI Information
CO₂e emissions in t
959,147
974,189
993,320
g CO₂e
tkm
g CO₂e
tkm
g CO₂e
tkm
9 Соге
tkm
g CO₂e
tkm
PERCENTAGE SHARE OF CARRIERS IN TOTAL (INBOUND AND OUT-
BOUND) IN TERMS OF TRANSPORT VOLUME AND CO2 EMISSION
AVERAGE DISTRIBUTION OF MATERIALS IN
51,741
1,878,9104
1,570,397
42,123
1,563,919
40,268
1,497,075
40,426
CO₂e emissions in t
Transport volume in million tkm
TOTAL (INBOUND AND OUTBOUND)
28,497
1,058,685
23,622
850,569
37,245
1,322,8595
BMW GROUP VEHICLES 1,2
in %
M.O.N. (modif. organ.
2020
2019
2018
2017
1.0
2.15
2.25
2.22
2.32
321
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Further GRI Information
FURTHER GRI INFORMATION
PRODUCTION, PURCHASING AND SUPPLIER NETWORK
BMW GROUP CO₂ FOOTPRINT¹
in t CO₂/CO₂e
2021
1 Calculation based on unit-adjusted averages for the BMW 1 Series, 2 Series, 3 Series, 4 Series,
5 Series, 6 Series, 7 Series, 8 Series, X1, X2, X3, X4, X5, X6, X7, Rolls-Royce, MINI, MINI Countryman
and the BEV vehicles iX, iX3, 14, 13, MINI E as well as the PHEV variants.
2 At approximately 2.46 million vehicles, the number produced (BMW Group plants, including the BMW
Brilliance Automotive Ltd. joint venture, partner plants and contract production) increased in the year
under report compared with the previous year (2020: approximately 2.26 million). Based on an average
weight of BMW Group vehicles of approximately 1.8 tonnes, the total weight of input materials is
around 4.3 million tonnes. To calculate the individual material flows, the total weight is multiplied by
the average distribution of the materials in BMW Group vehicles.
1 Efficiency indicator calculated from the amount of water consumed by automobile production (BMW
Group plants, including the BMW Brilliance Automotive Ltd. joint venture, excluding partner plants and
contract manufacturing) divided by the number of automobiles produced (BMW Group plants, including
the BMW Brilliance Automotive Ltd. joint venture and partner plants, excluding contract manufacturing).
13.6
12.6
85.1
4,924,477
2021
1111
4,722,310
2020
87.4
1,967
2019
Total emission²
90.4
5,425,073
5,073,220
2017
2018
of which rainwater in %
of which surface water in %
of which groundwater in %
of which drinking water in %
Water consumption
in m³
WATER CONSUMPTION1
88.0
← = Q
2017
72,850,724
85,667
85,667
72,554
72,554
66,442
6,562
6,182
6,098
6,098
2.39
in m³
PROCESS WASTEWATER PER VEHICLE
PRODUCED¹
50.3 Steel and iron
-1.9 Duromers
Others 10.0
(e.g. tyres and seals) 3.7
Elastomers
(e.g. aluminium) 20.0
Non-ferrous metals
Textiles 1.2
resins 12.6
Thermoplastic
Naturwerkst.) 0.3
88,272
88,782
company-owned planes
company vehicles 7,8
74,213,402
2019 old
75,987,119
2019
133,552,843
2020 old
65,828,005
2020
2021
118,491,889
122,539,929
SCOPE 1: DIRECT GREENHOUSE GAS EMISSION
Total emission
2018
625,072
642,259
678,403
642,885
BMW Group locations 3,4,5
529,728
487,249
550,494
586,638
568,538
678,967
604,620
699,713
631,3049
581,703
Other Information
Remuneration Report
Corporate Governance
5 Scope expanded to include the Greer packaging plant (South Carolina, USA) to supply production and distribute Rolls-Royce vehicles. The figures for 2021 are therefore not directly comparable with previous years.
" Includes both upstream and downstream transportation. Use and modelling of emissions factors primarily in accordance with DIN EN 16258 as well as figures from CleanCargo and JEC5; in some cases, extrapolations have been used for individual months.
3 Emissions from company cars (Scope 1) are also included on a pro-rata basis under employee commuting and use phase (both Scope 3). A system-related delimitation is not currently possible.
2 Includes all refuelling of function-relabel vehicles within Germany and at major international locations (e.g. test sites in the USA, Sweden and France). All refuellings of company vehicles in Germany and, since November 2021, throughout Europe are also included. The latter include both business and private trips, except refuel-
ling paid for privately by employees.
1 Due to the broader definition of Scope 1 and Scope 2 emissions generated by BMW Group locations in the year under report and adjustments to the methodology for calculating use-phase emissions, the years 2019 (base year) and 2020 have been adjusted for comparison purposes. For these reasons, a direct comparison with
2017 and 2018 figures is not possible.
1,316,438
1,150,857
1,150,857
1,878,9105
29,765
139,999
18,534,765
99,805,490
98,782,354
46,200,385
110,899,066
1,269,018
16,234,959
16,234,959
18,505,921
18,505,921
53,421,006
1,269,018
52,759,567
1,252,835
51,887,708
1,234,346
Disposal 8
Utilisation phase ³,9
17,221,109
16,786,192
Upstream chain 8
6 Includes air travel, train travel and rental cars.
7 The figures from 2020 onwards are not directly comparable with previous years due to the improved data basis. In some cases, figures have been extrapolated based on surveys conducted at major national and international BMW Group locations.
8 Based on life cycle assessments in accordance with ISO 14040/44 of representative vehicles of the product lines using the LCA tool GaBi provided by the company Thinkstep (including the climate-impacting gases CO₂, CH 4, N₂O, SF 6, NF 3). Corresponding to the CO₂e emissions, the life cycle assessments show the energy consump-
tion (lower calorific value): around 86,095,113 MWh in the category "Bought-in goods and services" and around 600,049 MWh in the category "Waste disposal".
9 Use-phase emissions are based on global average fleet emissions. For definition, see glossary carbon emissions of new vehicle fleet worldwide, including upstream emissions. The calculation is based on an average mileage of 200,000 km.
5,974,625
5,788,965
5,852,666
2021
2020
2020 old
2019
2019 old
2018
2017
Total energy consumption
121,705,368
TOTAL ENERGY CONSUMPTION
ENERGY CONSUMPTION 1,2,3
Further GRI Information
← = Q
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BMW Group Report 2021
323
in MWh
6,348,009
117,682,832
1,322,859
25,217
166,586
146,298
BMW Group Report 2021
322
^
>>>
9 Biomethane certificates amounting to 164,000 MWh are taken into account in this indicator. This share has reduced carbon emissions by 30,024 metric tonnes.
8 Emissions from company cars (Scope 1) are also included on a pro-rata basis under employee commuting and use phase (both Scope 3). A system-related delimitation is not currently possible.
7 Includes all refuelling of function-relabel vehicles within Germany and at major international locations (e.g. test sites in the USA, Sweden and France). All refuellings of company vehicles in Germany and, since November 2021, throughout Europe are also included. The latter include both business and private trips, except refuel-
ling paid for privately by employees.
6 Scope 2 emissions calculated using the market-based method in accordance with the GHG Protocol Scope 2 guidance; mainly the use of VDA emissions factors and in some cases the use of local emissions factors; alternative calculation using the location-based method: 1,404,348 t CO₂.
4 From 2021, this indicator also includes the carbon emissions generated by other BMW Group locations as well as those relating to production. For comparison purposes, the figures for 2019 (base year) and 2020 have been adjusted accordingly. The figures for 2017 and 2018 are therefore not directly comparable.
5 Calculation of Scope 1 and Scope 2 emissions, using the operational control approach in accordance with the GHG Protocol. Leased office space without the direct influence of the BMW Group on energy supply is therefore not included.
3 Carbon emissions (disregarding climate-impacting gases apart from carbon dioxide) generated by vehicle production (BMW Group plants including the BMW Brilliance Automotive Ltd. joint venture and motorcycle production, but excluding partner plants and contract manufacturing) and by other BMW Group locations not directly
related to production (e.g. research centres, sales centres, office buildings).
1 Due to the broader definition of Scope 1 and Scope 2 emissions generated by BMW Group locations in the year under report and adjustments to the methodology for calculating use-phase emissions, the years 2019 (base year) and 2020 have been adjusted for comparison purposes. For these reasons, a direct comparison with
2017 and 2018 figures is not possible.
2 The emissions listed account for approximately 90% of the BMW Group's total Scope 1 to Scope 3 emissions.
134,849
134,849
130,090
130,090
84,257
84,257
354,095
354,095
302,574
302,574
538,622
538,622
510,911
510,911
Electricity/heat purchased by BMW Group locations 3,4,5,6
Total emission
Scope 2: INDIRECT GREENHOUSE GAS EMISSION
To Our Stakeholders
Combined Management Report
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Corporate Governance
65,100,863
1,322,859
25,2172
129,646
132,520,346
1,570,397
75,042,286
1,570,397
129,646
146,298
136,608
73,093,077
1,563,919
159,039
71,714,741
1,497,075
169,233
140,187
Employees' commuter traffic 3,7
Business trips 6
Logistics4
Total emissions
166,586
SCOPE 3: INDIRECT GREENHOUSE GAS EMISSIONS
2020
2020 old
2019
2019 old
2018
2017
← = Q
Further GRI Information
BMW GROUP CO₂ FOOTPRINT¹
Other Information
Remuneration Report
2021
14.6
5,714,610
6,476,955
86,787
84,166
177,564
192,911
192,911
164,957
164,957
205,320
224,819
508,318
498,299
498,299
425,796
412,451
294,724
258,380
3,517,068
3,206,948
3,093,542
3,117,505
3,005,902
2,669,457
2,624,557
68,560
68,560
65,065
65,065
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
324
4 The decrease was mainly due to the pandemic-related interruption of production at most BMW Group plants.
² Due to an extention in the reporting scope in the year under report, figures from 2019 and 2020 have been adjusted to enable better comparison. Figures for 2017 and 2018 are therefore not directly comparable.
3 Upper calorific value.
1 Energy consumption generated by vehicle production (BMW Group plants including the BMW Brilliance Automotive Ltd. joint venture and motorcycle, excluding partner plants and contract manufacturing)
and by other BMW Group locations not directly related to production (e.g. research centres, sales centres, office buildings).
2,344
2,316
2,316
8,908
1,703
1,091
381
Solar (photovoltaics)
1,211
1,161
56
1,501
68
220
220
67,038
1,703
6,040,824
9,368
7,760
2,513,308
2,588,409
Electricity
TOTAL ENERGY CONSUMPTION BY SOURCE
125,450
1,021,955
114,072
979,887
5,329,550
4,946,865
4,946,865
114,072
653,673
1,001,199
120,583
5,226,227
5,226,227
120,583
627,825
530,3993
394,555
Non-manufacturing areas
89,300
95,493
1,793
5,169,266
5,362,618
Vehicle production
TOTAL ENERGY CONSUMPTION BY SEGMENT
2,439,675
Community heating
408,735
395,609
2,205
2,888
31,882
33,322
1,113
33,688
1,123
1,072
1,095
4,450
Wood pellets
of which CHP losses
3,660
Biogas (landfill gas)
Natural gas
Heating oil
Community cooling
284,763
274,484
266,112
2,453,215
2,320,314
2,154,8994
2,653,855
367,040
358,992
of which CHP losses
0.0
5,417,428
1 Water consumed by automobile production (BMW Group plants, including the BMW Brilliance Automotive Ltd. joint venture, excluding partner plants and contract manufacturing).
Teleworking position³
Thailand 561
7.7
7.0
6.6
5.6
5.2
in % of total number of employees
of which fixed-term 756
5,951
5,568
31,754
5,440
4,572
2021
2020
2019
2018
2017
Part-time workers²
Number of employees
China 2,059
Number of employees
SHARE OF EMPLOYEES PER COUNTRY WITH
PRODUCTION LOCATION(S)
5,000
34,339
36,208
43,309
648
567
Sabbaticals
South Africa 2,894
4.8
6.0
6.6
6.1
5.3
in % of total number of employees"
of which fixed-term 12
3,736
4,747
5,474
5,508
4,690
Number of employees who use "Vollzeit Select"
of which fixed-term 39
India 562
84.3
87.2
70.8
66.1
63.3
in % of total number of employees
41,180
ALTERNATIVE WAYS OF WORKING AT BMW AG1
1 Excluding executives and contractors. 7 GRI 102-41
100
100
85
86
UK
100
100
100
100
100
Germany¹
2021
2020
2019
2018
2017
in %
SHARE OF EMPLOYEES REPRESENTED BY A TRADE UNION OR FALLING UNDER COLLECTIVE AGREEMENTS
Further GRI Information
← = Q
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BMW Group Report 2021
85
764
84
China (plant)
100
Mexico¹
0
0
0
70
63
59
20
0
USA (no collective agreements exist)
62
53
South Africa
100
100
100
100
100
Austria¹
100
100
100
100
100
83
653
464
in % of total number of employees
2,077
Total
33 Thailand
-22 South Africa
15 Austria (incl. sales region Eastern Europe)
- 25 USA
-17 UK
-17 Germany
2021
2020
2019
2018
2017
Number
-7 India
TOTAL NUMBER OF EMPLOYEES LEAVING BMW AG, BY REASON FOR LEAVING¹
in %
SHARE OF WOMEN IN THE WORKFORCE BY
COUNTRY WITH PRODUCTION SITE(S)
↑
Further GRI Information
10.8
7.1
10.6
Tariff
27
2,247
21.1
2,794
3,720
52 China
2 Increase mainly due to a set of personnel measures.
37 Other countries
1 Figures refer to employees with permanent contracts.
33
50
65
60
61
Dismissed by employer
- 31 Mexico
1,749²
2,6012
1,029
873
809
(termination or suspension of employment contract by employee)
- 20 Brazil
Voluntarily left company
1,938
1,884
1,700
1,314
1,207
Part-time retirement, retirement, death
4,535
329
14.1
"Meister"
Austria¹ 3,934
of which fixed-term 426
877 Brazil
4 Statistical population not including apprentices, interns, thesis students working at the company and doctoral candidates.
3 Only workers in administrative positions who engaged in teleworking.
² Of which 3,716 were female (62%). For systemic reasons, this number is only calculated for BMW AG.
For the period 2018 and earlier, the percentage of employees no longer covered by the new definition is between 7.5% and 8.0 %.
1 The term "employee" has been redefined with effect from the reporting year 2020 (for definition, see Glossary).
5.4
5.2
4.9
4.1
3.9
4,211
4,158
4,082
3,675
3,389
in % of total number of employees
Parental leave
0.6
0.8
0.9
0.7
0.6
of which fixed-term 142
(master craftsmen)
USA 12,171
UK 6,475
30.7
14.1
16.7
Non-tariff employees
2021
2020
2019
Employee category
ACADEMY, BY EMPLOYEE CATEGORY
AVERAGE TRAINING HOURS AT THE BMW AG
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of which fixed-term 727
79,647 Germany
of which fixed-term 299
of which fixed-term 0
6,696 Other countries
of which fixed-term 2
3,033 Mexico
1 Including the Eastern Europe sales region.
of which fixed-term 100
of which fixed-term 0
6 Of whom 38.0 % are tariff-bound production employees of the BMW Group
5 Of whom 37.9 % are tariff-bound production employees of the BMW Group
4 Of whom 38.2 % are tariff-bound production employees of the BMW Group
Corporate Governance
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BMW Group Report 2021
327
← = Q
Further GRI Information
1 Efficiency indicator calculated from the waste generated in automobile production (BMW Group plants,
including the BMW Brilliance Automotive Ltd. joint venture, excluding partner plants and contract ma-
nufacturing) divided by the number of vehicles produced (BMW Group plants, including the BMW Brilli-
ance Automotive Ltd. joint venture and partner plants, excluding contract manufacturing).
2021
Remuneration Report
2020
2018
2017
0
2.90
3.33
4.09
|
3.86
4.27
Efficiency indicator calculated from the solvent emissions (VOC) generated in automobile production
(BMW Group plants, including the BMW Brilliance Automotive Ltd. joint venture, excluding partner
plants and contract manufacturing) divided by the number of automobiles produced (BMW Group
plants, including the BMW Brilliance Automotive Ltd. joint venture and partner plants, excluding
contract manufacturing).
2021
2019
2020
Other Information
2018
81
108
153
193
196
313
105
89
Number of audits and assessments conducted by or on behalf of the BMW Group²
Number of supplier locations not awarded contracts because they fail to meet the
BMW Group's sustainability or other requirements¹
0.3
SUSTAINABILITY ASSESSMENT OF RELEVANT SUPPLIER LOCATIONS
64 %
48 %
Number of identified sustainability deficits at potential and existing supplier locations
from an ESG perspective
98%
98 %
95 %
97%
Proportion of audited suppliers of production-related material with a contract volume
greater than € 2 million¹
2021
2020
2019
62 %
Number of existing supplier relationships that had to be terminated prematurely due to
serious sustainability violations
2019
2017
in kg
2021
2020
2019
2018
2017
Total waste
in t
WASTE FOR DISPOSAL PER VEHICLE
PRODUCED¹
WASTE 1
785,209
Further GRI Information
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326
= Q
↑
← = Q
2018
789,817
775,459
0
0.70
0.81
0.85
0.93
1.03
in kg
SOLVENT EMISSIONS PER VEHICLE PRODUCED 1
1 Waste generated by automobile production (BMW Group plants, including the BMW Brilliance Automotive Ltd. joint venture, excluding partner plants and contract manufacturing).
2 Includes both recycling and thermal utilisation.
6,650
780,911
7,168
9,906
9,031
Waste for disposal
822,848
768,292
771,162
779,911
776,179
Materials for recycling 2
829,498
9,749
Number of notifications of potential violations of our sustainability principles received
through our supply chain reporting channels
61 %
1 Basis: Industry-specific sustainability questionnaire.
EMPLOYEES IN GERMANY AND ABROAD¹
1 The term "employee" has been redefined with effect from the reporting year 2020 (for definition, see Glossary).
For the period 2018 and earlier, the percentage of employees no longer covered by the new definition is between 7.5% and 8.0%
2 Around 30,5% of these are women employed at BMW AG. For system-related reasons, this data is only collected for BMW AG.
3 Permanent and fixed-term employees.
6,846
6,433
6,318
6,299
5,553
Employees in part-time employment³
2,503
2,892
Number of employees in thousands
3,489
of which number of notifications that were clarified during the reporting year
97
103
110
119
117
8,466
8,473
8,684
8,860
4,638
8,645
150
134.73
3 Of whom 35.3% are tariff-bound production employees of the BMW Group
² Of whom 35.7% are tariff-bound production employees of the BMW Group
1 The term "employee" has been redefined with effect from the reporting year 2020 (for definition,
see Glossary). For the period 2018 and earlier, the percentage of employees no longer covered by the
new definition is between 7.5 und 8.0 %.
2021
2020
2019
2018
2017
0
30
129.92
in Germany
60
90
90
abroad
Employees
20
120
118.96
120.75
126.04
Employees
3,418
4,685
3,503
Corporate Governance
Remuneration Report
Other Information
← = Q
Further GRI Information
EMPLOYEES AND SOCIETY
EMPLOYEES AT END OF YEAR'
2017
2018
2019
2020
2021
BMW Group
Automotive
Motorcycles
Group Financial Statements
Financial Services
Combined Management Report
BMW Group Report 2021
2 Includes on-site visits and remote audits.
0
0
0
0
9
2
3
9
2
2
8
8
co co
328
To Our Stakeholders
3,474
Other
129,932
3,709
3,506
106,928
108,676
113,719
121,994
117,664
118,909
120,726
126,016
134,682
Employees with fixed-term contract²
1,793
Quantitative
Code
Number
TR-AU-000.A
Number of vehicles sold
Quantitative
Number
TR-AU-000.B
Product Safety
Percentage of vehicle models rated by
NCAP programmes with an overall 5-star
safety rating, by region
Number of safety-related defect
complaints, percentage investigated
Quantitative
- 87% China New Car Assessment Programme (C-NCAP)
― 60 % - U. S. National Highway Traffic Safety Admin-
istration's (NHTSA) New Car Assessment Programme
(NCAP)
- 100% - European New Car Assessment Programme
(Euro NCAP)
*Deliveries including joint venture BMW Brilliance Automotive Ltd., Shenyang
(2017: 385,705 automobiles, 2018: 455,581 automobiles, 2019: 538,612
automobiles, 2020: 602,247 automobiles, 2021: 651,236 automobiles).
194,261 (Motorcycles)
* Production including the joint venture BMW Brilliance Automotive Ltd., Shen-
yang (2017: 396,749 automobiles, 2018: 491,872 automobiles, 2019: 536,509
automobiles, 2020: 602,935 automobiles, 2021: 700,777 automobiles).
2,521,514* (Automobiles)
TR-AU-250a.1
Response Comment
TR-AU-250a.2
Number,
Percentage (%)
Percentage (%)
2,461,269* (Automobiles)
187,500 (Motorcycles)
Code
In its report on NCAP programmes, the BMW Group
focuses on markets in the EU (including the UK), China,
the USA and South Korea. Further information on new
car assessment programmes is provided in the section on
effective safety systems.
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
334
]]
Remuneration Report
At the BMW Group's international plants, strike action
resulted in operational disruptions at the Rosslyn site in
South Africa. Strikes were held on 13 days, spread over
four time-blocks, with the focus primarily on pay rise de-
mands. Lost production was compensated by additional
shifts. The number of employees involved in the strike
action was not recorded by the BMW Group.
Strike action is usually taken to reinforce pay rise
demands.
* Excluding senior management and contractors.
reporting on this accounting metric.
on the aforementioned countries for the purposes of
Based on the availability of data, the BMW Group focuses
Mexico: 100 %
USA: no collective agreements in place
At BMW AG, strike action was taken in 2021 at the Leip-
zig plant. In this case, a series of five 24-hour strikes
was called by IG Metall as part of its campaign to secure
a so-called “equalization allowance" to compensate the
difference in contractual weekly working hours between
the collective bargaining areas in eastern and western
Germany. Due to the fact that the strikes took place
during the semiconductor supply crisis, the impact the
BMW Group cannot be quantified directly. Following
the conclusion of a collective bargaining framework
agreement on the harmonisation of working hours, the
BMW Group entered into corresponding discussions with
the Works Council.
South Africa: 70%
Other Information
Topic
= Q
↑
SASB-Index
TR-AU-410a.2
Number
Quantitative
Number of (1) zero-emission vehicles
(ZEV), (2) hybrid vehicles and (3) plug-in
hybrid vehicles sold
[C
TR-AU-410a.1
Quantitative
Sales-weighted average passenger fleet
fuel economy, by region
Fuel Economy & Use-phase Emissions
Unit of Measure
Unit of Measure
Category
Accounting Metric
Mpg, L/km, gCO₂/km,
km/L
Austria²: 100 %
China (Plant): 100%
BMW Group Report 2021
Accounting Metric
Topic
[C
← = Q
Other Information
Remuneration Report
Corporate Governance
Product Safety
Group Financial Statements
To Our Stakeholders
BMW Group Report 2021
333
^
]]
*The survey period runs from November of the previous year through to November of
the reporting year, as to allow for a processing time after the receipt of complaints.
100 %* of the security-related complaints were
reviewed.
Combined Management Report
Number of vehicles recalled
Category
Quantitative
Unit of Measure
UK: 83%
Germany: 100 %
In reporting year 2021, safety and compliance-relat-
ed technical recall actions took place for 1,920,977
vehicles. These were voluntary and were carried out in
coordination with relevant authorities. The main tech-
nical recall actions related to the exhaust gas recircula-
tion cooler and Takata airbags. For further information
regarding quality management see 7 Product safety as
part of quality management.
Response Comment
SASB-Index
TR-AU-310a.2
Number, Days idle
Quantitative
(1) Number of work stoppages and
(2) total days idle
TR-AU-310a.1
Percentage (%)
Quantitative
Percentage of active workforce covered
under collective bargaining agreements
Labour Practices
TR-AU-250a.3
Number
Code
-66% Korean New Car Assessment Programme (KNCAP)
Category
Quantitative
77.6
Accounting Metric
86.9
87.5
89.8
89.5
Other 7.6
Transport 8.3
Cleaning 1.9
3.1 Driving
USA
Austria
South Africa
87.7
86.3
88.3
89.1
88.3
82.8
85.6
82.3
78.7
79.1
Secondary
Testing 2.8
activities 12.8
87.4
99.8
99.7
99.7
331
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Further GRI Information
SHARE OF LOCAL EMPLOYEES IN MANAGEMENT POSITIONS AT MAJOR COMPANY LOCATIONS 1
MAIN ACCIDENT FACTORS¹
in %
2017
2018
2019
2020
2021
6.7 Processing
Germany
UK
99.4
99.5
- 23.9 Walking
Number of vehicles manufactured
83.0
82.7
60.0
1 The accident severity rate in the reporting year was 66.1 lost days (due to occupational accidents)
per 1 million hours worked (2020: 53.4).
Mexico 3
48.4
62.9
67.8
1 "Local" refers to managers with local contracts. People deployed to work at the location who do not have a local employment contract are not included.
These are reflected in the difference to 100 in each case.
2 Including employees of the joint venture BMW Brilliance Automotive Ltd., Shenyang, which is not consolidated in the BMW Group.
3 Start of production 06/2019.
SASB-Index
57.8
332
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
SASB-INDEX
[C
Topic
Activity Metric
BMW Group Report 2021
57.1
56.8
56.8
85.9
85.4
Assembly/
dismantling 16.3
India
70.0
74.4
82.1
68.4
78.4
16.6 Handling
parts
Brazil
76.1
Response Comment
78.2
84.9
85.1
China2
76.5
76.7
73.7
78.8
82.2
Thailand
82.8
Global carbon emissions of the new vehicle fleet,
including emissions generated by upstream supply chain
(normalised based on WLTP):
C. Integrating processes for identifying,
assessing and managing climate-related
risks within the Group's general risk
management system
EU (WLTP): 115.9 g CO2/km²,3
* Reducing Carbon Emissions in the Supply Chain
Outlook, Risk and Opportunity Management
7 Climate-Related Opportunities and Risks
BMW Group Integrated Strategy
Strategy Process
CDP questionnaire 2021
C2.1, C2.3, C2.3a, C2.4, C2.4a, C 2.2a
C2.3, C2.3a, C 2.4, C2.4a, C3.1, C3.3
C 3.1, C3.1a
]]
>
7 Carbon Emissions at BMW Group Locations
TCFD-Index
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
[C
Risk Management
339
Production, Purchasing and Supplier Network
- Electric Mobility
7 Carbon Emissions and Pollutants
338
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
[C
Strategy
A. Climate-related risks and
opportunities
B. The impact of climate-related risks and
opportunities on the Group's business
activities and its strategic and financial
corporate planning
C. Resilience of the BMW Group's
strategy
BMW Group Report 2021
Outlook, Risk and Opportunity Management
7 Climate-Related Opportunities and Risks
BMW Group Integrated Strategy
7 Environmental Analysis and Megatrends
Strategy Process
Outlook, Risk and Opportunity Management
― Climate-Related Opportunities and Risks
BMW Group Integrated Strategy
7 Environmental Analysis and Megatrends
7 Climate change and CO₂ reduction
7 Strategy Process
Products and Mobility Solutions
A. Group processes for identifying and
assessing climate-related risks
TCFD-Index
B. Group processes for managing
climate-related risks
C4.1, C4.1b, C4.2
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
340
>
]]
← = Q
C2.2
C2.2, C2.2a, C 2.1
CDP questionnaire 2021
7 Climate-Related Opportunities and Risks
Outlook, Risk and Opportunity Management
7 Organisation of Risk Management
7 Environmental Analysis and Megatrends
Strategy Process
7 Environmental Analysis and Megatrends
Outlook, Risk and Opportunity Management
7 Organisation of Risk Management
7 Climate-Related Opportunities and Risks
BMW Group Integrated Strategy
BMW Group Integrated Strategy
7 Climate-Related Opportunities and Risks
Outlook, Risk and Opportunity Management
7 Organisation of Risk Management
197.9 g CO2/km¹
C 2.2, C2.2a
TCFD-Index
(C
Key Sustainability Indicators and Targets
C6.1, C6.3, C6.5
CDP questionnaire 2021
C4.2
7 Circular Economy, Resource Efficiency and Renewable Energy
Production, Purchasing and Supplier Network
7 Carbon Emissions and Pollutants
Products and Mobility Solutions
7 Performance Indicators
Strategy Process
BMW Group Integrated Strategy
Other GRI Information (Table BMW Group CO₂ Footprint)
Production, Purchasing and Supplier Network
7 Carbon Emissions and Pollutants
Products and Mobility Solutions
7 Performance Indicators
BMW Group Integrated Strategy
Other GRI Information (Table BMW Group CO₂ Footprint)
7 Performance Indicators
7 Dashboard
BMW Group Integrated Strategy
C. Targets according to which the Group
addresses climate-related opportunities
and risks
B. Disclosure of Scope 1, Scope 2 and
Scope 3 greenhouse gas (GHG) emissions
A. Key sustainability indicators the Group
uses to assess climate-related risks and
opportunities
BMW Group Report 2021
]]
>
― Circular Economy, Resource Efficiency and Renewable Energy
C 1.2, C 1.2a
Material Sourcing
Description of the management of
Discussion and Analysis
n/a
TR-AU-440a.1
risks associated with the use of critical
materials
SASB-Index
↑
= Q
Response Comment
Discussion of strategy for managing fleet Discussion and Analysis n/a
fuel economy, and emissions risks and
opportunities
In line with its corporate strategy, the BMW Group is
pursuing a clear course of decarbonisation. Against a
backdrop of increasing electrification, it is particularly
important to consider carbon emissions over the entire
life cycle of a vehicle. In this context, the BMW Group
has set itself decarbonisation targets by 2030 (base
year 2019) during the use phase, in the upstream supply
chain and in production. These targets were notified
to the SBTI and validated (Decarbonisation targets across
the value chain). The BMW Group is also taking measures
to mitigate and adapt to climate change. It is there-
fore imperative to identify climate-related risks and
opportunities and to take appropriate account of them
in determining the strategic direction to be followed,
managing the business and organising a Group-wide
risk management system. For further information, see
7 Climate-related opportunities and risks.
]]>>>
336
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
The BMW Group also has a set of rigorous measures in
place to reduce pollutant emissions generated by its ve-
hicles, such as nitrogen oxides (NOx), carbon monoxide
(CO) and particulate matter (PM) (pollutant emissions).
In order to meet the respective due diligence require-
ments in terms of environmental and social standards,
we rely on systematic risk analyses as well as preven-
tion, empowerment and remediation measures. Moreover,
the BMW Group enshrines its obligatory sustainability
standards in all its supply contracts. Sourcing the raw
materials required to produce battery cells, such as
lithium and cobalt, is generally a highly challenging task.
In order to establish traceability and transparency across
the supply chain for both of these raw materials and to
minimise the identified risks, the BMW Group sources
them directly from the producers and makes them avail-
able to its own suppliers in order to produce the current
generation of battery cells. Detailed information on the
approach taken by the BMW Group is provided in the
section Taking ecological and social responsibility.
Close cooperation with our suppliers in a spirit of part-
nership was one of the factors that enabled us, for ex-
ample, to cushion the effects of the global semiconductor
shortage to a large extent. In order to secure long-term
supplies in this area, the BMW Group concluded a direct
agreement with semiconductor suppliers for the first
time at the end of 2021. The agreement enables the
BMW Group to secure the supply of several million semi-
conductors per year. Global network and local procurement
TR-AU-410a.3
Code
Unit of Measure
USA (USC): 140.9 g CO2/km (volume-weighted fleet car-
bon emissions, based on passenger cars and light trucks)
CN (WLTC): 163.0 g CO2/km²
]]
The BMW Group focuses on the core markets of Europe,
China, and the USA, which account for more than 80 %
of BMW Group sales. Further information is provided the
sections Decarbonisation during the use phase meets legal re-
quirements and Fleet emissions in the USA, China and worldwide.
1The figures are determined using a new calculation method, which was
applied retroactively back to the year 2019 (2019 before adjustment:
140 g/km; 2020 before adjustment: 133 g/km). For definition, see
7 Glossary: Carbon emissions of the new vehicle fleet worldwide, including
upstream emissions.
2 This is a preliminary internal calculation with a potential variation of +/-
0.5 g CO2/km, as official registration figures have not been provided by the
authorities of all EU states. Official values published by the EU Commission
are not expected to be made available until the following year.
3 Flexibilities defined in the regulatory requirements for 2021: eco-innovations
at 1.7 g CO2/km (WLTP).
"Average volume-weighted fleet emissions including regulatory credit
factors of 8.83 g CO₂/ km (off cycle technologies, NEV multiplier, phase-in)
according to WLTC (Worldwide Harmonized Test Cycle) under China-specific
test road conditions.
(1) Emission free vehicles (BEV): 103,854*
(2) The BMW Group portfolio includes BEVs (1) and
PHEVS (2). Based on BMW Group definitions, 48V
vehicles are not classified as hybrid vehicles see
7 Electrified vehicles.
(3) Plug-in hybrid electric vehicles (PHEV): 224,460*
*Including the joint venture BMW Brilliance Automotive Ltd., Shenyang
]]
^
335
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
[C
Topic
Accounting Metric
Category
Topic
Materials Efficiency & Recycling
Fuel Economy & Use-phase Emissions
Category
Other Information
← = Q
TCFD-INDEX
[c
Governance
A. Responsibility of the Board of
Management for climate-related risks
and opportunities
B. The role of management in assessing
and managing climate-related risks and
opportunities
BMW Group Report 2021
Outlook, Risk and Opportunity Management
7 Organisation of Risk Management
7 Climate-Related Opportunities and Risks
C1.1a, C 1.1b
7 Performance Indicators
- Performance Management
7 Corporate Governance
Outlook, Risk and Opportunity Management
7 Organisation of Risk Management
7 Climate-Related Opportunities and Risks
BMW Group Integrated Strategy
7 Strategy Process
7 Performance Indicators
Accounting Metric
CDP questionnaire 2021
Remuneration Report
Corporate Governance
BMW Group Integrated Strategy
Strategy Process
TR-AU-440b.1
Quantitative
Group Financial Statements
Weight of end-of-life material recovered,
percentage recycled
Quantitative
Unit of Measure
Metric tons (t),
percentage (%)
Metric tons (t),
percentage (%)
Code
TR-AU-440b.2
Average recyclability of vehicles sold
Quantitative
Percentage (%) by sales-
weighted metric tons (t)
TR-AU-440b.3
Total amount of waste from manufactur-
ing, percentage recycled
Response Comment
To Our Stakeholders
SASB-Index
BMW Group Report 2021
Combined Management Report
TCFD-Index
337
The BMW Group not only wants to make vehicle more
recyclable, it is also looking to reduce the use of primary
raw materials in the automotive value chain and increase
the proportion of secondary raw materials. Circularity
as a strategic priority.
All BMW Group vehicles sold since 2008 meet the
currently applicable worldwide requirements for the
recycling of end-of-life vehicles, components and mate-
rials. Vehicles are already currently required to be 95%
recyclable (based on vehicle weight). Together with its
national sales organisations, the BMW Group has already
introduced take-back systems for end-of-life vehicles
in 30 countries and offers eco-friendly vehicle recycling
at more than 2,800 take-back points. From product
development to recycling.
At the Recycling and Dismantling Centre in Munich,
8,543 vehicles (including motorcycles) were taken back
and recycled during the reporting year. This is equivalent
to a total vehicle scrap weight of 12,799 t. In relation to
the entire vehicle, at least 85% of materials are recycled
and, including thermal utilisation, at least 95% as
stipulated by legal requirements (European End-of-Life
Vehicles Directive ELV 2000/53/EC).
Total amount of waste: 829,498 t.; 93.4 % of this was
recycled and 5.8 % thermally utilised.
%
Return on sales (earnings before tax revenues)
7,803
5.3
14.4
7,893
10,675
9,224
9,665
9,627
5,222
6.8
7,118
8,707
2,828
1,365
10.9
10.3
10.0
10.8
10.4
10.2
Income taxes
€ million
3,597
2,140
2,530
2,000
2,890
2,755
9.9
16,060
19.8
Earnings before tax
94,163
98,282
2,564
92,175
80,401
76,059
76,848
Gross profit margin
Earnings before financial result
%
13.7
17.3
19.0
20.3
€ million
19.9
21.2
20.1
20.2
€ million
13,400
4,830
7,411
8,933
9,899
9,386
9,593
9,118
7,978
8,275
19.7
2,692
Non-current assets
%
Other Information
← = Q
BMW Group Ten-year Comparison
2021
2020
2019
20181
2017
2016
2015
2014
2013
2012
BALANCE SHEET
Remuneration Report
Current assets
€ million
143,354
86,173
134,851
81,807
90,630
137,404 124,202
84,736
121,964
73,542
121,671
110,343
97,959
86,193
81,305
66,864
96,855
61,831
€ million
Effective tax rate
Corporate Governance
Combined Management Report
22.4
26.1
30.1
26.3
18.7
28.5
30.7
33.2
32.5
34.5
Net profit for the year
€ million
12,463
3,857
Group Financial Statements
5,022
8,675
6,910
6,396
5,817
5,329
5,111
1 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, note 6 to the Group Financial Statements).
In addition, prior year figures were adjusted due to changes in the presentation of selected items that are of minor importance overall.
² Retail vehicle delivery data presented for 2020 and 2021 is not directly comparable to such data presented for previous years. For further information on retail vehicle delivery data, please see Comparison of Forecasts with Actual Outcomes.
3 Excluding Husqvarna, deliveries up to 2013: 59,776 units; production up to 2013: 59,426 units.
"Since the reporting year 2020, a new definition for workforce size has been applied ( Glossary). To enable better comparability, the value for 2019 was adjusted accordingly (2019 before adjustment: 133,778 employees).
For the timeframe including and prior to 2018, the share of the employees that are no longer reflected in reporting is about 7.5-8 %.
5 Proposal by management.
345
BMW Group Report 2021
To Our Stakeholders
7,064
104,210
24.5-21.9
111,239
49-41
18.9 17.9
48-55
2.2 -2.1
BMW 745Le xDrive
2.5 2.1
57-47
20.1 18.8
45-52
2.6-2.5
51-47
59-56
16.9-16.6
17.8-17.5
BMW 745Le
2.2 1.8
2.1 1.8
50-42
47-54
2.2-2.2
51-49
17.1 -16.5
MINI
MINI Cooper SE
17.6 -15.2
MINI Cooper S Countryman ALL4
7.5-6.9
170-158
MINI Cooper SE Countryman ALL4
2.1 1.7
47-39
15.9 14.8
19.1 - 18.1
ROLLS-ROYCE
BMW 745e
23.0 19.8
56,844
BMW 545e xDrive
2.2-1.6
51-37
19.2-17.2
47-57
2.3-2.2
53-49
16.3-15.8
BMW X5M
BMW X5 xDrive45e
13.6-13.3
1.7 1.2
307-303
550 - 631
502-561
13.3
BMW X6M
13.4 13.1
39-27
305-299
27.7 24.3
77-88
2.1-1.6
13.1
47-37
301
25.2-23.5
BMW iX xDrive40
BMW iX xDrive50
BMW iX M60
22.5 19.3
372-425
303
Rolls-Royce Black Badge Ghost
15.8
359
PRODUCTION VOLUME
Automobiles
Motorcycles 3
FINANCIAL SERVICES
Contract portfolio
Business volume (based on balance sheet carrying amounts)
INCOME STATEMENT
2021
2020
2019
20181
2017
2016
2015
Motorcycles 3
2014
2012
units
units
2,521,514 2,325,179 2,537,504
194,261 169,272 175,162
2,486,149 2,465,021
165,566 164,153
2,349,962 2,259,733 2,117,965 1,963,798 1,845,186
145,032 136,963 123,495 115,215 106,358
units 2,461,269 2,255,637 2,564,025 2,541,534
units 187,500 168,104 187,116 162,687
2,505,741 2,359,756 2,279,503 2,165,566 2,006,366
185,682 145,555 151,004 133,615 110,127
1,861,826
113,811
€ million
contracts 5,859,890 5,981,928
139,530 133,093
5,973,682 5,708,032
142,834 133,147
5,380,785 5,114,906 4,718,970 4,359,572 4,130,002 3,846,364
124,719 123,394 111,191 96,390 84,347 80,974
Revenues
€ million
2013
Automobiles 2
DELIVERIES
BMW GROUP TEN-YEAR COMPARISON
Rolls-Royce Cullinan
16.5 16.1
377-368
Rolls-Royce Wraith
16.3 -15.8
369-357
Rolls-Royce Dawn
16.9-16.2
381-367
* Figures are preliminary and rely on an outlook based on the WLTP type test procedure.
16.9-14.9
6.5-6.2
2.1-1.9
149-142
48-44
14.8 14.1
15.8
15.2
359
348
BMW Group Ten-year Comparison
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
98,990
Combined Management Report
BMW Group Report 2021
344
372 - 367
16.3-16.1
365-363
16.0-15.9
To Our Stakeholders
52,184
1,253
Capital expenditure (excluding capitalised development costs)
BMW Group Report 2021
341
1 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, note 6 to the Group Financial Statements).
In addition, prior year figures were adjusted due to changes in the presentation of selected items that are of minor importance overall.
2 Retail vehicle delivery data presented for 2020 and 2021 is not directly comparable to such data presented for previous years. For further information on retail vehicle delivery data, please see Comparison of Forecasts with Actual Outcomes.
3 Excluding Husqvarna, deliveries up to 2013: 59,776 units; production up to 2013: 59,426 units.
"Since the reporting year 2020, a new definition for workforce size has been applied ( Glossary). To enable better comparability, the value for 2019 was adjusted accordingly (2019 before adjustment: 133,778 employees).
For the timeframe including and prior to 2018, the share of the employees that are no longer reflected in reporting is about 7.5-8 %.
5 Proposal by management.
346
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
To Our Stakeholders
← = Q
Combined Management Report
Corporate Governance
Mandatory disclosure requirement according to Art. 8 of the
Combatting corruption and bribery
Respect for human rights
Social matters
Employee matters
Environmental matters
Connection to figures in financial statements
Risks
Integration of top management
Business model
Mandatory disclosure pursuant to section 289 c - e HGB
NFS-INDEX
← = Q
Other Information
Remuneration Report
Group Financial Statements
EU Taxonomy Regulation*
Glossary and Explanation of Key Figures
EXPLANATION OF KEY FIGURES
Carbon emissions of the new vehicle fleet worldwide,
including upstream emissions
This indicator documents the progress made by the
BMW Group in its strategic objective of reducing carbon
emissions during the utilisation phase including upstream
emissions (drivetrain energy supply) by an average rate of
more than 50% per kilometre driven by 2030 (base year
2019). For the purpose of this calculation, the volume-weight-
ed average fleet carbon emissions are calculated for the core
markets EU (27 EU countries incl. Norway and Iceland; plus
UK) (driving cycle: Worldwide Harmonized Light Vehicles
Test Procedure; basis: production volume), USA (driving cy-
cle: United States Combined; basis: production volume) and
China (driving cycle: Worldwide Harmonized Test Cycle, sub-
ject to China-specific framework conditions for testing; ba-
sis: import volumes/local production volumes; incl. joint
venture BMW Brilliance Automotive Ltd.) before deduction of
legally permitted offsetting factors (e.g. supercredits and
eco-innovations) and then standardised according to the
WLTP (European) driving cycle. These core markets account
for more than 80% of the BMW Group's sales. The calculat-
347
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
Glossary and Explanation of Key Figures
← = Q
ed figures are increased by 10% to account for possible dis-
crepancies between cycle values and real emissions, as re-
quired by the Science Based Targets Initiative. This indicator
also includes the upstream emissions for the respective en-
ergy sources (fossil fuels and electricity used for charging), in
line with the well-to-wheel approach. This covers the entire
causal chain behind vehicle motion, i. e. from the generation
and supply of power to its conversion into drivetrain energy.
This approach also includes the environmental impacts as-
sociated with the supply of energy. For example, to calculate
the volume of emissions resulting from upstream electricity
(drivetrain energy supply), the BMW Group uses the energy
report published by the International Energy Agency (IEA) as
a basis in order to assess the emissions associated with the
electricity mix in its core markets.
Cash flow
Liquid funds generated (cash inflows) or used (cash out-
flows) during a reporting period.
porting period. New registrations for these purposes com-
prise all newly registered vehicles of a given manufacturer in
the EU, including Norway and Iceland, during the calendar
year, plus any individual vehicle-specific carbon emissions
determined in accordance with the WLTP type test proce-
dure. The BMW Group's fleet carbon emissions figure for
2021, as measured internally, includes legally permitted off-
setting of eco-innovations.
GLOSSARY AND
Carbon emissions of the new vehicle fleet in the EU
The average carbon emissions of a manufacturer's fleet are
calculated on the basis of the weighted average of carbon
emissions across all vehicles newly registered during the re-
Capitalisation rate
A
Apprentices
The number of people on multi-year vocational training
courses at a BMW Group company (includes all of the con-
solidated and non-consolidated companies in which the
BMW Group holds more than 50% of the shares), with these
training courses consisting of practical and theory sections.
Asset-backed financing transactions
A form of corporate financing involving the sale of receiva-
bles to a financing company.
B
BMW Group employees
Since 2020, all people with active temporary or permanent
employment contracts (as of 31 December in the year in
question) with the BMW Group (includes all of the consoli-
dated and non-consolidated companies in which the
BMW Group holds more than 50% of the shares) have been
considered employees of the BMW Group. This excludes ap-
prentices, interns, temporary staff (working students), tem-
porary employees, dormant/inactive employment contracts
due to maternity leave, sabbaticals, parental leave, long-
term illness (as defined in the country in question), those in
inactive early retirement phase, and employees accompany-
ing their partner abroad. Up to 2019, temporary staff, post-
graduate students, interns, apprentices, and people on ex-
tended sick leave or on sabbatical were also included in this
definition.
Bond
A securitised debt instrument in which the issuer certifies its
obligation to repay the nominal amount at the end of a fixed
term and to pay a fixed or variable rate of interest.
Business volume in balance sheet terms
The sum of the balance sheet line items "Leased products"
and "Receivables from sales financing" (current and non-cur-
rent), as reported in the balance sheet for the Financial Ser-
vices segment.
C
Capital expenditure ratio
Capitalised development costs as a percentage of research
and development expenditure.
Revenues that are taxonomy eligible
Capital expenditures that are taxonomy eligible
Operational expenditures that are taxonomy eligible
Electricity power
CO2 emissions
in g/km
(combined/weighted
combined) max/min
Fuel consumption
in l/100km
(combined weighted
combined) max/min
As of February 2022
official figures are only based on WLTP. In the vehicles, different figures
than those published here may apply for the assessment of taxes and
other vehicle-related duties which are also based on CO2 emissions. For
further details of the official fuel consumption figures and official spe-
cific CO2 emissions of new cars, please refer to the "Manual on fuel con-
sumption, CO₂ emissions and power consumption of new cars", available
at www.dat.de/co2
The figures for fuel consumption, CO₂ emissions and power consumption
are calculated based on the measurement methods stipulated in the cur-
rent version of Regulation (EU) 715/2007. This information is based on a
vehicle with basic equipment in Germany; ranges take into account differ-
ences in wheel and tyre size selected as well as optional equipment and can
change based on configuration. The figures have been calculated based on
the new WLTP test cycle and adapted to NEDC for comparison purposes.
For vehicles that were newly type approved on or after January 1, 2021,
FIGURES FOR FUEL CONSUMPTION, CO2-EMISSIONS AND POWER CONSUMPTION
CONSUMPTION AND
CARBON DISCLOSURES
Consumption and Carbon Disclosures
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
consumption
To Our Stakeholders
in kWh/100 km
(combined/weighted
combined) max/min
Electric range
(combined weighted
combined)
2.1-1.9
47-52
15.7-15.0
44-39
2.1 1.7
BMW 230e xDrive Active Tourer (preliminary figures)
BMW 225xe Active Tourer (model year 2021)
BMW X1 xDrive25e
BMW
Model
combined) max/min
in kWh/100 km
(combined/weighted
Figures according to NEDC
Electricity power
consumption
CO2 emissions
in g/km
(combined weighted
combined) max/min
Fuel consumption
in l/100km
(combined weighted
combined) max/min
Figures according to WLTP
BMW Group Report 2021
342
50,530
7 Performance Indicators
7 Environmental Analysis and Megatrends
7 BMW Group Integrated Strategy
7 Employer Attractiveness and Employee Development
7 Compliance and Human Rights
About this Report
Risk and Opportunity Management
7 Environmental Analysis and Megatrends
7 Managing sustainability
7 Performance Indicators
7 Strategy Process
7 BMW Group Integrated Strategy
7 BMW Group Integrated Strategy
7 Business Model and Segments
BMW Group Report 2021
7 Products and Mobility Solutions
Production, Purchasing and Supplier Network
7 BMW Group Integrated Strategy
-
NFS-Index
7 EU Taxonomy
7 Compliance and Human Rights
7 Purchasing and Supplier Network
7 Compliance and Human Rights
7 Corporate Citizenship
7 Purchasing and Supplier Network
Cash flow at risk
7 Product Safety and Data Protection
7 BMW Group Integrated Strategy
7 Diversity
7 Health and Performance
7 Employer Attractiveness and Employee Development
7 Employees and Society
7 Performance indicators
How does the BMW Group ensure cooperation?
7 Environmental Analysis and Megatrends
Similar to "value at risk” (see definition below).
Cash flow hedge
Hedges against exposures to the variability in forecasted
cash flows, particularly in connection with exchange rate
fluctuations.
Payout ratio
Ratio of unappropriated profit of BMW AG in accordance with
HGB to net profit for the year of the BMW Group in accord-
ance with IFRS.
People on extended sick leave
The number of people with active employment contracts
who are absent from work on grounds of illness for an ex-
tended period of time (as defined in the country in question
- in Germany, this means an absence of more than 42 calen-
dar days with a given illness).
Post-tax return on sales
Group net profit as a percentage of Group revenues.
Pre-tax return on sales
Group profit loss before tax as a percentage of Group reve-
nues.
R
Research and development expenditure
The sum of research and non-capitalised development cost
and capitalised development cost (not including the associ-
ated scheduled amortisation).
Research and development expenditure ratio
Research and development expenditure as a percentage of
Group revenues.
Research and development locations
The engineering, IT and process expertise required for the
(pre-)development of hardware and software for all
BMW Group products and services is combined at the
Group's international research and development locations.
The number of employees (see definition of "Employees”),
distinguishing between employees who have contractually
stipulated weekly working hours as prescribed by law, in a
collective wage agreement or by the company in question
(full time) and employees with a contractually stipulated re-
duction in their number of weekly working hours, which are
thus less than the respective number of full-time working
hours (part time).
350
>= 10.0 %-pts.
Part time, full time
← = Q
education worldwide. This data is collected by directly regis-
tering participants and, to a lesser extent, via qualified ex-
trapolation. It comprises the overall number of participants
on training and qualification courses, including e-learning
courses.
0
Offsetting
This entails compensating for carbon emissions which can-
not be avoided by reducing emissions elsewhere (avoid-
ance) or else by absorbing them by means of so-called car-
bon sinks (carbon removals). In its activities, the BMW Group
stresses the avoidance of carbon emissions over compensa-
tion. Unavoidable carbon emissions are neutralised in ac-
counting terms by means of offsetting. Offsetting involves
purchasing certificates on the voluntary carbon market and
thus goes beyond the carbon offsetting approach which is
implemented via the European Union Emissions Trading
System (ETS). Criteria such as additionality, permanence,
additional social benefits (e.g. will the avoidance of open
fires in enclosed spaces provide health benefits), certifica-
tion, transparency and the avoidance of double counting
contribute to the quality of the certificates used and thus to
the effectiveness of offsetting.
Outlook
The BMW Group uses the following terminology and ranges
when forecasting key performance indicators:
At previous year's level
Slight increase
Slight decrease
Solid increase
Moderate decrease
Significant increase
Significant decrease
[-0.9% +0.9%]
[+1.0% / +4.9%]
[-1.0% / -4.9%]
[+5.0% / +9.9%]
[-5.0% / 9.9%]
>10.0%
>=-10.0%
Unlike the other key performance indicators, the RoCE fore-
cast for the Automotive and Motorcycles segments is based
on the change in percentage points:
P
At previous year's level
Slight increase
Slight decrease
Solid increase
Moderate decrease
Significant increase
Significant decrease
[-0.9%-pts. / +0.9%-pts.]
[+1.0%-pts. / +4.9%-pts.]
[-1.0%-pts. / -4.9 %-pts.]
[+5.0%-pts. / +9.9 %-pts.]
[-5.0%-pts. - 9.9 %-pts.]
>= 10.0%-pts.
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
T
Temporary employee
The number of people employed by the BMW Group (in-
cludes all of the consolidated and non-consolidated compa-
nies in which the BMW Group holds more than 50% of the
shares) whom the BMW Group has actively hired from a
temporary employment agency as temporary employees.
Temporary staff/working students
The number of people employed on an hourly basis as tem-
porary staff at a BMW Group company (includes all of the
consolidated and non-consolidated companies in which the
BMW Group holds more than 50% of the shares) while stud-
ying for a degree.
Training and further education
Expenditure for training comprises all costs incurred in the
year under report for vocational training within the
BMW Group in a total of seven countries, including personnel
costs for trainers and apprentices as well as other costs and
investments related to vocational training.
The number of apprentices undergoing training within the
BMW Group includes those employed at domestic and inter-
national plants in a total of seven countries as well as those
working in corporate functions, at Group plants in Germany
and international sales companies as well as in the Financial
Services segment.
Expenditure for further education includes all costs incurred
by the BMW Group's consolidated companies in connection
with ongoing and advanced training. This includes prepara-
tion and implementation costs, opportunity costs and in-
vestments made in order to provide such training. Costs also
include notional depreciation, measured on the basis of as-
set inventory lists.
V
Value at risk
A measure of the potential maximum loss in value of an item
during a set time period, based on a specified probability.
W
Working hours/working times
Contractually stipulated weekly hours of work.
Scope 1 emissions are generated within a company through
the combustion of fossil fuels, Scope 2 refers to the indirect
emissions caused by the consumption of electricity and heat
from externally generated sources of energy. Scope 3 emis-
sions are generated in the upstream and downstream stag-
es of the value chain, both in the supply chain (upstream]
and in the subsequent use of products and services (down-
stream).
The carbon emissions generated by a company are recorded
in various categories. The Greenhouse Gas Protocol, a part-
nership between the World Resources Institute (WRI) and
the World Business Council for Sustainable Development
(WBCSD), distinguishes between Scope 1, Scope 2 and
Scope 3 emissions, based on their various sources. Whereas
Scope 1 to Scope 3 carbon emissions
The number of people with active employment contracts
who are absent from work for at least one month and for not
more than six months due to an employee-funded leave of
absence ("sabbatical").
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
Glossary and Explanation of Key Figures
← = Q
Return on capital employed (ROCE)
Glossary and Explanation of Key Figures
-
Return on equity (ROE)
-
RoE in the Financial Services segment is calculated as seg-
ment profit before taxes, divided by the average amount of
-
equity capital at the end of the last five quarters - attribut-
able to the Financial Services segment.
S
Sabbatical
ROCE in the Automotive and Motorcycles segments is meas-
ured on the basis of relevant segment profit before financial
result and the average amount of capital employed
at the
end of the last five quarters in the segment concerned.
Capital employed corresponds to the sum of all current and
non-current operational assets, less liabilities that generally
do not incur interest.
48-43
Other Information
Corporate Governance
Effective tax rate
The effective tax rate is calculated by dividing the income tax
expense by the Group profit before tax.
Electrified vehicles
The BMW Group uses the terms Battery Electric Vehicle
(BEV) to denote fully electric vehicles and Plug-in Hybrid Ve-
hicle (PHEV) to denote vehicles that can be charged and
also driven on a fully electric basis.
Consolidation
The process of combining separate financial statements of
Group entities into Group Financial Statements, depicting
348
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
Glossary and Explanation of Key Figures
EBIT plus financial result.
← = Q
EBT
Profit loss before financial result as a percentage of reve-
Commercial paper
Short-term debt instruments with a term of less than one
year which are usually issued at a discount to their face val-
ue.
the financial position, net assets and results of operations of
the Group as a single economic entity.
Credit default swap (CDS)
Financial swap agreements, under which creditors of securi-
ties (usually bonds) pay premiums to the seller of the CDS to
hedge against the risk that the issuer of the bond will default.
As with credit default insurance agreements, the party re-
ceiving the premiums gives a commitment to compensate
the bond creditor in the event of default.
D
Deliveries
A new or used vehicle will be recorded as a delivery once
handed over to the end user. End users also include lease-
holders under lease contracts with BMW Financial Services
and in the US and Canada - dealers when they designate
a vehicle as a service loaner or demonstrator vehicle. In the
case of used vehicles, end users may include dealers and
other third parties when they purchase a vehicle at auction or
directly from the BMW Group. Vehicles designated for the
end user and suffering total loss in transit will also be record-
ed as deliveries. Deliveries may be made by BMW AG, one of
its international subsidiaries, a BMW Group retail outlet, or
independent dealers. The vast majority of deliveries - and
hence the reporting to BMW Group of deliveries - are made
by independent dealers. In the US and Canada, the period
start and end dates for the reporting of deliveries may imma-
terially deviate from the beginning and, respectively, end of
calendar years or calendar quarters and instead follow in-
dustry-standard reporting calendars.
E
Earnings per share (EPS)
Basic earnings per share are calculated for common and
preferred stock by dividing the net profit after minority inter-
ests, as attributable to each category of stock, by the aver-
age number of shares in circulation. Earnings per share of
preferred stock are computed on the basis of the number of
preferred stock shares entitled to receive a dividend in each
of the relevant financial years.
EBIT
Abbreviation for "Earnings Before Interest and Taxes", equiv-
alent in the BMW Group income statement to "Profit / loss
before financial result". This is comprised of revenues less
cost of sales, selling and administrative expenses and the
net amount of other operating income and expenses.
EBIT margin
nues.
Employees
The number of employees includes BMW AG and all compa-
nies in which it holds a majority interest, irrespective of
whether they are consolidated in the Group Financial State-
ments. The figure does not include employees in dormant
employment relationships, those in the non-work phase of
partial retirement working arrangements and low-wage
earners. With effect from the financial year 2020, the defini-
tion also includes employees with permanent and fixed-term
contracts. Up to 2019, it also included temporary staff, post-
graduate students, interns, apprentices, those on extended
sick leave and sabbaticals.
Employees in the non-work phase of partial retirement
working arrangements
Liquidity
Cash and cash equivalents as well as marketable securities
and investment funds.
M
Management positions
Management positions are positions at functional levels I to
IV below the Board of Management level.
Maternity protection, parental leave
The number of people with active employment contracts
who are absent from work, as permitted by law, before and
after the birth of a child (maternity protection) or due to par-
enthood, as provided for by law in the country in question
(parental leave).
N
Number of training participants
The number of employees of the BMW Group (includes all
consolidated and non-consolidated companies in which the
BMW Group is the sole shareholder) participating in further
349
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
L
The number of people obtaining voluntary or mandatory
work experience at a BMW Group company (includes all of
the consolidated and non-consolidated companies in which
the BMW Group holds more than 50% of the shares) while
studying for a degree.
Interns
I
The number of people with temporary or permanent employ-
ment contracts who have opted for retirement via partial re-
tirement working arrangements and who are in the non-ac-
tive phase of this model (i. e. the second part, following the
active phase in this model).
Equity ratio
Equity capital as a percentage of the balance sheet total.
Expenditure on training and further education
Expenditure on training comprises all costs incurred in the
reporting year for vocational training within the consolidated
and non-consolidated, wholly owned subsidiaries of the
BMW Group, including personnel costs for trainers and ap-
prentices as well as other costs and investments related to
vocational training. The volume of expenditure for further ed-
ucation is calculated for all consolidated and non-consoli-
dated wholly owned subsidiaries of the BMW Group. This
includes preparation and implementation costs, opportunity
costs and investments made in order to provide such further
education. These costs also include notional depreciation,
measured on the basis of inventory lists.
F
Fair value
The amount at the measurement date for which an asset
could be exchanged, or a liability settled, between knowl-
edgeable, willing parties in an arm's length transaction.
Remuneration Report
Fair value hedge
Free cash flow
Free cash flow is derived from cash flows from operating and
investing activities. The cash flows from investing activities
from the purchase and sale of marketable securities and in-
vestment funds is not included. Cash flows from the pur-
chase and sale of shares and the dividend payout from in-
vestments accounted for using the equity method are
included in the cash flows from investing activities.
G
Goodwill
Goodwill corresponds to the consideration paid to acquire an
entity, less the fair value of the separate assets acquired and
liabilities assumed. The buyer is willing to pay the additional
amount in return for future expected earnings.
Gross profit margin
Gross profit as a percentage of Group revenues.
A hedge against exposures to fluctuations in the fair value of
a balance sheet item.
1.7-1.5
* Regulation (EU) 2020/852 of the European Parliament and of the Council of 18
June 2020 on the establishment of a framework to facilitate sustainable invest-
ment, and amending Regulation (EU) 2019/2088 (Text with EEA relevance).
15.0-14.4
6,122
7,688
7,671
8,370
2,713
4,459
5,792
5,404
3,481
3,003
3,809
PERSONNEL
Workforce at year-end 4
Personnel cost per employee 4
DIVIDEND
7,880
€
9,039
12,036
2,567
195,506
188,535
172,174
154,803
138,377
131,835
CASH FLOW STATEMENT
Cash and cash equivalents at balance sheet date
€ million
16,009
13,537
Free cash flow Automotive segment
€ million
6,354
3,395
10,979
208,938
39-35
126,016
98,901
1,904
1.90/1.92
2.50/2.52
3.50/3.52
4.00/4.02
3.50/3.52
3.20/3.22
2.90/2.92
1,707
2.60/2.62
1,640
2.50/2.52
16.1-15.4
46-42
2.0 1.8
51-57
2,102
120,726
99,647
2,300
2,303
134,682
101,178
129,932
100,760
124,729
99,575
122,244
97,136
116,324
92,337
110,351
105,876
89,869
89,161
Dividend total
€ million
Dividend per share of common stock / preferred stock
€
3,8275
5.80/5.825
1,646
2,630
228,034
216,658
229,527
4.2
5.7
6.5
5.4
Equity
€ million
75,132
61,520
59,907
57,829
54,107
47,363
42,764
37,437
35,600
4.0
30,606
4.8
5.4
€ million
5,012
3,922
5,650
5,029
4,688
3,731
3,826
4,601
4,967
4,151
Capital expenditure ratio (capital expenditure / revenues)
%
4.5
4.0
5.2
Equity ratio
Non-current provisions and liabilities
%
52,834
Current provisions and liabilities
€ million
76,466
71,963
82,625
71,411
71,765
67,989
65,591
59,078
51,134
48,395
Balance sheet total
€ million
51,643
58,288
63,819
73,183
32.7
28.4
26.3
27.7
27.7
25.1
24.8
18.6-17.1
24.2
23.2
€ million
77,929
83,175
85,502
79,698
69,634
25.7
44-35
118,909
103,569
BMW 530e Touring
51-60
18.6-16.5
43-31
1.9 1.4
14.8-13.9
41-35
1.8 1.5
52-60
18.4-16.5
41-30
1.8 1.3
BMW 330e xDrive
BMW 330e
16.4-16.0
49-43
2.0-1.7
2.1 1.9
45-40
BMW 330e Touring
15.8-14.7
49-43
2.2 1.9
48-57
19.3 17.3
48-35
2.1-1.6
BMW 330e xDrive Touring
15.6-14.5
44-38
1.9 1.7
52-61
18.3-16.2
42-31
1.9-1.4
15.9-15.2
46-57
19.5-17.3
1.9 1.5
51-53
15.2 -14.9
42-38
1.8-1.7
BMW 320e (automatic transmission)
BMW X2 xDrive25e
up to 90
20.0 17.9
30-22
1.4 1.1
13.5-13.5
14.3 13.8
41-41
1.8-1.8
69-80
1.9
43
13.7
1.8 1.3
2.2-1.5
BMW 320e xDrive Touring
15.3 14.3
44-38
1.9 1.7
50-59
18.6 -16.7
BMW M3
44-32
BMW 320e Touring
14.8 - 14.2
41-35
1.8-1.5
52-61
18.1 -16.1
41-30
1.9-1.4
10.2 10.0
49-35
10.8
15.1-14.5
43-39
1.9-1.7
2.0-1.8
51-57
18.4-17.0
43-35
1.9 1.5
BMW 520e Touring
53-61
18.2-16.3
41-30
1.8 1.3
BMW 520e
416-521
493-590
19.1 16.1
46-42
22.5 18.0
15.6-15.0
1.8 1.3
231-227
16.5-15.9
49-46
2.1 2.0
47-55
19.4-17.4
49-35
2.2-1.6
BMW 530e xDrive
14.9-13.8
43-39
1.9 -1.7
53-61
18.3-16.2
41 - 30
BMW 530e
BMW i4 eDrive40
Investments in property, plant and equipment and other in-
tangible assets (excluding capitalised development costs)
as a percentage of Group revenues.
BMW
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
343
230-226
BMW M4
453-461
Group Financial Statements
18.9 18.5
42-50
20.5-18.9
59-45
2.6-2.0
BMW X3 xDrive30e
248
BMW i4 M50
BMW iX3
Corporate Governance
10.1 9.9
Other Information
in kWh/100 km
(combined/weighted
combined) max/min
Remuneration Report
Electricity power
consumption
CO₂ emissions
in g/km
(combined/weighted
combined) max/min
in l/100km
(combined weighted
combined) max/min
Fuel consumption
Figures according to NEDC
Electricity power
consumption
CO₂ emissions
in g/km
(combined/weighted
combined) max/min
in kWh/100 km
(combined weighted
combined) max/min
Electric range
(combined weighted
combined)
Model
As of February 2022
Consumption and Carbon Disclosures
Figures according to WLTP
← = Q
Fuel consumption
in l/100km
(combined weighted
combined) max/min
Telephone +49 89 382-2 45 44
+49 89 382-2 44 18
Fax
+49 89 382-2 41 18
Further information about the BMW Group is available
online at:
THE BMW GROUP ON THE INTERNET
BUSINESS AND FINANCE PRESS
Group Financial Statements
Contacts
← = Q
Other Information
Remuneration Report
Corporate Governance
7 www.bmwgroup.com
Combined Management Report
CONTACTS
E-mail
7www.rolls-roycemotorcars.com
Investor Relations information is available directly at:
WWW.BMWGROUP.COM
7 www.bmw-motorrad.com
To Our Stakeholders
www.mini.com
7 www.bmw.com
ir@bmwgroup.com
E-mail
+49 89 382-1 46 61
Fax
Information about the various BMW Group brands is
available at:
Telephone +49 89 382-2 53 87
INVESTOR RELATIONS
Telephone +49 89 382-0
80788 Munich
Germany
Bayerische Motoren Werke
Aktiengesellschaft
PUBLISHED BY
7www.bmwgroup.com/ir
presse@bmwgroup.com
BMW Group Report 2021
Half-Year Report to 30 June 2022
Quarterly Statement to 30 September 2023
5 May 2022
BMW Group Annual Conference. Analyst and Investor Day
17 March 2022
BMW Group Annual Conference. Media Day
16 March 2022
2022
FINANCIAL CALENDAR
Quarterly Statement to 31 March 2022
Financial Calendar
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
BMW Group Report 2021
351
← = Q
352
11 May 2022
3 August 2022
3 November 2023
Half-Year Report to 30 June 2023
3 August 2023
Annual General Meeting
11 May 2023
Quarterly Statement to 31 March 2023
4 May 2023
Annual General Meeting
BMW Group Annual Conference. Analyst and Investor Day
BMW Group Annual Conference. Media Day
15 March 2023
BMW Group Report 2022
15 March 2023
2023
Quarterly Statement to 30 September 2022
3 November 2022
16 March 2023
To Our Stakeholders
Other Information
Remuneration Report
10.605
Equity
113.60
93.26
90.92
88.265
82.95
1 Xetra closing prices.
2 Proposed by management.
3 Weighted average number of shares for the year.
4 Stock weighted according to dividend entitlements.
5 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, Note 6 to the Group Financial Statements).
33
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
34
Overview of the BMW Group
80
Employees and Society
34
Organisational Structure
80 Employer Attractiveness and Employee Development
6.78
4.12
3.90
5.15
67.29
KEY DATA PER SHARE IN €
Dividend
Common stock
5.802
1.90
2.50
3.50
4.00
Preferred stock
5.822
1.92
2.50
34
3.52
Earnings per share of common stock³
18.77
5.73
7.47
13.07
Earnings per share of preferred stock"
18.79
5.75
7.49
10.625
13.09
Free cash flow Automotive segment
9.61
4.02
60.70
Business Model and Segments
Health and Performance
Innovation and Customer Orientation
56
Carbon Emissions and Pollutants
59
Electric Mobility
62
Mobility Concepts and Services
65
Product Safety and Data Protection
67
Production, Purchasing and Supplier Network
67
Production Network
70
Circular Economy, Resource Efficiency and Renewable Energy
74
Purchasing and Supplier Network
103 Refinancing
105 Net Assets Position of the BMW Group
107 Value Added Statement
109 Course of Business
117 Comments on the Financial Statements of BMW AG
121 EU Taxonomy
124 Outlook, Risk and Opportunity Management
124 Outlook
129 Risk and Opportunity Management
143 Internal Control System
51
101 Financial Position of the BMW Group
Products and Mobility Solutions
51
35
Locations
86
Diversity
38
BMW Group Integrated Strategy
89
Corporate Citizenship
38
Environmental Analysis and Megatrends
91
Financial Performance
39
83
Strategy Process
General and Sector-Specific Environment
43
Performance Indicators
95
Overall Assessment by Management of the Financial Year
44
Performance Management
96
Comparison of Forecasts with Actual Outcomes
48
Compliance and Human Rights
98
Earnings Performance of the BMW Group
91
144 Disclosures Relevant for Takeovers and Explanatory Comments
47.54
51.60
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
31
← = Q
The strategy is integrated into annual longer-range corpor-
ate planning, with implementation monitored by a target
system that is comprised of aspects finance, customers, pro-
cesses, learning and development. Performance indicators.
Corporate strategy
The BMW Group's corporate strategy, referred to as the
"BMW Group strategy", forms the core of our integrated ap-
proach. It defines the framework for decision-making and lays
the foundation for the Company to maintain a consistent focus
on profitability, growth and sustainability, even in an increas-
ingly dynamic environment.
The BMW Group strategy comprises four elements: position, di-
rection, strategic approach and collaboration. These formulate
the various aspects of our aspirations and are combined in a
"strategy arrow" that serves as a symbol for our forward-looking
approach. This strategic framework provides a fixed point of ref-
erence for all decisions of Company-wide significance.
Position -
What does the BMW Group stand for?
The BMW Group is committed to first-class individual mobil-
ity and contributes to sustainable development. It aims to
find the right balance between business, the environment
and society. The BMW Group combines driving pleasure and
responsibility without compromise and, together with its
partners, leads the industry in environmental, social and in-
tegrity standards. The Company is committed to the Paris
Climate Agreement and providing a verifiable track record of
continuous improvement. To achieve this and reduce the im-
pact on the environment as a whole, the BMW Group is pro-
moting as well the reduction of CO2 emissions throughout
the whole product life cycle as the principles of the circular
economy from the supply chain, to production, the use
phase and the recycling of its products. For this reason,
BMW has also laid out ambitious targets to reduce CO2 emis-
sions by 2030 (reference year 2019), understood as follows:
―
1. In the use phase of the vehicle, an average reduction
of more than 50 % for every kilometre driven
2. In production, a reduction of 80 % for every vehicle
produced
3. In the supply chain, a reduction of more than 20 %
Measurable science-based targets, initially up until 2030,
have been firmly established across the Company, laying the
foundation for the reduction of our CO2 emissions. We have
joined the Science-Based Targets Initiative (SBTI) for this
purpose. This will enable us to guarantee transparency and
comparability in the validation and measurement of our tar-
gets and, at the same time, ensure they are in line with the
latest scientific findings CO₂ and emissions.
Control parameters such as life cycle CO₂ emissions and sec-
ondary raw material quotas are already important perfor-
mance indicators during the development phase of our vehi-
cle projects
Performance indicators.
To leverage the potential for lowering CO₂ emissions during
the use phase, in particular, the BMW Group is actively
working on numerous projects and initiatives to improve the
framework conditions for electromobility. However, while
the ambitious goals of the Paris Climate Agreement are de-
signed to tackle climate change in the transport sector, they
I can only be achieved through a combination of all modern
drive technologies in addition to electromobility that are
closely aligned with customer needs and different mobility
requirements around the world. Modern combustion-en-
gine technology continues to make a meaningful contribu-
tion to the effective reduction of CO2 emissions worldwide.
For this reason, the BMW Group offers those customers
who choose not to buy an electrified vehicle - because of
their mobility needs or because the prerequisites are not
met vehicles with modern, efficient internal combustion
engines that rely on technology that is continuously further
Position
Strategic
approach
Collaboration
Direction
developed. Plug-in hybrid (PHEV) concepts also provide a
good alternative in these circumstances. Products and mobility
Other Information
← = Q
BMW Group and Capital Markets
BMW GROUP AND CAPITAL MARKETS
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2021
32
32
The BMW Group has maintained a good ranking in presti-
gious sustainability ratings in 2021. For instance, the
BMW Group is represented in the MSCI ESG, Sustainalytics
and ISS ESG indexes and is well positioned in its sector in all
three. Due to its transparent reporting of carbon emissions,
the BMW Group is again in the top grouping (A List) of the
CDP rating list.
stable
stable
Outlook
A-1
P-1
Short-term debt
solutions.
A
and Poor's
Moody's
Standard
Company rating
Long-term debt
With its above-average ratings, the BMW Group enjoys good
access to international capital markets and is thus able to
benefit from highly attractive refinancing conditions.
despite the challenging economic environment. Moreover,
both agencies explicitly highlight the fact that BMW AG con-
tinues to implement its policy of decarbonisation, thereby
enabling it to undercut the targets set by the EU for 2020.
tations that the BMW Group will continue performing well, SUSTAINABILITY RATINGS
GOOD PLACEMENT IN
In addition to the general recovery in the automotive indus-
try, the upgraded outlook reflects the rating agencies' expec-
In this context, Moody's raised its outlook for BMW AG from
"negative" to "stable" on 26 March 2021. At the same time,
the long-term rating of A2 and the short-term rating of P-1
were both confirmed. On 5 August 2021, Standard & Poor's
(S&P) adjusted its outlook for BMW AG from "negative" to
"stable" and confirmed its long-term and short-term ratings
of A and A-1 respectively.
The persisting impact of the coronavirus pandemic and the
challenges posed by the ongoing transformation of the auto-
motive industry caused rating agencies to reassess their rat-
ings for the automotive sector in 2020, resulting in the ratings
and outlooks of numerous companies being downgraded.
However, in light of the generally improved situation, upward
adjustments were made over the course of 2021.
The BMW Group continues to enjoy the best ratings on the
capital market of Europe's automobile manufacturers.
RATINGS REMAIN AT
HIGH LEVEL
A2
32.50
Sustainability is built into individual market strategies
across our global sales organisation. Centralised measures
are combined with local activities in the markets to imple-
ment a holistic programme. Best practices in the fields of
environmental protection, social sustainability, corporate
citizenship and governance are also shared within an es-
tablished international sustainability network.
-
90.83
68.34
37.66
58.70
69.86
77.71
PREFERRED STOCK
Number of shares in 1,000
59,404
57,689
56,867
56,127
55,605
Stock exchange price in €1
Year-end closing price
73.30
55.20
55.05
62.10
74.64
High
82.00
57.60
67.85
85.50
78.89
Low
96.26
77.75
76.68
95.89
What drives the BMW Group?
Direction is the second strategic element, after position. The
BMW Group offers exciting products for current and future
generations and secures its independence as a company by
maintaining a high level of profitability. The BMW Group is
shaping the future of sustainable mobility with its passion
and strong capacity for innovation. Thanks to its exciting
products, the Company is able to achieve maximum custom-
er satisfaction and brand strength, and thus grow its market
share.
Other Information
Corporate Governance
← = Q
BMW Group and Capital Markets
DIVIDEND TO RISE
SIGNIFICANTLY
BMW AG STOCK
The Board of Management and the Supervisory Board will
propose to the Annual General Meeting that the unappropri-
ated profit of BMW AG amounting to € 3,827 million (2020:
€ 1,253 million) be used to pay a dividend of € 5.80 per
share of common stock (2020: € 1.90) and a dividend of
€ 5.82 per share of preferred stock (2020: € 1.92). The pay-
out ratio for 2021 therefore stands at 30.7% (2020: 32.5%).
COMMON STOCK
Low
2021
2020
Direction
2019
2017
Number of shares in 1,000
Stock exchange price in €1
Year-end closing price
601,995
601,995
601,995
601,995
601,995
High
88.49
72.23
73.14
70.70
86.83
2018
COMBINED
Remuneration Report
REPORT
BMW Group plant Landshut
BMW Group plant Leipzig
BMW Group plant Munich
BMW Group plant Regensburg
BMW Group plant Wackersdorf
BMW Group plant Steyr, Austria
BMW Group plant Hams Hall, UK
BMW Group plant Oxford, UK
BMW Group plant Swindon, UK
Rolls-Royce Manufacturing Plant, Goodwood, UK
Partner plants in Europe
Partner plant, Born, the Netherlands
Partner plant, Graz, Austria
Partner plant, Kaliningrad, Russia
▲ Research and development network in Europe
BMW Group Research and Innovation Centre (FIZ),
Munich, Germany
BMW Car IT, Munich, Germany
BMW Group Autonomous Driving Campus,
Unterschleißheim, Germany
BMW Group Designworks, Munich, Germany
BMW Group Lightweight Construction and
Technology Center, Landshut, Germany
BMW Group Diesel Competence Centre, Steyr, Austria
Critical TechWorks S.A., Porto, Portugal
BMW France, S. A. S., Montigny, France
Rolls-Royce Motor Cars Ltd., Goodwood, UK
CIRCULAR
38
BMW Group Report 2021
To Our Stakeholders
Group Financial Statements
MANAGEMENT
Combined Management Report
BMW Group Integrated Strategy
BMW Group plant Eisenach
23
☐
20
Financial Services
1 Germany
8 Ireland
16 Czech Republic
9 Belgium/Luxembourg
17 Poland
2 Norway
3 Denmark
10 France
11 Switzerland
4 Sweden
12 Italy
5 Finland
Corporate Governance
13 Slovenia *
14 Spain
7 UK
15 Portugal
Sales locations only.
15
10
■ Production in Europe
BMW Group plant Berlin
BMW Group plant Dingolfing
18 Austria
19 Slovakia
20 Hungary*
21 Romania *
22 Bulgaria *
23 Greece
6 The Netherlands
• Sales subsidiaries and
Remuneration Report
← = Q
Remuneration Report
Other Information
← = Q
especially in urban areas, but will mainly be used as a sup-
plementary option 7 Mobility concepts and services.
Around the world, the conditions for individual mobility in
cities and their surrounding suburban areas are developing
very differently in some cases and depend above all on the
location of these conurbations, their population density
and the focus of emissions policy in the respective urban
regions. Mobility concepts and services.
Climate change and CO₂ reduction
We see the consequences of climate change as a major
challenge for the future. As governments around the world
work to translate the goals of the Paris Climate Agreement
into national laws, investors are increasingly evaluating
companies and their business models according to ESG cri-
teria BMW Group and capital market.
The European Union (EU) sees itself as a global leader in
achieving these climate goals. Within the EU, the Sustain-
able Finance Framework aims to classify a company's busi-
ness activities according to sustainability criteria.
The US government has also proposed more ambitious cli-
mate-protection goals that aim to halve greenhouse gas
emissions by 2030 from 2005 levels. China is relying on fleet
limits and a growing percentage of zero-emissions vehicles.
Electromobility and drive technologies
In the transport sector, a swift transition to electromobility is
an important prerequisite on the road to climate neutrality.
By 2030, the BMW Group will be capable of offering a com-
plete array of electric vehicles in terms of both product diver-
sity and range. Growing demand is additionally strength-
ened by the benefits of lower running costs and framework
conditions such as government subsidies Electromobility.
Digitalisation and connectivity
In addition to the topics already referred to, the combination
of digitalisation and connectivity is another important mega-
trend for the BMW Group. The modern vehicle is already one
of the most complex and software-intensive items owned by
consumers. Vehicles are increasingly viewed as digital ob-
jects, with corresponding functions expected. Customers de-
mand products that are seamlessly and perfectly integrated
into their familiar living environment. It is therefore safe to
assume that digital business models will generate a growing
percentage of added value in the future. China, in particular,
is setting new standards for digitalisation. Customer desires
are increasingly influenced by the world of consumer elec-
tronics and are an important factor in purchasing decisions
7 Innovation and customer orientation.
In addition to the new possibilities digitalisation can offer
customers, further potential lies in networking mobile value
creation. To create a virtual platform and meet future chal-
lenges, the BMW Group founded the Catena-X Automotive
Network, together with other manufacturers, system suppli-
ers and technology partners Production, purchasing and supplier
network.
Automated/autonomous driving
Alongside digitalisation, development of automated/autono-
mous driving remains a key expectation for the future of mo-
bility. Due to the importance of this topic for the automotive
industry and the complexity of the technologies and exper-
tise involved, extensive funding is being channelled into de-
velopment in this area worldwide.
Concrete requirements and regulations for autonomous driv-
ing are likely to be in place in individual countries and re-
gions by 2025. The aim of all regulators is assumably to au-
thorise autonomous driving systems in the medium term
7 Products and mobility solutions.
M&BX 524E
STRATEGY PROCESS
The BMW Group regards the strategy process as a continu-
ous task. The assumptions underpinning our strategies are
regularly reviewed, based on the findings from our analysis of
environmental and external factors. The Board of Manage-
ment sets the strategic direction for this process, regularly
addressing strategic issues for the BMW Group and assess-
ing the impact of external factors. The BMW Group's corpo-
rate strategy is the starting point for business departments to
systematically align their own strategy with the Company's
strategic goals and define the concrete measures that must
be implemented in order to achieve them. This process takes
place via a planning and management system with a built-in
feedback loop.
* 7 Consumption and carbon emissions data.
40
40
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
BMW Group Integrated Strategy
Group Financial Statements
Corporate Governance
Group Financial Statements
Combined Management Report
BMW Group Integrated Strategy
To Our Stakeholders
38
39
Strategy Process
43
44 Performance Management
48
Compliance and Human Rights
ELECTRIC
BMW GROUP INTEGRATED STRATEGY
Environmental Analysis and Megatrends
BMW GROUP INTEGRATED STRATEGY
The BMW Group operates at the intersection of challenging,
increasingly complex and differentiated conditions around
the world. This includes:
Global competition
Other Information
Megatrends such as electrification and connectivity
A capital market focused on profitability and growth
Sustainability
We constantly refine our corporate strategy and align our
strategic targets with these external factors and their dy-
namic rate of change as important input parameters.
The BMW Group's integrated strategy is based on funda-
mental elements, like the integrity of our actions.
7 Compliance and Human rights.
The BMW Group strategy is developed from an analysis of
the global megatrends that are crucial to the transformation
of the automotive industry and essentially comprises the in-
tegrated and continuous strategy process, the target system
and Corporate management.
ENVIRONMENTAL ANALYSIS
AND MEGATRENDS
A company's success depends to a large extent on its ability
to recognise changes in its environment early on, plan for
different scenarios, effectively manage risks and take advan-
tage of opportunities that may arise from such changes
(Risks and opportunities.) To this end, we continuously monitor
the business environment in our key regions, using available
data to analyse in detail the trends and developments that
could affect our business in the future. Regular Dialogue with
stakeholders within the framework of the BMW Group Xchange
formats rounds out the picture from the analysis of external
and environmental factors.
The most important megatrends with long-term implications
for the BMW Group's business model are currently climate
change and the reduction of carbon dioxide (CO2) emissions,
electromobility, digitalisation and connectivity - including
automated and autonomous driving, as well as mobility pat-
terns within society. GRI 102-46
Mobility patterns
Individual mobility appears likely to remain a fundamental
human need for the foreseeable future, although vehicle
ownership depends to a large extent on income, household
size and location (urban/suburban). Mobility services, so-
called on-demand mobility (ODM), will remain relevant,
39
BMW Group Report 2021
Diverging social expectations in the face of climate change
LOCATIONS IN EUROPE
Performance Indicators
Other Information
covers several automobile classes, ranging from the pre-
mium compact class, the premium mid-size class and
through to the ultra-luxury class. Alongside its state-of-the-
art plug-in hybrids and vehicles powered by highly efficient
combustion engines, the BMW brand also includes all-elec-
tric models manufactured under the BMW i sub-brand, such
as the BMW iX and the BMW i4 launched in 2021, as well as
modern plug-in hybrid models and high-performance vehi-
cles belonging to the BMW M sub-brand.
The MINI brand promises driving pleasure in the premium
compact segment and, alongside models powered by effi-
cient combustion engines, it also offers plug-in hybrid and
all-electric models. The all-electric MINI Cooper SE¹ was the
best-selling model in the MINI family in the year under
report.
With a tradition stretching back well over a century, Rolls-
Royce is the ultimate marque in the ultra-luxury class. Rolls-
Royce Motor Cars specialises in providing bespoke customer
specifications and offers the utmost in terms of quality and
service.
Its comprehensive range of products enables the BMW Group
to meet the diverse expectations and needs of its customers
worldwide. The global sales network of the BMW Group's
automobile business currently comprises more than 3,500
BMW, 1,600 MINI and over 150 Rolls-Royce dealerships.
7 Automotive segment
Motorcycles segment
As in all other areas, the BMW Group focuses rigorously on
the premium segment with its Motorcycles segment and its
model range of motorcycles and scooters in the Sport, Tour,
Roadster, Heritage, Adventure and Urban Mobility catego-
ries. BMW Motorrad also offers a broad range of equipment
options to enhance riding safety and comfort as well as per-
sonalised configurations. The Motorcycles segment's sales
network is organised similarly to that of the Automotive seg-
ment. Currently, BMW motorcycles are sold by more than
1,200 dealerships and importers in over 90 countries world-
wide. Motorcycles segment
Financial Services segment
The BMW Group is a leading provider of financial services in
the automotive sector. It offers these services in more than
50 countries worldwide via companies and cooperation ar-
rangements with local financial service providers and im-
porters. The Financial Services segment's main line of busi-
ness comprises credit financing and the leasing of
BMW Group brand automobiles and motorcycles to retail
customers. Customers can also select from an attractive ar-
ray of insurance and banking products.
Operating under the brand name Alphabet, the BMW Group's
international multi-brand fleet business provides financing
and comprehensive management services for corporate car
fleets in more than 20 countries.2 These services also in-
clude assisting customers to manage their fleets on a sus-
tainable and climate-friendly basis.
Financing dealership vehicle fleets serves to support the
dealership organisation and rounds off the segment's range
of services. Financial Services segment
LOCATIONS
Global overview
The BMW Group operates on a worldwide basis. The
BMW Group's largest automobile and motorcycle markets
are located in Europe, particularly in Germany and the
United Kingdom (UK) as well as in China and the USA.
17 Consumption and carbon emissions data
2 Including cooperation partners
36
BMW Group - Report 2021
To Our Stakeholders
Combined Management Report
Overview of the BMW Group
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
LOCATIONS WORLDWIDE
← = Q
Other Information
Remuneration Report
Group Financial Statements
← = Q
34
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Overview of the BMW Group
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
OVERVIEW OF THE BMW GROUP
ORGANISATIONAL
STRUCTURE
The BMW Group successfully manufactures automobiles
and motorcycles for the premium and luxury segments on a
global basis. With BMW, MINI and Rolls-Royce, the
BMW Group owns three of the best-known brands in the au-
tomotive industry worldwide. It also occupies a strong mar-
ket position in the premium motorcycles segment. At 31 De-
cember 2021, the BMW Group employed a workforce of
118,909 people worldwide.
• Sales subsidiaries and
Bayerische Motoren Werke Aktiengesellschaft (BMW AG),
based in Munich, Germany, is the parent company of the
BMW Group, which comprises BMW AG itself and all sub-
sidiaries over which BMW AG has either direct or indirect
control. List of Investments. BMW AG is also responsible for
managing performance throughout the Group, which is
sub-divided into the Automotive, Motorcycles and Financial Services
operating segments Presentation of segments. The Group's Other
Entities segment primarily comprises holding companies
and Group financing companies. The structure of the
BMW Group changed significantly at the beginning of the
financial year 2022 due to the BMW Group's majority ac-
quisition of the joint venture BMW Brilliance Automotive
Ltd. (BBA). Further information on the consolidation of
BMW Brilliance Automotive is provided in the 7 Notes to the
Group Financial Statements.
AND SEGMENTS
Business model
The BMW Group develops, manufactures and sells innova-
tive premium automobiles and motorcycles on a worldwide
basis. It also offers a broad range of financial and mobility
services. The Group is structured into operating segments,
namely the Automotive, the Motorcycles and the Financial
Services segments.
Automotive segment
The BMW Group manufactures BMW, MINI and Rolls-Royce
brand vehicles. The BMW brand caters to a broad variety of
customer requirements. Its wide-ranging model portfolio
1 The change took place outside of the financial period under report.
27 Consumption and carbon emissions data
M.ST 9056
M.NW 5143
35
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Overview of the BMW Group
BUSINESS MODEL
Financial Services
Corporate Governance
2 Canada
BMW Group plant San Luis Potosí, Mexico
BMW Group plant Spartanburg, USA
BMW Brilliance Automotive, China (joint venture - 3 plants)
☑
Partner plants outside Europe
Partner plant, Chongqing, China
Partner plant, Hosur, India
Partner plant, Jakarta, Indonesia
Partner plant, Cairo, Egypt
Corporate Governance
Partner plant, Kulim, Malaysia
▲ Research and development network outside Europe
BMW Group Technology Office USA, Mountain View, USA
BMW Group Engineering and Emission Test Center, Oxnard, USA
BMW Group plant Rosslyn, South Africa
BMW Group ConnectedDrive Lab China, Shanghai, China,
18
BMW Group Technology Office, Shanghai, China
BMW Group Engineering China, Beijing, China
BMW Group Engineering Japan, Tokyo, Japan
BMW Group Engineering USA, Woodcliff Lake, USA
BMW Group IT Technology Office, Greenville, USA
BMW Group IT Technology Office, Singapore
BMW Group IT DevOps Hub, Rosslyn, South Africa
BMW do Brasil, Araquari, Brazil
BMW Group Technology Office Tel Aviv, Tel Aviv, Israel
BMW Group R&D Center Seoul, Seoul, South Korea
37
BMW Group - Report 2021
To Our Stakeholders
Combined Management Report
Overview of the BMW Group
Group Financial Statements
Corporate Governance
1 Headquarters
Remuneration Report
and BMW Group Designworks Studio Shanghai, China
BMW Group plant Araquari, Brazil
BMW Group plant Chennai, India
BMW Group plant Manaus, Brazil
BMW Group plant Rayong, Thailand
BMW Group Designworks, Newbury Park, USA
☐
3 USA
4 Mexico
■ Production outside Europe
5 United Arab Emirates
6 Brazil
8 South Africa
7 Argentina *
14 Thailand
15 Malaysia
16 Singapore
10 India
11 China
12 South Korea
13 Japan
17 Indonesia *
18 Australia
9 Russia
19 New Zealand
☐
☐
10
41
0.15
Sales subsidiaries and Financial
Services locations worldwide
31
Production and assembly plants
13
Countries with research
and development locations
*Sales locations
46
BMW Group Report 2021
Board of Management remuneration
Performance criteria for the short- and long-term variable
remuneration of the Board of Management are also based
on the main strategic financial and non-financial targets
and key performance indicators and contribute towards the
BMW Group's long-term development. Non-financial key
performance indicators used in this context include the
number of vehicles delivered, the share of women in man-
agement functions, carbon emissions and sales of electri-
fied vehicles. Financial key performance indicators that
have an impact on variable remuneration include the return
on capital employed for the Automotive segment as well as
other key financial performance indicators monitored at
Group level. Remuneration Report
To Our Stakeholders
48
2021
8,938
2020
-2,597
7,351
8,061
16,289
5,464
Combined Management Report
BMW Group Integrated Strategy
Value-based management for project decisions
Operational business in the Automotive and Motorcycles
segments is largely shaped by the life-cycle-dependent
character of investment projects that have a substantial in-
fluence on future performance. Project-related decisions are
therefore a crucial element of financial management in the
BMW Group. Project decisions are based on calculations de-
rived from the expected cash flows of each individual project.
Calculations are made for the complete term of a project, in-
corporating future years in which the project is expected to
generate cash flows. Project decisions are taken on the ba-
sis of net present value and the internal rate of return calcu-
lated for the project. The net present value indicates the ex-
tent to which the project will be able to generate future net
cash inflows over and above the cost of capital. A project
with a positive net present value enhances future value add-
ed and therefore results in an increase in enterprise value.
The project's internal rate of return measures the average
return on the capital employed in the project. For all project
decisions, the project criteria and long-term impact on peri-
odic results are measured and incorporated in the long-term
Group plan. This approach enables an analysis of the impact
of project decisions on periodic earnings and rates of return
for each year during the term of the project.
Group Financial Statements
The CMS is tailored to the Company's specific risk situation.
It addresses all relevant compliance topics, including fraud
prevention, export control, anti-money laundering, antitrust
compliance, corruption prevention and human rights as well
as data privacy and technical compliance. These last two topics are
the responsibility of the respective specialist departments.
An effective and efficient compliance organisation is funda-
mental to reducing sanction and liability risks, as well as
risks arising from other (non-) financial disadvantages, such
as reputational risks.
Remuneration Report
During the reporting period, the organisation and content of
the CMS were refined according to defined strategic focus
topics. The objective is to further strengthen the culture of
compliance and integrity at the Company, with the declared
aim of avoiding Company-related violations of the law.
2020
Further development of the CMS is also taking place against
the backdrop of external factors, such as global legal devel-
opments and the evolution of compliance at other compa-
nies. To this end, the BMW Group is involved in various asso-
ciations and interest groups and has been an active
corporate member of the German Institute for Compliance
(DICO) for many years, at the Board level and through its
leadership of the working group "Human Rights/CSR".
Further development of the CMS
The BMW Group's Company-wide CMS is based on the Pre-
vent, Detect, Respond Model, which defines specific preven-
tion, monitoring, control and response measures, on the ba-
sis of clearly assigned roles and responsibilities.
Compliance Management System (CMS)
Corporate Governance
chored by the Board of Management in the Company's en-
hanced understanding of leadership.
Compliance is the managerial responsibility of the Board of
Management of BMW AG and is primarily executed by creat-
ing an appropriate regulatory and supervisory framework, as
well as through regular and ad hoc compliance reporting, ac-
companied by clear and unambiguous compliance commu-
nications. This approach is based on the core belief that
compliance with applicable laws and related internal regula-
tions is the personal responsibility of each individual em-
ployee. As role models, BMW Group managers are also
tasked with anchoring compliance culture in their respective
area of responsibility and ensuring compliance requirements
and processes are implemented accordingly. 7 GRI-Index 102-16
Compliance as a corporate function
Compliance means much more to the BMW Group than just
complying with applicable laws and Company rules: it is part
of our identity and our living culture of integrity and creates a
binding framework for all our business activities worldwide.
As such, compliance lays the foundation for the long-term
success of the Company, builds trust in our products and
brands, and shapes the public image of the BMW Group.
COMPLIANCE AND
HUMAN RIGHTS
← = Q
Other Information
During the reporting period, the Board of Management of
BMW AG significantly refined the compliance organisation
and created a new Chief Compliance Officer role, which took
effect on 1 January 2021 and which serves as head of the
Group Compliance. In addition to being responsible for the
Compliance Management System (CMS), the Chief Compli-
ance Officer manages the Group Compliance division and
briefs the Board of Management and Supervisory Board of
BMW AG on development and implementation of the CMS at
regular intervals. Furthermore, compliance has been an-
2021
Other Information
2021
in %
earnings amount -
cost of capital
earnings amount -
=
Value added
Group
In order to determine the internal rate of return, risk-adjusted
cost of capital rates are based on the average of actual rates
in recent years. In light of the long-term nature of product
and investment decisions, the following internal rates of re-
turn are used in conjunction with segment management:
Capital employed comprises the amount of Group equity and
pension provisions as well as the financial liabilities of the
Automotive and Motorcycles segments employed on aver-
age at the end of each of the last five quarters. The earnings
amount corresponds to Group profit/loss before tax, adjust-
ed for interest expense incurred in conjunction with the pen-
sion provision and on the financial liabilities of the Automo-
tive and Motorcycles segments (profit/loss before interest
expense and tax). The cost of capital is the minimum rate of
return expected by capital providers in return for the capital
employed. Since capital employed comprises an equity cap-
ital (e.g. share capital) and a debt capital element (e.g.
bonds), the overall cost of capital is determined on the basis
of the weighted average rates for equity and debt capital,
measured using standard market procedures. The pre-tax
average weighted cost of capital for the BMW Group in 2021
was 12%, unchanged from the previous year.
Automotive
The information provided by these key performance indica-
tors at Group level is complemented by the two financial per-
formance indicators of pre-tax return on sales and value
added. Value added, as a highly aggregated performance
indicator, also provides an insight into capital efficiency and
the (opportunity) cost of capital required to generate Group
profit. A positive value added means that a return on invest-
ment above the cost of capital has been achieved.
← = Q
Remuneration Report
Corporate Governance
Group Financial Statements
THREE-STAGE APPROACH TO COMPLIANCE
MANAGEMENT SYSTEM AND COMPLIANCE TOPICS
Combined Management Report
BMW Group Integrated Strategy
Strategic management at Group level
Strategic management and the measurement of its financial
impact are coordinated primarily at Group level in conjunc-
tion with the long-term corporate plan. One of the key perfor-
mance indicators used in this context is Group profit/loss
before tax, which provides a comprehensive measure of the
Group's overall corporate performance after consolidation
effects and enables a transparent comparison over time.
Other key performance indicators at Group level are the size
of the workforce at the year-end and the share of women in
management functions. By 2025, the BMW Group aims to
increase the share of women in management functions to
22%.
2020
=
Motorcycles
Value added Group
13.4
13.4
12.0
12.0
12.0
(cost of capital rate x
capital employed)
12.0
2021
Earnings amount Cost of capital (equity + debt capital)
BMW Group
in € million
VALUE ADDED GROUP
Financial Services
2020
RESPOND
-
protection
To Our Stakeholders
BMW Group Report 2021
50
50
Observance and implementation of compliance regulations
and processes are subject to regular audits. The BMW Group
CMS provides differentiated monitoring levels for this pur-
pose. Compliance Officers are those primarily responsible
for performing direct checks in their area of responsibility.
Further measures integrated into business processes to help
reduce risk generally form part of the ▾ Internal Control System.
The central Group Compliance function refined its audit ap-
proach in 2021, with the aim of increasing audit frequency by
introducing risk-based compliance audits without cause.
These compliance audits are currently focused on antitrust
CMS monitoring/controls
Combined Management Report
BMW Group Integrated Strategy
The BMW Group protects information providers in two ways.
If they prefer, individuals may provide information without
disclosing their identity. Policy also stipulates that no one
providing information should face retaliatory action. All com-
pliance-related queries and concerns are documented and
processed using an electronic Case Management System. If
necessary, Corporate Audit, Corporate Security, the legal de-
partments or the Works Council may be called upon to assist
in processing the case. GRI-Index: 102-34
Reporting system for detecting possible non-compliance with the
law and compliance controls
avoid compliance risks on the basis of this evaluation.
BMW Group employees have used IT-based systems for
swift and efficient documentation, assessment and approval
of compliance-relevant matters for years. Examples include
IT-supported processes to monitor money laundering, sanc-
tion lists and exchange activities with competitors as well as
to conduct background checks on the reliability of business
partners and verify, approve and document the legal admis-
sibility of benefits in kind. Measures are implemented to
Digitalisation supports compliance
In addition to imparting knowledge, online and classroom
training options, including practical case studies, play an im-
portant part in strengthening the compliance culture and un-
derstanding of compliant behaviour at the Company. Online
training must be completed every two years by relevant tar-
get groups. The training modules include exercises and test
questions relating to the BMW Group Legal Compliance
Code and corruption prevention, as well as other topics. So
far, more than 69,000 employees worldwide have com-
pleted the Compliance Essentials training, and over 36,000
employees completed online antitrust compliance training.
Department-specific training modules supplement the ex-
tensive options - for instance, in the areas of antitrust law or
human rights. GRI-Index: 205-1
The BMW Group continuously refines the Group Compliance
training opportunities for specific target groups. For exam-
ple, during the year under review, we redesigned our Group-
wide mandatory Compliance Essentials online training to
create a user-oriented approach with focused content and a
high level of interactivity. This training formed part of the
mandatory training programme and included human rights
topics in the year under report. > GRI-Index: 412-2
Any employee with questions or concerns relating to compli-
ance can discuss these matters with their managers and
with the relevant departments within the BMW Group: spe-
cifically, with Group Compliance, Legal Affairs and Corporate
Audit. The BMW Group Compliance Contact serves as a fur-
ther point of contact and provides non-employees with a
process for reporting compliance concerns. Our employees
worldwide can also submit information relating to possible
infringements of the law at the Company in several lan-
guages via the BMW Group SpeakUP Line. In 2021, an
ombudsperson for suppliers was dedicated. Verification of
effectiveness
Expanded training activities
Group Financial Statements
Remuneration Report
To Our Stakeholders
In the BMW Group's Financial Services segment, compli-
ance is incorporated into the target management process.
Integration of specific targets into strategic steering under-
lines the importance of this topic and helps to monitor the
implementation. A management system also supports the
process of identifying risks arising from non-compliance with
internal and external regulations at an early stage.
The financial services business entails specific risks, due to
the nature of its products and processes. The focus of com-
pliance management is therefore anti-money-laundering,
compliance with financial sanctions, information and privacy
protection, fraud prevention, legislative and regulatory moni-
toring, consumer protection and implementing the require-
ments of the Financial Supervisory Authorities. To manage
risk in these areas, the Financial Services segment has
established its own Compliance and Governance depart-
ment, which works closely with the central Group Compli-
ance function as a decentralised unit. Based on an annual
trend analysis it identifies the possible need for adjustments
and defines resulting measures. Implementation by the
BMW Group's financial services companies worldwide is
continuously reviewed and reported to the management of
the Financial Services segment on a quarterly basis.
Compliance management in the Financial Services
segment
In addition to the Company's international purchasing terms
and conditions, BMW Group dealer and importer contracts
include requirements relating to compliance and human
rights. Human rights issues also play an important role in
the Company's choice of locations and major investment
decisions. 1] GRI-Index: 412-3
The automotive industry is heavily involved in global supply
chains. In a collaborative global value creation process such
as this, there is a risk that human rights may not be respect-
ed throughout the supply chain. Respect for human rights
has been incorporated into the BMW Group Supplier Sustainability
Policy. To fulfil our environmental and social responsibility, we imple-
ment a multistage due diligence process in our Purchasing
and Supplier Network division.
Corporate Governance
Internationally recognised guidelines for environmental and
social compliance set the benchmark for the BMW Group's
entire value chain. This applies, in particular, to the Guide-
lines for Multinational Companies issued by the Organisa-
tion for Economic Cooperation and Development (OECD),
the UN Guiding Principles on Business and Human Rights,
the Ten Principles of the UN Global Compact, the content of
the ICC Business Charter for Sustainable Development, and
the United Nations Environment Programme's (UNEP) Dec-
laration on Cleaner Production. The BMW Group concen-
trates on topics and action areas where it can exert its influ-
ence as a company. With the participation of employee
representatives, these (supra) national requirements were
incorporated into internal company rules and principles
through the Joint Declaration on Human Rights and Working Conditions in
the BMW Group of 2005 (updated in 2010), clarified in the
7 BMW Group Code on Human Rights and Working Conditions of 2018 and
integrated with the human rights compliance programme.
The Board of Management and Supervisory Board of
BMW AG, the Audit Committee and other executive commit-
tees are informed on a regular basis and, if necessary, im-
mediately by the Chief Compliance Officer. In 2021, the con-
tent reported to committees was focused and the frequency
of reports increased – for example, at least twice a year for
the Board of Management.
Regular compliance reporting to the Board of Management and
Supervisory Board
All control checks are geared towards reducing compliance
risks for the BMW Group. Any infringements are immediately
remedied, with an emphasis on minimising the risk of repeat
offenses and strengthening the understanding of compli-
ance within the Company. Where incidences of non-compli-
ance can be traced to an individual, such persons will be
appropriately sanctioned, in accordance with the processes
defined for this purpose.
law. So-called Compliance Spot Checks were also carried
out in 2021, with a focus on possible corruption risks. Cor-
porate Audit also conducts audits focused on compliance
requirements.
← = Q
Other Information
[Global implementation of labour standards and human
rights
Data
relevant topics within their area of responsibility. Business
unit and division compliance functions also perform the task
of identifying and implementing specific compliance meas-
ures in their area of activity.
Business departments at the BMW Group are responsible
for lawful conduct during the performance of their assigned
tasks. This means they are also responsible for identifying
and evaluating any compliance risks that arise in the course
of their daily business. Monitoring and reducing these risks
also falls under their scope of duties. More than 230 man-
agers group-wide perform these tasks. These Compliance
Officers form part of the Compliance Organisation.
Anti-money-
control
Export
compliance
Antitrust
prevention
laundering
Fraud
Corruption
compliance
Technical
PREVENT
rights
Human
prevention
Specialist departments are supported in their work by the
central Group Compliance function, as well as a Group-wide
network of business unit and division compliance functions,
supplemented by around 80 local Compliance Officers
(heads of local compliance functions) at BMW AG's inter-
national subsidiaries. Local Compliance Officers are tasked
with implementing the CMS and compliance programmes for
DETECT
49
Company-wide compliance network
In response to the rapid pace of transformation in the auto-
motive industry, activities in the field of technical compliance
were also significantly expanded during the period under
report.
Increasingly strict national legislation to protect personal
data, and the higher risks associated with this, shaped com-
pliance measures regarding data privacy.
Note 10 to the Group Financial Statements GRI-Index: 205-3
A further priority was developing and implementing more ex-
tensive preventive measures in response to the antitrust
proceedings brought by the European Commission and con-
cluded in July 2021, concerning restriction of competition in
innovation in certain emissions control systems1.
the context of export controls from heightened trade rela-
tions between the US and China and in connection with
efforts to prevent money laundering, due in part to the in-
crease in legislative initiatives to tighten multinational
anti-money-laundering requirements.
The Supply Chain Due Diligence Law will take effect on
1 January 2023 in Germany; the adjustments it requires for
the human rights compliance programme have been a key
focus for Group Compliance during the reporting period. It
should be noted that the Board of Management decided in
December 2021 to appoint a Human Rights Officer and
assign this role to the head of Group Compliance. Concen-
trating relevant expertise in this new function will also
contribute to the strategic alignment of the Company in the
social dimension of sustainability. Other priorities arose in
← = Q
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
BMW Group Integrated Strategy
To Our Stakeholders
BMW Group Report 2021
Other Information
BMW Group Report 2021
Profit before tax
11.2
BMW Group Report 2021
44
44
M.VE 291E
* 7 Consumption and carbon emissions data
Financial Services segment
Return on equity (ROE) in %
Return on capital employed (ROCE) in %
Deliveries (in units)
Profit before financial result as a percentage of segment
revenues (EBIT margin)
-
Motorcycles segment
To Our Stakeholders
Share of electrified cars in total deliveries (in %)
CO2 emissions EU new vehicle fleet (in g CO2/km)
CO₂ emissions per vehicle produced (in tons)
Profit before financial result as a percentage of segment
revenues (EBIT margin)
Automotive segment
Number of employees at the end of the year
Share of women in management positions
Group profit before tax (Group EBT)
Group
The following summarises the strategic targets and key per-
formance indicators defined in DRS 20, which also form the
basis for Performance Management. GRI-Index: 102-19
Once approved by the Board of Management and Super-
visory Board, the target figures in the strategic target system
form the planning basis for the current reporting year and the
target agreements for BMW Group managers. Remuneration
report GRI-Index: 102-35. Companies subject to the provisions of
German Accounting Standard No. 20 (DRS 20) must define
the Company's most effective performance indicators for
corporate management during the external reporting period
(key performance indicators).
Long-range corporate planning for the Company as a whole
and its segments is geared towards the structure of the
BMW Group target system. In this way, the targets set out in
the planning are regularly compared with the BMW Group's
strategic goals. Department strategies are also aligned with
the corporate strategy.
Once strategic targets have been derived from the findings
of the environmental analysis and the ongoing strategy process
within the Company, the BMW Group target system trans-
lates the strategy into a clear system for measuring perfor-
mance. The target system is therefore a key instrument for
anchoring strategy throughout the Company. For corporate
management purposes, the strategic targets are backed by
effective performance indicators.
PERFORMANCE
INDICATORS
Return on capital employed (ROCE) in %
Deliveries (in units)
← = Q
Combined Management Report
BMW Group Integrated Strategy
Corporate Governance
Expenses
cost of capital rate
Average weighted
Cost of capital
Capital employed
Capital turnover
Return on capital
(ROCE or RoE)
Value added
Return on sales
Profit
Group Financial Statements
The BMW Group's long-term corporate strategies are deter-
mined by the Board of Management. Responsibility for im-
plementing the Group's sustainability goals therefore lies
is managed primarily at segment level. In order to manage
long-term corporate performance and assess strategic is-
sues, additional key performance figures are taken into ac-
count within the management system at Group level. In this
context, the value added serves as one of several indicators
to measure the contribution made to enterprise value during
the financial year. This aspiration to add value is measured
at both Group and segment level by means of the key finan-
cial and non-financial performance indicators (value drivers).
The link between value added and the relevant value drivers
is presented in a simplified form below.
VALUE DRIVERS
-
BMW GROUP
The BMW Group's performance management system is
based on a multi layered structure. Operational performance
The BMW Group's performance management system fol-
lows a value-based approach that focuses on profitability,
consistent growth, value enhancement for capital providers,
sustainability, climate protection and job security. Capital is
considered to be employed profitably when the amount of
profit generated on a sustained basis exceeds the cost of
equity and debt capital. This strategy also secures the de-
sired degree of corporate autonomy in the long term.
PERFORMANCE
MANAGEMENT
← = Q
Other Information
Remuneration Report
Managing sustainability
47
Remuneration Report
Corporate Governance
7 Consumption and carbon emissions data
To make this transformation possible, the BMW Group is
pushing ahead, both by restructuring existing plants and by
further developing employee competences (Employees and
Society). The restructuring of BMW Group Plant Munich pro-
vides a clear example of how the BMW Group can success-
fully and smoothly transform a full plant, including produc-
tion of internal combustion engines, to 100% electromobility
during ongoing production by 2026. Production, Purchasing and
Supplier network.
By 2023, in the middle of the second phase, we will already
have at least one fully electric model on the roads in virtually
all key model series from the compact segment to the
ultra-luxury class. In this context, we are investing additional
funds and plan to increase electrified vehicles' share total
deliveries to over 30% by 2025. The trend towards electro-
mobility will also continue to progress dynamically beyond
the year 2025. By 2030, the BMW Group plans to increase
the share of fully electric automobiles in its total deliveries to
more than 50%. Performance indicators.
The current, second phase of the transformation began in
2020 with our all-electric model offensive, led by the MINI
Cooper SE* and the BMW iX3*, and followed in late 2021
with the BMW i4 and BMW iX. Since 2013, the BMW Group
has delivered a total of more than 1 million electrified vehi-
cles to customers. From 2022 onwards, alongside the BMW
X3/iX3, additional models will be available with a choice of
fully electric or plug-in hybrid drivetrain, or with a state-of-
the-art internal combustion engine - for example, in the next
generation of luxury BMW 7 Series and BMW 5 Series se-
dans and the BMW X1. Going forward, the BMW Group will
continue to meet specific customer needs in individual mar-
kets and segments with a broad range of state-of-the-art
drive systems. Innovations and customer orientation.
We recognised the importance of electromobility early on
and began our transformation in this direction accordingly. In
the initial phase, the BMW Group introduced electrification
into standard production with the launch of the fully electric
BMW i3 in 2013. In 2014, the BMW Group launched the BMW
18, with ground breaking technology and a futuristic design.
The launch of the My BMW app in July 2020 has given BMW
a direct channel to its customers and provided them with a
direct link not only to their BMW dealership, but also to the
BMW brand as a whole. Customers can use the app to make
service appointments, request information on the condition
of their vehicle, or receive the latest news on BMW brand
products and services. The topic of battery charging has also
been fully integrated in this digital ecosystem. The My BMW
app can also be used to plan trips and display suitable
charging points along the route. The same applies, of course,
to the MINI brand with the MINI app.
The BMW Group is making customer experience the focus of
all its marketing and sales activities. The aim is to offer the
industry's best premium customer experience and to seam-
lessly integrate all customer touchpoints, online and offline.
The BMW Group is focused on its customers worldwide and
on meeting their different requirements. It does so by un-
derstanding the needs of its current and future customers
and exceeding their expectations. It combines ground
breaking technologies, emotional products and individual
customer care to create a unique overall experience. Creat-
ing the best customer experience, both physically and digi-
tally, as well as personalised, reliable communication, is of
primary importance to us.
Where is the BMW Group heading?
Strategic approach -
42
As part of our focus on efficiency, we regularly assess ways
to utilise synergies and efficiencies across the Company in
an effort to reduce the complexity that arises from increas-
ingly strict and heterogeneous regulatory requirements.
Faster, digitalised processes within lean structures are fun-
damental to systematically leveraging efficiencies. In vehicle
development, for instance, we see considerable potential for
reducing process time through digitalisation. In addition to
this, distinguishing the BMW Group from its competitors, we
are also taking advantage of the expanded possibilities of
digitalisation for customer contact, with integrated product
and service offerings, functional upgrades and customer
support. The BMW Group is also bolstering its portfolio with
attractive new models especially in highly profitable
segments.
The focus on profitability is a very important aspect of the
BMW Group's corporate management system. All measures
and initiatives are aimed at further developing the BMW
Group's strong economic base, so it can continue to operate
independently and invest in the future.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
BMW Group Integrated Strategy
To Our Stakeholders
BMW Group Report 2021
41
To underline the importance of the BMW Group's economic
performance capabilities, our ambitious financial targets are
tied to the following strategic key performance indicators:
EBIT margin in the Automotive segment (between 8 and
10%), RoCE in the Automotive segment (at least 18%) and
Group EBT margin (more than 10%) Performance indicators.
42
BMW Group Report 2021
To Our Stakeholders
Group Financial Statements
Combined Management Report
BMW Group Integrated Strategy
To Our Stakeholders
BMW Group Report 2021
43
* Consumption and carbon emissions data
We are constantly expanding our collaborations to secure
access to new technologies and increase value creation
setting cooperation goals and defining strategic fields of co-
operation with our partners based on the strategic frame-
work.
vey confirm high internal acceptance of the BMW Group's strat-
egy and sustainability activities, as well as employees' willingness
to play their part Employees and Society. BMW Group employees
not only work closely together within the Company, but also with
external partners. The stable relationships that have grown over
time in our partner networks are based on the same values as
those at the BMW Group. This has been especially evident during
the pandemic years of 2020 and 2021. Even when confronted
with the challenges of global lockdowns and the shortage of
semiconductor components, our supply chains have held up well
and our retail network showed its strength. This is the only way
we can maximise our effectiveness and, together, lead the Com-
pany to success.
To anchor strategy within the Company, it is critical to keep em-
ployees and managers informed, to strengthen their creativity
and to encourage them to actively participate in the implementa-
tion and achievement of goals. The results of the Employee Sur-
Our ambitious strategic objectives can only be achieved if all
employees work together. Diversity is an important compo-
nent of our competitiveness Employees and society. The diver-
sity metric defines the share of women in management po-
sitions as a key performance indicator and a strategic target
variable. The aim is to increase the share of women in man-
agement positions at the BMW Group to 22% by 2025 7 Per-
formance indicators.
How does the BMW Group
ensure cooperation?
In the Financial Services Segment, the strategic approach is
geared towards making the product range available to all
customer groups across all channels Financial Services segment.
BMW Motorrad is continuing to evolve in the direction of
electromobility. The "Vision Amby" Vision Vehicle and the
fully-electric Concept CE 02 provide a glimpse of the future of
urban mobility. In the urban mobility segment, the CE 04
electric scooter is a trailblazer for BMW Motorrad's electro-
mobility strategy 7 Motorcycles segment.
BMW M is also currently working on various forms of electri-
fication and already launched a performance car with a fully
electrified drive train, the BMW i4 M50*, in 2021. At the same
time, MINI's transition to an all-electric brand underlines its
urban identity. Rolls-Royce, the world's leading luxury brand,
will also focus on electromobility in the future Automotive
segment.
The third phase of the transformation will begin in 2025 with
our global fully electric product line-up, the Neue Klasse.
Production of vehicles for the Neue Klasse will get underway
at the newly constructed BMW Group Plant Debrecen and
then expanded to BMW Group Plant Munich from 2026 on-
wards. The Neue Klasse sets the standard for digitalisation,
electrification and sustainability. It will be characterised by a
New Cluster Architecture (NCAR) geared exclusively towards
battery electric vehicles (BEVs), a completely redefined tech
stack autonomous driving and a newly developed high-per-
formance electric drivetrain generation. The Neue Klasse
also makes a significant contribution to sustainability, by re-
lying on the concept of circularity Circular design.
The BMW iX is the first BMW Group vehicle to offer automated
driving and parking functions from a new technology kit that
will enable continuous improvement and expansion of driver
assistance functions and highly automated driving in the mid-
term (Level 3). These functions will continue to be rolled out
and used in the next-generation BMW 7 Series and BMW 5
Series, for instance. Moreover, with the launch of the BMW iX,
the BMW Group became the first premium manufacturer to in-
clude the 5G mobile communications standard in a series pro-
duction vehicle on a worldwide basis. In terms of mobility, this
means comprehensive expansion of data-based services in
the fields of entertainment and infotainment, automated and
assisted driving and, above all, road safety.
In addition to delivering product substance, we also offer our
customers a 360° approach to electrification, by creating an
appropriate charging ecosystem - because charging is a
trailblazer for electromobility. As well as offering charging
options at home and at work, we also provide public charg-
ing through BMW Charging and MINI Charging Mobility con-
cepts and services.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Combined Management Report
BMW Group Integrated Strategy
Revenues
with the full Board. All topics submitted to the Board of Man-
agement for decision-making must also be evaluated from
the point of view of sustainability, thereby ensuring that sus-
tainability issues are systematically integrated in deci-
sion-making processes.
Other Information
An integrated approach to target management ensures that
the BMW Group's vehicle projects make a positive contribu-
tion towards achieving the sustainability targets that have
been set. By 2030, the BMW Group intends to drastically
broaden the scope of recycling, while further increasing the
proportion of secondary raw materials used to manufacture
its automobiles. With this point in mind, the BMW Group es-
tablished the so-called "Secondary First" approach during
the year under report. Non-financial performance indicators
such as carbon emissions and secondary raw materials quo-
tas are therefore key performance indicators for all new vehi-
cle projects. The overall result is a cohesive management
model across all aspects of the business. 7 GRI-Index: 102-19
2020
103
2021
Motorcycles
in %
Return on capital employed
Average capital employed
in € million
in € million
Profit before financial result
RETURN ON CAPITAL EMPLOYED (MOTORCYCLES SEGMENT)
Average equity capital
2021
Financial Services
The performance of the Financial Services segment is meas-
ured on the basis of the return on equity (ROE), a key perfor-
mance indicator commonly used in the banking sector. With-
in the BMW Group, RoE is defined as segment profit/loss
before tax, divided by the average amount of equity capital
in the Financial Services segment. The target is a return on
equity of at least 14%.
Financial Services segment
The main value drivers include the number of deliveries as
well as the operating return on sales (corresponding to the
EBIT margin: segment profit/loss before financial result as a
percentage of segment revenues) as the key performance
indicator for segment profitability.
Average capital employed
Profit before
financial result
ROCE Motorcycles
The Motorcycles segment is largely managed according to
the same logic applied to the Automotive segment. The prin-
cipal key performance indicator is the return on capital em-
ployed (ROCE). The new definition of capital employed
adopted by the Automotive segment will also be applied by
the Motorcycles segment, beginning with the 2022 reporting
period. As in the Automotive segment, the new strategic
ROCE target set for the Motorcycles segment is 18%.
Motorcycles segment
← = Q
Other Information
RoE
Remuneration Report
2020
687
16,586
15,343
22.6
As part of the procedures for managing sustainability on an
integrated basis at corporate level, a Group target system
has been created, which has been implemented for each of
the Board members' areas of responsibility. The BMW Group
has set itself the target of decarbonising its vehicle fleet by
an average of 40% overall over the entire life cycle by 2030,
based on the reference year 2019. In this context, specific
targets have been set for the vehicle's use phase, production
and the supply chain (7 Position) including emissions reduc-
tion targets across the entire value chain (carbon emissions and
pollutants). Additionally, specific carbon targets have been set
for each vehicle project.
1,725
3,753
Financial Services
2020
2021
2020
632
2021
2021
in %
Return on equity
in € million
Average equity capital
Profit before tax
in € million
RETURN ON EQUITY (FINANCIAL SERVICES SEGMENT)
15.0
2020
2021
35.9
2020
Corporate Governance
227
Combined Management Report
BMW Group Integrated Strategy
EQUALITY
GENDER
DUNAOC
Due to the special significance of ROCE for the BMW Group,
the Automotive segment is also managed on the basis of a
number of additional key performance indicators that have a
significant impact on RoCE and hence on segment perfor-
Average capital employed
Profit before
financial result
ROCE Automotive
employed than previously reported. We also expect the
amount of capital employed to increase in light of the acqui-
sition of further shares in BMW Brilliance Automotive Ltd.
and the resulting full consolidation of that entity in the finan-
cial year 2022, whereby the increase will arise primarily due
to the capitalisation of reacquired rights in conjunction with
the purchase price allocation. The RoCE will be impacted
temporarily by the higher capital base as well as the related
amortisation expense expected to be recorded.
With effect from the reporting year 2022, a simplified defi-
nition of capital employed will be applied to make the calcu-
lation of RoCE more comprehensible and transparent. More-
over, the capital employed figures reflect the focus of the
operating segment management. In future, capital employed
will be calculated as the sum of intangible assets, property,
plant and equipment and net working capital, the latter com-
prising inventories and trade receivables less trade pay-
ables. The new definition results in a higher level of capital
Up to and including the reporting year 2021, capital em-
ployed has been defined as the sum of all current and
non-current operational assets less liabilities that were
available to the operational business and generally did not
incur interest (e.g. trade payables and other provisions).
The most comprehensive key performance indicator used for
the Automotive segment is RoCE, which is measured on the
basis of segment profit/loss before financial result and the
average capital employed in the segment. It provides infor-
mation on the profitability of capital employed and business
operations. Value driver analyses are used to interpret the
causes of a change in RoCE and derive suitable measures to
influence its development.
Automotive segment
Managing operational performance at segment level
At segment level, operational performance is managed us-
ing an aggregated approach based on returns on capital.
Depending on the business model, the segments are meas-
ured on the basis of return on total capital or return on equity.
Return on capital employed (ROCE) is used for the Automo-
tive and Motorcycles segments and return on equity (ROE)
for the Financial Services segment. These indicators com-
bine a wide range of relevant economic information, such as
profitability (return on sales) and capital efficiency (capital
turnover) to measure segment performance and the devel-
opment of enterprise value.
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
Group Financial Statements
Combined Management Report
BMW Group Integrated Strategy
45
To Our Stakeholders
BMW Group Report 2021
UN ALLIANCE OF
CIVILIZATIONS
The new strategic target for RoCE is 18% (target under the
previous definition: 40%). In substance, the new target is
even more ambitious than that previously used to measure
the return on capital employed. Value is enhanced for
BMW AG shareholders when the RoCE exceeds the cost of
capital.
Furthermore, the Automotive segment manages its compli-
ance with fleet carbon emissions requirements in regulated
markets. In this context, it also reports on the share of elec-
trified vehicles in total deliveries performance indicators. As
compliance with regulatory requirements is a significant fac-
tor in the BMW Group's success, business decisions relating
to vehicle projects also take targets for fleet carbon emis-
sions into account. Managing sustainability
To Our Stakeholders
BMW Group Report 2021
46
46
mance. These value drivers are the number of vehicle deliv-
eries and the operating return on sales (EBIT margin: seg-
ment profit before financial result as a percentage of segment
revenues) as the key performance indicator for segment
profitability.
59.9
17,026
16,486
2,162
9,870
2020
2021
12.7
Average capital employed
in € million
2021
2020
2021
in %
Return on capital employed
2020
RETURN ON CAPITAL EMPLOYED (AUTOMOTIVE SEGMENT)
Profit before financial result
in € million
Automotive
53
We view digital technologies as an excellent opportunity to
further improve our existing processes, come up with new
solutions, and engage seamlessly with our customers. For
example, in many markets vehicles can be demonstrated live
on a screen shared with a customer or configured online to-
gether with a member of our sales team. A complete online
sales process has already been successfully implemented in
some of our markets, with others to follow in the foreseeable
future.
BMW Group Report 2021
customer orientation
The BMW Group has already offered automated remote soft-
ware upgrades to more than four million of its vehicles, and cus-
tomers have successfully installed them more than 2.3 million
times. Read more in our online special. Online Report
Combined Management Report
Products and Mobility Solutions
Group Financial Statements
Corporate Governance
To Our Stakeholders
Some 30 BMW models are currently upgradeable, which means
that suitable vehicles can receive the latest software upgrades
"over the air". These remote software upgrades provide BMW
vehicles with improvements as well as new digital products and
services and keep the software up to date.
XDrive
Drive technologies of the future
The BMW Group also focuses on the needs and wishes of its
customers worldwide when developing its drive technolo-
gies. For this reason, we are constantly enhancing our exist-
ing drive technologies in the interests of efficiency, decar-
bonisation and resource conservation. At the same time, of
course, the BMW Group is researching new drive technolo-
gies with the aim of preparing them for series production. 1]
Liptond
MPZ 1869
REMOTE SOFTWARE UPGRADES
period under report. For example, the My BMW app now also
includes a digital tyre diagnosis feature that uses artificial
intelligence to assess the condition of the vehicle's tyres.
The MINI app now enables users to access a broader range
of services, including booking appointments and paying for
services contactlessly. In an optionally available service
video, they can find out about the vehicle check or opt for a
variety of services. Innovative digital solutions are also de-
ployed in other areas of the BMW Group, such as in
production or development scenarios. When it comes to
maintaining production systems, we are switching to what is
known as a predictive maintenance strategy. With the help of
sensors, cloud-based data analysis and artificial intelli-
gence, the system assesses when a particular piece of
equipment needs to be serviced in order to prevent unneces-
sary production downtime. The technology allows mainten-
ance to be planned and components to be replaced before
they actually break down.
Digitalisation also enables innovations, simplifications and
advances outside the vehicle. The My BMW app and the
MINI app for smartphones have been available since 2020.
They provide a connection from wherever the user is located
to the vehicle - or to the service partner if required. Both
apps were equipped with additional new features during the
In autumn 2021, with the launch of the new, all-electric BMW
iX, the BMW Group simultaneously introduced its new BMW
Operating System 8 as well as a new display and control
system. The principal design focus was on clarity and
straightforward, intuitive usability. The large BMW curved
display enables drivers to customise the content of their dis-
play via a touchscreen. Buttons and switches have been re-
duced to a necessary minimum.
Remote software upgrades also provide BMW owners with
the option to tap into new digital business models such as
"functions on demand". Customers can either purchase
additional functions or simply order them for a specific
amount of time. The response to these offers has already
been highly positive. 7 Online Report
Furthermore, digitalisation is a vital key to keeping our ve-
hicles "fresh" throughout their entire life cycle. Since the
launch of Operating System 7 in 2018, remote software up-
grades have become a reality for BMW automobiles.
Remuneration Report
REMOTE SOFTWARE UPGR
Other Information
Combined Management Report
Products and Mobility Solutions
[Electric-powered future with the Neue Klasse
The BMW Group sees the transformation to all-electric, con-
nected, sustainable mobility as an opportunity and has de-
veloped a clear road map that consists of three phases. In
the first phase, the Group began pioneering e-mobility as
early as 2007 with project i, enhancing the technology and
then developing electrified vehicles for series production. In
the second phase, which is currently underway, we are intro-
ducing electrification to the product portfolio with a new
model initiative Broader offering based on smart vehicle archi-
tectures and our highly flexible 7 production network, which is
capable of manufacturing the full range of vehicles from
all-electric to combustion engine drive systems on the same
production line. By the peak of the second transformation
phase at the end of 2025, the share of electrified cars in the
BMW Group's total deliveries is scheduled to rise to at least
30%.
Remuneration Report
[Digitalisation - an opportunity for innovation and
Corporate Governance
Group Financial Statements
To Our Stakeholders
BMW Group Report 2021
54
** Consumption and carbon emissions data
MHEV 5057 E
Hydrogen fuel cell technology has the potential to become a
sustainable alternative to battery electric drive systems. The
technology really comes into its own when comprehensive
electric charging infrastructure is not available and there are
also a broad number of applications for this technology on
long-distance journeys or in larger classes of vehicle. De-
pending on market requirements and other general condi-
tions, the BMW Group intends to offer a production vehicle of
this type in the second half of the decade. ]]
tween the carbon-free drive system, the chassis technology
and the electronic systems under realistic conditions. The
BMW iX5 Hydrogen uses hydrogen as a fuel and converts it
into electricity via a fuel cell, making the BMW iX5 Hydrogen
a fully electrically powered vehicle. A pilot series of this mod-
el will be produced at the end of 2022 in order to gain further
practical experience in a broadly based field trial.
HYDROGEN
CONCEPT PROTECTION VRS
HYDROGEN
During the year under report we began testing the BMW iX5
Hydrogen with its hydrogen fuel cell drive in everyday driving
scenarios in Europe. The aim is to test the interaction be-
Hydrogen fuel cell technology
[[Additionally bolstering battery expertise
Powerful, sustainable energy storage systems and the de-
velopment of new, innovative battery cells are key elements
for powering future generations of all-electric vehicles. For
the Neue Klasse, we are working on significantly increasing
the energy density of the cells, while at the same time cutting
material and production costs. Battery recyclability is an-
other key consideration that will impact the development of
all our future generations of battery cells. Moreover, the
BMW Group is already conducting intensive research into
solid-state battery technology, which shows great promise
for the future.
This high technological standard will be integrated in a com-
plete vehicle architecture exclusively geared towards electric
drive systems. 1]
closed-loop systems for essential production materials
the increasing use of secondary materials
the use of carbon-free energy in ever larger parts of the
supply chain
the all-electric drive system
From 2025, the third phase will begin with the Neue Klasse,
which will be characterised by three key aspects: a com-
pletely redefined IT and software architecture, a new genera-
tion of electric drive systems and batteries, and a new level of
sustainability across the entire vehicle life cycle. Contributing
factors include:
← = Q
← = Q
Combined Management Report
Products and Mobility Solutions
Remuneration Report
> 40%
AT A GLANCE
PRODUCTS AND MOBILITY SOLUTIONS
Product Safety and Data Protection
65
Mobility Concepts and Services
62
Electric Mobility
59
Carbon Emissions and Pollutants
56
Innovation and Customer Orientation
51
PRODUCTS AND MOBILITY SOLUTIONS
← = Q
Other Information
Remuneration Report
Corporate Governance
Group Financial Statements
To Our Stakeholders
BMW Group Report 2021
51
Other Information
decrease in carbon emissions on average per
vehicle over its entire life cycle compared with
2019 that is our target by 2030.
Decarbonisation targets
328,314
electrified vehicles delivered by the BMW Group
in 2021 more than twice as many as in 2019.
7 Broader offering
"> 250,000
Corporate Governance
Group Financial Statements
Combined Management Report
Products and Mobility Solutions
To Our Stakeholders
BMW Group Report 2021
52
ACTION
ANDINFRASTRUCTURE
CLIMATE
QINDUSTRY INNOVATION
W
Other Information
AND WELL-BEING
recycled and recyclable. This design study points
to what is conceivable as we move forward. ]]
[100 %
7 SASB-Index
Efficient urban mobility is another strategic focus reflected in
the vision and concept vehicles that the BMW Group pre-
sented in 2021. The Group also demonstrated its ability to
develop innovative solutions with design studies such as the
7 BMW Motorrad Vision AMBY and the BMW i Vision AMBY two-wheel-
ers. Powered by smart speed and drive system controls, they
can be used both on the road and on cycle paths. The 7 MINI
Vision Urbanaut shows a facet of the automobile that goes far
beyond its core purpose as a means of mobility and can be
used in a highly flexible manner. 1]
The BMW Group and its brands are well-known for their
emotive, forward-thinking design. In the course of the re-
porting year we also focused on another key facet of our
work: circular design. At the IAA Mobility in September 2021,
design geared to promoting sustainability and driven by the
circular economy concept 7 Circularity as a Strategic priority found its
expression in the BMW i Vision Circular. The design of this vision
vehicle has been optimised for closed material loops and
shows what a vehicle can look like that is not only made of
100% recycled materials, but is, in fact, itself fully recyclable.
Circular design - a topic shaping the future
[[An innovation only differs from a mere idea or an invention
when successfully applied to create new products, services
or processes. In this particular sense, innovation within the
BMW Group is inextricably linked with the concept of cus-
tomer orientation. During the year under report, innovations
again led to processes being optimised, products improved,
and new technologies introduced that make everyday life
easier for our customers. We see the future as electric, digital
and circular.
CUSTOMER ORIENTATION
INNOVATION AND
7 Range of reliable charging services ]]
charging points available to customers in Europe
with the BMW and MINI Charging Cards.
3 GOOD HEALTH
← = Q
Holistic management system
In order to build up an efficient hydrogen-based economy
and promote the production of green Hydrogen, the
BMW Group supports initiatives right across Europe.
in t CO₂ / CO₂e
TOTAL EMISSIONS
Scope 1
Scope 2
Scope 32
For definition, Glossary: Carbon emissions Scope 1 to Scope 3
2021
122,539,929
699,713
134,849
121,705,368
2020
118,491,889
678,967
130,090
117,682,832
For a detailed version, see 7 Carbon footprint of the BMW Group in "Further GRI information" ]]
M.VE 2918
[ Following the overall drop in carbon emissions one year
earlier due to the coronavirus pandemic, the figure rose
again by around 3% to approximately 123 million tonnes in
the year under report, mainly driven by renewed growth in
production volume. Nonetheless, carbon emissions are 8%
down overall compared to the base year 2019, mainly due to
lower average fleet emissions worldwide. 1]
Decarbonisation during the use phase meets legal
requirements
[ THE BMW GROUP'S CARBON FOOTPRINT
(ABRIDGED VERSION)³
The carbon emissions generated during the use phase are
the subject of numerous regulatory requirements and also a
key parameter in our life cycle assessment. With the early
serial introduction of electrified vehicles since 2013 and the
fleet-wide use of innovative Efficient Dynamics technologies since
2007, we have continuously and permanently reduced both
vehicle fuel consumption and emissions. These two param-
eters form the basis for us for again meeting mandatory car-
bon emissions and fuel consumption requirements in the
year under report. SASB-Index
As from 2021, average fleet CO₂ emissions in the EU4 must
be reported according to the new WLTP5 type test cycle. In
the year under report they totalled 115.9 g CO2/km, taking
regulatory requirements into account. We have thus signifi-
cantly reduced fleet carbon emissions compared with the
previous year (2020: 135 g CO₂/km 6,7). We were significantly
below the limit of 125.8 g CO2/km applicable for the
BMW Group by 9.9 g CO2/km. The reduction is therefore in
line with the trend seen in previous decades, driven by the
increasing electrification of our vehicle fleet and continuous
improvements in the efficiency of our internal combustion
engines. On this basis, we continue to work unabated to fur-
ther reduce greenhouse gas emissions going forward.
7 GRI-Index: 305-5
JOINING THE INITIATIVE BUSINESS AMBITION
FOR 1.5°C
In line with the targets set at the Paris Climate Agreement, the
BMW Group wants to make its contribution to limiting global
warming. We are demonstrating this commitment with our me-
dium- and long-term plans for decarbonisation. To emphasise
our intention, during the year under report we became the first
German automotive manufacturer to join the Business Ambi-
tion for 1.5°C initiative of the SBTi. The campaign brings together
companies that have set themselves the target of net zero emis-
sions in line with the SBTI and are thus following a long-term
1.5 degree pathway. By joining the initiative, the BMW Group is
also part of the international Race to Zero campaign organised
by the United Nations. With this move, we also want to motivate
other companies to take ambitious steps to protect the climate.
1 Excluding carbon emissions relating to disposal.
2 Scope 3 in this case includes emissions from logistics, business travel, employee
commuting, upstream supply chain, use phase and waste disposal.
3 Due to the broader extent of reporting on Scope 1 and Scope 2 emissions at BMW
Group locations and the changed method for calculating Scope 3 downstream
emissions in the use phase, the previous year's figures have been adjusted to
enable better comparison.
" EU-27 countries including Norway and Iceland.
5 WLTP stands for the new Worldwide harmonized Light vehicles Test Procedure.
Since 2021, the EU Commission has used this procedure as the basis for calculating
fleet carbon emissions.
6 This is a preliminary internal calculation with a potential variation of
+/- 0.5 g CO2/km, as official registration figures have not been provided by the
authorities of all EU states. The EU Commission is not expected to publish official
figures until November 2022.
7 To improve comparability of the previous year's figures with those of the current
year under report, the 2020 NEDC figures have been converted to WLTP after ad-
justment for the applicable flexibilities - specifically, from 99 g CO2/km according
to NEDC (incl. 5 g CO2/km phase-in, 7.5 g CO2/km supercredits and 2.4 g CO₂/km
eco-innovations) to 135 g CO2/km according to WLTP (excluding flexibilities). In
2020, a phase-in regulation was accepted, as was the recognition of supercredits.
As of 2021, these two simplifications no longer apply for the BMW Group.
87 Consumption and carbon emissions data
8
58
BMW Group Report 2021
To Our Stakeholders
EU carbon emissions targets achieved
Combined Management Report
Products and Mobility Solutions
With the even more ambitious target of reducing carbon
emissions during the use phase by more than 50%, the
overall view over the complete life cycle¹ of a vehicle by 2030
results in an average carbon emissions reduction of at least
40%. By 2050, we intend to achieve net zero in terms of our
carbon emissions across the entire value chain. As of the
year under report, we made the remaining carbon emissions
generated at our own plants and locations completely car-
bon-neutral through the use of voluntary offsetting certifi-
cates. Compensation of site-related carbon emissions
Other Information
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
CARBON EMISSIONS AND
POLLUTANTS
[ Mitigating the impact of climate change is one of the great-
est challenges of our time and requires a massive effort, not
only on the part of society as a whole, but also from policy-
makers and the business community. The BMW Group is
also involved in these endeavours. By 2050, we intend to
achieve the target of net zero in terms of our emissions
across the entire value chain. With this aim in mind, in 2020
the BMW Group set itself ambitious, science-based targets
for the year 2030, which have been validated by the Science
Based Targets initiative (SBTI). We intend to achieve these
targets by further reducing the carbon footprint and pollutant
emissions of our vehicles, as we have done in the past.
Decarbonising across the entire life cycle
[The BMW iX5 Hydrogen is powered by fuel cells that stem
from the Group's development cooperation with the Toyota
Motor Corporation. However, the fuel cell stack and the over-
all drive system are being developed in-house by the
BMW Group. The collaborative project, which began in 2013,
aims to optimise the everyday suitability of fuel cell technol-
ogy and its use in each company's own production vehicles.
The BMW Group intends to leverage its holistic manage-
ment system to substantially improve its carbon footprint
from one vehicle generation to the next across the entire
life cycle. In view of the increasing electrification, it is par-
ticularly important to be aware that although the trend
reduces carbon emissions during the use phase. It in-
creases them at the same time in the supply chain. The
reason for this lies primarily in the carbon-intensive com-
ponents needed to power electric mobility, such as
high-voltage batteries in particular. With this point in
mind, the BMW Group defines specific decarbonisation
targets for all its vehicles right from the outset. The targets
encompass the supply chain, production and the subse-
quent use of the vehicle by the customer. Our system for
7 measuring performance enables us to ensure that these tar-
gets are implemented both rigorously and consistently
throughout the entire Group. The strategy allows us to
take our decarbonisation targets into account right from
the product development stage as well as market-related
requirements for our vehicle fleet at the same time. We
manage the implementation of our targets and the as-
sessment of progress during the development process
with the help of a carbon footprint based on ISO stand-
ards 14040 and 14044.
Decarbonisation targets across the value chain
Measurable, science-based targets that initially extend to
2030 form the basis for our decarbonisation strategy and for
this reason we have joined the SBTi. The use of sci-
ence-based targets makes the measurability of our targets
transparent and at the same time ensures that they are in
line with the latest scientific findings. ]]
We have set ourselves the following decarbonisation targets¹
to be achieved by 2030 (base year 2019). These targets were
notified to the SBTI and validated in 2020.
← = Q
An average of 80% carbon reduction at our own produc-
tion sites and locations (Scope 1 and 2) per vehicle pro-
duced. Decarbonisation at BMW Group locations From 2021,
carbon emissions in accordance with Scope 1 and 2 include
not only production-specific emissions, but also those
generated at locations not directly related to production.6
Carbon reduction during the use phase (Scope 3 down-
stream) by an average of at least 50% per kilometre
driven. Thus we again significantly raised the original tar-
get of more than 40% that we had set ourselves. The
main reason for this is the dynamic growth in demand for
our electrified vehicles. Electric mobility, 7 Automotive segment
The adjusted target of 50% has been submitted and
successfully validated by SBTi in february 2022.
1 Scope 3 emissions generated by the upstream value chain, logistics services and
well-to-tank emissions are stated in carbon equivalents. When measuring Scope 1
and Scope 2 emissions and the further Scope 3 emissions, climate-impacting
gases apart from carbon dioxide have been ignored.
2 Figure rounded for simplification purposes. The target validated in conjunction with
the SBTi is 22%.
3 Categories included under Scope 3 upstream according to the Greenhouse Gas
Protocol: 1. Bought-in goods and services and 4. Transport and distribution.
Carbon footprint
"Based on the well-to-wheel method, which in addition to the tank-to-wheel
approach also takes into account the generation and supply of fuel and thus the
entire impact chain relating to the driving of vehicles.
5 Categories included under Scope 3 downstream: Use phase Carbon footprint.
6 For comparison purposes, the figures for 2019 (base year) and 2020 have been
adjusted accordingly.
57
57
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Products and Mobility Solutions
Group Financial Statements
Corporate Governance
Remuneration Report
An average of at least 20 %² carbon reduction in the sup-
ply chain (Scope 3 upstream³) per vehicle produced. This
data also provides us with a scientifically tested and con-
firmed target for reducing carbon emissions in the supply
chain. Reducing carbon emissions in the supply chain
Group Financial Statements
Corporate Governance
Remuneration Report
of the BMW Group's vehicle
deliveries worldwide are set to
be fully electric models.
By offering parallel drive technologies, we are creating a
smooth transition to the future of electric mobility, while sim-
ultaneously making the best possible use of our existing re-
sources. At the same time, we are systematically continuing
to electrify our product range, driven by the dual forces of
growing customer demand and regulatory requirements. ]]
By 2025, the proportion of electrified automobiles in total
Group deliveries is projected to rise to at least 30%. By the
year 2030, at least half of the BMW Group's vehicle deliver-
ies worldwide are set to be fully electric models. Moreover,
we intend to put some ten million fully electric vehicles on
the road during the next ten years. [t By the early 2030s, the
BMW Group plans to offer only all-electric vehicles to its
MINI and Rolls-Royce customers. The fact that we are sys-
tematically electrifying both brands has to do with their typ-
ical user profiles, as MINIs are predominantly used for urban
driving, while Rolls-Royce cars are mainly used for shorter
distances. 1]
7 Consumption and carbon emissions data.
60
60
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Products and Mobility Solutions
Group Financial Statements
Corporate Governance
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Other Information
← = Q
[Broader offering
By the year 2030, at least half
The BMW Group's range of electrified products consists of
purely battery electric vehicles (BEV¹) and plug-in hybrid
models (PHEV²).
During the year under report, the BMW Group also added
further engine variants to its PHEV model range with the
BMW 320e6 and the BMW 520e6. Including these innov-
ations, we are currently offering 17 plug-in hybrid basic mod-
els in a total of 83 markets worldwide. With innovations
such as the BMW eDrive Zone, extensive charging options and
increased ranges, we are enabling drivers of plug-in hybrids
to travel electrically as often and over as long a distance as
possible. The BMW 2 Series Active Tourer compact plug-in
hybrid model will be launched in 2022 and capable of trav-
elling up to 80 kilometres (WLTP4) purely on its own battery
power. 1]
In 2021, the BMW Group delivered a total of 328,314 all-elec-
tric and plug-in hybrid vehicles (2020: 192,6625] to custom-
ers, around 104,000 of them with all-electric drive systems,
thus surpassing our self-imposed target of more than doub-
ling our sales of electrified vehicles compared with the 2019
figure (146,158 units). Therefore, at the end of 2021, more
than one million BMW Group vehicles with fully electric or
plug-in hybrid drive systems were on the road worldwide
(Automotive segment). In the year under report, the percentage
share of electrified vehicles to total BMW Group deliveries
reached 13.0%.
[[Increasing range to suit customer needs
The BMW Group assesses the increase in electric vehicle
ranges from various points of view. We are not aiming to pro-
vide the technically greatest possible range across all vehicle
segments as a matter of pure principle. It is far more important
to adapt the range to suit the intended use of each individual
vehicle. At the same time, we also need to consider the eco-
logical impact, as a longer range means larger and therefore
heavier high-voltage batteries. This relationship has a direct
effect on resource consumption, the environmental footprint
of the respective supply chain, and vehicle weight, which in
turn has a significant influence on the overall consumption of
a given vehicle.
For these reasons, the MINI Cooper SE6 is designed for ur-
ban driving and has a range of more than 200 kilometres
(WLTP4), in line with customer requirements. The new BMW
iX and i4 models are designed for covering long distances of
around 600 kilometres (WLTP4) on just one charge. In view
of the customer and usage profiles of both vehicles, we con-
sider these ranges to be optimal. Fully electric vehicles will
be capable of achieving ranges of more than 600 kilometres
(WLTP4), depending on vehicle size and type, as the use of
electric mobility continues to become more widespread.
Hydrogen
Our customer-oriented technological diversity approach also
includes the further development of fuel cell technology, for
which we see considerable potential, depending on the seg-
ment. We see electric drive systems that use hydrogen as an
energy storage system as a complementary addition to bat-
tery electric mobility and as an opportunity to reduce carbon
emissions at an even faster rate. In this context, we present-
ed the BMW X5 Hydrogen at the IAA Mobility 2021.
We are also driving hydrogen fuel cell technology forward at
a higher level. For example, we are involved in worldwide or-
ganisations and associations, such as the 7 Hydrogen Council.
As an associated partner of H2 Mobility Deutschland GmbH, the
BMW Group supports the establishing of infrastructure re-
quired for hydrogen-powered vehicles. In this context, the
BMW Group welcomes the call in the EU's Fit for 55 legisla-
tive package to establish a basic infrastructure of 700-bar
hydrogen refuelling stations.
Expanding charging infrastructure and enabling faster
charging
An expanded, customer-friendly charging infrastructure will
pave the way for the rapid and widespread use of electric
mobility. For this reason, the BMW Group is committed to
creating standardised framework conditions and services
that enable easy charging. 1]
1 Battery electric vehicle.
2 Plug-in hybrid electric vehicle.
3 All performance and body variants are counted as basic models. Specifically, these
are the following: BMW 225xe*, BMW 320e*, BMW 320e Touring*, BMW 330e*,
BMW 330e Touring*, BMW 520e*, BMW 530e*, BMW 530e Touring*, BMW 545e*,
BMW 545e Touring*, BMW X1 xDrive25e*, BMW X1 xDrive25Le* (China only), BMW
X2 xDrive 25e*, BMW X3 xDrive30e*, BMW X5 xDrive 45e*, BMW 745e/Le/Le
xDrive* and MINI Cooper SE Countryman ALL4*.
"Range calculated on the basis of the new WLTP test cycle (Worldwide Harmonized
Light Vehicles Test Procedure). The actual range achievable depends on a variety
of factors, including personal driving style, route characteristics, the outside tem-
perature, heating, air conditioning, preheating and precooling. Provisional figure
5 Vehicle delivery figures presented for the year 2020 are not directly comparable
with those of previous years. See sales figures for deliveries in the section "Com-
parison of Forecasts with Actual Outcomes" for further information.
67 Consumption and carbon emissions data.
Apart from the established all-electric BMW i3, MINI Cooper
SE6 and BMW iX36 models already available, two key inno-
vation drivers were added during the year under report - the
BMW X6 and the BMW i46. Over the next two years, the
all-electric versions of the BMW 7 Series, the BMW X1, the
high-volume 5 Series and the MINI Countryman are set to
follow, as will the all-electric Rolls-Royce Spectre. From
2025, we will be rigorously taking the core BMW brand into
a new all-electric dimension with the 7 Neue Klasse.
The BMW Group has always focused its business on the
needs of its customers, and our product portfolio amply re-
flects this enduring ambition. Leveraging the benefits of
scalable, modular design and the Group's flexible production
systems, customers can now choose between fully electric ve-
hicles, plug-in hybrids and efficient conventionally powered
models. A prime example of the freedom of choice our cus-
tomers enjoy is the BMW X3, which is the first model series
to be available as a plug-in hybrid*, a combustion engine
version (both diesel and petrol), and as a BMW iX3* with an
all-electric drive system.
Drive system diversity
Our electrified vehicles are making an essential contribution
to driving down fleet emissions and thus to meeting our am-
bitious strategic decarbonisation targets right across the value
chain. For this reason, we are systematically continuing to
electrify our model range as a vital ingredient of our product
strategy.
Other Information
← = Q
Fleet emissions in the USA, China and worldwide
In the USA, average fleet emissions¹ for model year (MY]
2021 were calculated at 134.0 g CO2/km for passenger cars
(MY 2020: 155.7 g CO2/km) and 150.1 g CO2/km for light
trucks (MY 2020: 185.6 g CO2/km). Volume-weighted fleet
carbon emissions in the USA averaged 140.9 g CO2/km (MY
2020: 166.8 g CO2/km) (BMW internal calculation). In the
2021 reporting year, legally permissible imputation factors¹
were included for the first time. For this reason, direct com-
parability with the previous year is not possible. In China, av-
erage fleet carbon emissions² were 163.0 g CO2/km accord-
ing to the new WLTC test cycle introduced in the year under
report (2020: 151.1 g CO2/km NEDC). Due to the change
of cycle, a direct comparison with the previous year is not
possible.
The BMW Group's global carbon fleet emissions³ averaged
197.9 g CO2/km³ in the year under report (2020: 212.4g
CO2/km). The figure represents a reduction of 9.4% com-
pared with the 2019 baseline. When calculating these emis-
sions, the BMW Group takes into account the average fleet
carbon emissions in the EU, the USA and China and stand-
ardises them according to WLTP. Accounting for more than
80% of BMW Group deliveries overall, these three core mar-
kets and regions are a reliable basis for calculating fleet car-
bon emissions worldwide. In line with the SBTI, we add 10%
to the figures calculated to cover any possible differences
between the figures according to WLTP and actual emis-
sions. The figure also includes the upstream supply chain
emissions generated by energy sources (fossil fuels and
electricity) in accordance with the well-to-wheel approach.4
7 GRI-Index: 305-5
[Legal framework
The BMW Group has the clear ambition not only to comply
with statutory carbon emissions limits worldwide, but also
to significantly undercut them wherever possible. At the
same time, we support the development of harmonised reg-
ulations both nationally and internationally. Comparable
regulations in major markets create reliable, predictable
framework conditions that make a key contribution to com-
batting climate change and improving air quality. We ad-
dress the opportunities and risks associated with increas-
ingly strict carbon emissions regulations as part of our
7 climate-related risks. TCFD-Index
The BMW Group supports the proposal published by the EU
Commission in the year under report for implementing the
EU's 2030 climate protection target. The associated goals of
Fit for 55 largely coincide with those of the BMW Group.
Moreover, we are closely monitoring regulatory develop-
ments in the USA. In 2020, the BMW Group entered into a
voluntary agreement with the US state of California to reduce
its fleet emissions. The bilateral agreement is applicable for
all new BMW Group vehicle registrations in every state of the
USA. In 2021, the US government announced plans to intro-
duce tougher fleet fuel consumption targets at national level.
The BMW Group also intends to comply with these future
requirements. The US federal requirements regarding Green-
house Gas Emissions (GHG) generated by vehicle fleets and
the Corporate Average Fuel Economy (CAFE) regulations are
applicable in this case.
Designing conventional drive systems for greater
efficiency and lower emissions
The BMW Group expects state-of-the-art, highly efficient
combustion engines to continue playing a vital role. As part
of our Efficient Dynamics approach, we will therefore con-
tinue to work on further reducing the fuel consumption of
conventional drive systems in the coming years, thereby in-
creasing their efficiency. 7 SASB-Index
Technological improvements
The BMW Group has been implementing its Efficient Dy-
namics package of technological measures across its entire
fleet since 2007. The package comprises a range of coordi-
nated measures designed to reduce fuel consumption. We
will continue to pursue this strategy with innovative ap-
proaches to the use of internal combustion engines, aerody-
namics and lightweight construction. The broader use of 48-
volt technology is a key component in this regard. 48-volt
recuperation systems gather the energy recovered during
braking to supply the vehicle's electrical system and gener-
ate additional power, which reduces fuel consumption and
therefore carbon emissions. In the EU, apart from our
all-electric and plug-in hybrid models, we are also offering a
wide range of new models featuring a 48-volt recuperation
system. As from 2022, our modular motors will be fitted with
the second, even more efficient generation of 48-volt tech-
nology. The continued further development of energy man-
agement technologies in our vehicles, supplemented by oth-
er measures such as switching to highly efficient tyres,
should ensure even greater efficiency and optimise fuel con-
sumption. 1]
1 Average volume-weighted fleet emissions including regulatory credit factors (EV
multipliers, credits advanced technologies) of 21.6 g CO2/km according to USC
(United States Combined).
2 Average volume-weighted fleet emissions including regulatory credit factors of
8.83 g CO2/km (off-cycle technologies, NEV multiplier, phase-in) according to
WLTC (Worldwide Harmonized Test Cycle under China-specific test road conditions).
3 The figures are determined using a new calculation method, which was applied
retroactively to the year 2019 (2019 prior to adjustment: 140 g/km; 2020 prior to
adjustment: 133 g/km). For the defintion see Glossary Carbon emissions of the
new vehicle fleet worldwide incl. upstream emissions.
4 The well-to-wheel method takes into account the entire impact chain relating to
the movement of vehicles. The method covers everything from the generation and
provision of fuel to its conversion into energy and thus also takes into account the
environmental impact of producing the required fuel. For example, the BMW Group
takes the IEA Energy Report as the basis for calculating emissions in the upstream
value chain (Provision of electrical energy).
59
BMW Group Report 2021
Driving electric mobility forward
[Electric mobility is one of the key topics shaping the future
of the BMW Group in terms of sustainable mobility. The in-
creasing number of electrified models and continuously
growing sales volume figures place the BMW Group firmly
among the leading providers of premium electric mobility
worldwide. We see electrification from a holistic point of view
and consider it essential to promote electric mobility by put-
ting in place the necessary charging infrastructure as well as
customer-friendly charging solutions. Accordingly, we are
continuously expanding our range of products and providing
a comprehensive range of charging products and services.
ELECTRIC MOBILITY
7 GRI-Index: 305-7
Nitrogen oxide levels are a crucial factor determining the
quality of air in towns and cities. With this point in mind,
since mid-2018 the BMW Group has been using a highly ef-
fective combination of a NOx storage catalytic converter
(NSC) and a selective catalytic reduction (SCR) system with
urea injection (AdBlue) in all diesel-powered BMW vehicles
as well as in the larger MINI diesel models. The efficiency of
exhaust gas after-treatment has been additionally boosted
by the use of an improved oxidation catalytic converter com-
bined with a two-stage SCR system. The new technology
has been available since 2020 with the revised generation of
six-cylinder diesel engines and is due to be rolled out across
the entire product range during the coming years. There
have already been noticeable reductions in NOx pollution
levels in German cities over the past few years, partially driv-
en by the ongoing renewal of the vehicle fleets of all automo-
tive manufacturers. ]]
Since the early 1990s, the BMW Group has significantly re-
duced the level of regulated pollutant emissions generated
by its vehicles, such as nitrogen oxides (NOx), carbon mon-
oxide (CO) and particulate matter (PM), by deploying new
technologies and continually improving existing ones. Be-
tween 1992 and 2021, in Europe alone we reduced the rele-
vant exhaust emissions of our new fleet of diesel cars in line
with Euro 1 to Euro 6d exhaust standards by more than 90%
compared to the level recorded prior to their introduction.
Measures aimed at minimising air pollution have made a
significant contribution to these achievements. All
BMW Group vehicles offered for sale during the year under
report meet the current Euro 6d emissions standard in the
European Union as well as similar regulations in Switzer-
land, Norway, the United Kingdom and Iceland.
Combined Management Report
Products and Mobility Solutions
[Pollutant emissions
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To Our Stakeholders
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To Our Stakeholders
The BMW Group is pursuing a clear strategy of decarbonisa-
tion across the entire life cycle of its vehicles and has defined
specific targets in order to do so. With this holistic approach,
we are moving forward on a path in line with the climate pro-
tection targets designed to limit global warming enshrined in
the Paris Climate Agreement.
Since the BMW Group, Daimler and Audi acquired the HERE
mapping service in 2015, the three partners have been work-
ing on developing high-precision digital maps that can be
linked to real-time vehicle data. The maps form the basis for
the next generation of location-related services, thereby
marking another key step in the evolution of individual mobil-
ity as well as building a solid foundation for developing new
assistance systems. HERE remains accessible as an inde-
pendent platform for the automotive industry as well as for
other partners. During the year under report, the location
data and technology platform had nine direct and indirect
shareholders, i. e. Audi, Bosch, the BMW Group, Continental,
Intel, Mitsubishi, Daimler, Nippon Telegraph and Telephone,
and Pioneer.
BMW Group Report 2021
56
Information on the overall scope of the BMW Group's re-
search and development activities is provided in the section.
7 Earnings performance
Moreover, the BMW Group and Solid Power, Inc. have ex-
tended the development agreement that has been in place
since 2016; the BMW Group intends to purchase solid-state
battery cells from Solid Power, Inc. for use in a prototype
within the first half of the current decade.
In 2021, the BMW Group, together with the Ford Motor Com-
pany, Volta Energy Technologies and other investors, invest-
ed in Solid Power, Inc., one of the industry's leading develop-
ers of solid-state battery cells with high energy density that
can also be used to power electric vehicles. This investment
and the subsequent IPO provided Solid Power, Inc. with the
financial resources to secure its research and development
activities for the years to come.
Under the brand name YOUR NOW, the BMW Group and
Daimler Mobility AG offer innovative, customer-friendly solu-
tions for business partners, cities, towns and municipalities
that are looking to make their mobility more efficient and
sustainable. The cooperation includes the joint ventures
FREE NOW (ride-sharing and multimodality), REACH NOW
(on-demand mobility and multimodality), SHARE NOW
(car sharing) and CHARGE NOW (charging). In 2021, the en-
ergy company bp also joined to become the third partner in
Digital Charging Solutions GmbH (DCS), which operates the
CHARGE NOW brand. Innovative mobility services on offer
The BMW Group is a founding partner of the IONITY joint
venture, the aim of which is to establish a high-performance,
high-power charging network for electric vehicles right
across Europe. The joint venture represents a vital step to-
wards ensuring that electric mobility also becomes a con-
venient means of transport for long-distance travel, thus es-
tablishing it firmly on the market. The founding partners, i. e.
the BMW Group, Daimler AG, the Ford Motor Company and
the Volkswagen Group together with Audi and Porsche, all
participated in equal measure. In 2019, the Hyundai Motor
Group with its Hyundai and Kia brands joined as an addi-
tional partner. In the year under report, the existing partners
signed the inclusion of Blackrock as a further investor (clos-
ing after approval through anti-trust authorities). The move
will enable IONITY to further invest in consolidating and ex-
panding the fast charging network. Expanding charging infra-
structure and enabling faster charging
Spotlight Automotive Limited (Spotlight), a joint venture be-
tween the BMW Group and the Chinese manufacturer Great
Wall Motors, will produce all-electric MINIs as well as electric
vehicles for Great Wall Motors. Established in December
2019, the joint venture also includes the collaborative devel-
opment of battery electric vehicles. The construction of a
production plant in Zhangjiagang (Jiangsu Province) is
meanwhile in the advanced stages. With this collaboration,
the BMW Group is stepping up its commitment in China and
significantly increasing its production capacities.
BMW Brilliance Automotive Ltd. (BBA) is a joint venture
founded in 2003 and owned equally by the BMW Group and
Brilliance China Automotive Holdings Ltd. (CBA). BMW Bril-
liance Automotive manufactures BMW brand models at an
engine plant and two automobile plants in Shenyang, China
(Liaoning Province). In February 2022, the BMW Group ac-
quired a further 25% of the shares in the BMW Brilliance
joint venture. Further information on the consolidation of
BMW Brilliance Automotive is available in the Notes to the
Group Notes to the Financial Statement.
← = Q
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Combined Management Report
Products and Mobility Solutions
To Our Stakeholders
Corporate Governance
55
Inspiration and cooperation
Good ideas often come into being when different partners
decide to work together. Accordingly, we focus on cooper-
ations in which the strengths of the BMW Group comple-
ment those of established partners and innovation drivers
such as start-ups. Using this approach, we are constantly
developing the innovative strength of the BMW Group.
Regional BMW Group Technology Offices are in search of
promising business partners worldwide in fields of innova-
tion such as sensor technology, artificial intelligence, bat-
tery technology, smart materials, natural user interfaces
and smart logistics. To maintain this network, the
BMW Group also holds an intensive dialogue with selected
colleges and universities. For example, numerous Group
employees also lecture at universities and higher education
institutions and a great many students come to the
BMW Group each year to complete an internship or write a
scientific thesis, enabling us to ensure the transfer of
knowledge between theory and practice and help train
highly qualified junior staff. 1]
QUANTUM COMPUTING
BMW Group Report 2021
The BMW Group is one of ten German companies that formed the
Quantum Technology and Application Consortium (QUTAC) in June
2021. The aim of the consortium is to continue developing the existing
fundamentals of quantum computing to create truly usable industrial
applications.
Worldwide culture of innovation
The BMW Group clearly sees quantum computing as a groundbreak-
ing technology of the future that has considerable potential for use in
a broad range of applications, such as for researching materials, in
the field of battery cell chemistry, or to power the future of automated
driving with quantum machine learning. However, it is still a long way
from achieving technological maturity and that's why it is particularly
important for us to provide the best possible support for cutting-edge
research and its transfer to industrial applications.
The global dialogue with start-ups is another important
means for us to bring new impulses into the Company. The
dialogue is based on three key pillars: BMW i Ventures through
which we invest in technology start-ups, the Accelerator
URBAN-X start-up, which was initiated by the MINI brand and
In June 2021, the BMW Group and the Technical University of Munich
(TUM) jointly announced the establishment of the endowed chair for
Quantum Algorithms and Applications. The move was followed in
November 2021 by an agreement with RWTH Aachen University also
aimed at supporting research into quantum computing. Both of these
collaborations are intended to build a bridge between basic research
and industrial application.
In July 2021, the BMW Group launched the BMW Group Quantum Com-
puting Challenge crowd innovation initiative in collaboration with
Amazon Web Services Inc. Researchers, start-ups and companies
alike are called upon to develop innovative quantum algorithms that
serve as solutions to one of four industrial challenges that were an-
nounced. The winners will be invited to implement the selected pilot
projects together with the BMW Group as their customer.
focuses on life in the city, and the BMW Startup Garage, which
represents the third and final pillar. In May, the BMW Group
opened a so-called "incubation site" in Shanghai in cooper-
ation with Alibaba Cloud. This joint innovation base aims to
help Chinese tech start-ups scale their innovations.
Cooperations and partnerships
In order to maintain its long-term success, the BMW Group
enters into targeted cooperations and partnerships, not only
with companies from the automotive industry, but with tech-
nology leaders from other sectors as well. The aim of co-
operating with external partners is to pool our common ex-
pertise and implement innovations as swiftly as possible.
Some of the BMW Group's major collaborations and invest-
ments are listed below:
The Munich Research and Innovation Centre (FIZ) is the
main hub of the BMW Group's international network of re-
search and development locations. After the initial construc-
tion phase, the extension was first occupied in autumn 2020,
the new driving simulation centre was also put into oper-
ation during the year under report. In five of a total of 14 sim-
ulators and usability labs, LED walls are deployed to create
a virtual environment for development purposes, to enable
more realistic representations than previous projection
systems.
The approval process for the planned pilot plant in Parsdorf
near Munich for near-series battery cell production came
closer to completion during the year under report. The
BMW Group intends to further optimise the production of
battery cells at the Parsdorf plant in terms of quality, perfor-
mance and costs. Since 2019, we have been pooling our
knowledge at the Battery Cell Competence Centre in Munich.
The entire value chain of battery cell technology is concen-
trated at the Centre, including research and development,
the composition and design of the battery cell and industrial
producibility.
Restructuring production for electric mobility
Developing expertise for battery cell production
* BMW Group production sites, including contract manufacturing at Magna Steyr
Fahrzeugteile (Austria), VDL Nedcar (the Netherlands) and Inokom Kulim (Malaysia).
The Dingolfing plant now plays a leading role as a compe-
tence centre for electric drive systems, producing battery
modules, high-voltage batteries and fifth-generation electric
motors, which are also produced at the Landshut plant. The
BMW Group plants in Spartanburg (USA) and Shenyang
(China) also make high-voltage batteries. The Leipzig plant
began manufacturing battery modules and other battery
components during the year under report. The Regensburg
plant also began producing battery components during the
same period. In Thailand, the BMW Group collaborates with
a partner that makes high-voltage batteries for electrified ve-
hicles that are produced locally.
Component production for electrified vehicles
By the end of 2022, every production plant in Germany shall
have the capacity to manufacture at least one all-electric
model. From the middle of the decade, the 7 Neue Klasse will
also feature a cluster architecture consistently geared to pro-
ducing electric drive systems. The new architecture will be
deployed for the first time at the Group's new plant in Debre-
cen, Hungary, as well as at the Munich plant, and will be
gradually transferred to the BMW Group's global production
network in the coming years.
The BMW Group already manufactures automobiles with
all-electric or plug-in hybrid drive systems at 13 locations*
across its worldwide production network. All-electric mod-
els are already part of the production programme in Dingolf-
ing, Leipzig, Munich, Oxford and Shenyang, including the
BMW iX produced in Dingolfing and the BMW i4, which has
been manufactured at the Munich plant since the year
under report.
← = Q
65
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BMW Group Report 2021
70
CIRCULAR ECONOMY,
RESOURCE EFFICIENCY
Other Information
AND RENEWABLE ENERGY
← = Q
Since 2019, we have been
building up relevant knowledge
in this field at the Battery Cell
Competence Centre in Munich.
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Other Information
70
[ Digital connectivity and automation
Automated features and digitally connected vehicles can
help reduce emissions, the risk of accidents and traffic con-
gestion. Since 2017, the Group has been pooling the devel-
opment of assistance and automation functions at the Au-
tonomous Driving Campus, located just north of Munich. It
also operates research facilities in both China and the USA,
the BMW Group's two largest markets in terms of traffic-re-
lated as well as traffic law specifics, the very beginning. In
order to develop new technologies to maturity for series pro-
duction and expand our testing capacities, we are currently
building a new test site in the Czech Republic.
Since 2021, the Munich-based research project TEMPUS*, in
which the BMW Group is participating, has been following up
questions relating to technical feasibility. The project also aims
to assess the acceptance of automated traffic systems among
the general public.
With the all-electric BMW iX, which was launched in 2021, we
are also offering state-of-the-art driver assistance systems.
The BMW iX is the first BMW Group vehicle to feature auto-
mated driving and parking functions from a new modular tech-
nology toolkit that will be deployed across the entire product
portfolio from next year.
With its BMW eDrive Zone technology, the BMW Group is
demonstrating how vehicle connectivity can help make urban
mobility more sustainable. Plug-in hybrids equipped with the
appropriate module can automatically switch to all-electric
driving when entering a defined zone, making it easier for cus-
tomers to drive emissions-free as often as possible, provided
their vehicles are charged with green electricity. BMW eDrive
Zone technology is already available in over 138 towns and
cities across Europe.
Safety of automated and smart systems
The BMW Group gives the safety of its automated systems
the highest priority. For that reason, we support the develop-
ment of an industry-wide ISO standard for highly and fully
automated driving functions. In 2019, the BMW Group, to-
gether with 11 leading companies in the field of automated
driving, published the white paper Safety First for Automated
Driving, which was translated into an ISO Technical Report in
2020. The work is currently being continued in a worldwide
ISO working group and scheduled to be published as an ISO
Technical Specification in 2023 with the aim of defining uni-
form technical standards for safe automated driving.
Artificial intelligence (AI) has been used in BMW driver
assistance systems since 2018. It helps to detect dangerous
situations, such as other vehicles swerving into traffic, at an
early stage so that the driver can react accordingly. The Al's
learning is controlled and safeguarded throughout the pro-
cess. Here, too, the Group is working to achieve the inter-
national harmonisation of Al standards and helped initiate the
development of the new ISO Safety and Artificial Intelligence
standard in 2021. In this context, as a founding member of the
European GAIA-X project, we are committed to establishing a
protected, high-performance data infrastructure as the basis for
safe, efficient traffic management. ]]
$138
European towns and cities are compatible with
BMW eDrive Zone technology. ]]
The efficient use of resources needs to be considered right
from the outset, not only during the design process, but also
later at the product development stage, and is therefore an
essential requirement. The BMW Group aims to design its
vehicles so that as many material cycles as possible are
closed. We summarise this principle under the concept of
circular design. With the BMW i Vision Circular, we have
shown that we are taking a critical look at the trend towards
increasingly complex composites of materials and analys-
ing new approaches to using compounds of (mono)mater-
ials (Innovations). ]]
From product development to recycling
We are working hard to further integrate the principle of cir-
cularity in all our processes. However, the availability of
high-quality secondary raw materials is currently limited and
in some cases insufficient to meet demand. Depending on
material requirements, adequate amounts of secondary ma-
terial are not yet available for every application. As part of its
efforts to meet these challenges, the BMW Group is working
together with its partners to form closed material loops in the
automotive industry. In collaboration with BASF and the
ALBA Group, we are currently testing improved methods of
recycling automotive plastics as part of a pilot project.
7 Online-Report
The responsible and efficient use of resources is of great im-
portance to the BMW Group, which takes a targeted ap-
proach to the circular economy concept based on the four
principles Re:think, Re:duce, Re:use and Re:cycle.
Circularity as a strategic priority
[[ Circularity is one of our key strategic priorities. The in-
creased use of secondary raw materials is a cornerstone of
the BMW Group's long-term decarbonisation strategy. We
also see the circular economy concept as an important factor
in our efforts to significantly mitigate the social and environ-
mental impacts of mining and processing primary raw ma-
terials. The use of secondary materials also has economic
benefits, as it conserves primary raw materials. Circularity
calls for a holistic strategic approach, beginning at the product
design stage and encouraging the increased use of second-
ary raw materials in our supply chain as well as the recycling
of BMW Group vehicles at the end of their life cycle. At the
same time, in our own production cycles we are systematically
pursuing the strategy of conserving resources, improving
energy efficiency and continuously cutting emissions.
3 Contract manufacturing.
- 16.3
venture (2021: 700,777 units; 2020: 602,935 units).
56,081
69,149
56.6
3,776
5,912
20.3
8,400
10,104
23.3
36.0
8,472
- 4.4
25,752
24,624
21.3
50,760
61,580
5.1
6,228
335,311
311,137
7.8
1 Includes vehicles produced by the BMW Brilliance Automotive Ltd., Shenyang joint
9.1
2,255,637
2,461,269
Total
11.3
26,256
29,220
Partner plants
52.6
35,747
54,547
Graz (Magna Steyr)³
Combined Management Report
Products and Mobility Solutions
125,666
105,214
25.2
291,798
365,466
2 BMW Brilliance Automotive Ltd., Shenyang joint venture.
To Our Stakeholders
Front
camera (8 Mpi).
64
The environmental impact of a battery vehicle is predomi-
nantly caused in the upstream value chain, where the pur-
chasing of raw materials to manufacture battery cells and
the carbon-intensive production of the batteries themselves
leave a significant footprint.
For this reason, the BMW Group sees it as particularly im-
portant to produce components such as the electric motor,
high-voltage storage systems, and battery cells in a more
sustainable manner. Reducing carbon emissions in the supply chain.
Other methods of mitigating the environmental impact in-
clude recycling and reusing the high-voltage storage units
installed in our BEV and PHEV models. The BMW Group al-
ready offers all customers that use its battery-powered vehi-
cles to take back their high-voltage batteries free of charge
at the end of their life cycle. ]]
1 Disclosure in CO₂ equivalents.
2 The entire value chain was taken into account and standard consumption levels as
well as the European electricity mix were used as a basis.
37 Consumption and carbon emissions data.
62
BMW Group Report 2021
> Cooperations and partnerships ]]
To Our Stakeholders
* Munich test site, pilot test of automated driving in urban traffic.
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
MOBILITY CONCEPTS
AND SERVICES
Combined Management Report
Products and Mobility Solutions
[The BMW Group aims to make mobility more sustainable
and cities more pleasant places to live in. With these aims in
mind, we are cooperating with cities around the world and
are involved in overarching platforms for mobility, thus mak-
ing our contribution to reducing both traffic density and the
associated negative impacts. Via BMW Group subsidiaries,
we also offer a range of innovative urban mobility services,
which include car sharing, driving and charging services, and
a digital, multimodal platform that allows users to conveni-
ently order, combine and use various modes of transport via
their smartphones. To make these services more sustain-
able, the YOUR NOW companies FREE NOW and SHARE
NOW are gradually electrifying their fleets of vehicles. In
addition, the BMW Group is driving forward the connectivity
and automation of its vehicles as key elements towards en-
suring eco-friendly, safe and free-flowing traffic in cities.
[ At European level, in collaboration with the joint venture
7 IONITY, the BMW Group is further expanding a comprehen-
sive, high-performance, fast-charging network along major road
routes. Depending on the vehicle, charging is particularly fast
with capacities of up to 350 kW. All IONITY charging points are
publicly accessible, regardless of vehicle brand, and designed in
accordance with the European Combined Charging System (CCS)
standard. A ubiquitous high-power charging network is key to
achieving sufficient market penetration and ultimately the suc-
cess of electric mobility. All 6,600 IONITY charging points are
powered by 100% green electricity.
Recording electric mobility over the entire life cycle
Electrified vehicles need to be as eco-friendly as possible,
not only during their use phase, but also in terms of their
overall footprint, including the supply chain. 7 Holistic manage-
ment system. In the BMW Group's case, for instance, this was
confirmed by the environmental report on the BMW iX3³:
Over its life cycle, the all-electric vehicle emits around 40%
fewer carbon emissions' than the BMW X3 30i reference
vehicle. If the battery is charged using renewable energy
only, carbon emissions are even around 67% lower.
61
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Products and Mobility Solutions
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
IONITY EUROPEAN FAST-CHARGING NETWORK
← = Q
With BMW Charging and MINI Charging, the BMW Group
offers a comprehensive range of charging solutions that
make electrified vehicles more convenient to use in a variety
of situations. These include charging products and services
that benefit customers on the road, at home and at work.
Customers can use their BMW and MINI charging cards to take
advantage of public charging services, providing them with
straightforward, transparent access to one of the world's larg-
est charging networks with over 250,000 charging points
across Europe, of which 48,000 are located in Germany alone,
and also include fast-charging stations with a capacity of over
150 kilowatts (kW). The IONITY European high-power charging
service can also be accessed via BMW Charging and MINI
Charging. In 2021, the BMW Group introduced a standardised
tariff structure for public charging in 22 European countries.
With the Connected Charging application, available both within
the vehicle and as a smartphone app, we also enable MINI and
BMW drivers to charge their vehicles in a predictive, convenient
and cost-efficient manner. The service provides drivers with
comprehensive information at any time, including the remain-
ing range of their vehicle and the availability of charging points.
Apart from the public charging services they offer, BMW
Charging and MINI Charging provide a standard charging
solution in the form of the Flexible Fast Charger and other
charging products designed for home use. BMW also offers
charging solutions for corporate customers in collaboration
with partners. The BMW Group itself operates one of the
largest company charging networks in Germany. Employee mobility
In addition to the BMW Charging and MINI Charging ser-
vices, we offer green electricity tariffs and attractive solar
power services for the home in certain countries, and plans
are being put in place to expand this offering to other markets.
Improving framework conditions
The BMW Group still sees a need for political action in order
to better promote electric mobility in many countries and
cities. EU market research data highlight the close correlation
between the density of charging infrastructure and the sale
of electrified vehicles - both at the level of member states
and in a comparison of various regions.
We support political initiatives in favour of sector coupling,
with the aim of forming smart connections between the mo-
bility and the energy sectors. The BMW Group is also con-
ducting its own targeted research and development work in
this area. For example, as part of a pilot project in California,
USA, customers can already use the 7 BMW Charge Forward
service to synchronise their charging behaviour with grid
capacity utilisation and the use of renewable forms of energy
(Collaboration with cities). The further expansion of this tech-
nology is planned.
Another project aimed at promoting sector coupling is so-
called Bidirectional Charging Management (BDL), which is funded by
Germany's Federal Ministry for Economic Affairs and Ener-
gy. BDL transforms electric vehicles into mobile energy stor-
age devices and thus into a part of the energy system in that
their batteries are not only able to store electricity, but also
simultaneously feed it into the operator's power grid in the
opposite direction.
[Range of reliable charging services
Shaping the future of mobility
The BMW Group is currently working together with the three
German cities of Munich, Berlin and Hamburg, and at inter-
national level with Rotterdam, Los Angeles and Beijing, on
cooperative research and implementation projects.
In Munich, for example, the BMW Group is currently working
with partners from the local business community to develop
a new model of collaboration between policymakers, stake-
holders and the private sector, building on 25 years of in-
volvement in the so-called Inzell-Initiative. The focus is on
creating strategic measures for developing sustainable
transportation in the region.
[[The DCS offering includes
360,000
public charging points in 30 countries. ]]
143,758
Surround
view camera.
Full range
radar
The recently opened Driving Simulation Centre in Munich is unique
worldwide. Visitors can virtually test driver assistance systems and
automated driving functions that realistically simulate the product
requirements of the future.
(300 m).
Surround
view cameras.
O
Ultrasonic
sensors.
Short range
radars.
Sensor-setup for driving
Sensor-setup for parking
49
M&DI 270E
and autonomous driving. A large number of Al-based applications
are currently in use and being tested under everyday conditions.
Automated driver assistance functions are being rigorously devel-
oped at more than 12 locations worldwide (including test sites) in
order to allow for local circumstances such as regulatory, road and
climatic conditions. Regionally differing customer requirements also
play a key role.
Around 1,200 engineers are working on developing and testing new,
automated driver assistance functions to achieve these aims. Around
half of these employees are highly qualified software developers. Ar-
tificial intelligence (AI) is a key technology for enabling automated
At the end of 2021, the all-electric BMW iX was the first BMW Group
vehicle to offer automated driving and parking features from a new
technology kit that will also be deployed in the upcoming BMW 7
Series. With the introduction of completely new software and state-
of-the-art sensor technology - including the use of an 8-megapixel
camera for the first time in the automotive sector - customers can
now choose from around 40 driver assistance features designed to
make their driving experience more pleasant, convenient and ulti-
mately safer.
In the German capital, the BMW Group is involved in the
7 New Mobility Berlin project, which addresses people's chan-
ging mobility needs and the shortage of space in a growing
city. Against this backdrop, the project aims to make public
street space more flexible to use. The project is looking to
create shared spaces to provide mobility stations for car
sharing or rental bicycles, for example.
cooperation
In October 2021, the BMW Group extended its
with the City of Rotterdam, which has been ongoing since
2018, for a further six years. One successful example of this
collaboration is the BMW eDrive Zone technology, which was
launched in 2020. BMW eDrive Zone technology
The importance of cooperation between cities and energy
suppliers was meaningfully demonstrated in the 7 BMW
Charge Forward project in California. The project enabled us to
demonstrate that intelligently controlled charging coordinat-
ed to suit the availability of renewable energy is more envi-
ronmentally friendly, more energy-efficient and more cost-ef-
fective for the customer.
Range of innovative mobility services
Together with Daimler Mobility AG, the BMW Group offers
mobility services via the joint venture YOUR NOW, which was
established in 2019. The YOUR NOW range of services in-
cludes car sharing and the use of e-scooters, e-bikes and
e-kick scooters (multimodality) as well as driving and char-
ging services and provides customers with access to the
charging infrastructure as well as to alternative means of
transportation apart from their own cars. At the same time,
they are promoting the expansion of public charging points
with their increasingly electrified range of vehicles. All YOUR
NOW subsidiaries continued to consistently develop their
activities throughout 2021 against a backdrop of pandem-
ic-related restrictions.
As Europe's largest multimodal mobility platform, FREE
NOW combines various forms of mobility in one single app.
With this strategy, the service brings registered users in
European and Latin American cities to their destination
quickly and in line with their individual needs. Apart from taxi
cabs and private ride services, e-scooters and e-kick scooters,
SHARE NOW vehicles have also been bookable via the FREE
NOW app since mid-2021. At the same time, FREE NOW is
systematically promoting the electrification of the fleet it uses.
FREE NOW intends to grow its share of electrically powered
trips to 50% by 2025 and go all-electric by 2030.
SHARE NOW is one of the pioneers in the field of car sharing
and offers vehicles for on-demand rental. In 2021, the mobil-
ity brand launched its first connection between two metro-
politan areas with the route between Rotterdam and
Amsterdam. Furthermore, SHARE NOW systematically con-
tinued to electrify its vehicle fleet during the year under re-
port and more than a quarter of its vehicles are meanwhile
powered by electricity. ]]
63
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Products and Mobility Solutions
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
[The joint venture also includes Digital Charging Solutions
(DCS) GmbH, one of the leading developers of digital char-
ging services for car manufacturers and fleet operators in
Europe. Under the CHARGE NOW brand, DCS offers com-
prehensive access to public charging points. As a so-called
white-label solution, business customers can offer their end
customers made-to-measure access to a network of more
than 360,000 public charging points from a variety of oper-
ators in 30 countries. The BMW Group utilises the DCS offer-
ing by giving its customers access to the public charging ser-
vices provided by BMW Charging and MINI Charging at competitive
tariff rates in both Europe and Japan. The addition of the
energy company bp as DCS's third partner will make a sig-
nificant contribution towards further expanding the available
charging network.
In 2021, the YOUR NOW holding company sold its digital
parking services, which were offered under the PARK NOW
brand, among others, to the Swedish company EasyPark. 1]
AUTOMATED AND AUTONOMOUS DRIVING
BMW Group Report 2021
151,154
In the National Platform for the Future of Mobility, which was set up
by the previous federal government, the BMW Group chaired
the working group on digitalisation for the mobility sector.
The group developed measures to make mobility more cli-
mate-neutral, efficient, convenient and cost-effective for the
future.
175,984
DECENT WORK AND
is a network-based system for exchanging
information and data that creates greater
transparency in the supply chain.
* Highlight box ]]
"Catena-X
7 Preference for secondary raw materials ]]
share of secondary raw materials in our vehicles -
and that figure is set to increase.
"Up to 30%
* Carbon emissions at BMW Group locations
decrease in carbon emissions on average per
vehicle produced compared with 2019 - that is
our target by 2030.
80%
AT A GLANCE
QINDUSTRY INNOVATION
BMW Group Report 2021
Combined Management Report
Products and Mobility Solutions
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Purchasing and Supplier Network
PRODUCT SAFETY AND
DATA PROTECTION
[We aspire to deliver the highest standards of quality and
safety for all BMW Group vehicles. In all measures, the safety
of people is key. In its manufacturing processes, the
BMW Group avoids the use of any substances that pose a
health risk. The active and passive safety systems built into
our vehicles ensure greater safety on the road. In our driving
safety training courses, we instruct customers on all aspects
of safety and show them how to recognise and react appro-
priately to dangerous situations. Responsibility towards our
customers also includes the responsible handling of their
data. In this respect we focus on transparency, informational
self-determination, data sovereignty and data security.
Product safety as part of quality management
To Our Stakeholders
The BMW Group operates a comprehensive system of qual-
ity management, as we want to ensure that our products are
of high quality, safe and compliant with the law. All
BMW Group vehicles are therefore subject to stringent test-
ing from the development stage right through to production.
However, our quality management system goes further and
also includes the use of our vehicles after they have been
delivered to our customers; if any deviations from the quality
standard are observed, they are rigorously followed up. The
BMW Group also informs the relevant authorities without
delay if required to do so by market-specific regulations. This
is especially true for safety-related aspects. If a safety risk is
detected, the BMW Group implements any technical meas-
ures required in close coordination with the responsible au-
thorities. Corresponding committees, processes and organ-
isations are in place for this purpose, which are controlled by
the Product Support, Technical Actions and Warranty Costs
department. In the reporting year 2021, safety- and compli-
ance-related technical actions affected 1,920,977 vehicles.
ANDINFRASTRUCTURE
M
Other Information
Remuneration Report
Corporate Governance
Combined Management Report Group Financial Statements
Production, Purchasing and Supplier Network
To Our Stakeholders
BMW Group Report 2021
68
69
* BMW Group production sites, including contract manufacturing at Magna Steyr
Fahrzeugteile (Austria), VDL Nedcar (the Netherlands) and Inokom Kulim (Malaysia).
The restructuring of its plant in Munich amply demonstrates
how the BMW Group is transforming itself going forward. Since
the launch of the all-electric BMW i4 in November 2021, the
BMW Group's main plant has been manufacturing vehicles with
all types of drive system on the same production line. From 2023,
at least half of all vehicles produced at the Munich plant will be
powered by an electrified drive system and the majority of these
will be all-electric models.
ECONOMIC GROWTH
MUNICH
The BMW Group production network comprises 31 locations
in 15 countries. The same high standards of quality, safety
and sustainability apply at all Group locations* worldwide.
Our state-of-the-art production facilities enable us to manu-
facture all-electric, plug-in hybrids and conventionally pow-
ered automobiles all on one line. Electric mobility is playing
an increasingly key role in this regard. For example, at the
end of 2021, electrified vehicles already accounted for some
26% of the total number produced at the BMW Group plant in
Munich.
The BMW Group production network
Electrification, digitalisation, efficiency and sustainability
are the key factors shaping the future of the BMW Group's
production system and the main guiding principles in the
restructuring of its global production network. As production
of the all-electric BMW iX and BMW 14 models began in
2021, we rigorously attuned our vehicle assembly systems
to suit the requirements of electric mobility. At the same
time, we are benefiting from the high flexibility of our pro-
duction system. During the year under report, this agility en-
abled us to respond both swiftly and specifically to major
challenges such as the tense semiconductor supply situ-
ation and the ongoing coronavirus pandemic, despite which
we still managed to significantly increase production vol-
ume year-on-year.
PRODUCTION NETWORK
SUPPLIER NETWORK
PRODUCTION, PURCHASING AND
QO
AND PRODUCTION
CONSUMPTION
RESPONSIBLE
TRANSFORMING THE MAIN PLANT IN
These actions were all of a voluntary nature and carried out
in coordination with the respective authorities. The main
technical actions related to exhaust gas recirculation issues
and Takata-airbags. GRI-Index: 416-1, 7 SASB-Index
Effective safety systems
State-of-the-art safety systems play a major role in reducing
the risk of accidents and injuries (active safety) and largely
mitigate the consequences of a possible accident (passive
safety). Safety begins with key factors such as optimal chas-
sis tuning, highly effective braking systems and stable pas-
senger compartments, but also includes airbags as standard
and digital driver assistance systems such as active cruise
control, collision warning, lane guidance and emergency
braking assistants. They also promote greater safety for all
road users. The connectivity and automation of vehicles also
provides a growing number of opportunities to improve safe-
ty. The BMW iX sets new standards in this regard, thanks in
part to its advanced front collision warning system with brak-
ing intervention, which comes as standard.
NAVIGATION
NAVIGATION IS
NOW SET TO
ISLA TAPAS
CALENDAR LOCATIONS
DINNER WITH
FRIENDS AT 7PM
[ BMW CarData provides BMW
and MINI customers with
transparency and sovereignty
over any data transferred to
authorised third parties. 1]
67
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Production, Purchasing and Supplier Network
The secure transmission of data to third parties was imple-
mented with the introduction of BMW CarData in Germany
and Europe (2017) and in the USA (2020). CarData provides
BMW and MINI customers with complete transparency and
sovereignty over any data transferred to authorised third par-
ties, allowing them to decide independently at any time which
data they release to service providers such as workshops, in-
surance companies or fleet managers in order to receive indi-
vidual service offers. 1]
Corporate Governance
Other Information
← = Q
PRODUCTION, PURCHASING AND
SUPPLIER NETWORK
Production Network
67
70
Circular Economy, Resource Efficiency and
Renewable Energy
74
6.2
Remuneration Report
The BMW Group's responsibility for its products includes the
secure transfer of vehicle data to third parties. For this rea-
son, BMW Group vehicles are not directly connected to the
Internet, but communicate directly and exclusively with the
BMW Connected Drive back end via a highly secure connec-
tion in a virtual private network. This strategy enables us to
minimise the risk of unauthorised third parties gaining ac-
cess to either the vehicle or the driver's personal data. The
point of access to the Internet is controlled via a gateway. We
see this Extended Vehicle Approach in accordance with ISO
20078 as the best solution to ensure an outstanding level of
data security and protection and to meet statutory cyber-
security requirements (e. g. UN R155).
Securely connected
The BMW Group collaborates closely with the relevant data
protection supervisory authorities particularly regarding
fundamental data protection issues, such as those relating
to the increasing connectivity of our vehicles.
We work continuously on improving vehicle safety. The
7 European New Car Assessment Programme (Euro NCAP), a vehicle
crash safety assessment scheme, confirms the effective-
ness of the safety measures installed in our vehicles. In the
2021 Euro-NCAP-Rating, the BMW iX received the highest
rating, just like numerous models did in past years, such as
the BMW 4 Series Coupé and BMW 4 Series Convertible,
thus demonstrating the Group's premium-level standards in
terms of vehicle safety.
Pollutants management
SASB-Index
The BMW Group endeavours to meet legal requirements re-
garding the use and handling of pollutants at every stage of
the value chain. Right from the design stage, the BMW Group
is careful to exclude any substances of concern from its ve-
hicles to the greatest extent possible. In doing so, we use the
7 Global Automotive Declarable Substance List (GADSL) as a guide. At
the same time, we are working to reduce emissions in the
vehicle interior to an absolute minimum. All BMW, MINI and
Rolls-Royce vehicles are equipped with passenger compart-
ment air filters as standard, reliably filtering out pollutants
and particles such as dust or pollen from the outside air. In
2020, the BMW Group fitted passenger compartment air fil-
ters with nanofibre filter technology, which keeps certain micro-
bial particles and allergens from entering the vehicle's interior.
Since 2021, we have been gradually introducing this technol-
ogy in a range of other BMW Group models.
Customer awareness and empowerment
The BMW Group provides its customers with extensive infor-
mation on the correct use of its products and services. Infor-
mation on safety, the proper use of its vehicles, and health
protection is available in the integrated operating instruc-
tions in printed form, online, or via an app. The information is
supplemented by notes and background tips on services,
accessories and the vehicle's various components. ]]
66
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Products and Mobility Solutions
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
[With its BMW and MINI Driving Experience, the BMW Group offers
product experiences and safety training with BMW, MINI and
BMW Motorrad brand vehicles in 25 countries. The Driving
Experience teaches participants safe vehicle handling and
prepares them for any dangerous situations that may occur
on the road. In 2021, more than 100,000 customers world-
wide took part in these training courses.
Data protection - an essential task
The BMW Group views data protection as one of the most
important tasks in these times of increasing digitalisation.
For this reason, the strictest data protection requirements
are taken into account at an early stage when developing
features and services. Via an individually configurable data
protection menu, we provide our customers with transpar-
ency, informational self-determination and ultimately data
sovereignty.
Customer data protection
At the BMW Group, data and information protection is based
on the relevant laws and standards, particularly the EU Gen-
eral Data Protection Regulation and the ISO/IEC 27001 in-
ternational security standard. The personal data of custom-
ers are only collected, processed or used to the extent
legally permitted and with the consent of the data subject.
However, should customers have any queries or complaints
regarding the protection of their personal data, they are wel-
come to contact the Customer Interaction Centre or the data
protection officer in their respective markets.
[In 2021, more than 100,000
customers worldwide took part
in BMW and MINI Driving
Experience training courses. 1]
At the same time, we continuously strive to maintain our
high level of data protection and regularly check all applica-
tions that process customer data to ensure that they comply
with all current and appropriate IT security measures. In the
course of this process, we specifically search for any possible
weak points and eliminate them with teams of IT specialists.
We implement any new insights into mandatory corporate
standards as the need arises.
← = Q
Production sites in key markets
[ All BMW Group vehicles are
subject to stringent quality,
safety and legal compliance
tests, right from the develop-
ment stage through to
production. 1]
BMW GROUP VEHICLE PLANTS
Dingolfing
Regensburg
Spartanburg
in units
BMW GROUP AUTOMOBILE PRODUCTION BY PLANT
The coronavirus pandemic had a lower impact on BMW Group
production volumes than one year earlier. However, the limit-
ed availability of semiconductor components led to adjust-
ments in the production programme. Despite these chal-
lenges, the BMW Group achieved significant year-on-year
growth during the reporting period with a production volume
of 2,461,2691 BMW, MINI and Rolls-Royce brand vehicles
(2020: 2,255,6371 units; +9.1%), comprising 2,166,6441
BMW (2020:1,980,740¹ units; +9.4%), 288,713 MINI (2020:
271,121 units; +6.5%) and a record number of 5,912 Rolls-
Royce (2020: 3,776 units; +56.6%) brand vehicles. In the
reporting year 2021, the number of electrified vehicles pro-
duced grew by 51% to 341,097 units (2020: 225,604 units).
With 187,500 units produced (2020: 168,104 units), BMW
Motorrad recorded growth of 11.5 % year-on-year.
Significant growth in production volume
The BMW Group's production network also includes engine
plants in Hams Hall (UK), Munich (Germany), Steyr (Austria)
and Shenyang (China), as well as component plants in Ei-
senach, Landshut and Wackersdorf (Germany) and Swindon
(UK). By 2024, the BMW Group intends to concentrate its
production in Europe of combustion engines at the Steyr and
Hams Hall plants.
← = Q
Other Information
Remuneration Report
Leipzig
Corporate Governance
Combined Management Report
Production, Purchasing and Supplier Network
To Our Stakeholders
BMW Group Report 2021
69
PHEV
BEV, PHEV
BMW 1 Series, BMW 3 Series, BMW X1, BMW X2
BMW 5 Series, BMW X3; BMW iX3*
Electrification
Production programme 2021
Group Financial Statements
Oxford
Munich
Rayong
186,883
The BMW Group aims to strike a good balance between pro-
duction and deliveries in the various regions of the world
where it operates. While 20 of its 31 locations are BMW Group
plants, three belong to the BMW Brilliance Automotive Ltd.
joint venture in Shenyang (China), which is currently being
enlarged to create additional production capacity. Further in-
formation on the consolidation of BMW Brilliance Automo-
tive Ltd. is provided in the 7 Notes to the Group Financial Statements.
Eight production sites are operated by Group partners or
contract manufacturers.
-4.7
200,968
191,604
- 8.3
199,991
183,485
5.5
231,970
244,734
Change in %
20.0
361,365
433,810
2020
2021
Born (VDL Nedcar)³
Dadong (BBA)²
Tiexi (BBA)²
San Luis Potosí
Goodwood
Araquari
Chennai
China
China
Rosslyn
Tiexi (Shenyang)
BMW 3 Series, BMW 4 Series, BMW i4, BMW M
MINI, MINI Clubman, MINI Cooper SE*
United Kingdom
Thailand
Rayong
Oxford
BEV, PHEV
BEV, PHEV
BMW 2 Series, BMW 3 Series, BMW 5 Series, BMW 6
Series, BMW 7 Series, BMW X1, BMW X3, BMW X4,
BMW X5, BMW X7, MINI Countryman
BMW 3 Series, BMW 4 Series, BMW 5 Series, BMW 6
Series, BMW 7 Series, BMW 8 Series, BMW M; BMW IX
BMW 1 Series, BMW 2 Series, BMW i3, BMW M
BMW motorcycles
Brazil
Germany
Munich
Germany
Leipzig
Manaus
Germany
Dingolfing
BEV
BMW 3 Series, BMW X1, BMW X3, BMW X4, BMW X5
BMW motorcycles
Germany
India
Electrification portfolio
Production programme 2021
Country
Brazil
Berlin
Chennai
Country
Location
Araquari
BEV, PHEV
BEV
The BMW Group's automotive partner plants in Jakarta (In-
donesia), Cairo (Egypt), Kaliningrad (Russia) and Kulim (Ma-
laysia) mainly produce BMW and MINI brand models for their
respective regional markets.
United Kingdom
BMW 2 Series, BMW 3 Series, BMW 5 Series, BMW 7
Series, BMW X1, BMW X3, BMW X5, BMW X7
BMW motorcycles
Location
Dadong (Shenyang)
** Additional information on consumption and carbon emissions data.
BEV from 2023
Rolls-Royce Cullinan, Dawn, Ghost, Phantom, Wraith
PHEV
BMW X3, BMW X4, BMW X5, BMW X6, BMW X7,
BMW M
PHEV
BMW 2 Series, BMW 3 Series
BMW X3
Mexico
USA
South Africa
PHEV
BMW 1 Series, BMW 2 Series, BMW X1, BMW X2
Germany
Rolls-Royce Manufacturing Plant, Goodwood
San Luis Potosí
Spartanburg
Rosslyn
Regensburg
The BMW Group also awards contracts to external partners
(contract manufacturers) to produce its automobiles and
motorcycles in series. During the period under report, Magna
Steyr Fahrzeugtechnik produced both the BMW 5 Series Se-
dan and the BMW Z4 in Graz (Austria). VDL Nedcar in Born
(the Netherlands) manufactures the MINI Convertible, the
MINI Countryman and the BMW X1. BMW motorcycles are
also produced by the TVS Motor Company in Hosur (India)
and by Loncin Motor Company in Chongqing (China).
PHEV
BMW BRILLIANCE AUTOMOTIVE JOINT VENTURE (VEHICLE PLANTS)
2.17
ENERGY CONSUMPTION PER VEHICLE PRODUCED 1,2
in MWh
← = Q
An 80% average reduction of
carbon emissions per vehicle
produced by 2030.
2.04
2.12
|
2.10
|
Other Information
0
2.12
Remuneration Report
Energy management and efficiency
Group Financial Statements
Production, Purchasing and Supplier Network
Combined Management Report
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73
The BMW Group invests systematically in the energy effi-
ciency of its global production network, enabling it to cut the
energy consumption of machines to a minimum, such as
those deployed to generate the required processing heat in
its paint shops. The limited availability of semiconductor
components compelled the BMW Group to make adjust-
ments to its production programme during the year under
It is vitally important to use energy in an efficient, responsible
manner in order to conserve resources. The BMW Group
has processes in place throughout the organisation to plan
and implement energy management measures with the aim
of continuously optimising its use. Clear roles are assigned
with corresponding responsibilities, targets and reporting
obligations to the central strategy departments, the regional
controlling bodies and the various production plants at local
level. ]]
The remaining emissions are largely due to the use of nat-
ural gas. Here we face the challenge of replacing natural gas
with non-fossil energy sources such as biogas, hydrogen or
renewable electricity. The "heat transition" required to do so
is made more complicated by the physical availability of al-
ternative energy sources, the technical retrofitting of plants,
and political framework conditions.
opportunities to further reduce these emissions lie. As in the
past, we are focusing on additional energy efficiency meas-
ures, the increasing generation of our own electricity from
renewable sources, the purchasing of green electricity from
supply contracts, and the use of certificates of origin.
Carbon emissions at BMW Group locations
Compared with the base year 2019, the BMW Group intends
to reduce the average amount of carbon emissions per ve-
hicle produced by a further 80% by 2030. [[ Production
accounts for biggest share of the 7 Scope 1 and Scope 2 emissions
generated by the BMW Group and this is where the greatest
2017
Corporate Governance
2018
Corporate Governance
2020
The main reason for the drop in relative carbon emissions
per vehicle produced was improved energy efficiency on the
back of higher production volumes following the pandem-
ic-related restrictions. From mid-2021, however, supply
bottlenecks for semiconductor components and the necessary
adjustments to the production programme dampened the
positive trend. As a result, absolute carbon emissions³ at
BMW Group locations increased to 766,153 t of CO₂ (2020:
734,710 t of CO2) due to the overall increase in energy con-
sumption relating to higher production volumes. In the previ-
ous year, consumption and production volumes were signifi-
cantly lower due to pandemic-related restrictions. In the first
half of 2021, the cold weather in Germany also led to greater
energy requirements for heating and thus to an increase in
carbon emissions. GRI-Index: 305-1, 305-2, 305-3, 305-5
The BMW Group reduced its emissions of volatile organic
compounds (VOC³) per vehicle produced by 13.6% to 0.70
kg during the period under report. The year-on-year improve-
ment was mainly due to the use of solvent-free cleaning
agents and the new thermal afterburners deployed in the
paint shops at the Group's plants in Shenyang (China) (* Sol-
vents per vehicle produced). Due to the progress made in the use
of solvent-free substances and the optimisation of our paint
shops, we expect to see a further reduction in emissions lev-
els going forward. GRI-Index: 305-71]
Carbon emissions at BMW Group locations
Year-on-year, the carbon emissions per vehicle 12 generated
at BMW Group locations fell by 5.7% to 0.33 t of CO₂ (2020:
0.35 t of CO₂), i. e. a reduction of 17.5% compared with the
2019 base year.
← = Q
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74
cation process, projects are required to demonstrate, for exam-
ple, the permanence of the decarbonisation impact they achieve.
Another vital criterion is additionality, i. e. proof that the project
in question would not have come about without financing via
carbon offsetting certificates. Furthermore, for the post-Kyoto
phase of the carbon offsetting market, we emphasise the import-
ance of ensuring that there is no double counting of the emissions
saved alongside the nationally determined contributions of the
affected countries named in the Paris Climate Agreement. We
also ensure that the projects additionally generate a social ben-
efit. 7 GRI-Index: 305-51]
[[ The carbon emissions generated within its own production
network are already below the 1.5°C path calculated for the
BMW Group. Since the year under report, the BMW Group has
been making the remaining carbon footprint generated by its
plants and other locations carbon-neutral on the energy bal-
ance sheet, including company cars and business trips, through
the use of voluntary offsetting certificates. Via this method, we
are demonstrably offsetting the associated carbon emissions by
supporting external projects. In collaboration with experienced
partners such as atmosfair and First Climate, we support climate
protection projects that meet strict criteria. As part of the certifi-
5 To the extent recordable in the carbon footpring; market-based-method according to
GHG-Protocol.
for 2020 has been adjusted accordingly (2020 prior to adjustment: 5,714,610 MWh).
"Including BMW Brilliance Automotive Ltd., Shenyang.
tions as well as energy consumption in production. For comparison purposes, the figure
3 As of 2021, this figure also includes energy consumption at further BMW Group loca-
2 Figures for 2017 and 2018 figures were subjected to a limited assurance review.
1 Efficiency indicator calculated from the absolute energy consumption (adjusted for CHP
losses) of automobile production (BMW Group plants incl. BMW Brilliance Automotive Ltd.
joint venture, excluding partner plants and contract manufacturing) divided by the number
of units produced in automobile production (BMW Group plants incl. BMW Brilliance
Automotive Ltd. joint venture and partner plants, excluding contract manufacturing).
COMPENSATION OF SITE-RELATED CARBON EMISSIONS
Energy consumption in detail
7 GRI-Index: 302-1, 302-3, 302-4
report, which also negatively impacted energy consumption
per vehicle at some of its plants. For this reason, absolute
consumption³ within the BMW Group increased to 6,476,955
MWh during the year under report (2020: 6,040,824 MWh).
However, at 2.10 MWh per vehicle produced, specific energy
consumption in the BMW Group's vehicle production fell by
0.9% in 2021 compared to 2020. This fact is attributable to
various energy efficiency measures as well as improved pro-
duction capacity utilisation.
At present, however, the BMW Group is unable to entirely
cover its electricity requirements by producing its own re-
newable energy, and therefore purchases additional power
from renewable and predominantly local or regional sources.
We cover an increasing proportion of our electricity require-
ments through so-called Power Purchase Agreements
(PPAs), i. e. direct purchases from defined renewable energy
generation plants, such as the regional green electricity
bought in to manufacture the BMW iX and the BMW i4.
The BMW Group is committed to the use of renewable ener-
gy at all its locations. Worldwide, all BMW Group production
sites and the vast majority of its other locations procure
their electricity from renewable self-generation plants, direct
supply contracts for green electricity, and electricity of certi-
fied origin. We also made additional use of biogas certifi-
cates in the year under report. Moreover, we are increasing
the amount of renewable energy generated at our own sites.
Additions made during the reporting year included large-
scale photovoltaic installations at our plant in Araquari, Bra-
zil, which generate some of the electricity required for pro-
duction at the site.
Renewable energy
2021
2019
Solvents
← = Q
Waste
RECYCLING
WERTUNG
The BMW Group invests, partly through its own venture capital
fund, in key technologies that can make a decisive contribu-
tion to achieving carbon neutrality and conserving resources.
Investments in resource-friendly technologies
In general, any secondary raw materials used have to meet
the same strict requirements as primary materials in terms
of quality, safety and reliability. Therefore, the market avail-
ability of these high-quality materials needs to increase sig-
nificantly. In order to improve the structural framework condi-
tions required to achieve this aim, both cross-industry
approaches and political initiatives are necessary.
7 SASB-Index
-
The use of secondary raw materials also significantly re-
duces carbon emissions compared with primary materials –
for example around 80% of aluminium and up to 70% of
steel² are recycled. At the same time, this strategy reduces
the amount of natural resources and critical raw materials
that need to be extracted. The circularity principle also helps
to more effectively mitigate risks that can be associated with
the extraction of primary raw materials from market-
related or even political availability risks to those relating to
environmental and social standards.
Currently, an average of up to 30% of the components
used in vehicle manufacture across Europe originate from
recycled and reused materials. However, the percentage of
material recycled differs considerably, depending on the
group. While the recycled proportion of many plastics, for
example, is in the single-digit percentage range, secondary
cast aluminium is already used at a rate of over 50% in cer-
tain components.
achieve this aim, the BMW Group established the "Second-
ary First" approach during the year under report, which gen-
erally gives preference to the use of secondary materials
when stipulating specifications for products, materials and
suppliers. This principle can only be deviated from in justi-
fied exceptional cases.
The BMW Group not only wants to create the basic condi-
tions for recycling vehicles, it is also looking to reduce the
use of primary raw materials in the automotive value chain.
This means closing loops in the production chain, i.e. by re-
turning production remnants to the material supplier or re-
covering materials at the end of a product's life cycle. In
doing so, we take special care to avoid downcycling these
materials into inferior secondary materials. By 2030, the
BMW Group aims to take the recycling process to a new
level, while at the same time further increasing the proportion
of secondary materials it uses to manufacture its vehicles. To
Preference for secondary materials
In this context, the BMW Group regards end-of-life vehicles
as a source of secondary materials. We therefore promote
the recovery of end-of-life vehicles, components and mater-
ials in order to reintegrate them in the raw materials cycle.
Together with its national sales organisations, the
BMW Group has already introduced take-back systems for
end-of-life vehicles in 30 countries and offers eco-friendly
vehicle recycling at more than 2,800 take-back points. All
BMW Group vehicles sold since 2008 meet the currently ap-
plicable worldwide requirements for the recycling of end-of-
life vehicles, components and materials. Vehicles are already
currently required to be 95% recyclable (based on vehicle
weight). GRI-Index: 301-3 SASB-Index
MATERIALVERTEILUNG
7 Average distribution of materials in BMW Group vehicles
Re:cycle our circular economy
principles.
-
Re:think, Re:duce, Re:use,
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71
Efficiency indicator calculated from the absolute energy consumption (adjusted
for CHP losses) of automobile production (BMW Group plants incl. BMW Brilliance
Automotive Ltd. joint venture, excluding partner plants and contract manufacturing)
divided by the number of vehicles produced in automobile production (BMW Group
plants incl. BMW Brilliance Automotive Ltd. joint venture and partner plants, exclud-
ing contract manufacturing).
[At the end of a product's life cycle, it needs to be possible
to increasingly separate and recycle key groups of materials
at a high degree of purity so that they can be reused in the
automotive industry in so-called closed loops. The strategy
reduces the need for primary materials and thus the neces-
sity to source potentially critical raw materials.
IM AKTUELLEN BMW 3ER
54,2%
WIEDERVER-
systems are also currently being tested in the painting pro-
cess and gradually introduced throughout the Group's pro-
duction network. Specific water consumption in production was
improved slightly to 2.15 m³ (2020: 2.25 m³) per vehicle pro-
duced during the year under report.
painting process and can be reduced through the use of new painting technologies.
3 VOC (volatile organic compounds) emissions are mostly generated during the
² Related to the total weight of the waste.
1 In accordance with the BMW Group's environmental management system, each
operator is required to describe the environmental impacts in the aspects register
and identify measures for improvement (e. g. long-term targets).
The BMW Group pursues the aim of continuously reducing
the amount of water used in its production processes. Ac-
cordingly, its production plants optimise their circulation sys-
tems, for example by treating wastewater and putting
water-saving processes in place. One example is the dry
separation system used in the paint shop. Other closed-loop
Water
A certified environmental management system in accord-
ance with ISO 14001 is implemented at every BMW Group
production site. A total of five competence centres, i. e. Emis-
sions, Water, Waste, Qualification and the Environmental
Management System, coordinate environmental protection
measures throughout the BMW Group worldwide. According-
ly, any ecological improvements that have proven to be effec-
tive at one location are implemented at other locations to the
extent possible. Continuous training and the exchange of ex-
periences among employees ensure the transfer of know-
ledge and the Group-wide application of the latest findings.
In the year under report, our environmental management
system again made a major contribution to ensuring that
there were no significant environmental incidents involving
the payment of fines throughout the production network.
[ Controlling resource consumption is an integral part of en-
vironmental management in the BMW Group's global pro-
duction network and managed by a dedicated steering com-
mittee for the international environmental protection network.
Each facility, area and building is assigned to an internal op-
erator, who is responsible not only for the technical systems
and the smooth running of processes and procedures, but
also for their environmental impacts'.
← = Q
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72
2 Based on the Gabi database.
1 Based on vehicle weight, calculated on the basis of actual supplier feedback,
studies and expert assessments.
Resource management at every location
The BMW Group wants to lead the way by keeping resource
consumption and carbon emissions in its production pro-
cesses to an absolute minimum. Apart from carbon emissions,
the other relevant variables are energy and water consump-
tion, waste for disposal, the use of solvents and the reduction
of solvent emissions (VOC). ]]
With this point in mind, through BMW i Ventures we have
been investing in the US start-up Lilac Solutions since 2021.
Lilac is pursuing the goal of extracting lithium from the brine
of saltwater deposits using ion exchangers, deploying a far
more eco-friendly method that conserves resources more
effectively than conventional processes. Since the year un-
der report, our investments through BMW i Ventures have
additionally focused on an innovative process developed by
the US start-up Boston Metal for producing steel without
generating carbon emissions. We have also entered into an
agreement with the Swedish start-up H2 Green Steel to pur-
chase hydrogen steel produced using green electricity.
13,9%
be
RE:CYCLE
1,4%
8,6%
In its efforts to reduce the volume of waste it generates, the
BMW Group deploys coordinated recycling and treatment
concepts adapted to the waste streams in its various plants,
to regionally applicable regulations and to locally existing
waste disposal structures. In 2021, 99.2%² of the waste
generated by production processes was either recycled or
recovered. During the year under report, the volume of waste for
disposal per vehicle produced decreased to 2.90 kg, 12.9% lower
than the 2020 figure. We aim to maintain this high recycling
and recovery rate within the BMW Group as we increasingly
transition to electric mobility. We are therefore integrating
the newly generated waste streams in our recycling and
treatment systems. SASB-Index
2 As of 2021, this figure also includes the carbon emissions of all other BMW Group
locations in addition to those generated by production processes. For comparison
purposes, the figure for 2020 has been adjusted accordingly (2019 before adjust-
ment: 0.30 t; 2020 before adjustment: 0.23 t).
During the year under report, the BMW Group identified sus-
tainability deficits at 61% of its suppliers (2020: 64%) and
agreed on corrective preventive measures. The measures
related to subcontractor management, reporting, control
mechanisms and mission statements. 1]
"Figure rounded for simplification purposes. The target percentage validated in
conjunction with the SBTi is 22%.
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Production, Purchasing and Supplier Network
Group Financial Statements
Corporate Governance
Remuneration Report
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← = Q
[The BMW Group is actively involved in multi-stakeholder
initiatives such as the Initiative for Responsible Mining Assurance
(IRMA), the Aluminium Stewardship Initiative (ASI), the Global Plat-
form for Sustainable Natural Rubber (GPSNR) and the > Responsible
Mica Initiative (RMI) with the aim of establishing and further de-
veloping certification systems for suppliers. We therefore re-
quire certification in accordance with these standards for
prioritised raw materials in our supplier network. Online
-
Reducing carbon emissions in the supply chain
With the growing demand for electrified vehicles, the need for
suitable components and parts in production is also increas-
ing and with it the volume of carbon emissions they gener-
ate. If no countermeasures are taken, the supply chain foot-
print of an all-electric vehicle could be nearly twice that of a
conventional combustion engine model, practically eroding
part of the benefit of electric driving during the use phase. ]]
The BMW Group is reversing this trend and also intends to
reduce the volume of carbon emissions generated in the sup-
ply chain by at least 20% per vehicle by 2030 compared to
the base year 2019. [ To achieve this aim, we have been es-
tablishing decarbonisation as well as other measures among
our suppliers as an award criterion since 2020. Within this
TYRES MADE OF FSC-CERTIFIED NATURAL
RUBBER
[I In 2021, the BMW Group introduced the use of FSC-certified
tyres on a first vehicle model - the BMW X5 xDrive45e plug-in
hybrid² FSC-certified tyres made of natural rubber, making
the BMW Group the first automotive manufacturer in the world
to equip its vehicles with tyres based on sustainable, certified
natural rubber and rayon - a wood-based material used to re-
inforce tyres. ]]
framework, we bindingly agreed corresponding measures for
429 contracts awarded in the course of 2021.
One of the most effective ways of decarbonising the supply
chain is the use of green electricity. For this reason, in 2020,
we entered into contractual agreements with battery cell
manufacturers to use only energy generated from renewable
sources to produce the current generation of battery cells. In
2021, the BMW Group also introduced green electricity as a
mandatory criterion for awarding new contracts in its supply
chain and has already concluded green electricity agree-
ments in the awarding of 427 orders, particularly with up-
stream suppliers of energy-intensive products.
-
These measures have already enabled the Group to reach
agreements that cut carbon emissions² by well over 20 million
tonnes during the period from 2021 to 2030. For example, car-
bon emissions generated in the supply chain to produce bat-
tery cells for the BMW iX have been reduced by up to 1.5 t CO₂
per vehicle, simply by agreeing to use green electricity to man-
ufacture them. The implementation of the strategic target was
incorporated in the necessary areas across the Group in 2021
and will be measured and reported in future by using the key
parameter of carbon emissions per vehicle produced.
Carbon Disclosure Project (CDP) for supplier empowerment
Through its participation in the CDP Supply Chain Pro-
gramme, the BMW Group has been motivating its suppliers
to operate sustainably since 2014 and, for example, to use
renewable energy in their production processes. The core of
the programme is an annual report, which includes a variety
of climate-related aspects such as decarbonisation and in-
creasing the percentage of renewable energy used. The
BMW Group strongly encourages its suppliers to set targets
in line with the Paris Climate Agreement in their efforts to
help limit global warming. Together with the BMW Group's
specified target for decarbonising the supply chain, this led
to a further significant increase in supplier commitment.
For example, year-on-year, supplier participation in the CDP
We aim to reduce carbon
emissions in the supply chain by
79
at least 20% by 2030 (base
year 2019).
* Since the end of 2021: Federal Ministry for Economic Affairs and Climate Protection (BMWK).
CONFLICT MINERAL TUNGSTEN:
CLOSING MATERIAL CYCLES
78
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Production, Purchasing and Supplier Network
[[Rigorous reduction and traceability of critical raw materials
Due to the complexity of multilayered, dynamic, globalised
value chains and customer-supplier relationships, it is a major
challenge to ensure sustainability standards right from the
raw materials extraction stage. We have a clear aspiration to
comply with environmental and human rights standards at
every level of our supply chains. Sourcing the raw materials
required to produce battery cells, such as lithium and cobalt, is
generally a highly challenging task. In order to establish trace-
ability and transparency across the supply chain for both of
these raw materials and to minimise the identified risks, the
BMW Group sources them directly from the producers, and
ALLIANCE FOR CROSS-COMPANY,
DECENTRALISED DATA EXCHANGE
[[ As part of the Catena-X Automotive Network initiative, the
BMW Group is working to establish an open, scalable, decentral-
ised network for the secure exchange of information and data
across companies in the automotive value chain. The network
is based on an industry consortium funded by the Federal Min-
istry for Economic Affairs and Energy (BMWK)* consisting of
national and international partners from the automotive value
chain. Continuously connected data chains will make it possible
to create completely digital images of automobiles and the core
processes of automotive value creation, so-called digital twins.
New business processes and services can be either made pos-
sible or collaboratively enhanced, based on these digital twins.
By using the European GAIA-X and International Data Spaces
Frameworks as the architectural basis for the Catena-X network,
the companies involved have already agreed on the essential in-
frastructural principles for project implementation.]]
makes them available to its own suppliers in order to produce
the current generation of battery cells. The strategy allows us
to fully document both the origin and the path of the lithium
and cobalt we use, while creating transparency regarding
mining methods at the same time.
Further measures that serve to meet our due diligence require-
ments include reducing or eliminating the use of so-called
high-risk primary raw materials. For example, we have re-
duced the use of cobalt in the cathodes of our current gener-
ation of battery cells to less than 10%. Our latest generation of
electric motors is made without the need for any rare earths.
The BMW Group also keeps a close eye on raw materials
that are classified as so-called "conflict minerals". These in-
clude ores whose mining and trade are frequently associ-
ated with violations of environmental and social standards.
By using standardised applications such as the Conflict Min-
erals Reporting Template (CMRT) of the Responsible Miner-
als Initiative (RMI), the BMW Group ensures the traceability
of the raw materials it uses, right from the direct supplier to
the certified smelter. SASB-Index
Mitigating risks through industry initiatives and partnerships
Apart from eliminating, substituting or reducing the use of
risk-related primary raw materials, we rely on close cooper-
ation with our partners in the supplier network. Our aim is to
continue reducing the potential negative impacts of our busi-
ness activities in our raw materials supply chains.
[t Traceability of conflict minerals
back to the certified mine. ]]
We also expect our direct suppliers to demand minimum
standards in their chain of upstream suppliers, which has
been done for all the 37 raw materials we analysed. The
BMW Group even goes one step further in this regard be-
cause, as a precautionary measure, we are committed to
not using minerals such as cobalt that are extracted from
the deep sea. Together with other companies, we have de-
clared this in a 7 moratorium. ]]
[[ The circular economy concept is a key method for ensuring the
responsible use of raw materials and resources. For example,
since the year under report, the BMW Group has been reducing
the amount of the primary raw tungsten it requires by introducing
a closed material cycle. To achieve this aim, we collect discarded
drill and screw inserts in our German and Austrian plants, recycle
them, and have new tools manufactured from the secondary
raw material obtained. Apart from reducing our consumption of
primary raw materials, the strategy also cuts carbon emissions.
7 SASB-Index ]]
18
Supply Chain Programme increased from 218 to 250 sup-
pliers, which covers 80% (2020: 79%) of the BMW Group's
production-relevant purchasing volume. Some 34% of sup-
pliers (2020: 29%) had at least a 2-degree-compliant target
system in place and 38% (2020: 35%) of suppliers received
at least a B rating. As in previous years, in 2021 the average
CDP rating among the BMW Group's participating suppliers
was a score of C.
7 GRI-Index: 308-1, 308-2, 414-21]
€ 389 million
invested in vocational and further training of BMW
Group employees in 2021.
Direct link to section
18.8%
of management positions at BMW Group held by
women at the end of 2021. By 2025, the share is
expected to rise to 22%.
Direct link to section
"€ 35 million
spent by the BMW Group in 2021 on social pro-
jects and other activities in conjunction with its
corporate citizenship responsibilities.
7 Direct link to section ]]
8 DECENT WORK AND
M
EMPLOYER ATTRACTIVE-
NESS AND EMPLOYEE
DEVELOPMENT
[The personal commitment and technical expertise of our
employees are crucial to the success of the BMW Group.
With a broad range of interesting and future-oriented jobs at
attractive conditions, we offer our employees secure pros-
pects and the opportunity to develop personally as well as
help shape the BMW Group's future. The objectives of our
Human Resources (HR) strategy have been defined with a
view to attracting skilled employees, optimising their deploy-
ment and providing them with opportunities to develop their
potential, thereby ensuring that all their skills and expertise
are available to meet the future needs of the BMW Group.
The success of this approach is borne out by the results of
employee satisfaction surveys and the outstanding positions
consistently achieved in employer rankings. 1]
The BMW Group's attractiveness as an employer
At 31 December 2021, the BMW Group employed a total of
118,909 people worldwide*, slightly below the headcount at
the end of the previous year (2020: 120,726; -1.5%). Further
GRI information This reduction was achieved through a combi-
nation of natural employee fluctuation and voluntary agree-
ments in line with planned workforce restructuring meas-
ures. For this purpose, appropriate provisions were made
which were taken into account in personnel expenses. Notes
to the Group Financial Statements, no. 15. At the same time, we
stepped up our recruitment efforts in 2021 with a view to en-
suring the continued availability of all the required expertise
within the workforce to ensure the planned future growth of
the BMW Group. 7 GRI-Index: 102-8
Strategic personnel planning serves as a tool for identifying
the need to readjust personnel and competence structures
at an early stage. The BMW Group uses this information as
the basis for making targeted improvements in the fields of
vocational and further training, personnel development, HR
marketing, recruiting and training programmes for future tal-
ents. 7 GRI-Index: Employee development, vocational and further training
* With effect from the reporting year 2020, a new definition of the term "employee"
is applied (see the Glossary for the definition). For the periods 2018 and older,
the percentage of employees no longer reported was between 7.5% and 8.0 %.
AT A GLANCE
The BMW Group has integrated the assessments of the CDP
Supply Chain Programme in its key purchasing processes.
The results are used in supplier discussions, in strategic
management discussions and in the overall supplier strat-
egies to point out potential for improvement. They also form a
basis for determining the group of bidders in purchasing
strategies when awarding contracts. The BMW Group uses
the CDP's assessment to support and further encourage its
own suppliers to implement the Paris Climate Agreement.
Suppliers who have participated for some time generally at-
tain a significantly improved CDP rating.
EMPLOYEES AND SOCIETY
89
1 Average per vehicle produced; figure rounded for simplification purposes. The
target validated in conjunction with the SBTi is 22%.
27 Consumption and carbon emissions data.
80
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80
Employer Attractiveness and Employee
Development
83
Health and Performance
86
Diversity
Corporate Citizenship
3 As of 2021, this figure also includes the carbon emissions of all other BMW Group
locations in addition to those generated by production processes. For comparison
purposes, the figure for 2020 has been adjusted accordingly (2020 before adjustment:
652,795).
In the automotive supply chain, which is particularly complex
by industry standards, traceability right back to the raw ma-
terial extraction stage can be significantly improved with
new digital tools. The BMW Group is committed to driving
improvements within the framework of initiatives such as the
Catena-X Automotive Network - and is working with partner
companies to standardise data and information flows in the
automotive value chain in order to comply with antitrust-re-
lated and legal requirements. Together with partners at Cat-
ena-X and the WBCSD, we are working on solutions to
measure actual carbon emissions data in the supply chain and make
it comparable, with the aim of effectively reducing carbon
emissions in our supply chain. 1]
[[ Alongside the required prevention measures, the BMW Group
has been offering training courses aimed at buyers, internal
process partners and suppliers since 2012. To raise awareness
of social and environmental standards in the supply chain, we
explain interdependencies and clearly describe what we expect
of the companies we work together with. Moreover, together
with partner companies, in selected cases we are breaking new
ground with the aim of taking action at the very beginning of the
supply chain. Further GRI information GRI-Index: 412-21]
[t The department Purchasing and Supplier Network is re-
sponsible for the worldwide procurement and quality assur-
ance of production materials, raw materials, capital goods
and services as well as the production of vehicle components
manufactured in-house. The BMW Group follows the princi-
ple of sourcing vehicle components as closely as possible to
its production sites. Efficient teams are in place in all major
purchasing markets in order to identify risks swiftly and re-
spond flexibly and at short notice to changing market situa-
tions. Close cooperation with our suppliers in a spirit of part-
nership was one of the factors that enabled us, for example,
to cushion the effects of the global semiconductor shortage
to a large extent. In order to secure long-term supplies in this
area, the BMW Group concluded a direct agreement with
semiconductor suppliers for the first time at the end of 2021.
The agreement enables the BMW Group to secure the supply
of several million semiconductors per year. Overall, however,
the supply situation for semiconductor components will again
remain tight in 2022.
Taking ecological and social responsibility
The BMW Group sees itself as a pioneer in terms of corpo-
rate due diligence in its supplier network. Back in 2008, we
defined a comprehensive draft of preventive measures, in-
cluding contractual obligations to comply with environmental
and social standards, and stipulated them for the first time
when selecting suppliers for the BMW i3. We have also de-
fined and implemented raw-material-specific sustainability
requirements for certain components.
In 2014, we extended our standards to include a multistage
due diligence process. Since then, the process has included
the procurement of production materials for vehicle models
as well as risk-based, non-production-related goods and
services. Every supplier who has a direct business relation-
ship with the BMW Group is obliged to sign these require-
ments for its manufacturing and delivery locations and pass
them on contractually to its respective sub-suppliers. Specific
requirements are set out in the BMW Group Supplier Sustainability
Policy, the order documents and the contract documents.
These requirements must be implemented prior to the start
of production or by the agreed target date.
Further GRI information GRI-Index: 308-1, 414-1 SASB-Index
Management system and mission statement
The BMW Group is committed to respecting internationally
recognised human rights and is guided, among other things,
by the UN Guiding Principles on Business and Human
Rights, the OECD Due Diligence Guidance for Responsible
Business, and the German government's National Action
Plan as well as the Supply Chain Due Diligence Act derived
from it Worldwide Implementation of Labour Standards and Human
Rights.
REGIONAL DISTRIBUTION OF BMW GROUP
PURCHASE VOLUMES¹
in € billion
Asia/Australia
6.9%
Rest of Western
Europe
15%
North America
20.1%
IMPLEMENTATION OF THE SUPPLY CHAIN DUE DILIGENCE ACT
Total
€ 64.1 billion
Other
1.3%
Germany
38.4%
Eastern Europe
18.3%
[[ In 2021, the German Bundestag passed the Supply Chain Due
Diligence Act, in which the BMW Group actively participated
through its involvement in the National Action Plan "Business
and Human Rights". We very much welcome the regulation that
has now been adopted and are also advocating for Europe-wide
directives that ensure fair competitive conditions.
← = Q
Our sustainability programme has fulfilled key due diligence re-
quirements since 2014. For example, as a preventive measure, the
BMW Group requires its suppliers to draw up a guideline on work-
ing conditions and human rights. Since 2019, we only commission
suppliers with more than 500 employees if they have a certified
occupational health and safety management system in place in
Other Information
Corporate Governance
CO2 EMISSIONS PER VEHICLE PRODUCED 1,2
in t
0.40
0.35
0.33
0
2019
2020
2021
[Carbon emissions relating to transport logistics
As part of the Green Transport Logistics project, the
BMW Group is aiming to make transport logistics cli-
mate-neutral, both within the production network and for ve-
hicle deliveries. The carbon footprint and the use of car-
bon-efficient energy and modes of transport play a significant
role in this regard. We are therefore making a major contribu-
tion to transforming the transport sector, pursuing a techno-
logically open, innovative approach across all modes of
transport. In order to ensure sufficient supplies between our
plants, however, we were compelled to increase the year-on-
year use of air freight during the reporting year due to issues
relating to the supply of semiconductors.
Since the beginning of 2021, in cooperation with transport
service providers, the BMW Group has been using low-car-
bon liquefied natural gas (LNG) on certain European trans-
port routes to cover its production requirements. Depending
on availability, we are gradually increasing the biogenic con-
tent of the LNG fuel we use. At the same time, we are in-
creasing the volume of products transported by rail: around
half of the vehicles produced leave our plants by rail.
PURCHASING AND
SUPPLIER NETWORK
The BMW Group's supplier network comprises over 32,000
direct supplier locations worldwide, with whom we maintain
direct supplier relationships. Our rigorous partner selection
process is based on the criteria of quality, innovation, flexi-
bility, cost and sustainability. To meet the respective due dili-
gence requirements in terms of environmental and social
standards, we rely on systematic risk analyses as well as
prevention, empowerment and remediation measures. We
also use standardised online assessments and audits that
are integrated in our business processes. Moreover, the
BMW Group enshrines its obligatory sustainability standards
in all its supply contracts. 1] We have set ourselves the goal of
reducing carbon emissions in the supply chain by at least
20% by 2030 (base year 2019), while simultaneously in-
creasing the use of secondary materials.
[t Global network and local procurement
Global purchasing, the management of international suppli-
er relationships, in-house component production and the
efficient management of challenges within the supplier net-
work are key factors in ensuring stable supplies to our pro-
duction sites. At the same time, Purchasing ensures the fu-
ture viability of the BMW Group by rigorously aligning the
supplier network with strategic future topics such as digital-
isation and electric mobility, while securing the required pur-
chasing volume. 1]
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Group Financial Statements
Production, Purchasing and Supplier Network
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7 Raw Material Outlook Platform. The platform currently contains
risk profiles for ten raw materials.
accordance with ISO 45001. Our suppliers are also trained as part
of the certification process. Moreover, if we identify high-risk
suppliers, we conduct additional audits at the supplier's premises
with the help of our own assessors and external auditors. In the
year under report, we reviewed approximately 200 potential and
active supplier locations via this method². Auditing, however, was
hampered by pandemic-related travel restrictions and is thus be-
low the level of the previous year (2020:313). 1]
2 The audits conducted worldwide were in accordance with the standards of the Responsible
Business Alliance (RBA) and the United States Environmental Protection Agency (EPA).
77
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Combined Management Report
Production, Purchasing and Supplier Network
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
[ We require suppliers with more than 100
employees to have externally audited and
certified environmental protection man-
agement systems in place. 1]
[By signing a contract with the BMW Group, the supplier un-
dertakes to implement and apply the preventive measures
prior to the start of production or by an agreed target date.
The supplier undertakes to demand compliance with these
agreements from his subcontractors and to follow them up.
All BMW Group supplier contracts include resource efficiency
requirements and demand compliance with the principles of
the UN Global Compact and the International Labour Organ-
isation (ILO). For this reason, the BMW Group has set itself
the goal of ensuring compliance with these commitments.
7 GRI-Index: 308-2, 412-2, 414-2
Checking effectiveness
In addition to the preventive measures mentioned above, the
BMW Group conducts audits of environmental and social
standards at supplier locations in high-risk regions or for
high-risk product groups. For this reason, we are members of
the Responsible Business Alliance (RBA) and the German
Association of the Automotive Industry (VDA). Together with
other automotive manufacturers and suppliers in the VDA,
we have developed the Responsible Supply Chain Initiative
(RSCI), an assessment programme newly established for this
purpose that we will implement as of 2022.
Since September 2021, we have supplemented our preven-
tion and remediation review methods with the standard-
ised use of RBA Voices, a grievance mechanism for em-
ployees of the companies we audit. RBA Voices will be
applied to all high-risk suppliers that are part of the RBA's
audit programme and do not yet have their own grievance
mechanism.
Any information received regarding potential breaches of
the BMW Group's sustainability standards in the supplier
network is processed by the internal Human Rights Contact
Supply Chain function, where tips can be submitted anony-
mously by telephone or email. In addition, suppliers and
their employees have the option of reporting potential hu-
man rights or environmental violations to our Compliance
Ombudsman for the supplier network. Whistle-blower systems
to uncover possible violations of the law and compliance controls. A human
rights officer was appointed for the first time during the year
under report. Compliance and human rights
Standardisation and cooperation
At the instigation of the BMW Group and with the support of
other automotive manufacturers in the Drive Sustainability
initiative, in 2017 an analysis of the 37 most important raw
materials was conducted at the European business network
CSR Europe. Since then, the resulting Material Change Report
has served as the basis for potential improvements and the
development of both BMW-Group-specific and common
solutions for the automotive and electronics industries. In
2021, further improvements were made to the report on the
TRAINING FOR THE SUPPLY CHAIN
* Direct suppliers are tier-1 suppliers of the BMW Group. Indirect suppliers operate
downstream in the value chain between tier-1 suppliers and raw materials suppliers.
1 Direct and indirect procurement; without BMW Brilliance Automotive Ltd., Shenyang joint
venture.
and the potential risks. Direct suppliers with more than 50
employees are required to implement preventive measures
such as guidelines regarding child labour, freedom of associ-
ation, and collective bargaining as well as occupational safe-
ty and environmental protection. We require suppliers with
more than 100 employees to communicate our sustainability
standards to their suppliers and have a control mechanism
in place in the form of externally audited and certified envi-
ronmental management systems. If a supplier employs more
than 500 people, we require, among other things, the publi-
cation of a sustainability report, a code of conduct, and ex-
ternally audited and certified occupational safety and envi-
ronmental protection management systems as additional
control mechanisms.
Preventive and remedial measures
76
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Combined Management Report Group Financial Statements
Production, Purchasing and Supplier Network
Corporate Governance
Remuneration Report
Other Information
← = Q
In 2014, we agreed upon preventive measures with our direct
suppliers concerning working conditions, occupational
health and safety, human rights and the environment. The
extent of these measures is based on the size of the supplier
[ Obligatory sustainability standards
apply to all BMW Group suppliers
and are incorporated in the supply
contracts. 1]
The BMW Group Code of Conduct on Human Rights and Working
Conditions explains how we promote human rights and
good working conditions and implement the core working
standards of the International Labour Organisation (ILO).
The BMW Group Supplier Sustainability Policy summarises the
BMW Group's principles governing the global supplier
network in accordance with internationally acknowl-
edged standards and guidelines. We regularly update the
risks we have identified in our supplier network.
Risk analyses on ecological and social responsibility
The BMW Group monitors and assesses human rights risks
and impacts in its supplier network, both in its existing busi-
ness relationships and whenever it enters a new market or
field of business. The BMW Group Due Diligence Programme
within the Purchasing and Supplier Network consists of vari-
ous coordinated procedures, measures and standardised
applications that are integrated in business processes such
as procurement.
The BMW Group has been using a risk filter to identify human
rights risks at the locations of direct and indirect suppliers*
since 2012. In a dynamic, location-specific risk analysis, it
draws on various country- and commodity-group-specific risk
databases and standardised risk maps, and includes all sup-
plier locations that have already been awarded orders as well
as all potential supplier locations. Since 2020, the risk filter
has also included risk databases and standardised risk maps
provided by the Responsible Business Alliance (RBA). This
view of risks is supplemented by commodity-group-specific
assessments provided by our internal purchasing experts.
Another component when assessing the potential negative
impacts of business activities is the Drive Sustainability
questionnaire, which is subject to continuous improvement.
In this context, both direct and indirect suppliers are required
to provide information on their sustainability performance
and the preventive and remedial measures they have imple-
mented. The information provided is checked for accuracy
and completeness by an independent third party. The infor-
mation is obtained from new suppliers as part of the contract
awarding process. Existing business relationships are audit-
ed and updated on a continual basis. Further GRI information. In
order to minimise the risks, we pay close attention to imple-
menting preventive measures. Further information is availa-
ble 7 online.
Our aim is to check compliance with our sustainability stand-
ards in the intermediate stages of the value chain on an ad
hoc basis. The audit is partially conducted via the supply
chain mapping of suppliers for whom an indirect risk has
been identified. Moreover, the BMW Group develops
raw-material-specific sustainability strategies and derives
so-called empowerment activities and pilot projects from
them to both ensure and improve compliance with environ-
mental and social standards.
7 GRI-Index: 308-1, 412-1, 412-3, 414-1
The respective demands placed on us and our suppliers are
integrated throughout the Group by means of the following
internal standards:
ECONOMIC GROWTH
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BMW Group Report 2021
2 The BMW Foundation Herbert Quandt is a corporate foundation of BMW AG. The
Foundation implements its programme with the income earned on endowment
assets or received in the form of regular financial contributions from the bene-
factor. In accordance with its statutes, the independent foundation is advised
by a board of trustees, on which the Chairman of the Supervisory Board and
one member each of the Supervisory Board and the Board of Management of
BMW AG are represented.
The BMW Group places great emphasis of ensuring that all
employees have access to its in-house health services. In
Germany, these services focus on providing acute care for
employees and temporary workers during working hours. In
certain countries, however, the Group's health service also
takes on primary care tasks, such as at the sites in Thailand,
India or Mexico. The BMW Group's Company doctors also
advise employees on individual preventive measures if re-
quested to do so, and help them adapt their work environ-
MEASURES ADOPTED IN LIGHT OF THE
CORONAVIRUS PANDEMIC
[[ The SARS-CoV-2 occupational health and safety regulations
applicable for Germany and the Works Agreement concluded in
2020 continued to apply in 2021. A Group-wide "Corona Manual",
which is updated regularly, provides guidelines for implementing
infection control measures. In addition to protection and hygiene
concepts, the emphasis of the prevention efforts made during
the year under report was on the vaccination of employees. The
BMW Group's health service teams carried out Covid-19 vacci-
nations at numerous international plant locations. In Germany
alone, the BMW Group carried out almost 50,000 vaccinations
in 2021. 1]
[[ SICKNESS RATE¹
in %
4.9
4.6
3.7
3.4
3.4
سال
2.0
2017
2018
2019
2020
2021
ment to ensure that their health and performance are main-
tained in the long term. GRI-Index: 403-3, 403-6
One of the parameters the BMW Group uses to quantify the
success of its health management measures is the sickness
rate. At 3.4%, the sickness rate at BMW AG was at the same
level to one year earlier (2020: 3.4%). The Group continu-
ously strives to improve this figure. 7 GRI-Index: 403-10
]]
Occupational safety and ergonomics at Group sites
Preventive measures such as safe and ergonomically fa-
vourable workplaces are well-established aspects of the
BMW Group's approach to health protection. The right to
health and safety in the workplace is also a key feature firm-
ly embedded in the BMW Group's Code on Human Rights and Working
Conditions, which includes a commitment to comply with cur-
rently applicable occupational health and safety legislation
worldwide. Furthermore, uniform standards applying to all
sites are constantly improved, and help to ensure that health
and safety requirements are consistent throughout the
Group.
[ 99.72% of employees at BMW Group
plants work at a site covered by an
international occupational health and
safety management system certified to
either ISO 45001 or OHRIS level. 1]
Certified occupational health and safety management system
In addition to international cooperation arrangements, occu-
pational health and safety activities throughout BMW Group
are coordinated on a global basis in line with a corresponding
management system that is certified to ISO 45001 or OHRIS2
level at 28 out of 31 plants. This means that 70,459 (2020:
69,092) or 99.72% (2020: 99.7%) of permanent employees
and 14,772 or 98.98% of temporary employees³ at BMW Group
plants work at a site covered by an international occupational
health and safety management system. It is the stated aim of
the BMW Group to obtain certification to one of these inter-
national standards for all of its plants by 2025. The only plants
for which this remains to be done are the Manaus plant (Bra-
zil), the partner plant in Kaliningrad (Russia) and the contract
manufacturing facility in Born (the Netherlands). Employer and
employee representatives work together at nearly all locations
to bring about a continual improvement in health and safety
standards. GRI-Index: 403-1, 403-41]
Global approach
1 BMW AG; number of hours of absence due to paid sick leave divided by the con-
tractually agreed number of working hours; up to 2018, absence due to unpaid was
also taken into account. Figures up to 2018 are not comparable.
The BMW Group bundles all measures aimed at promoting
the health and performance of its workforce within its Health
Initiative programme. Current health-related topics such as
nutrition, exercise and fitness as well as behavioural ergo-
nomics, cancer prevention or mental resilience are ad-
dressed in action days, dialogue events and training courses,
with the aim of raising employee awareness for these impor-
tant issues.
Employees and Society
4,000
2017
2018
2019
2020
2021
Securing future talents
The BMW Group covers its recruiting requirements with the
help of future talents programmes, either with an academic
emphasis or through qualified vocational training. Trainees
are currently preparing for their future occupations within the
BMW Group in 30 skilled trades and 18 dual study pro-
grammes at 19 training locations around the world. The total
number of apprentices, dual study students and participants
in future talents programmes* remained at the high level of
4,517 in the year under report (2020: 4,672; -3.3%). In Ger-
many, some 1,200 young people began an apprenticeship or
a dual study programme in 2021 (2020: 1,200). A similar
number of apprenticeships and study places has been an-
nounced for the coming year. BMW AG continues to offer its
apprentices and dual study students permanent employ-
ment at the BMW Group's plants and headquarters after
they have completed their vocational training.
[Focus on future-oriented fields
Electrification, automation and connectivity as well as artifi-
cial intelligence (AI) are shaping and influencing apprentice-
ship and future talents training programmes offered by the
BMW Group. The relevant programme contents are therefore
updated annually to ensure that our expertise needs for the
future are adequately covered. In the year under report, for
instance, training for all vocational fields was expanded to
include fundamental aspects of cloud computing, 3D print-
ing and data analytics. At the same time, further vocational
profiles were added in 2021, such as IT specialist for data
and process analysis.
HEALTH AND
PERFORMANCE
The health and performance of employees are key factors in
the success of the BMW Group. We are therefore committed
not only to maintaining the status quo, but also to conscious-
ly encouraging improvement. Despite the coronavirus pan-
demic and the challenges it has posed, we continued to
make good progress in terms of the various health manage-
ment and occupational safety measures in place throughout
the BMW Group. Overall, for example, the accident frequency
rate decreased.
Centralised health and occupational safety management
Health and occupational safety activities within the
BMW Group are combined in the Work Environment, Health,
Group Safety and Group Data Protection unit and allocated
to the Board of Management's Human Resources and Social
Affairs area of responsibility. The managers in the various
specialist departments are responsible for all related pro-
cesses, supported and advised by the centralised health
management and occupational safety teams. ]]
* Includes SpeedUp (an undergraduate programme) and Fastlane (a master's
programme).
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Corporate Governance
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[Health management on a holistic basis
2 Occupational Health and Risk Management System.
3 Figures excluding temporary employees included in the management system.
85
The BMW Group ensures the quality of its processes by
means of annual internal audits. Audits and certifications of
sites are conducted by external service providers. All neces-
sary audits were again successfully performed in 2021, re-
sulting, for example, in the elimination of defects identified in
plant and equipment. 7 GRI-Index: 403-2
Regular training for employees
An important prerequisite for ensuring that its occupational
safety and health procedures work well at all locations is the
provision of regular training to employees. Responsibility for
the training measures implemented in this field lies with the
Training Competence Centre, which comprises staff from the
occupational safety, ergonomics, environmental protection
and health management departments. The seminar curricu-
lum is drawn up in collaboration with safety specialists,
Company doctors and the BMW Group Academy. The spe-
cialised departments can also be called on to provide solu-
tions to help meet short-term needs.
[The BMW Group requires its
suppliers to comply with
internationally recognised
occupational health and safety
requirements. 1]
Occupational safety along the value chain
It is extremely important for the BMW Group that external
partners and their employees also find a safe work environ-
ment at our locations and take advantage of the available
safety measures. For this purpose, cooperation with con-
tractual parties is regulated in a separate contractor declar-
ation, enabling potential hazards to be identified and appro-
priate protective measures to be taken on this basis. On
large-scale construction sites of the BMW Group, all employ-
ees of partner companies are given safety briefings by
BMW Group experts. In the case of smaller contracts, the
contractor is responsible for performing this duty. The de-
partment responsible for placing the order monitors compli-
ance with the occupational health and safety regulations,
supported by the relevant occupational health and safety
unit as required.
In order to improve occupational safety at the upstream
stages of the value chain, too, the BMW Group requires its
suppliers via the agreed purchasing terms and conditions
to comply with internationally recognised occupational
health and safety requirements.² GRI-Index: 403-71]
-
[12.8 accidents per million hours
worked. ]]
1 Number of occupational accidents with at least one day of absence from work per
one million hours worked.
2 Management systems in accordance with ISO 45001 and derived from the Interna-
tional Labour Organization (ILO) or UNGC (United Nations Global Compact).
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Corporate Governance
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DIVERSITY
-
The BMW Group uses various management systems to as-
sess the methods and tools deployed across the Group. The
results of the assessments are subsequently used to en-
hance internal norms. As part of co-determination arrange-
ments, the Works Council and, if necessary, the representa-
tives of severely disabled employees and HR management
are involved.
places on a fully automated basis. With this project, the
BMW Group is going beyond current legal requirements and
setting the benchmark for the automotive industry. The
range of risk assessments was expanded to include a mobile
workplace analysis in view of the increased scale of working
from home.
The BMW Group conducts comprehensive risk and stress
analyses in order to identify potential work-related risks in
both production and office workplaces. Pilot work continues
on the so-called Digital Workplace Stress Management sys-
tem which is used to assess ergonomic aspects of work-
-
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Employees and Society
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
[[ACCIDENT FREQUENCY RATE¹
3.6
3.5
iliii
3.5
2.8
|||||
0
2017
2018
2019
2020
[ Accident frequency
2021
The measures implemented by the BMW Group are also
helping in accident prevention terms. The accident frequency
rate dropped further to 2.8 accidents per million hours
worked (2020: 3.2). There were no fatal accidents during the
year under report (2020: one) 7 Further GRI information. The
stated goal is to have occupational health and safety stand-
ards in place throughout the Group. The success of the
plants of our joint venture BMW Brilliance Automotive Ltd.,
Shenyang, China, in this respect with their very low acci-
dent frequency rate – is a good example. 7 GRI-Index: 403-9
Recognising and avoiding risks
3.2
[ The BMW Group sees diversity as a strength. A diverse
workforce brings with it different perspectives, experiences
and competencies – and can therefore make us more in-
novative and competitive as a company. For this reason, we
encourage a working environment that actively incorporates
different perspectives. We embrace diversity in all its facets
on the basis of our diversity concept. Our guiding principle is
to create “a sense of community" in which people can work
together in a spirit characterised by appreciation, mutual un-
derstanding, openness and fairness.
4,517
4,750
The Group-wide survey of the workforce conducted every
two years enables employees to assess the organisation's
performance on a regular basis and from their own perspec-
tive. The assessment is performed with the aid of the High-
Performance Index (HPOI).
[The survey conducted in autumn 2021 showed a signifi-
cant improvement in the HPO-I compared with two years
earlier. At the same time, the participation rate rose to a
record high, with some 100,000 employees or 79% of the
total workforce² taking part in the survey. Moreover, signifi-
cant progress was evident in all areas surveyed. For in-
stance, the BMW Group's corporate strategy received a
very high level of approval from the workforce. Particularly
noteworthy was the fact that 84% of participants were
convinced by the strategy of integrating sustainability and
setting ambitious targets in this respect. They also sig-
nalled a high level of willingness and motivation to play an
active role in this process, with some 82% of respondents
concluding that they are optimistic about the future of the
BMW Group. 1]
EMPLOYEE MOBILITY
[[The BMW Group offers its employees a variety of eco-friend-
ly mobility and commuting solutions. The creation of one of
Germany's largest corporate charging networks marks a spe-
cial milestone. The network of some 5,000 charging points at
numerous locations in Germany is available to charge not only
company and fleet vehicles, but employees' private electric ve-
hicles, too. More than 1,000 e-roaming³ charging points are also
available for use by the general public. All charging points are
powered entirely by renewable electricity sources.
At the same time, we encourage our employees to use alterna-
tive means of transport such as bicycles, including BMW Lease-
Rad arrangements. The Munich location is also served by a net-
work of Group-owned shuttle buses -30% of which are already
fully electric - that operate between the Group's various sites.
The BMW Group also subsidises the use of public transport with
the BMW JobTicket in Munich. ]]
1 BMW AG; departures of employees with permanent employment contracts.
2 All BMW Group employees on fixed contracts at 1 August 2021.
3 E-roaming enables electric vehicles to be charged irrespective of the provider.
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Corporate Governance
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[ Despite the good progress, however, employees also
identified a number of potential areas for optimising busi-
ness processes. The results of the survey will form the ba-
sis for concrete measures that are scheduled for implemen-
tation by mid-2022. GRI-Index: 102-43
Employee involvement
Our employees represent a crucial stakeholder group for the
BMW Group. As such, we actively involve them in our cor-
porate strategy development. The internal dialogues on the
topic of sustainability, first introduced in 2020, have become
one of the main platforms used to achieve this end. At the
two dialogue events held in 2021, we provided information
and findings on sustainability topics such as decarbonisa-
tion and the social dimension of sustainability. Dialogue with
the stakeholders
The BMW Group's ideas management system as a further
opportunity for employee involvement encourages employ-
ees to contribute ideas on matters that do not fall within their
normal remit. Employee ideas that generate a positive finan-
cial effect for the BMW Group are rewarded with the pay-
ment of a bonus. In 2021, 4,810 ideas were submitted (2020:
5,980), more than a quarter of which were directly related to
sustainability - similar to one year earlier. A total of 1,318
ideas were implemented during the year under report (2020:
1,561), resulting in first-year benefits totalling € 30.4 million
(2020: €18.2 million). GRI-Index: 102-42
Developing expertise for the future
Results of the employee survey
The transformation of the automotive industry entails nu-
merous far-reaching changes. The BMW Group takes a for-
ward-looking approach to the related challenges for the
workforce structure, equally considering social, economic
and technological developments. Against this backdrop, we
strive continuously to ensure our employees have the neces-
sary skill sets, for both the present and the future. The
BMW Group is combining the transformation of expertise
Highly regarded employer ratings once again ranked the
BMW Group as one of the world's most attractive employers.
In 2021, for instance, the BMW Group was again the world's
top-ranked automotive manufacturer in the current ranking of
the World's Most Attractive Employers 2021 as rated by Universum, a
well-known study provider. Among aspiring engineers, the
BMW Group ranked third worldwide, directly after Google and
Microsoft. For IT students, the BMW Group is the only auto-
motive company among the world's top 10 employers, mostly
in competition with prestigious technology enterprises. The
BMW Group again achieved the top spot in the Trendence
Professionals Barometer for Germany in 2021.
Employees have varying needs when it comes to organising
their work and their working hours. For this reason, the
BMW Group offers a great deal of individual personal scope
in the form of working time arrangements, including flexible
working hours, remote working, additional holidays in return
for a corresponding reduction in salary, sabbaticals, and
temporary or permanent part-time solutions. Further GRI infor-
mation During the reporting year, under the title Connected-
Works, we continued to develop a process that was started
back in 2013 to implement a diverse range of options for em-
ployees to work within a spatially flexible, autonomous and
needs-oriented environment.]]
To Our Stakeholders
Combined Management Report
Employees and Society
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
EMPLOYEE ATTRITION RATE1
as a percentage of workforce
3.39
2.64
2.78
5.51
4.71
0
2017
2018
2019
2020
[Attractive employment conditions
2021
As a key factor for the BMW Group's attractiveness as an
employer, we aim to ensure that, based on their overall re-
muneration package, our employees earn above average for
the respective labour markets. To confirm this, we conduct
remuneration studies each year on a worldwide basis. The
total salary package consists of a monthly remuneration
and a variable component dependent on the BMW Group's
overall performance. We also offer additional benefits such
as Company pension schemes and an attractive range of
mobility benefits, which can differ from country to country.
7 GRI-Index: 102-35, 102-38, 102-39, 401-2, SASB-Index
The BMW Group confirmed its
position as the most popular
automotive manufacturer in
the latest ranking of the
World's Most Attractive
Employers 2021.
Employer rankings and awards
necessitated by electrification with substantial levels of in-
vestment at its various
locations.
Largest training initiative in the BMW Group's history
2020
2021
]]
1 Further training of BMW Group employees in consolidated and non-consolidated
100% subsidiaries worldwide. Data are collated on the basis of direct inputs of
participants and, to a small extent, by extrapolation. Data also include e-learn-
ing formats.
2 Vocational and further training comprises the in-house training of all BMW Group
apprentices (Glossary [Apprentices]) as well as the further training of BMW
Group employees and temporary staff at consolidated companies worldwide.
83
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Employees and Society
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
[Key role for managers in the transformation process
BMW Group managers have a key role to play in shaping the
ongoing transformation process. For this reason, the
BMW Group promotes personalities who have the right atti-
tude and willingness to perform, joint leadership skills and a
high degree of identification with the organisation. We en-
courage leadership skills by means of strategically aligned
management training programmes based on a uniform un-
derstanding of leadership. Apart from careers in manage-
ment, the BMW Group also offers the so-called "Expert
Career", which does not generally involve disciplinary re-
sponsibility for other employees. It focuses instead on tech-
nical, project-related or corporate topics as well as other
tasks driving the transformation process.
Recruiting and promoting new staff
Through its comprehensive range of apprenticeships, the
BMW Group creates a broad range of attractive employment
prospects for young people. Promoting future talents also
plays a key role in building up expertise within the Group. 1]
[The recruitment and promotion
of future talents is increasingly
focused on the future-oriented
topics of electrification,
automation and artificial
intelligence. 1]
APPRENTICES AND PARTICIPANTS IN YOUNG
TALENT PROGRAMMES¹
Number
4,964
4,801
2019
2018
2017
200
In 2021, the BMW Group launched the largest training initia-
tive in its history, aimed at promoting and maintaining the
ability of its workforce to perform with the requisite expertise
and ensuring the Group's long-term competitiveness. Apart
from electric mobility and digitalisation, the BMW Group is
also focusing on a number of future-oriented fields, such as
electrics and electronics, data analytics, innovative produc-
tion technologies and new working methods.
The scale of the training initiative is reflected in the signifi-
cant increase in the number of participants compared with
the previous year. Training measures undertaken across the
BMW Group in 2021 involved a total of 1.1 million participants
(2020: 770,000). Each member of the BMW Group work-
force received an average of 23.1 hours of training during the
year under report (2020: 16.0 hours). Further GRI Information. ]]
In total, the BMW Group invested € 388.6 million (2020:
€ 279.0 million) in training and further education in the fi-
nancial year 2021. The total expense for the years 2020 and
2021 therefore exceeds half a billion euros. GRI-Index: 404-2
[AVERAGE HOURS OF FURTHER TRAINING1
Number of hours
27.1
26.6
26.0
16.0
Illi
23.1
0
4,672
2017
2019
2020
2021
INVESTMENT IN TRAINING AND FURTHER
EDUCATION²
in € million
389
373
370
349
279
illil
2018
Embedding diversity
← = Q
[ A diverse workforce brings with it different
perspectives, experiences and competen-
cies – making the BMW Group more
innovative and competitive. ]]
Entire workforce
[The BMW Group is also aware of the need to achieve a
high percentage of women in our future talents programmes.
The aim is to ensure that the share of women in the total
workforce and in management functions continues to rise in
the future. The share of women participating in the trainee
programme (Global Leader Development Programme) in-
creased to around 47% in 2021 (2020: 42%). By contrast,
the percentage in student proportion programmes (Fastlane,
Speed Up) fell slightly to around 32% (2020: 33%). 1]
1 Regarding the term "management function" please see the Glossary.
2 The new definition of the term "employee" is provided in the Glossary.
89
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Employees and Society
CORPORATE CITIZENSHIP
[As a corporation with a multinational workforce and loca-
tions on six continents, we are very much a part of society.
For this reason, our ecological, economic and social respon-
sibility extends beyond our core business. The main focus of
our corporate citizen activities at our international locations
is to make a contribution towards achieving better living con-
ditions, educational opportunities and greater intercultural
understanding. Through a broad range of activities, we also
contribute towards the attainment of the UN's Sustainable
Development Goals.
BUILDING BRIDGES BETWEEN CULTURES
[[ As an enterprise with global operations and a highly diverse
workforce, we have a keen interest in encouraging tolerance
and understanding between various nations, cultures and reli-
gions. Together with the United Nations Alliance of Civilisations
(UNAOC), since 2011 we have regularly presented the Intercul-
tural Innovation Award. The Award is given in recognition of pro-
jects that seek constructive solutions to intercultural tensions
and conflict.
The BMW Group's target is to reach a total of six million people
by 2025 with the award-winning projects. By the end of 2021,
the award-winning projects will already have benefited around
5.7 million people (2020: 5.1 million people).' The BMW Group
therefore considers it is well on the way to exceeding the target
it has set itself. ]]
Our aspiration
The BMW Group aspires to address concrete needs and
achieve a long-term impact by means of its corporate citi-
zenship activities. We therefore focus primarily on projects
where our expertise can be best leveraged to make a pur-
poseful contribution. In the event of a crisis, we also provide
fast and unbureaucratic assistance. During the year under
report, for instance, the BMW Group made € 1.5 million
available for rescue services in connection with the flood dis-
aster in Germany.²
The BMW Group's expenditure on corporate citizenship ac-
tivities in 2021 totalled € 34.6 million (2020: € 33.6 million).
These include social projects, communication activities,
sponsorship of cultural and sporting events, and donations
of various kinds.
Improving prospects for life with educational projects
At its various locations, the BMW Group develops education-
al projects that facilitate young people's first steps into the
labour market and, in this way, offer them better prospects
for life. With its programmes from primary school level
through to higher education, the BMW Group is making a
[[TOTAL EXPENDITURE ON CORPORATE
CITIZENSHIP BY TYPE OF ACTIVITY3
2021
in € thousand
2020
2018
15.7
15.5
15.9
16.2
16.0
17.5
19.3
19.9
16.0
17.2
19.3
17.2
19.5
17.8
19.7
18.8
0
2017
2018
2019
2020
2021
Management positions
Entire workforce
by 2025, namely to 22% for the BMW Group and 20% for
BMW AG. By 2025, we aim to increase the share of women
in the BMW Group workforce as a whole to between 20 and
22% and to between 17 to 19% for the BMW AG.
The share of women in management functions¹ within the
BMW Group has been rising steadily for many years. Global-
ly, the share of female managers in the BMW Group stood at
18.8% at the end of 2021 (2020: 17.8%). At BMW AG, the
number of women in management functions has more than
doubled between 2011 and the present day. Expressed as a
percentage, the share of female managers at BMW AG was
17.5% at the end of the period under report (2020:16.2%).
The share of women in the BMW Group workforce as a whole
reached 19.7% (2020: 19.5%). At BMW AG, women ac-
counted for 16.0% of the total workforce (2020: 15.9%)
Further GRI Information.
2017
Management positions
2019
Commercial Activities →
Community Investment →
Donations/
payments in kind →
37,242
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Employees and Society
[Strengthening employee engagement
A great number of BMW Group employees around the world
are committed to social and environmental issues in a va-
riety of ways. This includes, above all, supporting education-
al projects and campaigns for the benefit of the communities
at the locations where we have operations. In order to make
it easier for employees to become involved in such activities,
the BMW Group launched a so-called Social Week in 2021,
comprising a lecture series as well as introductory events. In
addition, the creation of a Social Marketplace provides em-
ployees with a digital platform on which they are able to ob-
tain information about charitable projects and exchange
ideas with like-minded people. Environment-related initia-
tives such as collecting plastic waste, planting trees or
growing vegetables - are also a recurring feature of the pro-
jects pursued by our employees.
-
Awards for social engagement
The BMW Group actively involves its employees in its social
engagement activities. Over the past ten years, particularly
dedicated charitable work has been recognised with the
BMW Group Award for Social Engagement. In 2021, the
BMW Group honoured four employees for their social en-
gagement, in one case even with a special prize sponsored
by the Doppelfeld Foundation. The BMW Group Awards for
social engagement are each endowed with € 10,000 and di-
rectly benefit the projects concerned.
Promoting innovation
We encourage young talented people within the BMW Group
to use their know-how to set up their own projects to help
solve the social and ecological challenges of our day. In the
"Innovation for Impact" accelerator programme, we support
young employees who are making a valuable contribution
with innovative technologies.
Inspiring Responsible Leadership -
the BMW Foundation Herbert Quandt
The BMW Foundation Herbert Quandt2 is an independent corpor-
ate foundation and, as an important partner, contributes
with its activities to the social responsibility aspirations of
the BMW Group. At the same time, the Foundation encour-
ages leaders worldwide to take action as "Responsible
Leaders" and is committed to help shape a peaceful, just
and sustainable future. The Foundation strives to promote
the UN Sustainable Development Goals. These goals also
play a key role in the Foundation's grants, collaborations and
investments, with social and sustainability-related impacts
taken into account in every investment decision. Detailed in-
formation on this process is provided in the latest Impact In-
vesting Report. Significant activities during the year under re-
port included the 7 RESPOND Accelerator programme, the Equity,
Diversity, and Belonging Week and a Responsible Leaders Lab on
the topic of Reshaping Mobility to Serve Citizens' Needs. 1]
CREATING A FORUM FOR YOUNG TALENT
ACROSS THE WORLD
[[The mission statement of the 7 One Young World network is to
meet global challenges together, while creating lasting, global
connections. This guiding principle brings together young people
from all over the world who are committed to social responsibility.
The BMW Group has been sending a delegation to the One Young
World Summit since 2016. In 2021, around 60 young employees
from the BMW Group took part in the event. ]]
[With our accelerator programme,
[The BMW Group Award honours
particularly dedicated social
engagement on the part of our
employees. 1]
1 Designation until 2020: BMW Group Award for Social Commitment.
The BMW Group places great emphasis on an unprejudiced,
appreciative and inclusive working environment for all its
employees. Key principles such as protection against dis-
crimination, equal treatment of all employees and respect at
all times are firmly embedded in the BMW Legal Compliance Code
and the BMW Group Code of Human Rights and Working Conditions. All
employees can contact their line managers, the relevant
BMW Group Report 2021
90
90
3 The BMW Group's corporate citizenship activities are divided into three main
areas: donations (comprising cash and non-cash contributions), community in-
vestments (including expenditure on our own project initiatives and partnerships
as well as corporate volunteering) and commercial activities (covering activity
and event sponsoring undertaken to promote culture, sports and sustainability).
Commercial activities also include cause-related marketing.
"In the form of cash and non-cash contributions.
33,436
33,229 33,631
34,646
0
2017
2018
2019
2020
2021
[[DONATIONS WORLDWIDE
in € million
16.5
15.1
Sports
6.2%
Environment /
Sustainability
Culture
9.6%
Society /
Community
24.9%
Total
€ 16.6 million
Politics
0.1%
Science /
Education
57.8%
lasting contribution towards more equal opportunity. The
BMW Group bases its funding approach on the specific
needs and requirements at each location. During the year
under report, the BMW Group supported a range of educa-
tional projects for example in China, India, South Korea,
Russia and the USA. Further information is provided and ad-
ditional projects described on the website 7 BMW Group Cor-
porate Citizenship. ]]
1 The number of people supported by projects is provided by the award winners
at the end of each year. It is calculated based on combined data from media and
sources. The figure reported relates only to the people who benefit directly from
the projects concerned.
2 Of which approximately €900,000 was called upon in 2021.
1.4%
14.0
we support young employees who
are making a valuable social or
ecological contribution with innova-
tive technologies. 1]
in %
59.2
2020 total
10.4
59.9
29.7
2021 total
9.8
59.9
30.3
direct¹
13.3
53.6
33.1
indirect²
7.8
63.6
28.6
male
8.8
59.2
31.9
female
15.2
11.6
2019 total
30-50
years old
<30
years old
16.1
Using a variety of training events, presentations and dia-
logue formats, we endeavour to sensitize employees and
managers to the positive contribution that diversity can
make to the business. The BMW Group also promotes diver-
sity and equal opportunity in its recruiting and personnel de-
velopment strategies.
Diversity-promoting concepts have also been developed in
relation to the composition of the Board of Management and
Supervisory Board. Information on the stipulated diversity
criteria and their implementation is provided in the Corporate
Governance Statement. GRI-Index: Diversity and equal opportunity
specialist departments, the HR department or the Works
Council if they have any pertinent concerns. The BMW Group
SpeakUP Line is a telephone service available in over 30
languages that gives employees worldwide the opportunity
to report possible violations both anonymously and confi-
dentially (Whistleblower Systems for Detecting Possible Legal Violations
and Compliance Controls). GRI-Index: 406-1
The BMW Group is committed to raising awareness for di-
versity throughout the organisation. In this context, for in-
stance, we organise an annual Diversity Week, which in 2021
involved 170 activities aimed at motivating employees world-
wide to address the issue of diversity. The international com-
munication campaign Driven by Diversity was also launched
at the same time. The aim of the internal campaign is to
make the diverse identities, ways of thinking and experi-
ences of our employees visible and to embed diversity even
deeper in the corporate culture of the BMW Group and in the
mindset of its employees.
Employee engagement
Employee initiatives play a key role in ensuring that diversity
is actively practised. For example, two teams from the future
talents programme took part in the Germany-wide Diversity
Challenge of the Diversity Charter during the year under report.
One of the teams was awarded first place for developing a
diversity app.
Many other employees are involved in internal networks that
have been set up, including a number of women's networks
at various locations and the BMW Group PRIDE group, which
campaigns across borders for the interests of the LGBT+*
community. Sexual Orientation and Identity The dialogue generat-
ed by the aforementioned internal networks creates further
momentum for the BMW Group's commitment to support
diversity.
Promoting diversity
The BMW Group takes an holistic approach to the subject of
diversity, focusing primarily on five key dimensions, namely
cultural background; age and experience; sexual orientation
and identity; physical and mental ability; and gender. The
two departments, HR Policy and Strategy and HR Oper-
ations, working together with the relevant disciplinary line
managers, are responsible for implementing the measures
decided upon. 1]
*Abbreviation for all sexual orientations and forms of identity.
63.4
87
To Our Stakeholders
Combined Management Report
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
Employees and Society
> 50
years old
29.2
[ BMW AG EMPLOYEES ACCORDING TO AGE GROUP,
DIVIDED INTO FUNCTIONS AND GENDER
in %
BMW Group Report 2021
21.4
Group-wide initiatives
[Cultural background
2 All employees without clock control.
3 The share of employees with severe disabilities is based on the statutory require-
ments in accordance with the German Social Code (SGB IX).
"The figure for 2021 comprises all orders completed and billed by 31 December
2021.
88
88
BMW Group Report 2021
To Our Stakeholders
Combined Management Report
Employees and Society
Group Financial Statements
Corporate Governance
Remuneration Report
Other Information
← = Q
BMW AG regularly compares the monthly salary levels and
variable remuneration of women and men employed by the
Company. The respective degree of employment and func-
tional level are also taken into account. The objective of the
audit is to ensure that the remuneration structures result in
fair pay. There were no significant differences in the overall
remuneration package between the genders within BMW AG
in the year under review. GRI-Index: 405-21]
Increasing the share of women
The BMW Group is working continuously to increase the
share of women in the workforce as a whole and in manage-
ment functions in particular. This remains a challenging task
in that it is still the case that more men go through the pro-
cess of vocational training, particularly in technical fields,
and are therefore in the majority on the labour market.
The BMW Group has set targets for the percentage share of
women at all levels of the Company. We have raised our tar-
gets for the percentage of women in management functions
Share of women in manage-
ment functions in the
BMW Group at 18.8 %.
PERCENTAGE OF WOMEN IN MANAGEMENT
POSITIONS AND IN THE TOTAL WORKFORCE AT
BMW AG²
PERCENTAGE OF WOMEN IN MANAGEMENT
]]
1 Clock-controlled and production employees.
]]
in %
2020
People from over 110 countries work successfully together at
the BMW Group. Further GRI Information A broad range of op-
portunities for personnel development, qualification and fur-
ther training helps to promote intercultural understanding. For
example, the BMW Group deliberately gears the Global
Leader Development Programme towards international par-
ticipants. As in the previous year, new employees from eight
countries took part in the programme. Moreover, the
BMW Group uses various dialogue formats to ensure an un-
prejudiced working environment in a spirit of mutual respect.
2021
Age and experience
The BMW Group sees demographic change as both a chal-
lenge and an opportunity. Since 2019, as part of the Senior
Expert Programme, retired employees have been passing on
their knowledge and experience to their younger colleagues.
Conversely, within the Reverse Mentoring Programme or-
ganised by the BMW Group, older employees benefit from
the new knowledge of the younger generation. We train our
managers to recognise and leverage the opportunities that
mixed-age teams offer. GRI-Index: 404-2
Physical and mental abilities
In line with its core values, the BMW Group is convinced of
the need to offer an inclusive and barrier-free working envi-
ronment for employees with physical or mental disabilities.
This begins with providing training opportunities for severe-
ly disabled young people and continues by designing work-
places that meet their needs. We have reaffirmed this as-
piration in 2021 by joining the international initiative The
Valuable 500. Furthermore, in the year under report BMW AG
awarded contracts amounting to around € 24.2 million
(2020: € 25 million) to workshops staffed by people with
severe restrictions.
[[SHARE OF EMPLOYEES WITH SEVERE
DISABILITIES AT BMW AG³
in %
6.5
6.3
6.4
6.6
|
POSITIONS AND IN THE TOTAL WORKFORCE OF THE
BMW GROUP²
Sexual orientation and identity
2018
2019
2017
4.0
|||||
6.5
[t People from over 110 countries
In 2021, the BMW Group systematically implemented the
measures decided upon in 2020 aimed at promoting women
in the workforce. One focus was placed on future talents and
executive management training programmes. Increasing the
share of women at all levels. In the Inspired Lead leadership pro-
gramme, for example, gender diversity is taken into account
in both the selection of participants and the learning content.
The option of filling management functions in tandem (joint
leadership) was also well received by employees in the first
year after the programme was introduced. In 2021, our
measures relating to the promotion of women were evaluat-
ed externally on the basis of the Women's Career Index. This
assessment confirmed the effectiveness of the measures
taken and the progress we have made.
Gender
The focus we place on sexual orientation and identity is a
clear reflection of diversity in action within the BMW Group.
An open-minded, unprejudiced and respectful working envi-
ronment is a prerequisite for LGBT+ employees to be able
to contribute their full potential. For this reason, the
BMW Group uses a range of informational events and dia-
logue formats to raise awareness of LGBT+ issues among
employees and managers. We are supported in the imple-
mentation of measures by the internal network BMW Group
PRIDE. We also send a clear signal to the outside world: in
2021, for instance, we joined the PROUT EMPLOYER net-
work of the Prout at Work Foundation and signed the UN Stand-
ards of Conduct for Business for Tackling Discrimination
against LGBTI people.
work successfully together at
the BMW Group. 1]
7,118
5,222
17.8
Employees at year-end¹
126,016
120,726
16,060
118,909
Share of women in management positions in the BMW Group (in %)²
17.2
18.8
3.0
17,096
154,950
20.8
- 27.3
3.7
AUTOMOTIVE SEGMENT
EBIT margin in %
RoCE in %3
Deliveries
Share of all-electric cars in deliveries (in %)
CO2 emissions of the EU new vehicle fleet (in g/km) 5,6,7
CO₂ emissions per vehicle produced (in tonnes)
MOTORCYCLES SEGMENT
23,509
149,475
20.2
Profit/loss before tax in € million
2020
2023
32
Dialogue with Stakeholders
EBIT margin in %
35
BMW Group and Capital Markets
01
TO OUR
STAKEHOLDERS
9
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
← = Q
BMW Group in Figures
BMW GROUP IN FIGURES
KEY PERFORMANCE INDICATORS
GROUP
2019
2021
2022
Change in %
Other Information
1.9
Deliveries
99.1 (135.0)8
115.9
105.0
102.1
- 2.8
0.40
0.35
0.33
0.32
0.28
127.0
- 12.5
4.5
8.3
8.1
8.1
29.4
15.0
21.9
24.9
22.1
- 11.2
8.2
63.3
14.7
9.0
FINANCIAL SERVICES SEGMENT
RoE in %
1 The term "employee" has been redefined with effect from the reporting year 2020 (for definition, see Glossary).
4.9
2.7
10.3
8.6
9.8
14.0
29.0
12.7
24.0
18.1
20.2
11.6
2,537,504
2,325,179
2,521,514
2,399,632
2,554,183
6.4
1.6
4.1
ROCE in %10
Composition of the Board of Management and Supervisory Board
Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) (TCFD Index)
The Board of Management
-
6- Other Information
Reporting Outlook for 2024
Non-financial disclosure requirements are continuing to evolve.
From the 2024 reporting year onwards, the BMW Group will be
subject to the transparency requirements of the Corporate Sus-
tainability Reporting Directive (CSRD) and the European Sustain-
ability Reporting Standards (ESRS). We are currently implement-
ing the new sustainability reporting standards and assessing
their impact on the structure and scope of the BMW Group's
reporting with a particular focus on the management report.
GRI Index: 2-4
FRAMEWORKS APPLIED
The BMW Group Report is based on the following reporting and
accounting standards.
Combined Management Report
The Combined Management Report is based on the following le-
gal frameworks:
-
German Commercial Code (HGB) (among other relevant
legislation)
Content of the Management Report in accordance with
§§ 289 and 315 HGB
5 Remuneration Report
Combined Non-Financial Statement (NFS) at Group and
Company level in accordance with § 289 b and § 315 b
HGB (NFS Index)
German Stock Corporation Act (AktG)
Taxonomy Regulation (Regulation (EU) 2020/852 of the
European Council and of the European Parliament on the
Establishment of a Framework to Facilitate Sustainable
Investment, and amending Regulation (EU) 2019/2088)
and its delegated acts ( EU Taxonomy)
* Part of the Combined Management Report.
6
BMW Group Report 2023 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
About This Report
Remuneration Report
Other Information
← = Q
The Combined Management Report is also based on:
Guidelines on Alternative Performance Measures issued by
the European Securities and Markets Authority (ESMA)
German Corporate Governance Code (GCGC)
Furthermore, the Combined Management Report makes refer-
ence to the following reporting standards and transparency
requirements:
German Accounting Standards (GAS 20) underpinning
HGB requirements
4- Responsibility Statement and Auditor's Report
3- Group Financial Statements
2 Combined Management Report
258
175,162
Remuneration of the Members of the Board of Management
297 Remuneration of the Members of the Supervisory Board
300 Comparison of Change in Remuneration and Earnings
pursuant to § 162 (1) Sentence 2 No. 2 of the German Stock
Corporation Act (AktG)
304 Other Considerations
305 Auditor's Report
三
个
CONTENTS
5
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
About This Report
ABOUT THIS REPORT*
REPORTING CONCEPT
Integrated reporting and corporate strategy
The BMW Group regards its balance of economic, ecological and
social interests as the basis for its commercial success. This re-
port is intended to provide qualified insight into the BMW Group
and explain our activities in a transparent, comprehensible and
measurable manner. We are keen to demonstrate to our stake-
holders how economic, ecological and social issues complement
one another and are mutually dependent, and to identify the gen-
eral external conditions that influence the Company. For these
reasons, we explain the BMW Group's strategy as well as the latest
developments and the way in which the business is managed on
the basis of key financial and non-financial indicators and tar-
gets. Dashboard
On 12 March 2024, the Financial Statements of BMW AG were
authorised for issue by the Board of Management and the Group
Financial Statements approved for publication. The BMW Group
Report (hereinafter also "the Report") combines the manage-
ment reports of Bayerische Motoren Werke Aktiengesellschaft
(BMW AG) and the BMW Group in a Combined Management
Report.
The report is divided into the following sections:
1 To Our Stakeholders
-
29
GRI Standards 2021 of the Global Reporting Initiative (GRI)
(GRI Index)
Group Financial Statements
The BMW Group is also required to ensure that third parties re-
port relevant data to the BMW Group correctly. These third par-
ties include independent dealerships - the overwhelming major-
ity of which report vehicle delivery figures to the BMW Group -
and suppliers, which provide the BMW Group with data on the
implementation of agreed measures designed to reduce carbon
emissions.
Statement on Corporate Governance
The Board of Management and the Supervisory Board of BMW
AG prepare a yearly combined Statement on Corporate Govern-
ance in accordance with § 289 f and § 315 d HGB to report on
corporate governance within the BMW Group. The Statement on
Corporate Governance is published on BMW AG's website at
7 www.bmwgroup.com/ezu. It also includes the Declaration of Com-
pliance pursuant to § 161 AktG.
Editorial comments
Key figures presented in the report have been rounded in accord-
ance with standard commercial practice. In individual cases, this
may mean that figures do not add up exactly to the stated total
and that percentages cannot be derived from the values shown.
Summarised disclosures of fuel consumption, carbon emissions
and electricity consumption are provided in the section
7 Consumption and Carbon Disclosures.
* See Glossary for a definition of deliveries.
8
BMW Group Report 2023
To Our Stakeholders
Certain non-financial performance figures reported by the
BMW Group are based on a significant number of estimates and
valuations. Some are complex and subjective in nature, or sub-
ject to uncertainty for other reasons. The BMW Group is also con-
tinuously updating the policies and procedures used to calculate
its non-financial performance figures. It is not always practical to
apply new policies and procedures to prior reporting periods. Alt-
hough the methodology used to calculate indicators is in line with
standard practice, some indicators are not directly comparable
with the values reported by other companies.
Combined Management Report
Remuneration Report
Other Information
← 三〇
9
BMW Group in Figures
12
Report of the Supervisory Board
20
Statement of the Chairman of the Board of Management
27
Group Financial Statements Responsibility Statement and Auditor's Report
Preparation of non-financial performance figures
This report contains various forward-looking statements con-
cerning future developments that are based on the current status
of the BMW Group's assumptions and forecasts. These state-
ments are therefore subject to a variety of predictable and unpre-
dictable risks, uncertainties and other factors, which means that
the actual outcome, including that of the BMW Group's net as-
sets, financial position and results of operations, its development
or performance, could differ considerably from those statements.
Forward-looking statements
The Group Financial Statements of Bayerische Motoren Werke
Aktiengesellschaft for the year ended 31 December 2023 have
been prepared in accordance with International Financial Re-
porting Standards (IFRS) as endorsed by the European Union
(EU) and the supplementary requirements of § 315 e HGB.
ADDITIONAL INFORMATION
ON THE REPORT
Publication and scope
The BMW Group Report is published annually to coincide with
the BMW Group Annual Conference - most recently held on 15
March 2023 and is subsequently available in both German and
English on the BMW Group website. The GRI Index is also avail-
able on the website as a separate document. The reporting pe-
riod covers the financial year from 1 January to 31 December
2023. The statements made in the report generally relate to the
BMW Group reporting entity. Any deviations are marked accord-
ingly. The BMW Group Report 2024 will be published in March
2025.
7 GRI Index: 2-2, 2-3, 2-4
External audit
The report, comprising the Combined Management Report, the
Group Financial Statements and the additional GRI information,
has been subject to an annual independent audit by Pricewater-
houseCoopers GmbH Wirtschaftsprüfungsgesellschaft ("PwC" or
"Auditor"). Unaudited sections are marked accordingly. The ex-
ternal audit serves to underpin the reliability and trustworthiness
of the information contained therein for the public. The external
audit supports the Supervisory Board of BMW AG in fulfilling its
auditing duties. Any links and disclosures that refer to infor-
mation outside the BMW Group Report and the GRI Index are
not part of the audit. The Remuneration Report 2023 was prepared
in accordance with the requirements of § 162 of the German
Stock Corporation Act (AktG) and its content audited by PwC.
PwC has audited the Group Financial Statements and the Com-
bined Management Report for the 2023 reporting year and is-
sued an unqualified audit opinion thereupon. Further information
is provided in the Independent Auditor's Report and the Independent
Practitioner's Report on Non-financial Disclosures.
The contents of the NFS, in accordance with § 289 b ff. and
§ 315 b ff. HGB, were subjected to an audit to obtain limited
assurance and are denoted with the symbol [[ ]]. The section
7 Dialogue with Stakeholders and the additional information provided
in the section Further GRI Information were also subjected to a lim-
ited assurance engagement. Information provided in the SASB
Index is also subjected to a limited assurance review on a volun-
tary basis. The TCFD Index indicates the sections in which the
depth of the audit is identified. Certain individual parts of the
7 NFS as well as the remainder of the Combined Management
Report were also subjected to a reasonable assurance engage-
ment.
Materiality analysis
The material topics covered in our non-financial reporting for the
reporting year are derived from the materiality analysis which the
BMW Group performed in 2022 in accordance with § 289 c and
§ 315 c HGB and validated for the 2023 reporting year. The top-
ics that were categorised as material remain those where the ac-
tions of the BMW Group may have a significant sustainability im-
pact on the environment and society (inside-out) and which may
be of high business relevance to the BMW Group (outside-in). As
a result, our focus is on alternative drive systems Electromobility,
decarbonisation along the value chain Carbon emissions, respon-
sible sourcing Purchasing and Supplier Network, resource manage-
ment in line with the principle of the circular economy Circular
Economy, Resource Efficiency and Renewable Energy as well as compli-
ance Compliance and Human Rights. Employee diversity and equal
opportunity Diversity, Equal Opportunity and Inclusion as well as an at-
tractive workplace Employer Attractiveness and Employee Development
are also given high priority within the BMW Group. Our reporting
under the GRI standards also covers topics which are considered
material from a double materiality perspective because they
have a significant environmental impact (inside-out) or are of
high business relevance to the BMW Group (outside-in). This
concept must be applied from 2024 onwards in accordance with
the Corporate Sustainability Reporting Directive. The topics cov-
ered in this context are responsible digitalisation ▾ Innovation,
Digitalisation and Customer Orientation, Product and Road Safety
7 Product Quality and Safety, Occupational Health and Safety Health
and Performance and Sustainable Governance Performance
Management.
7
BMW Group Report 2023
About This Report
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Connection to figures in the Group Financial Statements
For each topic, an assessment was carried out to identify figures
reported in the Group financial statements that enable a better
understanding of the NFS, and which therefore need to be dis-
closed and explained.
Sustainable Development Goals
With its business operations, the BMW Group is in a position to
contribute directly to the achievement of Sustainable Develop-
ment Goals (SDGs), in particular SDG 3, 8, 9, 12 and 13. Infor-
mation about the importance of these goals for the BMW Group
is provided on our website.
SASB Standards according to the Sustainable Accounting
Standards Board ( SASB Index)
169,272
3,753
202,895
8
36
29
- 3.4
3,055
3,163
3,701
1,721
2,312
0.8
- 203
259
227
103
194
22.1
12,981
10,635
9,870
2,162
4,499
32.0
257
-13
- 93.6
377
2,272
- 4.1
258
269
228
100
187
- 33.2
12,642
18,918
11,805
2,722
4,467
- 27.3
17,096
23,509
16,060
5,222
7,118
2,200
147
- 390
808
18,482
1,725
13,999
4,830
123,602
95,476
80,853
91,682
9.0
155,498
142,610
111,239
98,990
104,210
132,277
- 37.3
11,071
6,354
3,395
2,567
4.8
8,974
8,566
6,495
6,143
257 Outlook for the 2024 Financial Year
6,942
7.0
2,368
2,284
7,411
- 15.9
- 16,231
- 19,298
- 19,857
- 14,194
-19,443
37.5
11
8
5
3
5
3.1
36,227
35,122
32,867
30,044
29,598
1.2
3,214
3,176
2,748
13,400
194,261
3,205
-7.6
Financial Services
Other Entities
Eliminations
Group profit/loss before financial result (EBIT)
Automotive
Motorcycles
Financial Services
Other Entities
Eliminations
Group profit/loss before tax (EBT)
Motorcycles
Automotive
Financial Services
Other Entities
Eliminations
Group income taxes
Profit/loss from continuing operations
Profit/loss from discontinued operations
Group net profit/loss
Earnings in € per share of common stock/preferred stock
Pre-tax return on sales² in %
1 Expenditure for capitalised development costs, other intangible assets and property, plant and equipment.
Motorcycles
Automotive
Group revenues
Free cash flow Automotive segment
209,066
3.0
15.0
11.2
22.6
17.9
17.2
- 3.9
2 The new definition of the term "employee" (see footnote 1) also has an impact on disclosures relating to the percentage of female employees.
3 The term "ROCE" has been redefined with effect from the reporting year 2022 (for definition, see Glossary). The 2021 figure was adjusted accordingly for comparison purposes (2021 before adjustment: 59.9%).
"Deliveries including BMW Brilliance Automotive Ltd., also for the period prior to full consolidation in the Group Financial Statements (2019: 538,612 units, 2020: 602,247 units, 2021: 651,236 units, 1 January to 10 February 2022: 96,133 units).
5 EU-27 countries including Norway and Iceland; with effect from 2021, values are calculated on a converted basis in line with WLTP (Worldwide Harmonised Light Vehicles Test Procedure), values for 2018 to 2020 were calculated based on the New European Driving Cycle (NEDC).
6 This is a preliminary internal calculation with a potential variation of +/- 0.5 g CO2/km, as official registration figures from the authorities are not available for all EU states. Figures officially published by the EU Commission are not expected to be available until November of the following year.
7 Including an allowance for eco-innovations (amounts of clearly minor significance).
8 To improve comparability, the 2020 NEDC figures were converted to WLTP after adjusting for permissible flexibilities - specifically from 99 g CO2/km according to NEDC (including 5 g CO2/km phase-in, 7.5 g CO2/km supercredits and 2.4 g CO2/km eco-innovations) to 135 g CO2/km according to WLTP
(excluding flexibilities). In 2020, a phase-in regulation was accepted, as was the recognition of supercredits, which ceased in 2021.
9 Efficiency ratio calculated on the basis of Scope 1 and Scope 2 carbon emissions (i.e. a market-based method according to GHG Protocol Scope 2 guidance; mainly based on the use of emissions factors for electricity, district heating and fuels of the VDA (each in the most current valid version: 12/2023) and
occasionally using local emissions factors; excluding climate-changing gases other than carbon dioxide from vehicle production (BMW Group manufacturing sites and Motorrad, but excluding partner plants and contract manufacturers), as well as BMW Group non-manufacturing sites (e.g. research centres,
sales centres, office buildings) divided by the number of vehicles produced (BMW Group manufacturing sites and partner plants, but excluding contract manufacturers).
10 The term "ROCE" has been redefined with effect from the reporting year 2022 (for definition, see Glossary). The 2021 figure was adjusted accordingly for comparison purposes (2021 before adjustment: 35.9%).
10
BMW Group Report 2023
To Our Stakeholders
BMW Group in Figures
Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
OTHER FINANCIAL PERFORMANCE FIGURES
in € million
Total capital expenditure¹
Depreciation and amortisation
2 Group profit/loss before tax as a percentage of Group revenues.
2,962
2019
2021
- 34.5
12,165
18,582
12,463
3,857
4,978
0.1
- 4,931
- 4,927
- 3,597
44
- 1,365
1,334
122
-257
910
288
- 100
995
531
-235
-96
- 2,140
7.47/7.49
6.8
5,022
2022
2023
Change in %
7,784
6,222
7,518
10,610
11,440
- 33.3
11.0
16.5
14.4
5.3
- 35.3/-35.3
17.67/17.69
27.31/27.33
18.77/18.79
- 34.5
12,165
18,582
12,463
3,857
5.73/5.75
2020
256 Review of the 2023 Financial Year from a
Remuneration Perspective
7.8
5 - REMUNERATION REPORT
Significant increase over previous year
7
Slight increase over previous year
7
Slight increase over previous year
7
Slight increase over previous year
14.7
209,066
2,554,183
154,950
in %
SHARE OF ALL-ELECTRIC
CARS IN DELIVERIES
in units
DELIVERIES IN THE MOTORCYCLES
SEGMENT
in units
DELIVERIES IN THE AUTOMOTIVE
SEGMENT
↑
This is a simplified presentation of the data. Detailed information on the performance figures
as well as the identification of the depth of the audit can be found in the respective chapters.
LINK TO CHAPTER →
The BMW Group Strategy
NON-FINANCIAL GOALS - TARGETS FOR THE PERIOD UP TO 2025
This is a simplified presentation of the data. Detailed information on the performance figures
as well as the identification of the depth of the audit can be found in the respective chapters.
≥ 18%
of Automotive segment
Return on capital employed
8-10%
Automotive segment
EBIT margin in the
at year-end
> 10%
FINANCIAL GOALS
THE BMW GROUP'S STRATEGIC GOALS
← = a
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report
3
Group EBT margin
% Share of women
GROUP WORKFORCE
Within the corridor of 8 to 10%
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report
2
NEXT ERA
Link to the online report
On the path to electric and digitalised mobility in a sustainable circular economy.
Report on the economic performance of the BMW Group and its environmental
and social contribution.
BMW GROUP REPORT 2023
DRIVING THE
Neue Klasse
MOTOR CARS LTD
ROLLS-ROYCE
MINI
W
M
BMW
GROUP
256 Remuneration Report
6,017
Remuneration Report
Other Information
← = a
BMW GROUP REPORT 2023
Within the corridor of 8 to 10%
↓
17.2
8.1
9.8
in %
ROE IN THE FINANCIAL SERVICES
SEGMENT
in %
Within the corridor of 17 to 20%
EBIT MARGIN IN THE MOTORCYCLES
SEGMENT
EBIT MARGIN IN THE AUTOMOTIVE
SEGMENT
in € million
Significant decrease from previous year
17,096
BEFORE TAX
GROUP PROFIT/LOSS
You can find more information on the BMW Group and reporting year 2023 in the following report.
The BMW Group can look back on a successful year 2023. The company is growing and also profitable. BMW is once again number one in the premium segment, with a highly attractive, innovative
range of products available to our customers across all brands, segments and drivetrain technologies. Vehicles with all-electric drivetrain systems are our biggest growth drivers. At the same time,
our Vision Vehicles demonstrate how we are setting up the NEUE KLASSE as our next innovative leap. Strong performance figures show that we are on track despite the numerous challenges in
our environment.
in %
Å% |
KEY PERFORMANCE INDICATORS
22%
Part of the Combined Management Report.
338 Contacts
330 Glossary and Explanation of Key Figures*
337 Financial Calender
328 BMW Group Ten-year Comparison
326 Consumption and Carbon Disclosures
325 NFS Index
321 TCFD Index
318 SASB Index
307 Further GRI Information
6 - OTHER INFORMATION
REPORT
4 - RESPONSIBILITY STATEMENT AND AUDITOR'S
160 Notes to the Group Financial Statements
158 Statement of Changes in Equity for Group
156 Cash Flow Statement for Group and Segments
154 Balance Sheet for Group and Segments at 31 December 2023
153 Statement of Comprehensive Income for Group
2 COMBINED MANAGEMENT REPORT
244 Responsibility Statement by the Company's Legal
Representatives
245 Independent Auditor's Report
252 Independent Practitioner's Report
147 Disclosures Relevant for Takeovers and Explanatory
Comments
146 Internal Control System
in management positions
142 Compliance and Human Rights
127 Risks and Opportunities
126 Appropriateness and Effectivness of the Internal
Control System and Risk Management System
123 Outlook
115 Employees and Society
152 Income Statement for Group and Segments
104 Production and Supplier Network
90
EU Taxonomy
78
52
The BMW Group Strategy
42
Overview of the BMW Group
38
Products
3 - GROUP FINANCIAL STATEMENTS
Financial Performance
35
The BMW Group Strategy
LINK TO CHAPTER →
↓
> 20%
↓
in the supply chain
Reduction in carbon emissions
80%
4
↑
during a vehicle's use phase
Reduction in carbon emissions
> 50%
cars in deliveries
BMW Group and Capital Markets
↑
NON-FINANCIAL GOALS - TARGETS FOR THE PERIOD UP TO 2030
Share of all-electric
> 50%
BMW Group Report 2023
Contents
Reduction in carbon emissions
per vehicle in production
Group Financial Statements Responsibility Statement and Auditor's Report
The Board of Management
32
To Our Stakeholders Combined Management Report
Dialogue with Stakeholders
Statement of the Chairman of the Board of Management
29
20
Report of the Supervisory Board
12
27
9
Remuneration Report
Other Information
BMW Group in Figures
5
← = Q
1 TO OUR STAKEHOLDERS
About This Report*
Composition of the Board of Management and
Supervisory Board
94
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
[[Inspiration and a culture of innovation
Group Financial Statements
Combined Management Report
Products
To Our Stakeholders
Good ideas often emerge when different partners work together.
According to this principle, we focus on collaborations in which
the BMW Group complements its strengths with those of estab-
lished partners and innovation drivers such as start-ups, ena-
bling us to continue developing our innovative strengths. The
global network of BMW Group Technology Offices is also making
an essential contribution to maintaining the Group's leading role
in terms of innovation.
BMW Group Report 2023
94
← = Q
Market and sales communication, e.g. generated
marketing texts
The BMW Group is involved in numerous research and imple-
mentation projects for developing new mobility concepts. The
main focus is on pilot projects that improve the quality of life and
promote more sustainable urban mobility. In Munich, we are co-
initiators of the new Mobile Future Alliance Munich. Together with
policymakers, the Technical University of Munich and the Munich
Transport and Tariff Association, a strategy for sustainable mo-
bility in the greater Munich area is to be developed. Specifically,
it is about using street space more efficiently, creating open
spaces for liveable urban areas, establishing new mobility solu-
tions and promoting parking space management, among other
things.
Shaping the future of mobility
Testing and comparison of vehicle specifications
Coding support for IT and vehicle development
Knowledge management or comparison of offers in
purchasing
Knowledge management for customer interaction in call
centres
Application of generative Al in various processes at the
BMW Group, such as:
Text and image generation applications, as well as
knowledge management based on large language models
for exploration for all employees
Large language models, such as those on which ChatGPT
is based, for voice applications within the vehicle
Image-generating Al for end-to-end support of our design
and vehicle construction processes
The development of generative Al is still in its infancy and indus-
trialisation has only just begun. We are already using the first
tools based on this technology or investigating its potential for
specific applications, such as:
These offices are strategically positioned worldwide and focus
on key hotspots of technology and innovation. The potential of
new technologies is therefore being explored in pilot projects and
transferred to the Group's centralised teams. Whether manufac-
turing, developing smart city solutions or the mobility of the fu-
ture, these Technology Offices are driving forward innovations
that benefit the Group in all its lines of business.
In recent years, artificial intelligence (AI) has been increasingly
developed and performs ever more comprehensive tasks. GPTs
(Generative Pretrained Transformers) support and accelerate
operational processes, including creative tasks. The technology
holds considerable potential for the way we work, collaborate,
develop, share knowledge and interact with our customers and
how the future experience within our vehicles will be designed.
Artificial intelligence
In Rotterdam, we are working with the city authorities, Erasmus
University and other local partners on various pilot projects, in-
cluding the improved interconnectedness of different modes of
transport (intermodality), visionary urban vehicle concepts and
the more efficient use of charging infrastructure. The BMW Group
also held a stakeholder dialogue together with the City of Rotter-
dam in the reporting year. Over 100 participants from city admin-
istrations, the scientific community, industry and start-ups from
Europe, the USA and China discussed the urban mobility of the
future. The findings are now being incorporated into other pro-
jects.]]
Global dialogue with start-ups is an important means for the
BMW Group to gain impetus. This is based on three pillars, com-
prising BMW i Ventures (through which we invest in technology
start-ups), the start-up Platform URBAN-X (a MINI brand-initiated
start-up that focuses primarily on urban living) and the 7 BMW
Startup Garage. The latter serves as the BMW Group's venture cli-
ent unit and is tasked with searching for innovations that repre-
sent a significant benefit for products, services, systems and pro-
cesses. The aim of the programme is to evaluate and empower
start-ups to become suppliers and partners.
Other Information
When it opened in Silicon Valley in 1998, the BMW Group Tech-
nology Office USA was the Group's first research and develop-
ment facility to be established outside of Munich. Originally
If a safety risk or a compliance-related defect is found, the BMW
Group implements all the measures required to remedy the issue
following detailed discussions with the relevant authorities. In
2023, safety- and compliance-related technical campaigns af-
fected around 1.8 million vehicles (2022: 3.4 million vehicles). All
these actions were voluntary and carried out in coordination with
the authorities concerned. The BMW Group works according to
the principle of prevention. To avoid technical campaigns of this
type going forward, the BMW Group has also developed a com-
prehensive programme that has been in place since 2023.
With the M Mixed Reality approach, for example, a team of
engineers at BMW M GmbH has developed an immersive
driving experience for the BMW M2 and M4, which is now
being made available to Driving Experience customers for
the first time. Wearing VR goggles, drivers can be immersed
in a virtual world while driving the real vehicle. In addition,
the BMW Group has made further inroads into the gaming
scene with the launch of Air Console, i.e. casual gaming in
numerous current BMW and MINI models.
In addition to its high quality and compliance with statutory reg-
ulations and standards, the BMW Group's comprehensive quality
management system also focuses on ensuring the safety of its
products. From the development stage to manufacturing, they
are therefore subject to rigorous testing procedures. Further-
more, any information received from customers regarding poten-
tial deviations from quality standards are systematically followed
up.
Quality management
We are also working continuously to further improve the safety of
our vehicles. In 2023, the new BMW 5 Series achieved top marks
in the European New Car Assessment Programme (Euro NCAP).
The new BMW i5* was also named "Safest car of the year" by
the Korean New Car Assessment Programme (KNCAP). Further
awards gained in 2023 included the "Top Safety Pick+" from the
Insurance Institute for Highway Safety (IIHS, USA) for the new
BMW 5 Series, the BMW X3 and the BMW X1, as well as a triple
"Good" rating in the China Insurance Automotive Safety Index (C-
IASI) for the BMW X1. GRI Index: 416-1 SASB Index
[[All BMW Group products and services are required to meet the
highest standards in terms of quality and safety, People's safety
has top priority, right from the product development stage. With
this point in mind, optimum chassis tuning, highly effective brak-
ing systems and stable passenger compartments are key fac-
tors. Moreover, BMW Group vehicles are equipped with state-of-
the-art safety systems that reduce the risk of accidents and inju-
ries (active safety systems such as collision warning or lane de-
parture warning systems) as well as mitigate the consequences
in the event of an accident (passive safety systems such as air-
bags or seat belts).
SAFETY
PRODUCT QUALITY AND
The BMW Group offers a range of additional mobility services in
the MyBMW app. It provides customers with access to exclusive
FREE NOW services and, in cooperation with SIXT, to rental cars
with exclusive specialised services. This BMW add-on mobility
offering is currently available to BMW and MINI customers in a
growing number of markets. For business customers and fleet
operators, among other services the BMW Group offers keyless
vehicle use for flexible fleet concepts or digital and efficient vehi-
cle management options. The BMW Group's range of services
also includes comprehensive charging solutions for the home,
the workplace and on the road. 7 Reliable and comprehensive charging
opportunities]]
As Europe's largest multimodal mobility platform, FREE NOW
combines the entire range of various forms of mobility in one app.
Apart from taxi cabs and private ride services, various types of e-
scooters as well as car-sharing vehicles can also be booked via
the FREE NOW app. By 2025, the share of electrically powered
trips is projected to increase to 50% and users are set to travel
fully electrically as of 2030.
Together with Mercedes-Benz, the BMW Group offers innovative
mobility services via the YOUR NOW joint venture. The range of
services provides customers with access to various modes of
transport other than their own vehicle.
[[Mobility services offered by the BMW Group
← = Q
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Products
To Our Stakeholders
BMW Group Report 2023
95
On 6 November 2023, the BMW Group signed an agreement
with Mercedes-Benz to establish a company based in China with
the objective of building charging infrastructure in that market.
The approval by the antitrust authorities has already been given.
The BMW Group holds a 50% stake in the recently founded
company. Reliable and comprehensive charging opportunities]]
On 19 October 2023, the BMW Group jointly founded a com-
pany together with General Motors, Honda, Hyundai, Kia, Mer-
cedes-Benz and Stellantis. The partners are working together
with the aim of establishing a public charging network in the USA
and Canada.
The BMW Group is continuously building on its various coopera-
tion arrangements aimed at expanding charging infrastructure in
general. In addition to the BMW Group, Mercedes-Benz, Ford,
Porsche, Volkswagen, Audi, Hyundai/Kia and BlackRock are all
involved in the long-established IONITY joint venture. The aim is
to set up an efficient, high-power charging network for electric
vehicles right across Europe.
Since the launch of the first BMW voice assistant (BMW Intelli-
gent Personal Assistant) in 2018, voice interaction has become
an increasingly important part of the BMW iDrive display and op-
erating concept. The next generation of the voice assistant will
be based on Amazon's Alexa technology, thus enabling an even
more natural dialogue between driver and vehicle.
In collaboration with Amazon Web Services (AWS), the
BMW Group is developing innovative cloud technologies for pro-
cessing vehicle data. The two companies are also working to-
gether to develop commercial standard cloud solutions for the
secure handling of vehicle data. The agreement is a continuation
of the partnership in the field of vehicle data that began back in
2015. As in all previous collaborations with AWS, the
BMW Group retains full and exclusive control over the data and
complies with the data protection regulations applicable in its re-
spective markets.
The HERE mapping service was acquired by BMW, Mercedes-
Benz and Audi in 2015. Continental, Intel, Mitsubishi, Nippon
Telegraph and Telephone, and Pioneer are also current share-
holders. The participation in HERE ensures long-term access to
scalable, high-resolution maps. The development of a central-
ised, more efficient geo-database, from which all HERE products
(including the currently used SD navigation map and HD maps)
can be fed and continuously updated, was completed in 2023.
Since 2022, the BMW Group and Qualcomm Technologies have
been working together to develop solutions for the next genera-
tion of automated driving. The three companies aim to develop
technologies ranging from New Car Assessment Program
(NCAP) solutions and advanced Level 2 driving assistance sys-
tems to the Level 3 functionalities of highly automated driving.
The joint development of software functions is based on BMW's
current software toolkit for automated driving. Within the terms
of the cooperation, ultimately some 1,300 specialists will work
together at various locations worldwide, including sites in Ger-
many, the USA, Sweden, China, Romania and the BMW Test
Centre in Sokolov in the Czech Republic.
To ensure its long-term success, the BMW Group enters into tar-
geted cooperations and partnerships with companies from vari-
ous industries Several of the Group's largest collaborations and
investments are listed below:
Worldwide cooperations and partnerships
based in Palo Alto, the BMW tech office moved to its current lo-
cation in Mountain View in 2011. Today, the Mountain View
team is part of a global network of BMW tech offices strategically
located in key technology hotspots around the world. They all
play a crucial role in the BMW Group's open approach to innova-
tion. Apart from the locations in Silicon Valley and Munich, the
worldwide network also includes Seoul, Shanghai, Tel Aviv and
Tokyo.
The trend research conducted by the technology offices enables
the BMW Group to anticipate the technological developments of
tomorrow. The results are made publicly available in the Trend
Radar where scientific institutions, start-ups, but also potential
partners can make use of them.
In-car experiences: Enhancing the quality of experience with
a focus on infotainment, productivity and gaming.
double sin (angle) cos (angle)
Commercial: Interaction with both new and existing tech-
savvy target groups in virtual spaces and virtual worlds.
92
47 Consumption and Carbon Disclosures.
to autonomous driving in five stages.
3 SAE (Society of Automotive Engineers) levels categorise the degree of automation from manual
2 The use of OS 8.5 and OS 9 depends on the vehicle class and the production period.
1 The availability and contents of remote software upgrades depends on the country, model, equip-
ment and software version installed.
Y, 2) = tay, b
+z+d): Por (T d) con
2*p. xxxp. y y D.
double theta const
expli Point30
Paint30
M.DI 351E
To ensure the safety of automated systems, the BMW Group is
promoting the development of industry-wide ISO standards for
partially, highly and fully automated driving functions. The work
on classifying the standardisation of SAE³ Level 3 and Level 4
functions has resulted in an ISO technical report that is due to be
published as an ISO technical specification in 2024. Further-
more, in 2023 an ISO PAS standard was published that supports
the introduction of Level 2 systems with innovative driver inte-
gration. The documents define uniform technical standards for
safe assisted and automated driving.]]
Digital connectivity and automation
Automated functions and digitally connected vehicles can help
cut emissions, reduce the risk of accidents and ease traffic con-
gestion. That's why the BMW Group is consistently driving this
issue forward - with a sharp focus on customer convenience and
safety.
More than twenty years ago, with the founding of BMW Car IT
the BMW Group began developing its own software Since then,
the company has continued to expand its teams of developers to
form a global network. Beginning with the Ulm site in southern
Germany, its software expertise has been bolstered by the joint
ventures Critical TechWorks in Portugal and BA TechWorks in
China.
Software expertise at the BMW Group
92
The latest MINI vehicles in the "New MINI Family" also incorpo-
rate these technology modules and, with the MINI Operating
System 9, offer their customers an unmistakable digital user ex-
perience typical for the MINI brand. The iconic, round OLED dis-
play takes centre stage in this concept.
The latest generation of BMW Group vehicles offers customers a
maximum of interaction, infotainment and connectivity. State-of-
the-art on- and off-board technologies such as 5G connectivity
and cloud services make the latest BMW vehicles an integral part
of their users' digital ecosystems. The comprehensive connectiv-
ity enables a whole host of digital services and functions, from
smart and learning navigation to in-car gaming and video
streaming. The vehicle is thus becoming the "next living space"
for its users.
The vehicle as a digital experience
BMW ConnectedDrive upgrades also allow additional functions
to be either bought or simply booked for a specific period after
the vehicle has been initially purchased.
Digitalisation stands for innovation and customer focus
Digitalisation is a key element in keeping the vehicle constantly
up to date for customers long after they have taken delivery of
their new automobile. Since the launch of Operating System 7 in
2018, remote software upgrades' have been available for BMW
vehicles. Apart from these software upgrades, the BMW Group
also releases new functions and features on an ongoing basis.
At the end of 2023, over six million BMW vehicles worldwide
were already fully updatable. In other words, these vehicles can
be updated in every respect, including infotainment, the drive
system, driver assistance, convenience and safety. The BMW
Group can currently update over 30 derivatives of all its drive var-
iants remotely over the air.
The BMW VISION Neue Klasse represents the entire range of
technological innovations with which the BMW Group is under-
lining its future entrepreneurial viability. It stands for the dawn of
a new era of individual mobility: electric, digital and circular.
The BMW VISION Neue Klasse is also characterised by the in-
creased use of secondary raw materials, resource-friendly pro-
duction methods and an electric drive system featuring sixth-
generation BMW eDrive technology.
[[In the interior, the next generation of the BMW iDrive provides a
unique digital user experience: analogue controls are reduced to
a minimum in the BMW VISION Neue Klasse. The driver interacts
with the vehicle via the BMW Panoramic Vision, the central dis-
play unit and multifunctional buttons on the steering wheel. The
user experience is complemented by the tried-and-tested voice
control system via the BMW Intelligent Personal Assistant. The
next generation of the BMW iDrive thus offers a modern interpre-
tation of the brand's typical driver-oriented focus. Similar to the
BMW iDrive controller that was formerly on the centre console or
the BMW head-up display, the brand is setting new standards
with the BMW Panoramic Vision, which will be available for the
first time in the NEUE KLASSE. It projects information at a height
ideally aligned with the driver's line of sight and, for the first time,
across the entire width of the windscreen. This innovation will
complement the enhanced BMW head-up display in the NEUE
KLASSE series models.
← = Q
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Combined Management Report
Products
Pollutants management
With the further development of the BMW iDrive in 2023 and the
"QuickSelect" fast access concept, an improved menu structure
based on devices from the consumer electronics sector is being
added to the system. With the right information in the right place,
the new BMW iDrive provides users with a concentrated, confi-
dent driving experience. The latest BMW iDrive generation is
based on the BMW Operating System 8.5 and BMW Operating
System 9.2
Engagement on digital platforms enables experience-
oriented interaction with young target groups (Gen Z) within
their digital ecosystems with the aim of enhancing brand
image and developing long-term customer loyalty. In
dedicated virtual worlds such as the BMW Motorrad
MetaRide, innovative products can be experienced in a new
way and supported throughout the entire customer journey.
BMW Group Report 2023
Combined Management Report
Products
For example, as part of the iFactory, planners can use vir-
tual reality to virtually assess buildings, systems, logistics
and the assembly of new production areas and test pro-
cesses in 3D, long before construction is scheduled to
begin.
Corporate: The virtualisation of internal processes, methods
and products with real-time collaboration, regardless of
location
For the BMW Group, the virtualisation of products, processes and
interaction spaces are a catalyst for digitalisation, reflecting the
fact that the combination of rapidly developing technologies such
as Web 3.0, artificial intelligence, X-reality (virtual reality, aug-
mented reality, mixed reality) and spatial computing generates
benefits across all areas of the value chain. Our holistic activities
comprise the following three pillars and underline the
BMW Group's commitment to innovation:
[[Virtualisation
← = Q
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To Our Stakeholders Combined Management Report
Products
BMW Group Report 2023
93
* Munich test site - pilot test of automated driving in urban traffic.
The BMW Group is conducting its own research and develop-
ment work with the aim of integrating electrified vehicles in the
power grid. The focus is on technologies such as smart charging,
a key component of the 7 BMW Charge Forward service, which en-
ables customers to synchronise their charging behaviour with the
current grid load and the use of renewable energy. The technol-
ogy has been available to all drivers of electrified vehicles in the
USA since November 2023. Another cross-sectoral project
known as Bidirectional Charging Management (BCM) was successfully
completed at the end of 2022. Over a period of three years,
BMW Group, together with grid operators and universities, tested
how electric vehicles can become mobile energy storage units
and thus part of the power grid system. The results of the project
underline the great potential of bidirectional charging and were
incorporated in an initial customer offering, Connected Home
Charging, in 2023. The project is a strategic cooperation with the
grid operator E.ON, which aims to establish a Europe-wide eco-
system for smart charging at home. The innovation enables cus-
tomers to connect their electrified BMW or MINI vehicle with their
smart home and the power grid. The service has been available
in an initial expansion stage in several European countries since
late 2023. In the coming years, it is to be expanded and ex-
tended to include additional scope with the ultimate aim of ena-
bling bidirectional charging as well.]]
To Our Stakeholders
the
New generation of battery cells
High-performance, innovative and sustainably produced battery
cells are the key to success for individual electric mobility. With its
NEUE KLASSE models, as of 2025 the BMW Group will be using
newly developed, round battery cells for the first time, which are
optimally coordinated to suit the new architecture. The sixth gen-
eration of our lithium-ion cells represents a giant technological
leap forward compared with the previous generation, effectively
increasing energy density by more than 20%, charging speed by
up to 30% and range by around 30%. The carbon emissions
generated by cell production will be reduced by up to 60%.
When developing drive system technologies, the BMW Group
considers the needs of its customers worldwide. For this reason
we are constantly developing existing drivetrain technologies in
the interests of efficiency, decarbonisation and resource conser-
vation. At the same time, we continue to research new drivetrain
technologies with the ultimate aim of developing them for series
production.
Drivetrain technologies of the future
Following recent approval by the Federal Motor Transport Au-
thority, the new BMW 7 Series will be equipped with Level 3 func-
tions for the first time. The option will be available as of March
2024, making the BMW Group one of the leading automobile
manufacturers in the field of highly automated driving.
The new BMW 5 Series sets new standards in terms of digital
connectivity and automation. Among other things, the vehicle
can be optionally equipped with a highway assistant, which per-
manently takes over distance control and steering tasks and, for
the first time, actively changes lanes when confirmed by the
driver's gaze.
[[During the year under report, the BMW Group opened a new test
site, the Future Mobility Development Centre in Sokolov, Czech
Republic, where we are currently testing automated driving and
parking functions and even fully automated driving (Level 4) on
an area of 600 hectares. With the help of virtual simulations and
real-life testing, all driving situations are covered, whether in the
city, in the country, on the highway or when parking. We are thus
creating the basis for meeting our customers' high safety stand-
ards when it comes to automated driving. We also operate re-
search facilities in Munich, where we were involved in the
7 TEMPUS* research project in collaboration with the city authori-
ties. Between 2021 and 2023, we gathered practical experience
on a wide range of use cases relating to automated driving func-
tions and innovative mobility services in urban areas. The BMW
Group also has research facilities located in China and the USA,
enabling it to integrate its two largest markets with regard to
road- and traffic law-related issues right from the outset.
Take your hands off the steering wheel and temporarily turn your at-
tention away from the traffic situation – this is highly automated driving
at Level 3 and can be experienced in new BMW 7 Series models as of
March 2024. BMW Personal Pilot L3 is the name of the new function
that relieves customers of the task of driving in defined traffic situa-
tions and regulates speed, distance and lane guidance for them. The
innovative system enables drivers to engage in secondary activities
(such as writing messages or watching video streaming) on highways
with structurally separated lanes and at speeds of up to 60 km/h. ]]
In the new BMW 5 Series Sedan, customers can use the BMW Highway
Assistant and Active Lane Change feature for the first time. The BMW
Highway Assistant enables drivers to take their hands off the steering
wheel and place them in a comfortable position when driving for pro-
longed distances. The function is also supplemented by a new feature:
the Active Lane Change assistant with driver's gaze confirmation,
which enables the vehicle to change lanes automatically without the
driver having to touch the steering wheel. All the driver needs to do is
glance at the wing mirrors to confirm the lane change. The prerequi-
sites for this technology include high-precision sensors, a powerful
computing platform and connection to the BMW Cloud.
[[BMW Highway Assistant and Active Lane Change
← = Q
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Group Financial Statements Responsibility Statement and Auditor's Report
Electrified vehicles as part of the power grid
To the extent possible, the BMW Group excludes the use of prob-
lematic substances right from the vehicle design stage and sets
out corresponding stipulations for its suppliers. Guidance is pro-
vided in the form of the Global Automotive Declarable Substance List
(GADSL). At the same time, we are working to reduce pollutant
emissions in the interior of our vehicles to an absolute minimum.
All BMW, MINI and Rolls-Royce brand vehicles are equipped as
standard with interior air filters that prevent exterior pollutants
and particles such as dust or pollen from entering the vehicle.
Since 2020, the BMW Group has been using air filters equipped
with nanofibre technology that are specially designed to prevent
certain microbial particles and allergens as well as ultra-fine par-
ticulate matter from entering the vehicle.]]
Group Financial Statements
96
Regulatory GHG-based fleet consumption targets were met in
the US market during the year under report. In the USA, fleet [[ Making conventional drivetrains more efficient and lowering
GHG emissions 7 averaged 116.5 g CO2/km for model year (MY)
2023 in the Passenger Cars category (MY 2022: 137.3 g
CO2/km) and 137.6 g CO2/km (MY 2022: 154.9 g CO2/km) in
the Light Trucks category. Volume-weighted fleet-wide carbon
emissions came to 126.5 g CO2/km on average in the USA (MY
2022: 145.9 g CO2/km). The significant year on year reduction
in fleet-wide carbon emissions in the US market was driven by
an upturn in all-electric vehicle sales in MY 2023. In China, aver-
age fleet carbon emissions were 146.4 g CO2/km in accord-
ance with the WLTC test cycle (2022: 150.6 g CO2/km WLTC).
Thus, we also met the regulatory CAFC fleet-wide consumption
requirements applicable during the year under report. 10
their emissions
The BMW Group pays close attention to carbon emissions legis-
lation in its various markets. Current developments in the year
under report included the adoption of fleet-wide carbon emis-
sions limits in the EU for the years 2030 and 2035 and the pub-
lication of draft legislation for GHG fleet-wide consumption tar-
gets in the USA for the period from 2027 to 2032. The statutory
framework for China's Zero Emission Vehicle (ZEV) mandate
was amended in the year under review. The amendment covers
the years 2024 to 2025 and increased the quota set for the
number of zero emissions vehicles. The BMW Group supports
the development of harmonised regulations - both nationally
and internationally. Comparable specifications in large markets
create reliable and predictable framework conditions and make
a vital contribution to combating climate change effectively. We
provide information on the BMW Group's most important climate
policy positions and activities in our Climate Commitment Report.
6
Carbon emissions generated in the use phase are not only an
important metric in our life cycle assessment, but also subject to
numerous regulatory requirements. Average fleet carbon emis-
sions within the EU¹, taking into account regulatory require-
ments² and in accordance with WLTP³, were 102.1 g CO2/km².
We have thus further reduced the carbon emissions generated
by our new vehicles within the EU5 fleet by 2.9 g year on year
(2022: 105.0 g CO2/km 4). In the year under report, we remained
significantly below the legal limit applicable to the BMW Group
(128.6 g CO2/km²) by 26.5 g CO2/km, thus continuing the trend
seen in recent decades, driven by the electrification of the vehicle
fleet and the fleet-wide use of innovative Efficient Dynamics
technologies.
As in previous years, statutory carbon emissions limits
during the use phase are met again
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Combined Management Report
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To Our Stakeholders
BMW Group Report 2023
99
]]
4 The methodology used to calculate carbon emissions changed in the 2023 reporting year for the
items "Purchased Goods and Services" and "Logistics - material supply of the plants and distri-
bution of vehicles". The prior-year figure has been retrospectively adjusted. Figure before change
in methodology: 117.4 million t CO2.
2 In-house generation, direct purchase or Energy Attributes Certificates (e.g. guarantees of origin).
37 Consumption and Carbon Disclosures.
1 Not including carbon emissions generated through waste disposal.
in the technology clusters
for all scopes
to meet targets and implementation
Development of measures
Development and Production depart-
ments
(t CO₂/vehicle) of the Purchasing,
Targets for product projects and
anchoring in the periodic targets
Steering
CO₂
M
The BMW Group's global fleet-wide carbon emissions¹¹ aver-
aged 185.4 g CO2/km¹² (2022: 193.7 g CO2/km) in the year un-
der report. These figures correspond to a decrease of 15.1%
compared to the base year 2019 (2019: 218.5 g CO2/km). As in
previous years, when calculating the emissions figure, the
BMW Group takes into account average fleet-wide carbon emis-
sions (including upstream emissions for fuel and electric charg-
ing) in the EU, the USA and China and standardises them in ac-
cordance with the WLTP. With a share of more than 80% of
BMW Group deliveries, these three core markets and regions
form a reliable basis for calculating global carbon fleet emissions.
Vehicles powered by modern, efficient internal combustion en-
gines continue to play a major role for our customers. This fact is
particularly true in regions where unrestricted access to charging
infrastructure is not yet available nationwide. For this reason, the
BMW Group will continue to work on improving the already high
efficiency of its conventional drivetrains going forward through
the use of innovative technologies as part of the Efficient Dynam-
ics technology package. A key component in this respect is the
broader use of 48-volt technology. 48-volt recuperation systems
use the energy recovered when braking to supply the vehicle's
electrical system and generate additional propulsion, thereby re-
ducing fuel consumption and carbon emissions. In Europe, in ad-
dition to our all-electric models and plug-in hybrids, we offer nu-
merous new model series that feature a 48-volt recuperation
system. Since 2022, our modular engines have been fitted with
the second, even more efficient generation of 48-volt technology.
The further development of energy management in BMW Group
vehicles, alongside other measures such as switching to highly
efficient tyres, is designed to ensure additional efficiency and op-
timised consumption figures.]]
1 EU-27 countries including Norway and Iceland.
2 Including an allowance for eco-innovations (with minor significance).
1 The other non-EU countries to which this statement applies are Albania, Andorra, Bosnia and
Herzegovina, Liechtenstein, Macau, North Macedonia, Montenegro and Turkey.
27 Consumption and Carbon Disclosures.
As of 2025, the Group will take its core BMW brand into a new,
consistently all-electric era with the NEUE KLASSE. By the early
2030s, the MINI and Rolls-Royce brands will have an exclusively
all-electric product portfolio. The strategy will help to achieve a
share of more than 50% of the BMW Group's global sales with
all-electric vehicles - depending on certain framework conditions
such as the development of a comprehensive charging infra-
structure by 2030. The BMW Group aims to have delivered more
than 10 million all-electric vehicles to customers by 2030.
With our growing range of all-electric models, we are serving a
rapidly increasing level of demand. Deliveries of all-electric cars
increased significantly again year on year to 375,716 units
(2022: 215,752 units/+74.1%). The share of all-electric vehi-
cles to total deliveries was 14.7%, also significantly higher than
in the previous year (2022: 9.0%/+63.3%). Since the 2023 fi-
nancial year, this key figure has replaced the proportion of elec-
trified vehicles, including PHEV vehicles, which was reported as
a key performance indicator up to 2022.
Demand for all-electric vehicles rising
We already provide our customers with an extensive range of all-
electric, battery-powered vehicles (BEV). In 2023, another high-
volume model, the all-electric BMW i52 business sedan, went on
sale. MINI presented the new all-electric MINI Cooper SE² to the
public during the year under report. The Rolls-Royce brand
launched its first all-electric model, the Rolls-Royce Spectre², in
2023. The BMW Group therefore has at least one all-electric
model in its range for all three premium brands and in all seg-
ments. At the end of the reporting period, a total of 20 all-electric
models in ten different series were available to order from the
BMW Group.
[[The BMW Group sees the electrification of its model range as a
key component of its product strategy to reduce fleet emissions
and thus achieve its ambitious strategic decarbonisation targets.]]
ELECTROMOBILITY
The level of nitrogen oxides is a crucial factor for air quality in
cities. For this reason, since mid-2018 the BMW Group has been
using a highly effective combination of nitrogen oxide storage
catalytic converters (NSCs) and selective catalytic reduction
(SCR) systems that include urea injection (AdBlue) in all BMW
vehicles as well as in the larger diesel-powered MINI models.
The efficiency of exhaust gas aftertreatment has been further in-
creased by the use of an improved oxidation catalyst in combi-
nation with a two-stage SCR system. The new technology has
been available since 2020 with the revised generation of six-cyl-
inder diesel engines and is currently being rolled out to other
models. There have already been signs of a reduction in NOx
pollution in German cities over the last few years. Apart from var-
ious measures taken to reduce pollutants, the ongoing renewal
of the vehicle fleets of all automobile manufacturers has also
contributed to the improvement. GRI Index: 305-71]
All type-approved BMW Group internal combustion engine vehi-
cles currently on sale in the EU comply with the latest Euro 6d or
Euro 6e emissions standards. The same applies to non-EU
countries as for example Switzerland, Norway, the UK and Ice-
land, where comparable regulations apply. At the same time, the
BMW Group is already preparing for the introduction of the up-
coming Euro 7 emissions standard, which is currently undergo-
ing the legislative process and will include for the first time limits
for brake particle emissions and tyre abrasion amongst other
things.
[[ Further reduction in pollutant emissions
← = Q
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Target guidance and target control
through ongoing evaluation of
contribution to the measures
(avoidance of carbon emissions)
Responsibility Statement and Auditor's Report
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To Our Stakeholders
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100
12 Takes into account an additional 10 % in line with SBTi to cover possible differences between
WLTP figures and real driving emissions. The upstream supply chain emissions generated by var-
ious energy sources (fossil fuels and electricity) according to the well-to-wheel approach are also
included. The assumed average mileage is 200,000 km (in accordance with VDA 900-100). For
definition and further information, see Glossary.
9 Average volume-weighted fleet-wide emissions, including regulatory allowable crediting factors
(off-cycle technologies, NEV multipliers, phase-in) in accordance with WLTC (Worldwide Harmo-
nised Test Cycle under China-specific test boundary conditions). Preliminary internal calculation.
10 On the Chinese market, manufacturers receive positive credits for undercutting regulatory CAFC
(Corporate Average Fuel Consumption) fleet limits. Failure to remain below the regulatory limits
results in negative credits. In addition, manufacturers receive positive credits for meeting or un-
dercutting the ZEV quota specifications (Zero Emissions Vehicle quota). At the end of a calendar
year, a positive CAFC/ZEV credit balance must be achieved in order to meet regulatory require-
ments. As CAFC/ZEV credits are valid for five years on the Chinese market, a short-term failure to
meet fleet limit targets in one year can be compensated by undercutting them in a previous year.
Moreover, it is possible to purchase credits from other manufacturers. In 2023, the BMW Group
drew on existing credits from previous years. However, it did not purchase any external credits
from other manufacturers. The requirements were therefore met without exception by using self-
generated and existing credits. A settlement between CAFC and ZEV remains in place.
11 For a definition, see Glossary.
8 Average volume-weighted fleet-wide emissions, including regulatory allowable crediting factors
(EV multipliers, credits for advanced technologies) in accordance with USC (United States Com-
bined). Preliminary internal calculation.
7 Converted from g/mi to g/km for comparison purposes.
6 In the US market, manufacturers receive positive credits for undercutting regulatory GHG (Green-
house Gas) fleet limits. Failure to remain below the regulatory limits results in negative credits. At
the end of a model year, a positive GHG credit balance must be achieved in order to meet regula-
tory requirements. As GHG credits are valid for five years on the US market, a short-term failure to
meet fleet-wide limit targets in one year can be compensated by undercutting them in a previous
year. Moreover, it is possible to purchase credits from other manufacturers. In 2023, the BMW
Group drew on existing credits from previous years. However, it did not purchase any external
credits from other manufacturers. The requirements were therefore met without exception by us-
ing self-generated and existing credits.
Glossary.
5 For a definition, see
"This is a preliminary internal calculation with a potential variation of +/- 0.5 g CO2/km, as official
registration figures from the authorities are not available for all EU states. Figures officially pub-
lished by the EU Commission are not expected to be available until November of the following
year. Prior-year figures have not been retrospectively adjusted.
3 Average carbon emissions fleet-wide within the EU (including Norway and Iceland) are required
to be reported in accordance with the new Worldwide Harmonised Light Vehicles Test Procedure
(WLTP) type test cycle as of 2021. Since 2021, this metric has been used by the EU Commission
as the basis for calculating carbon fleet emissions.
Group Financial Statements
N
Monitoring & Reporting -
Governance
(Group reporting,
publications)
(Scope 1, 2, 3) and SBTi commitment
[[The BMW Group is fully committed to the climate protection tar-
gets set out in the Paris Agreement. We are taking ambitious
steps to contribute to progressive decarbonisation, and have
therefore developed a carbon reduction strategy based on a ho-
listic approach.
CARBON EMISSIONS
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97
7 CarData provides BMW and MINI customers with transparency
and sovereignty over the transfer of data to authorised third par-
ties. With the introduction of the service in Germany and Europe
in 2017 and the USA in 2020, the BMW Group is fully imple-
menting the current requirements of the EU General Data Pro-
tection Regulation (EU GDPR) and the California Consumer Pri-
vacy Act (CCPA). The BMW Group deploys state-of-the-art tech-
nologies to prevent vehicle theft. The new BMW 5 Series and 7
Series also feature the latest ultrawide-band technology, which
further raises the level of vehicle safety.]]
The BMW Group's responsibility for its products includes the se-
cure transmission of vehicle data to third parties. For example,
Group vehicles are not directly connected to the Internet, but
communicate directly and exclusively with the BMW Connect-
edDrive back-end facilities via a secure connection within a vir-
tual private network. The strategy enables the BMW Group to
minimise the risk of unauthorised third parties accessing either
the vehicle itself or any of its sensitive data. The access point to
the Internet is controlled via a gateway. We currently see this ex-
tended vehicle approach in accordance with ISO 20078 as the
best solution for offering an outstanding level of data security and
data protection and meeting the statutory cybersecurity require-
ments (e.g. UN R155).
Secure connectivity
For the BMW Group, holistic means decarbonising the emissions
generated by its vehicles over their entire life cycle. Although the
gradual electrification of the Group's fleet is contributing towards
decarbonisation during the use phase, emissions are also in-
creasing at the same time, particularly in the supply chain. The
main reason for this is the carbon-intensive production of com-
ponents such as high-voltage batteries. Reducing carbon emis-
sions within the supply chain is therefore one of our main selec-
tion criteria when awarding contracts to suppliers. With this strat-
egy, the BMW Group is making a vital contribution to decarbon-
ising the entire life cycle of its products, including energy-inten-
sive raw materials such as steel, light metals and plastics. The
approach also helps reduce carbon emissions across various
sectors. Carbon emissions in the supply chain
The BMW Group collaborates closely with the relevant data pro-
tection supervisory authorities particularly regarding funda-
mental data protection issues such as those arising from the in-
creasing connectivity of vehicles. 7 GRI Index: 3-3,418-1
In order to ensure the protection of customer data, despite the
challenge posed by the growing number of digitalised services,
we are constantly developing our data management systems
and respond promptly to any information received regarding
data protection risks. If customers have any queries regarding
the processing of their personal data, they can contact the Cus-
tomer Interaction Centre or the Data Protection Officer in their re-
spective market. With the aim of maintaining our high level of
data protection, we regularly check all applications that process
customer data to ensure full implementation of all current and
appropriate IT security measures. Teams of experts also search
specifically for any vulnerabilities in existing applications. We also
translate any new findings into binding, Group-wide standards.
Right from the early stages of developing its functions and ser-
vices, the BMW Group sets out strict requirements for data pro-
tection due to the growing IT risks. Any personal data required in
the course of contact with our customers are only collected, pro-
cessed or used to the extent legally permitted and with the active
consent of the data subject.
Customer data protection
With the BMW M Driving Experience, the BMW Group offers driver
and rider safety training for BMW, MINI and BMW Motorrad
brand vehicles in 25 countries. Participants learn how to handle
their vehicles in a safe manner and are sensitised to recognise
dangerous situations in road traffic. In 2023, more than 110,000
customers worldwide took part in these training courses.
[[Sensitising and empowering customers to drive safely
The BMW Group provides its customers with a broad range of
information regarding the proper use of its products and services.
Information on safety, the correct operation of vehicles, and
health protection is available in both printed and digital form. The
information is supplemented by detailed notes and background
information on the services, accessories and components per-
taining to each individual vehicle.
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Products
To Our Stakeholders
BMW Group Report 2023
96
-
** Consumption and Carbon Disclosures.
The BMW Group's decarbonisation targets are part of its inte-
grated corporate target system and validated by the Science
Based Targets initiative (SBTi). They are being implemented
under the responsibility of the Board of Management in the BMW
Group's various departments and thus throughout the organisa-
tion Performance Indicators and Performance Management. Specific de-
carbonisation targets are derived from the overarching objectives
for each vehicle project, with the aim of achieving substantial im-
provements from one vehicle generation to the next. The respon-
sibility for achieving these goals lies with specialist units in the
management areas of Development, Purchasing, Supplier Net-
work, Production and Logistics. Internal control and reporting
systems take into account the various stages in the value chain,
comprising the supply chain, development, production and the
use phase. Among other factors, our decarbonisation measures
are based on emissions specifications at material and compo-
nent level. Target management and the monitoring of target
We explain how the BMW Group manages the topic of sustaina-
bility across the organisation in the chapter 7 The BMW Group
Strategy. We also report on the management of climate-related
opportunities and risks in the chapters Outlook and 7 Risks and
Opportunities.
Paris Agreement
Consistency with the objectives of the
BMW Group
Strategy
[[Carbon steering
Absolute carbon emissions rose by 3.0% to around 134.7 mil-
lion t CO2 during the year under report (2022: around 130.7 mil-
lion t CO₂), driven mainly by increased vehicle volumes and a rise
in emissions in the supply chain due to the increasing electrifica-
tion of the BMW Group's product portfolio. On the other hand,
electrification had a proportionate positive effect in the use
phase. Comprehensive information on the BMW Group's carbon
footprint is provided in the chapter Further GRI Information.]]
[[We reviewed our carbon targets in 2023, as previously an-
nounced. The aim of this process was to set absolute targets for
reducing carbon emissions by 2030. The targets are expected to
be revalidated in the course of 2024. At the same time, we also
improved the quality of carbon-emissions-related data in our
supply chain (Scope 3 upstream) in 2023. In addition, greater
transparency was achieved with the first-time publication of a
Vehicle Footprint for the new BMW i5³, providing stakeholders
with useful information, including the greenhouse gas potential
of the vehicle over its entire life cycle. New level of transparency
achieved for vehicle data
Across the entire the life cycle of a vehicle, the above-mentioned
individual targets will result in an average carbon reduction of at
least 40% by 2030 compared to 2019. In order to achieve this
target, we are committed to promoting decarbonisation
measures such as the use of green electricity² in our own opera-
tions and those of our suppliers, without compensation
measures being taken into account. The combination of a signif-
icant increase in the sale of electrified vehicles, efficiency im-
provements in all drivetrain technologies and effective measures
to reduce carbon emissions in the supply chain are expected to
help achieve the targets that have been set.
Products
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Combined Management Report Group Financial Statements
achievement are performed at vehicle level and subsequently
aggregated for reporting at Group level.
To Our Stakeholders
88
98
8 Categories included under Scope 3 upstream according to the Greenhouse Gas Protocol: Cate-
gory 1: Purchased goods and services; Category 4: Transportation and distribution. Further GRI
Information.
7 This figure has been rounded. The target validated under SBTI is 22%.
6 Categories included under Scope 3 downstream according to the Greenhouse Gas Protocol: Cat-
egory 11: Use phase. Further GRI Information.
"In-house generation, direct purchase or Energy Attributes Certificates (e.g. guarantees of origin).
5 Takes into account an additional 10% in line with SBTI to cover possible differences between
WLTP figures and real driving emissions. The upstream supply chain emissions generated by var-
ious energy sources (fossil fuels and electricity) according to the well-to-wheel approach are also
included. The assumed average mileage is 200,000 km (in accordance with VDA 900-100). For
definition and further information, see Glossary
3 In addition to production emissions, Scope 1 and 2 carbon emissions also include those gener-
ated at non-manufacturing sites.
2 Scope 3 emissions (upstream) in the supply chain and transport logistics, as well as well-to-tank
emissions from the supply of fuel in the use phase, take into account not only carbon dioxide but
also other climate-impacting greenhouse gases such as methane and are stated in carbon equiv-
alents (CO₂e). The measurement of Scope 1 and Scope 2 emissions, as well as the additional
Scope 3 emissions, does not include climate-impacting gases other than carbon dioxide.
7 Glossary.
1 In this context the entire value chain is to be understood as Scope 1 and 2 as well as the Scope 3
categories applicable to the BMW Group (categories 1, 4 and 11) in accordance with the Green-
house Gas Protocol.
Decarbonisation by an average of more than 20% per
vehicle produced in the supply chain (Scope 3 upstream³).
Thus we also have a scientifically approved and confirmed
target for reducing carbon emissions in the supply chain.
The use of green electricity as a criterion when awarding
contracts to suppliers, a continuously increasing secondary
raw materials quota as well as innovations in the production
of primary raw materials contribute in particular to achieving
the target. Carbon emissions in the supply chain
Decarbonisation by an average of 80% per vehicle
produced at our own plants and sites (Scope 1 and 2)³.
These targets can be achieved, for example, by reducing our
energy requirements and simultaneously increasing the use
of renewable energy." Carbon emissions of BMW Group locations
Decarbonisation in the use phase of the vehicle (Scope 3
downstream) by an average of more than 50% per
kilometre driven. To accomplish this target, we are driving
the electrification of the entire product portfolio forward and
using new, efficiency-enhancing technologies. Efficient
Dynamics technologies
We have set ourselves the following decarbonisation targets² to
be achieved by 2030 (base year 2019 for each scope):
Reducing carbon emissions across the entire value chain
The BMW Group aims to achieve Net zero carbon emissions
across the entire value chain¹ by no later than 2050. This objec-
tive is based on decarbonisation targets up to 2030 that were
validated in 2021 by the SBTI and are in line with the climate
targets set out in the Paris Agreement to limit global warming.
Based on this commitment, we are part of the SBTI and the in-
ternational Race to Zero Campaign led by the United Nations.]]
BMW Group Report 2023
99
91
BMW Group Report 2023 To Our Stakeholders
At 705,398 t CO2, total carbon emissions generated at
BMW Group locations were on a par with the previous year
(2022: 705,417 t CO₂). In a contrasting trend, the mild temper-
atures led to a reduction in the use of natural gas for heating pur-
poses.
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
Production and Supplier Network
107 BMW Group Report 2023
2 Contract manufacturing.
17 Consumption and Carbon Disclosures.
11.7
2,382,305
2,661,922
11.8
18,612
20,808
- 41.4
45,184
26,461
21.3
99,126
120,235
Remuneration Report
Other Information
← = Q
CIRCULAR ECONOMY,
RESOURCE EFFICIENCY AND
RENEWABLE ENERGY
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Production and Supplier Network
To Our Stakeholders
BMW Group Report 2023
108
The BMW Group is also investing in research and innovation pro-
jects such as Circular Republic to implement closed material
cycles for certain product groups. The joint initiative of the organ-
isation "UnternehmerTUM" and the BMW Group focuses on the
transfer of knowledge between the world of science and compa-
nies to promote the circular economy.]]
Via the BMW i Ventures venture capital fund, the BMW Group in-
vests in fast-growing technology start-ups. One focus of the in-
vestment activity is on businesses that can make a strong con-
tribution to achieving carbon neutrality and conserving re-
sources. One example is the Swiss company Bcomp, which the
BMW Group has held a share in since 2022. Bcomp uses flax to
create structural components made from natural fibre compo-
sites as an alternative to plastic composites. By increasing our
stake in the US start-up Boston Metal in April 2023, we are scal-
ing up our investment in innovative processes for the manufac-
ture of carbon-reduced steel. In April 2023, BMW i Ventures also
acquired a stake in Cyclic Materials, a company developing a re-
cycling technology that extracts rare earths and base metals
from end-of-life products.
Investments in resource-friendly technologies
The Car2 Car project focuses on the recycling of aluminium, steel, glass,
copper and plastic. Together with representatives of the recycling in-
dustry, raw materials processors and the scientific community, the
BMW Group is leading a project to improve the quality of secondary
raw materials obtained from the recycling of end-of-life vehicles. Inno-
vative dismantling and automated sorting processes will enable reus-
able materials to be extracted to a far greater extent than previously.
As part of the funding project, the BMW Group is providing 433 end-
of-life vehicles. In order to cover a representative range, various mod-
els out of the Company's own inventories are being used – from MINI
to Rolls-Royce - with combustion engines, plug-in hybrid systems and
all-electric drives. ]]
[[ From scrap to raw material: the Car2Car funding
project
At the same time, we promote the recovery of end-of-life vehi-
cles, components and materials in order to retain them in various
material cycles as a source of secondary raw material. Together
with its national sales companies and importers, the BMW Group
has already organised the return of end-of-life vehicles in 32
countries and offers environmentally friendly recycling at more
than 2,800 points of return. GRI Index: 301-1, 301-3, 7 SASB Index
Compared to primary raw materials, the use of secondary mate-
rials also helps reduce carbon emissions - by up to 80% for al-
uminium and up to 70% for steel to name two examples. At the
same time, potential risks associated with the extraction of pri-
mary materials, such as high levels of energy consumption and
therefore carbon emissions, long transportation routes, environ-
mental damage and risks arising due to a lack of social standards
are being mitigated. As a result, the increased use of secondary
materials also promotes resilience throughout the value chain.
Purchasing and Supplier Network
The BMW i Vision Circular vehicle is emblematic of our ambitions
and made entirely from recycled or renewable raw materials. The
NEUE KLASSE is also consistent with this vision in that the com-
ponents cobalt, lithium and nickel used to produce battery cells
will in future contain a certain percentage of secondary materials,
thus reducing the volume of primary materials needed and miti-
gating the associated negative environmental impacts. The
NEUE KLASSE will also contain a higher proportion of secondary
materials in other material groups such as steel and aluminium.
materials used bythe BMW Group must meet the same high
standards of quality, safety and reliability. GRI Index: 3-37 Average
distribution of materials in BMW Group vehicles
The BMW Group already uses a certain extent, depending on the
vehicle, of recycled and reused materials to manufacture its ve-
hicles. In line with the "Secondary First" approach, we aim to in-
crease the use of secondary materials going forward, taking both
technical feasibility and market availability into account. Within
the framework of selected product, material and supplier require-
ments, we have therefore decided to give preference to second-
ary materials in our future vehicles. All secondary and primary
The BMW Group pursues the strategic aim of reducing the pro-
portion of primary materials in its value chain. An important start-
ing point in this endeavour is to close cycles for certain materials
and components. With this objective in mind, the BMW Group re-
turns selected production residues to the supplier, enabling
those materials to be recovered and reused in a new production
process. At the BMW Group, the circular economy principle ("De-
sign for Circularity") is already being implemented as an opera-
tional concept in the design of the NEUE KLASSE by the corpo-
rate function "Total Vehicle Development" and systematically
applied in the development of new vehicle models.
Closing material loops
[[The significance of the circular economy concept continues to
grow against a backdrop of increasingly scarce resources, up-
ward price trends on raw materials markets, geopolitical tensions
and the need to meet sustainability targets. For these reasons,
the BMW Group is taking further steps to increase the proportion
of recycled materials in its products and thus reduce its depend-
ence on primary raw materials. The BMW Group is also continu-
ally enhancing its local supply chains in line with the "local for
local" principle. At all levels of in-house production, we remain
committed to consistently conserving resources, continuously
improving energy efficiency and further reducing carbon emis-
sions.
2,871
- 1.0
6,239
6,179
217,480
65.9
143,654
238,301
3.3
282,661
291,907
- 1.3
10.1
201,323
279,645
416,301
410,793
6.5
395,021
420,586
Change
in %
2022
2023
307,972
8.0
188,199
151,949
29.2
8,208
10,608
1.0
12,912
13,044
53.3
9,960
15,264
10.8
61,609
68,238
84.9
63,600
117,576
- 0.5
186,301
185,400
23.9
← = Q
high level of 613,640 units (2022: 462,396 units; +32.7%) in
the 2023 reporting year, of which 415,692 were all-electric
(2022: 252,077 units; +64.9%). The number of motorcycles
produced by BMW Motorrad rose by 2.8% to 221,988 units
(2022: 215,932 units) over the 12-month period.
[[Resource management at all BMW Group locations
Within the BMW Group's global production network, resource ef-
ficiency and the control of resource consumption have been inte-
gral parts in the environmental management system for dec-
ades. Alongside 7 Carbon Emissions, the other key indicators for
managing resource efficiency and controlling resource consump-
tion within the BMW Group are energy consumption, potable water
consumption, the amount of waste generated and the use of VOC
solvents. The BMW Group intends to reduce its energy and pota-
ble water consumption, waste for disposal, and the amount of
solvents used per vehicle produced by 25% in each category by
2030 (base year: 2016).
A certified environmental management system in accordance
with ISO 14001 has been implemented at all BMW Group pro-
duction sites. Moreover, all the Group's German plants are certi-
fied under the EMAS environmental management system. The
BMW Group coordinates its worldwide environmental protection
measures relating to imissions, water, waste, qualification stand-
ards, environmental management system in a total of five cen-
tralised competence centres. Environmental improvements that
have proven effective at one location are then implemented at
other locations to the extent possible. Regular further training
courses and the exchange of experiences within the workforce
ensure that relevant knowledge is effectively applied throughout
the organisation. During the year under report, our proactive en-
vironmental management system again made a major contribu-
tion to ensuring that there were no significant environmental in-
cidents involving the payment of fines throughout the global pro-
duction network.
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Production and Supplier Network
To Our Stakeholders
BMW Group Report 2023
110
Carbon emissions from the BMW Group locations per vehicle
produced¹
5 Value of the base year 2016 to the target reduction of -25% by 2030: 2.21 These figures have
been subjected to a limited assurance review.
Glossary.
37 Consumption and Carbon Disclosure.
2 For a definition of beyond value chain mitigation (contribution to climate protection outside the
BMW Group's own value chain), see the
'To the degree recordable within the carbon footprint; market-based method in accordance with
the GHG Protocol.
The BMW Group is pursuing the goal of reducing its dependence
on fossil energy sources. With this aim in mind, we are currently
in the process of investigating all our production sites to ascertain
whether natural gas can be fully dispensed with and replaced by
sources such as electricity, biogas, hydrogen or geothermal en-
ergy.
2023
2022
2021
4 Efficiency indicator calculated on the basis of total energy consumption (adjusted for CHP losses)
of automobile production (BMW Group plants, excluding partner plants and contract manufactur-
ing) divided by the number of vehicles produced in automobile production (BMW Group plants
and partner plants, excluding contract manufacturing).
in tonnes
0.40
0.35
1 Efficiency indicator calculated on the basis of Scope 1 and Scope 2 carbon emissions (market-
based method according to GHG Protocol Scope 2 guidance; mainly based on the use of emis-
sion factors for electricity, district heating and fuels of the VDA, each in the most current valid ver-
sion: 12/2023) and occasionally using local emissions factors; excluding climate-impacting gases
other than carbon dioxide from vehicle production (BMW Group plants including Motorcycle, but
excluding partner plants and contract manufacturing), as well as BMW Group non-manufacturing
sites (e.g. research centres, sales centres, offices) divided by the number of vehicles produced
(BMW Group plants and partner plants, but excluding contract manufacturing). Glossary.
2 Using the market-based method in accordance with the GHG Protocol Scope 2 guidance.
About half of the vehicles produced by the BMW Group leave its
plants by rail. In Germany, a significant volume of rail transport
relating to production and the sale of spare parts is already pow-
ered by green electricity.]]
Carbon emissions generated by transport logistics
[[With its Green Transport Logistics project, the BMW Group has
been pursuing the aim of continuing emissions-reduced trans-
portation within its global production and sales network since
2015. In addition to second-generation biofuels (e.g. HVO 100,
produced from residual and waste materials), battery-powered,
heavy-duty commercial vehicles have been increasingly de-
ployed for transporting goods at the Group's main plant in Mu-
nich since 2023. For the first time, the use of bio-LNG on public
roads was tested in Germany to supply production. Moreover,
the BMW Group has been involved in the "H2Haul" research pro-
ject since 2019 and the "HyCET" research project since 2022 in
order to gain early experience in the use of hydrogen trucks.
In collaboration with partners such as atmosfair and First Cli-
mate, we support climate protection projects operating in the vol-
untary market for the full extent of our Scope 1 and Scope 2 car-
bon footprint and our Scope 3 category "business travel" emis-
sions. These projects are certified by independent institutions in
line with international standards and have to meet a set of strict
criteria such as additionality, permanence and other factors. It is
also important to us that the projects in the global South gener-
ate social benefits in line with applicable sustainable develop-
ment goals (SDGs). These include, for example, initiatives that
enable people to earn an income or programmes that prevent
illness. GRI Index: 305-5
these initiatives without them counting towards the the
BMW Group's CO₂ reduction targets.
The BMW Group is committed to achieve a technically feasible,
substantial reduction in Scope 1 and Scope 2 emissions in order
to continue meeting this target for each financial year. Further-
more, the BMW Group also supports projects dedicated to de-
carbonisation outside its own value chain. We voluntarily back
The carbon emissions generated directly and indirectly by
BMW Group locations are already within the 1.5°C pathway cal-
culated for the enterprise as a whole. Reducing carbon emissions
across the entire value chain
Contribution to climate protection outside the BMW Group's own
value chain
7 Carbon footprint, 7 GRI Index: 305-1, 305-2, 305-3, 305-5
Carbon emissions generated at BMW Group locations
By reducing energy consumption while simultaneously increas-
ing production volumes, carbon emissions generated per vehicle
produced at BMW Group locations fell by 12.5% to 0.28 t CO₂
(2022: 0.32 CO₂). The figure corresponds to a reduction of
30.0% compared to the base year 2019.
2023
2022
2021
2020
2019
0
0.28
0.32
0.33
2020
A steering committee manages the international environmental
protection network within the BMW Group. Each individual facil-
ity, area and building is assigned to an internal operator, who,
within their area, is responsible for the technical systems, the
smooth running of processes and workflows and their environ-
mental impacts.
2019
1.97
BMW Group Report 2023
109
7 Efficiency indicator calculated from solvent emissions generated in automobile production
(BMW Group plants, excluding partner plants and contract manufacturing) divided by the number
of vehicles produced in automobile production (BMW Group plants and partner plants, excluding
contract manufacturing).
6 Solvent emissions (volatile organic compounds = VOC) are especially generated during the paint-
ing process and can be reduced by deploying new painting technologies.
5 Efficiency indicator calculated from the waste for disposal in automobile production (BMW Group
plants, excluding partner plants and contract manufacturing) divided by the number of vehicles
produced in automobile production (BMW Group plants and partner plants, excluding contract
manufacturing).
3 Potable water consumption refers to water purchased from external water suppliers. If a
BMW Group site does not purchase water from an external supplier, the primary source of supply
is counted as potable water. This method of measurement applies to the BMW Group plants in
San Luis Potosí (Mexico) and Araquari (Brazil) where groundwater is the main source of supply.
4 Waste for disposal in relation to the total weight of waste.
2 Efficiency indicator calculated from the potable water consumption measured for automobile pro-
duction (BMW Group plants, excluding partner plants and contract manufacturing) divided by the
number of vehicles produced in automobile production (BMW Group plants and partner plants,
excluding contract manufacturing).
1 In accordance with the environmental management system, each operator is required to describe
the environmental impacts in the aspects register and identify measures for improvement (e.g.
long-term targets).
To Our Stakeholders
biodiversity in countries where our renewable raw materials are
grown. In Indonesia, for instance, we therefore support local na-
ture conservation initiatives that are dedicated to preserving nat-
ural biodiversity via the "Living Rubber" project. We are also cur-
rently analysing biodiversity-related impacts as well as the op-
portunities and risks in order to develop corresponding targets
and the next steps moving forward. 7 GRI Index: 304-2]]
Biodiversity
The VOC solvent emissions per vehicle produced 6,7 fell again signifi-
cantly by 14.8% to 0.52 kg (2022: 0.61 kg) during the year un-
der report. Due to the progress made in the use of solvent-free
substances and the constant optimisation of painting processes,
we expect to see a further slight decrease in emissions levels in
the coming year. GRI Index: 305-7
VOC solvent emissions
To minimise the total volume of waste generated, the
BMW Group utilises coordinated recycling and processing con-
cepts that are adapted to the specific waste streams at its vari-
ous plants, regionally applicable statutory regulations and local
waste management structures. In 2023, a total of 99.4% 4
(2022: 99.3%) of the waste generated by production was either
recycled or recovered. The amount of waste for disposal per vehicle
produced in the automobile production fell significantly by 22.6%
year on year to 2.12 kg (2022: 2.74 kg). The BMW Group in-
tends to maintain its high rates of recycling and recovery as it
gradually transitions to electric mobility. 7 GRI Index: 306-4, 306-5,
7 Waste generation in detail, 7 SASB Index
Waste
paint shops and washing facilities at the assembly plants is re-
cycled. Moreover, slightly contaminated water (so-called "grey
water") is used as process water at the BMW Group's Dadong
vehicle plant (Shenyang, China). In regions where water is
scarce, the BMW Group ensures that it is used as sparingly as
possible. At the BMW manufacturing plant in Chennai, India, for
example, rainwater is collected during the monsoon season that
covers up to 100% of its water demand. vAt 1.78 m³ per vehicle
produced, specific potable water consumption²,³ in automobile pro-
duction was moderately below the previous year's level due to
the higher production volume (2022: 1.90 m³/-6.3%). 7 Water
consumption in detail
The BMW Group also aims to continuously reduce water con-
sumption at its production plants in order to prevent potential
water supply risks. With this point in mind, wastewater from the
Water
The BMW Group also takes biodiversity into account at its vari-
ous locations worldwide. It assesses biodiversity in the context of
its plants, using a biodiversity indicator as an example within the
framework of ecological verification procedures. Based on this
assessment, measures to improve these habitats are then pro-
posed accordingly. We are also committed to protecting
Combined Management Report
Production and Supplier Network
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
2.13
2.10
2.12
2.04
0
in MWh
Energy consumption per vehicle produced 4,5
At present, the BMW Group is unable to entirely cover its energy
needs by generating its own renewable energy and therefore
purchases from renewable sources, for example via power pur-
chase agreements (PPAs). The directly sourced green electricity
from defined generation plants is used, for example, to produce
the BMW iX3 and BMW i4³ models.
All BMW Group production sites worldwide and the majority of
other BMW Group locations use green electricity, which is either
generated in-house, procured directly or using Energy Attribute
Certificates (e.g. guarantees of origin).
Renewable energy
6,295,990 MWh; +1.3%). Energy consumption in detail, ▾ GRI Index:
302-1, 302-4
The BMW Group continuously invests in improving the energy ef-
ficiency of its worldwide production network. In this context, clear
roles in each case with corresponding responsibilities, targets
and reporting obligations - are assigned to central strategy de-
partments, regional management units and plants at local level.
After the persistent restrictions put in place due to the corona-
virus pandemic and the impact of the war in Ukraine, production
volumes increased again significantly in 2023. Due to the asso-
ciated improvement in plant capacity utilisation, specific energy
consumption in automobile production fell to 1.97 MWh per ve-
hicle produced (2022: 2.13 MWh; -7.5%) for the year under re-
port. At 6,380,652 MWh, the total amount of energy consumed
by the BMW Group during the period under report was higher
than the previous year due to production volume factors (2022:
7 Contribution to climate protection outside the BMW Group's own value chain
Energy management and efficiency
As a further contribution to protecting the climate, the
BMW Group finances various climate protection projects outside
its own value chain, equivalent to the amount of Scope 1 and
Scope 2 emissions remaining in 2023 as well as Scope 3 emis-
sions from the category "business travel".²
The remaining emissions are largely attributable to the use of
natural gas. In this respect, the BMW Group faces the challenge
of replacing natural gas with non-fossil energy sources such as
biogas, green hydrogen or green electricity. However, the transi-
tion to alternative energy sources depends largely on their avail-
ability, the technical retrofitting of the systems and the political
framework conditions.
The BMW Group intends to reduce carbon emissions per vehicle
produced (Scope 1 and Scope 2) by an average of 80% by 2030
compared to the base year 2019. Production accounts for the
majority of Scope 1 and Scope 2 emissions within the BMW Group.
As in the past, we remain committed to energy efficiency
measures, electricity generated in-house from renewable
sources, the purchase of green electricity from Power Purchase
Agreements and the use of Energy Attribute Certificates (e.g.
guarantees of origin).
Energy use and carbon emissions
← = Q
Other Information
| | ||
Total
Zhangjiagang (Spotlight)
Graz (Magna Steyr)
NETWORK
PRODUCTION AND SUPPLIER
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Production and Supplier Network
BMW Group Report 2023 To Our Stakeholders
104 Production Network
104
* Consumption and Carbon Disclosures.
HAJDROGEN FUEL CELL
M DH1024E
The BMW Group is also committed to promoting hydrogen tech-
nology at a higher level, including involvement in global organi-
sations and associations such as the ▾ Hydrogen Council. As an as-
sociated partner of H2 Mobility Deutschland GmbH, the BMW Group
is also supporting the development of hydrogen infrastructure in
Germany.]]
Firstly, the findings from the pilot project are being incorporated
into the development of a potential series product. Secondly, we
are using them to promote initiatives for the construction of hy-
drogen filling stations worldwide. In this context, the Alternative
Fuel and Infrastructure Regulation (AFIR) will provide new impe-
tus at EU level. Among other things, it provides for the establish-
ment of a basic network of hydrogen filling stations along the
main European transport routes.
Hydrogen-powered pilot fleet operating successfully
Since the beginning of 2023, a pilot fleet of the hydrogen-pow-
ered BMW iX5 Hydrogen has been driven on roads worldwide.
The aim is to ascertain whether the product is ready for series
production and to obtain initial customer feedback. On the one
hand, we are focusing on countries where the hydrogen industry
is developing positively, for example with the establishment of a
filling station network. On the other hand, we are also active in
areas where the production of preferably green hydrogen and its
distribution and use in various applications are gaining in im-
portance. These areas currently include parts of Europe, Japan,
South Korea, China, the USA and the Middle East.
The BMW Group also promotes the use of renewable energy.
Since 2022, for each charging process conducted via BMW and
MINI Charging, the equivalent amount of energy consumed is fed
into the power grid as green electricity, which is certified via En-
ergy Attribute Certificates (EACs) as recognised proofs of origin.
Moreover, we are working continuously on integrating electric ve-
hicles with their high-voltage storage systems in the public power
grid. In 2023, we launched Connected Home Charging, the first
customer-oriented solution on the European market in collabo-
ration with E.ON. Electrified vehicles as part of the power grid
[[Solutions for simple, eco-friendly charging
Charging should be as easy as conventional refuelling and we
are working on digital solutions in particular to meet this demand.
Via the Connected Charging app, drivers not only receive up-to-
date charging information, they can also control the charging
process at the touch of a button. Customers can use the eRoute
function to plan charging stops on long journeys. In 2023, the
first BMW models, such as the BMW i7* and the BMW iX1*, were
equipped with a Plug&Charge function in which both authentica-
tion and billing are carried out automatically by connecting the
vehicle to the charging system. Using the so-called multi-con-
tract functionality, individual driving electricity tariff contracts
from various providers can also be stored digitally within the ve-
hicleto facilitate the use of charging stations from different oper-
ators.
MCI 3790
107 Circular Economy, Resource Efficiency and
Renewable Energy
111 Purchasing and Supplier Network
PRODUCTION AND SUPPLIER NETWORK
Country
Brazil
BMW Group vehicle plants
Location
From 2025, the NCAR will feature a vehicle architecture system-
atically geared to suit electric drive systems. The vehicle is due to
be manufactured initially at the new Debrecen plant in Hungary
as well as in Munich as of 2026. We aim to gradually transfer the
new vehicle architecture to the global production network in the
years that follow. We also plan to produce all-electric vehicles at
our plant in Spartanburg (USA), and at least six all-electric X
models are scheduled to be manufactured there by 2030.
Electric mobility has been growing in importance for the BMW
Group for many years. With the start of production of the BMW
151 at the Dingolfing plant and the BMW iX21 at the Regensburg
plant, the BMW Group has continued to expand the production
of all-electric models at its German plants. Production has also
started in Zhangjiagang at the Spotlight plant, a joint venture
with Great Wall Motors. The site has been manufacturing the all-
electric MINI for the global market since November 2023. We are
therefore currently producing automobiles and motorcycles with
electrified drive systems at 15 7 BMW Group locations and at two
partner plants within our global production network. In 2023, all-
electric cars rolled off production lines in Dingolfing, Goodwood,
Munich, Regensburg, Oxford, Shenyang, at VDL Nedcar² in Born,
and in Zhangjiagang. Moreover, all-electric motorcycles were
manufactured both in Berlin and at our partner plant in Hosur
(India).
Electric mobility globally integrated
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Production and Supplier Network
BMW Group Report 2023 To Our Stakeholders
105
The new Cell Manufacturing Competence Centre (CMCC) in Pars-
dorf near Munich plays a key role for the BMW Group. Using a
pilot production approach, the CMCC's experts can accurately
replicate the value-added processes involved in manufacturing
battery cells The BMW Group will take the findings of this pilot
scheme and apply them in close collaboration with its mass pro-
duction partners for battery cells at a later stage. The strategy
enables the BMW Group to set new standards regarding the
quality, performance, cost and ecological sustainability of battery
cells.
In line with the "local for local" principle, the BMW Group's high-
voltage battery assembly facilities worldwide are set up close to
the Group's vehicle plants with a view to increasing the resilience of
supply chains. Production facilities for the sixth generation of the
high-voltage battery are being established in Debrecen (Hun-
gary), Woodruff near Spartanburg (USA), San Luis Potosí (Mex-
ico) and Shenyang (China). The BMW Group is also planning to
produce sixth-generation high-voltage batteries in Germany at
the Irlbach-Straßkirchen site to supply German vehicle plants.
Integrated component production for electrified vehicles
The competence centre in Dingolfing plays a leading role in the
production of electrified drive systems, as battery modules, high-
voltage batteries and fifth-generation electric motors are all pro-
duced at the site. At the same time, we are preparing the BMW
Group's network to produce next-generation electrified drive sys-
tems. For this reason, the Steyr engine manufacturing plant in
Austria is to be expanded and the new drive systems will be pro-
duced there alongside diesel and petrol engines. Production is
scheduled to begin in the course of 2025.
The production system is based on the strategic vision of the
BMW iFACTORY, with a keen focus on sustainability, electrifica-
tion, digitalisation and profitability. The BMW iFACTORY utilises
innovative technologies that facilitate flexible, efficient production
with the aim of minimising the use of resources and promoting
digital solutions in the fields of data science, Al, virtual planning
and development.
With its flexible production network, the BMW Group is capable
of manufacturing vehicles with both all-electric and plug-in hybrid
drive systems as well as conventional combustion engines on
one single line, making it far easier to tailor the product range to
suit a wide variety of customer wishes and needs.
PRODUCTION NETWORK
← = Q
Production programme 2023
Other Information
Group Financial Statements Responsibility Statement and Auditor's Report
With BMW and MINI Charging, we offer attractive electricity tariffs
and convenient charging solutions whether on the road, at
home or at work. Customers can use a large number of public
charging points via their BMW or MINI charging card and the My
BMW and/or MINI app. Digital Charging Solutions GmbH (DCS)
provides broad access to various charging networks throughout
Europe. DCS is one of Europe's leading providers of digital charg-
ing solutions and a joint venture between the BMW Group, Mer-
cedes-Benz and bp.]]
-
An expanded, customer-friendly charging infrastructure will pave
the way for the rapid and widespread use of electric mobility. With
the adoption of the Alternative Fuels Infrastructure Regulation
(AFIR) in 2023, the EU resolved to set up a basic network of both
electric charging stations and hydrogen filling stations by the end
of 2030. From the BMW Group's point of view, this is a first key
step towards providing a customer-friendly charging infrastruc-
ture. The BMW Group remains committed to achieving standard-
ised framework conditions and encourages offers that enable
customer-friendly charging on a broad basis. An expanded, cus-
tomer-friendly charging infrastructure will pave the way for the
rapid and widespread use of electric mobility.
Reliable, comprehensive charging opportunities
It is therefore particularly important to the BMW Group to include
environmental and social aspects in the production of compo-
nents such as electric motors, high-voltage storage systems and
battery cells. Carbon emissions in the supply chain, Social and ecological
responsibility. Other approaches to mitigating the environmental
impacts include increasing the use of recycling and reusing high-
voltage storage units from our BEV and PHEV models in an ap-
propriate manner. The BMW Group offers customers who pur-
chase its battery-powered vehicles the option to take back their
high-voltage batteries free of charge. The offer also applies to
markets where take-back is not mandatory by law.
The BMW Group's electrified vehicles are characterised by their
high efficiency and low consumption. However, the BMW Group
has greater aspirations: its vehicles need to be as eco-friendly
as possible, not only during their locally carbon-free use phase,
but also in terms of their overall footprint, including the supply
chain and production. Carbon Emissions Unlike conventional com-
bustion engine-powered vehicles, the environmental impact of
battery-powered automobiles lies predominantly in the up-
stream value chain. Where the use of natural raw materials to
manufacture battery cells and the carbon-intensive production of
batteries make a significant impact.
Thinking holistically about electric mobility
compact segment can cover up to 110 kilometres (WLTP²) solely
on battery power.
17 Consumption and Carbon Disclosures.
The new all-electric MINI Cooper SE1, which is mainly designed
for urban use, has a customer-focused range of around 400 kil-
ometres (WLTP2). The new BMW i51 can achieve a range of up
to 582 km in the statutory WLTP test cycle, depending on factors
such as equipment and type of motor. With offers such as the
BMW eDrive Zone, attractive electricity tariffs for driving, charg-
ing equipment, the integration of charging in the vehicle app and
increased ranges, we are helping drivers of plug-in hybrids to
drive electrically as frequently and over as long a distance as
possible. For instance, the BMW X5 Plug-in-Hybrid from the
At the BMW Group, customer-oriented technological diversity
also includes the ongoing development of fuel cell technology.
Depending on the segment, we see hydrogen-powered electric
vehicles as a potentially key alternative to battery-powered elec-
tric mobility and thus as an opportunity to reduce carbon emis-
sions even more quickly. Hydrogen-powered pilot fleet operating
successfully
Our product portfolio serves the growing level of demand for
electrified models and at the same time takes into account the
varying framework conditions and customer needs in each indi-
vidual market. In addition to all-electric vehicles, our customers
can therefore choose from a wide range of plug-in hybrids and
vehicles powered by efficient combustion engines. Our flexible
production systems and scalable modular vehicle system reflect our
rigorous focus on customer needs. With the launch of the new
BMW i51, a further model series is now available with all three
types of drive system, which previously applied to the BMW X1,
BMW X3, BMW 3 Series and the BMW 7 Series.
[[Offering with consistently dedicated customer focus
Remuneration Report Other Information
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Products
BMW Group Report 2023 To Our Stakeholders
101
Partner plants
Designing electric vehicle ranges to match user behaviour
The BMW Group assesses the increase in the electric ranges of
its vehicles from various points of view. Our main approach is to
optimally adapt vehicle ranges to the respective purpose of use
and user behaviour. With this strategy we also take into account
the environmental impact, as greater range also means deploy-
ing larger and therefore heavier high-voltage batteries. This re-
lationship has an effect on resource consumption and the carbon
footprint of the supply chain as well as the vehicle's weight and
therefore its electricity consumption.
2 Range calculated based on the new WLTP test cycle (Worldwide Harmonised Light Vehicles Test
Procedure). However, the actual range possible depends on a variety of factors, particularly varia-
bles such as personal driving style, route conditions, outside temperatures, heating, air condition-
ing and pre-heating. Preliminary figure.
102
BMW Group Report 2023
Combined Management Report
Products
BMW Group Report 2023 To Our Stakeholders
103
2 Primarily via direct purchase and Energy Attributes Certificates (e.g. certificates of origin).
37 Consumption and Carbon Disclosures.
1 Total number of charging points displayed on BMW front-ends (vehicle & app). The network can
be accessed by registered customers wherever a local partner is available.
3
HDC 4628E
With the publication of the Vehicle Footprint for the BMW 153, the
BMW Group is further enhancing transparency at product level. The innova-
tion provides customers and other interested parties with comprehensive in-
formation on the vehicle's key sustainability-related performance data.
These data include the four core CO₂e emissions indicators over the vehicle's
entire life cycle, including raw materials procurement, production, the supply
chain, recycling, energy consumption in the use phase, the secondary raw
material quota and key aspects of social sustainability in the supply chain.
The vehicle footprint includes a life cycle assessment performed in accord-
ance with DIN EN ISO 14040:2021 and DIN EN ISO 14044:2021 and au-
dited by TÜV Rheinland Energy. Going forward, the BMW Group will publish
analogous reports for vehicle start-ups based on a representative model per
drivetrain type. ]]
[[ New level of transparency achieved for vehicle data
BMW and MINI Charging provide the Flexible Fast Charger and
other charging products for use both on the move and at home.
We also offer charging solutions for corporate customers in co-
operation with our partners. The BMW Group itself operates one
of the largest company charging networks in Germany. ]]
With the new charging infrastructure under the terms of a coop-
eration with Mercedes-Benz in China, the BMW Group is meeting
its charging commitment in its three most important markets.
With this aim in mind, at least 1,000 charging stations with
around 7,000 charging points are to be installed by the end of
2026. The network will be open to drivers of all brands. The first
charging stations will go into operation as early as 2024 in
regions with a high density of electrified vehicles.
In the year under report, the BMW Group also announced the es-
tablishment of a charging network in the USA and Canada to-
gether with six other manufacturers. The aim is to install at least
30,000 charging points in cities, towns and along major
transport routes. The first charging stations are scheduled to
open in summer 2024.
[[BMW and MINI customers have access to over two million charg-
ing points worldwide¹ through the navigation system or the rele-
vant vehicle app. In Europe alone, we provide easy access to a
network with over 588,000 charging points through the public
BMW/MINI Charging service. These also include fast-charging
stations from IONITY, a company launched by the BMW Group,
with a charging capacity of up to 350 kilowatts (kW). IONITY cur-
rently operates 590 stations with more than 3,300 charging
points in a total of 24 countries, which are publicly accessible,
brand-independent and designed in accordance with the Euro-
pean Combined Charging System (CCS) charging standard. Fur-
thermore, they are all powered by 100% green electricity².
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Products
To Our Stakeholders
Remuneration Report
Germany
← = Q
Araquari
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
Production and Supplier Network
BMW Group Report 2023
106
BEV
Electrification portfolio
Including Lydia extension since June 2022.
2 Contract manufacturing.
Remuneration Report
17 Consumption and Carbon Disclosures.
China
Production programme 2023
Country
Location
Jointly controlled vehicle plants
Regensburg
Rosslyn
PHEV
BMW X3, BMW X4, BMW X5, BMW X6, BMW X7, BMW
XM1, BMW M
MINI Cooper
Other Information
← = Q
Production sites in key markets
Born (VDL Nedcar]
BMW Series, BMW X1, BMW X3, BMW X4
BMW motorcycles
Zhangjiagang (Spotlight)
Goodwood
Rayong
Chennai
Rosslyn
San Luis Potosí
Leipzig
Oxford
Regensburg
Munich
Dingolfing
Tiexi
Dadong
Spartanburg
in units
BMW Group automobile production by plant
Production volume record despite challenging environment
The BMW Group manufactured a total of 2,661,922 BMW, MINI
and Rolls-Royce brand vehicles in the year under report (2022:
2,382,305 units; +11.7%). BMW brand models accounted for
2,340,547 units (2022: 2,089,801 units; +12.0%), MINI for
315,196 units (2022: 286,265 units; +10.1%), and Rolls-
Royce Motor Cars for 6,179 units (2022: 6,239 units; -1.0%).
Production of electrified vehicles increased to a new
The BMW Group's production network also includes engine
plants in Hams Hall (UK), Steyr (Austria) and Shenyang (China),
as well as component plants at sites in Eisenach, Landshut and
Wackersdorf (all in Germany) and Swindon (UK). Engine produc-
tion in Munich (Germany) was discontinued in 2023. The pro-
duction network currently comprises a total of 32 plants in 15
countries.
The BMW Group manufactures BMW motorcycles, components
and scooters at its Berlin plant and also at international locations
in Ma-naus (Brazil) and Rayong (Thailand), where motorcycle
components are also produced. Components for motorcycles are
also produced in Rayong. BMW motorcycles and scooters are
also produced by the partner companies TVS Motor Company in
Hosur (India) and Loncin Motor Co., Ltd in Chongqing (China).
The BMW Group plants in Europe, South Africa, the USA and
Mexico manufacture for the global market. Production of the all-
electric MINI for the global market also began at the Spotlight
joint venture plant in China in November 2023. The BMW Bril-
liance plants in China mainly manufacture for the local market.
The BMW Group plants in Araquari (Brazil), Rayong (Thailand)
and Chennai (India) primarily serve their respective regional mar-
kets and produce BMW and MINI brand models. The same ap-
plies to the BMW Group's automotive partner plants in Jakarta
(Indonesia), Cairo (Egypt), Kulim (Malaysia) and Chu Lai (Vi-
etnam). The Group also awards contracts for the series produc-
tion of automobiles and motorcycles to external partners (con-
tract manufacturers). During the period under report, Magna
Steyr Fahrzeugtechnik produced both the BMW 5 Series Sedan
(up to May 2023) and the BMW Z41 in Graz (Austria). VDL Ned-
car2 in Born (the Netherlands) has continued to produce the MINI
Convertible and the MINI Countryman until the beginning of
2024.
USA
Spartanburg
Araquari
BMW 1 Series, BMW 3 Series, BMW X1, BMW iX11,
BMW X2, BMW i3 (extended-wheelbase version of BMW
3 Series),
Germany
Brazil
Germany
BEV
Rolls-Royce Cullinan', Dawn', Ghost¹, Phantom',
Wraith¹, Spectre¹
UK
BEV, PHEV
BEV
Electrification portfolio
BMW 4 Series, BMW 5 Series, BMW i5¹, BMW 6 Series,
BMW 7 Series, BMW i7¹, BMW 8 Series, BMW M, BMW
iX1
BMW 1 Series, BMW 2 Series, MINI Countryman
BMW motorcycles
BMW 2 Series, BMW 3 Series, BMW 5 Series, BMW 6
Series, BMW 7 Series, BMW X1, BMW X3, BMW X5,
BMW X7, MINI Countryman
Germany
India
Rayong
Oxford
Manaus
Munich
Goodwood (Rolls-Royce Manufacturing)
Leipzig
Dingolfing
BEV
Berlin
PHEV
Chennai
BMW 3 Series, BMW 4 Series, BMW ¡41, BMW M
MINI, MINI Clubman, MINI Cooper SE¹
UK
Shenyang (Tiexi)³
China
BMW 5 Series, BMW X3, BMW iX31, BMW X5
China
Shenyang (Dadong)
PHEV
BMW 2 Series, BMW 3 Series, BMW M
Mexico
BEV, PHEV
BMW X3
San Luis Potosí
BEV
BMW 2 Series, BMW 3 Series, BMW 5 Series, BMW 7
Series, BMW X1, BMW X3, BMW X5, BMW X6, BMW X7
BMW motorcycles
Thailand
Germany
BMW 1 Series, BMW X1, BMW iX11, BMW X2, BMW iX21 BEV, PHEV
South Africa
PHEV
BEV, PHEV
in %
[[Sickness rate BMW AG*
-
Nevertheless, we aim to reduce this level, for example, with tar-
geted measures in accordance with our "Attendance Manage-
ment Works Agreement" (BAM) and the relevant health manage-
ment initiatives. BAM is a service provided by the BMW Group to
promote the health of employees and increase their attendance.
Health-preserving and health-promoting measures and offers
from the Company are also suggested to employees. The dis-
cussions are conducted by managers regularly or as needed.
7 GRI Index: 403-10]]
sickness rate in Germany remained at a high level until the mid-
dle of 2023 and normalised over the course of the year.
One of the ways in which the Company measures the success of
health management is by its sickness rate, which at 3.8% at
BMW AG was below the previous year (2022: 4.2%). The
It is important to the BMW Group that all employees have access
to the Company's own health services. In Germany, these ser-
vices focus on providing acute care to employees and temporary
employees during working times. At some locations
such as
South Africa, Thailand, India and Mexico - health management
also involves the provision of basic healthcare. The
BMW Group's occupational physicians advise employees on in-
dividual preventive measures on request. They also help to or-
ganise the respective working environment in such a way that
health and performance can be maintained over the long term.
The provision of occupational healthcare and medical advice
helps to prevent work-related health problems at an early stage
and avoid accidents at work. GRI Index: 3-3, 401-2, 403-3, 403-6
The use of management systems and certifications (e.g. Occu-
pational Health and Safety Assessment Series, OHSAS 18001)
is aimed at continuously developing internal guidelines for occu-
pational safety and the ergonomic design of the workplace.
We use regular action days, dialogue events and training courses
to inform our employees and raise awareness of current health-
related topics such as nutrition, exercise and fitness, behavioural
ergonomics and cancer prevention.
Health management on a holistic basis
The BMW Group bundles all measures to maintain health and
performance in the "Health Initiative". In the reporting year, the
focus of health management was on psychological and mental
health. We discussed various mental health topics in expert pan-
els in the new "Health Talks" format. Our "Health and Leader-
ship" programme also focuses on managers' responsibility for
the mental health of our employees.
Responsibility for the topics of health and occupational safety is
enshrined in the Work Environment, Group Safety and Group
Data Protection division. 7 GRI Index: 403-1
measures.
The BMW Group also applies additional safety standards that go
beyond the legal obligations. The digital safety and ergonomic
risk analysis (SERA) records threats and sources of stress for
production workplaces and production-related areas worldwide.
The SERA takes into account the stricter US regulations and re-
quirements in addition to the German legal regulations. In pro-
duction, the use of laser scanners for presence monitoring in
small robot cells serves as another example of increased safety
[[The health and performance of people employed by the
BMW Group enjoys top priority. The different activities at the op-
erating sites result in extensive requirements for occupational
health and safety. The Company is committed to complying with
applicable occupational health and safety laws worldwide. The
right to health and safety in the workplace is also enshrined in
the BMW Group's Code on Human Rights and Working Conditions.
HEALTH AND PERFORMANCE
← = Q
To help promote a balanced diet, BMW AG runs company can-
teens in Germany. We focus on regional and sustainably pro-
duced food. The sustainability criteria used in supplier audits in-
clude sustainable water management during production, the use
of renewable energy and compliance with product-group-spe-
cific regulations. Since 2023, the "Sustainable Catering" guide-
lines have also been in place at most international locations,
aimed at further improving the environmental impact of BMW's
catering services.
3.7
2022
3.4
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Employees and Society
To Our Stakeholders
BMW Group Report 2023
119
* Number of hours of absence due to paid sick leave divided by the contractually agreed number of
working hours.
2023
2021
2020
2019
2.0
أنني
3.8
4.2
3.4
Other Information
Combined Management Report
Employees and Society
Group Financial Statements Responsibility Statement and Auditor's Report
4 The trainee programme was launched in April 2023 under its new name "AcceleratiON" (formerly
the Global Leader Development Programme, GLDP).
3 Including the BMW Group plant in Debrecen, Hungary, for the first time in 2023.
2 Includes the programmes "Speed Up" (an undergraduate programme) and "Fastlane" (a master's
programme). These programmes vary by country, and are adapted to local market requirements
and university curricula.
1 The key figure "Spending on employee training and development" includes the BMW Group's in-
vestments in vocational training, instruction and further education (for definition see Glossary),
limited to consolidated BMW Group subsidiaries.
2023
2022
2021
2020
5 Since 2022 including BMW Brilliance.
2019
illi
3.73
4.00
4.71
5.51
[[Regular training for employees
3.39
in % of workforce size
0
Remuneration Report
6 Departures of employees with permanent employment contracts.
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Employees and Society
To Our Stakeholders
BMW Group Report 2023
118
*All BMW Group employees on permanent contracts at 1 August 2023 were surveyed. In 2023,
this included the employees of BMW Brilliance Automotive Ltd. for the first time.
Also, in 2023, highly regarded employer ratings once again ranked the
BMW Group as one of the world's most attractive employers: the
BMW Group again achieved the top spot in the Trendence Profession-
als Barometer for Germany in 2023 for the 12th time in a row. In the
current ranking of the World's Most Attractive Employers 2023 of
the study provider Universum, the BMW Group moved up to third place
worldwide among prospective engineers, directly behind the technol-
ogy companies Google and Microsoft. The BMW Group is one of the top
15 employers globally among students in the fields of IT and business.
Excellent results in employer rankings
Employees also have a central opportunity to participate through
idea management, which allows employees to contribute ideas
outside of their area of responsibility. If the proposals have a pos-
itive impact on the BMW Group in terms of efficiency or sustain-
ability, they will be honoured accordingly. In 2023, numerous
employees submitted a total of 5,470 ideas (2022: 5,028). At
the same time, a total of 1,267 ideas (2022: 1,188) were imple-
mented, resulting in first-year benefits totalling € 52.0 million
(2022: € 20.5 million). More than a fifth of these had their pri-
mary impact in the area of sustainability. GRI Index: 2-29]]
117
The BMW Group measures the general mood in the workforce
and the performance of the organisation every two years as part
of a Company-wide employee survey*. This is measured using
the "High Performance Organisation Index" (HPO-I). In the sur-
vey in autumn 2023, the participation rate was higher than ever
before at 84%. At the same time, the HPO-I improved again
when compared to the last survey in 2021. 88% of the workforce
would recommend the BMW Group as an employer. 86% of em-
ployees were convinced by the strategy of integrating sustain-
ability and setting ambitious targets in this respect. They also
signalled a high level of willingness and motivation to play an ac-
tive role in this process, This contributes significantly to the fact
that approximately 85% of respondents are optimistic about the
future of the BMW Group. The topic of Compliance also scores
well among the workforce, with 88% approval. Despite progress
compared to the last survey, employees identified room for im-
provement in the optimisation of processes. The results of the
survey will form the basis for concrete measures that are sched-
uled for implementation by mid-2024.
Involving employees
The BMW Group offers its employees an individual scope of free-
dom to organise their work and their working hours. The tools
used include flexible working times, remote work, additional
leave with corresponding reductions in pay, sabbaticals, and
temporary or permanent part-time solutions. Further GRI
information As part of our "ConnectedWorks" initiative, we ad-
vanced the methodological, technical and spatial foundations for
flexible and collaborative work in the reporting year.
[[In terms of total remuneration, we aim to ensure that our em-
ployees earn above average for the respective labour market. To
confirm this, we conduct remuneration studies each year on a
worldwide basis. The BMW Group also consistently applies the
principles of performance-related compensation. The total salary
package consists of a monthly remuneration and a variable com-
ponent dependent on the Company's overall performance. We
also offer additional benefits such as Company pension schemes
and an attractive range of mobility benefits, including subsidised
tickets for local public transport. For example, the BMW Group
subsidises the purchase of the "Deutschlandticket" for the ma-
jority of its scale-wage employees in Germany. Apprentices and
dual study students receive the ticket free of charge. 7 GRI Index:
2-21, 401-1, 401-2
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
The employees of the BMW Group are one of the most important
stakeholder groups for the Company, and are actively involved in
shaping the future direction of the Company. Dialogue with
Stakeholders
BMW Group employees at all locations are trained in occupa-
tional health and safety as part of qualification programmes. The
necessary qualification requirements for occupational safety are
determined in coordination with the specialist department for oc-
cupational safety and ergonomics. The seminar curriculum is
drawn up in collaboration with safety specialists, Company doc-
tors and the BMW Group Academy.
7 GRI Index: 406-1
The BMW Group follows the globally recognised ISO 45001
standard for occupational health and safety. Occupational health
and safety management systems are in place at all production
sites, and 29 of the 32 plants are certified in accordance with this
standard or OHRIS¹, which is based on ISO 45001. This means
that 99.80% (2022: 99.79%) of employees and 100% (2022:
99.98%) of temporary employees at BMW Group plants work at
a site covered by an international occupational health and safety
management system. The BMW Group plant in Manaus (Brazil,
certification planned for 2024), the contract manufacturing facil-
ities in Born (the Netherlands, production will end in 2024) and
the jointly managed Spotlight plant in Zhangjiagang (certification
planned for 2024) are not currently certified.
2023 in total
29.4
59.8
10.8
2022 in total
> 50
years
30.3
59.9
9.8
2021 in total
30-50
years
<30
years
in %
[[BMW AG employees by age group
divided into functions and gender
The BMW Group provides information about its commitment to
these categories on our website.
Sexual orientation and identity
Physical and mental ability
Cultural background
Age and experience
11.3
60.0
28.7
direct¹
-
Employee attrition rate BMW AG6
The aim of diversity management is to anchor the importance of
diversity in thought and action. A key component is web-based
training against discrimination in the workplace. This training has
been mandatory for all employees in Germany since 2023. From
2024, all BMW Group employees will be offered anti-discrimina-
tion training. We have also introduced measures such as the
7 Senior Expert Programme and the Joint Leadership Programme,
which were used with increasing frequency in 2023. The BMW
Group also commissioned an external analysis of its existing
commitments, with a focus on the dimensions of sexual orienta-
tion and identity. This took place within the framework of our
membership with "PROUT AT WORK", a leading foundation and
consultancy in Germany focusing on LGBTIQ+3 issues in the
workplace, aimed at promoting equality for individuals within the
queer community. We will use this as the basis for specific
measures in the next step.
20.3
64.0
15.6
female
30.4
Gender
59.2
male
27.3
63.2
9.5
indirect²
30.9
54.6
14.4
10.4
Certified occupational health and safety management
system
Our Company-wide concept for diversity, equal opportunities and
inclusion forms the basis of our holistic commitment. The HR de-
partment manages the content and implementation together
with Diversity Officers and disciplinary managers. The concept
contains aims and measures that focus on five key dimensions:
anonymous and professional advice centre for discrimination,
bullying and sexual harassment in the workplace.
2021
2020
2019
0
1.93
2.0
2.8
3.2
3.5
[[Accident frequency rate❝
The BMW Group's preventive measures continue to have an im-
pact. In 2023, these also meant that the accident frequency rate
remained at a low level of 2.0 (2022: 1.93). There were no fatal
accidents during the reporting year (2022: no fatal accidents).
7 Further GRI Information, GRI -Index: 403-9
Accident frequency at a low level
The BMW Group ensures the quality of its processes by means
of annual internal audits. Audits and certifications of sites are
conducted by external service providers. All necessary audits
were again successfully performed in 2023. The results and re-
sulting measures are made available to all BMW Group locations.
7 GRI Index: 403-2, 403-7
The BMW Group regularly assesses all methods and instru-
ments used within the Company. The results of the assessments
are subsequently used to enhance internal norms. The Works
Council and, if necessary, the representatives of severely disa-
bled employees and HR management are involved.
The BMW Group conducts comprehensive risk and stress ana-
lyses in order to identify potential work-related risks in both pro-
duction and office workplaces. With the Digital Workplace Stress
Management (DWSM) project - a fully automated ergonomics
assessment - the BMW Group continues to set standards in the
automotive industry. Over the last two years, ergonomics spe-
cialists from the BMW Group have been training employees in
the use of DWSM at all assembly locations in Germany. Prepa-
rations have also been made at the locations in Mexico, the UK,
the USA and South Africa for the implementation of DWSM.
Recognising and avoiding risks
The BMW Group has set the goal of obtaining certification to one
of the aforementioned international standards for all of its plants
by 2025. Employer and employee representatives work together
at nearly all locations to bring about a continual improvement in
health and safety standards. GRI Index: 403-1, 403-4, 403-8
2022
2023
]]
Occupational safety along the value chain
Cooperation with contractual partners on safety-related aspects
at the sites is regulated by way of a separate contractor declara-
tion. At major BMW Group construction sites, all employees of
partner companies receive safety briefings from BMW Group ex-
perts. In the case of smaller orders, the contractor is responsible
for the process of familiarisation. The commissioning specialist
department monitors compliance with the occupational health
and safety requirements, and is supported by the relevant spe-
cialist department for occupational safety and ergonomics.
All employees can contact their managers, the relevant specialist
departments, the HR department, the Works council and the rep-
resentative body for employees with disabilities with concerns
relating to diversity, equal opportunities and inclusion. The BMW
Group SpeakUP Line is a telephone service available in over 30 lan-
guages that gives employees worldwide the opportunity to report
possible violations both anonymously and confidentially.
Compliance and Whistleblower Systems Controls Employees in Ger-
many also have access to the "Zero Tolerance" hotline, a free,
Equal opportunities at the BMW Group are also expressed in a
remuneration system that is designed to be independent of gen-
der, religious denomination, origin, age, disability, sexual orien-
tation or country-specific characteristics. In the reporting year,
BMW AG was the first German company to be certified as a Fair
Pay Leader by the Fair Pay Innovation Lab (FPI). The certifica-
tion is evidence that BMW AG's remuneration structures are ef-
fective in ensuring equal salaries between women and men. This
is supported by annual, science-based equal pay analyses, a
practice which the BMW Group also aims to expand to interna-
tional locations in the future. GRI Index: 405-2
[[An appreciative, unprejudiced and inclusive working environment
for all employees is a fundamental prerequisite for successful
collaboration at the BMW Group. People from over 110 nations
bring different perspectives, experiences and competencies to
their daily work at the BMW Group, thereby strengthening the
Company's innovative power and competitive ability. Key princi-
ples such as protection against discrimination, equal treatment
of all employees and respect at all times are firmly embedded in
the BMW Group Code of Conduct and the BMW Group Code of Human
Rights and Working Conditions.
DIVERSITY, EQUAL
OPPORTUNITY AND
INCLUSION
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Promoting diversity
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Employees and Society
5 Management systems in accordance with ISO 45001 and derived from the International Labour
Organization (ILO) or United Nations Global Compact (UNGC).
4 Number of workplace accidents resulting in at least 1 lost day per million working hours.
3 Previous year's value adjusted due to a correction in working hours.
term sick-leave and people on sabbatical.
2 The calculation takes into account apprentices, interns, temporary staff, doctoral students, long-
1 Occupational Health and Risk Management System.
7 GRI Index: 403-7]]
Suppliers to the BMW Group are obligated to comply with inter-
nationally recognised occupational health and safety require-
ments via the Purchasing Terms and Conditions.5
120
The BMW Group is one of the most attractive employers world-
wide. A positive perception of the Company, challenging and fu-
ture-oriented tasks, individual opportunities for personal devel-
opment, attractive remuneration and additional benefits, and a
modern working environment contribute to this.]]
Prevention and remediation
2023
Innovations
Quality is a promise we make to our customers as well as a de-
cisive competitive advantage and an essential factor for the en-
during success of the BMW Group. The quality management sys-
tem is the basis for continuously improving the quality of our
products, processes and services. It consists of an intercon-
nected, comprehensive system that encompasses the entire
product development process, industrialisation and series pro-
duction with respect to both in-house production and the supplier
network. The various steps are supported based on need by our
teams of quality experts when necessary. The ultimate aim is to
ensure - both preventatively and systematically - that all quality
requirements are met at all times.
Quality assurance
In-house production as a strategic competitive advantage
The BMW Group regularly examines its range of products in
terms of their profitability and strategic significance. The main fo-
cus is being directed at electric mobility, digitalisation and sus-
tainability. In these key areas of transformation, the BMW Group
is expanding its in-house expertise on a targeted and long-term
basis on matters relating to strategically important components.
At the same time, in-house production aims to improve both se-
curity of supply and the ability to innovate. The benefits of this
approach have already been seen, for example, with the control
unit of the high-voltage storage system and scopes of the electric
drive equipment. At the same time, we are looking to strengthen
our process competencies in technologies relevant for quality
management and enablement within the supplier network.
Secondary raw materials will be increasingly deployed to cover
the BMW Group's cobalt, lithium and nickel requirements, to-
gether with purchased green electricity for the latest generation
of battery cells. Contracts and framework agreements have al-
ready been concluded with suppliers to this end. This will help
further reduce our carbon footprint from the new battery cell in
the supply chain compared to the previous generation. 7 Carbon
emissions in the supply chain
To strengthen this resilience even further, we plan to anchor the
upstream value chain for critical components in the respective re-
gions while accounting for geopolitical risks and economic effi-
ciency. Through this, the BMW Group also aims to improve its
resilience in the face of external events while reducing its de-
pendence on geopolitical factors and its exposure to related
risks.
As of 2025, the BMW Group plans to deploy a new generation of
battery cells. Against this backdrop, we have concluded contracts
with our partners that guarantee us annual production capacities
in Europe, China and the USA. We are strategically establishing
supply chains for battery cells close to our production sites,
thereby underpinning the "local for local" approach. During the
year under report, we entered into a new partnership in North
America to make the battery cell supply chain more resilient.
Purchasing battery cells
Moreover, the BMW Group has set itself the goal of generating a
positive impact for selected raw materials through our involve-
ment in local development projects. This currently applies to the
raw materials lithium, mica, cobalt and natural rubber.
Among other things, the BMW Group focuses on the conflict min-
erals tin, tantalum, tungsten and gold (3TG) and uses standard-
ised tools of the Responsible Minerals Initiative (RMI) to trace raw
materials back to the smelter. We use existing certifications for
other raw materials. The BMW Group is also involved in develop-
ing certified standards for critical stages of the value chain, for
example as part of the Initiative for Responsible Mining Assur-
ance (IRMA), and is engaged in their implementation by suppli-
ers. Further details and raw materials profiles are available
7 online. SASB Index
Annual risk analyses form the basis for implementing raw-mate-
rials-related preventive and remedial measures to reduce envi-
ronmental and human rights risks. Key levers in this respect are
to forgo, substitute or reduce the use of primary raw materials
that entail a high level of risk. The BMW Group's secondary raw
materials strategy is of vital significance in this context: > Circular
economy, resource efficiency and renewable energy. We also focus in par-
ticular on collaborating closely with our partners in the supplier
network as well as in multistakeholder initiatives and projects.
We use scientific findings to gain an even better understanding
of the extraction processes of raw materials and take them into
account accordingly when analysing the level of risk. 7 Lithium
Study
For the BMW Group, the responsible procurement of raw mate-
rials is the result of a holistic approach that takes economic, eco-
logical and social aspects equally into account. Our commitment
to upholding environmental and social standards as well as hu-
man rights throughout our raw materials supply chains is set out
in, among other places, the 7 BMW Group Supplier Code of Conduct in
which we oblige our Tier 1 suppliers to pass on our requirements
to their upstream sub-suppliers. There are also raw-materials-
specific statements such as the High Level Commitment for
sustainable natural rubber.
The volatile situation on energy and raw materials markets had
a major impact on purchasing over the course of 2023. The long-
term supply of critical raw materials required for electric mobility
remains a strategic challenge. Measures taken by the
BMW Group to increase supply security and promote the pro-
curement of raw materials from responsible sources include,
among other things, sourcing lithium and cobalt directly. Further-
more, the BMW Group analyses the development of raw materi-
als prices and hedges against price fluctuations - provided the
capital market offers the opportunity to do so. 7 Raw materials price
risks and opportunities
Raw materials security and strategy
[[An increasing number of training courses and informational
events are being organised both internally and externally to raise
awareness of the rapidly growing level of cyber risk.
← = Q
Other Information
Collaboration with technology partners and the establishment of
new networks enables us to implement innovations in our vehi-
cles within a very short time. In this context, we work closely with
the BMW Startup Garage and BMW i Ventures.
Remuneration Report
The specialist teams cooperate in technology clusters to sharpen
the focus on innovation screening, which is implemented through
strategic supplier dialogue formats (Future Vision Deep Dive) and
other means. Findings from the supplier network are systemati-
cally processed within the technology clusters.]]
BMW Group Report 2023
The BMW Group monitors and assesses the sustainability risks
in its supplier network in business relationships at both potential
and active supplier locations. In order to identify and assess ab-
stract environmental and human rights risks, various internal and
external data sources such as country- and product-group-spe-
cific indicators as well as media analyses at Group and location
level are drawn upon. The BMW Group uses standardised sus-
tainability surveys and commissions external on-site audits (as-
sessments) to conduct in-depth risk analyses for its Tier 1 sup-
pliers. Supply chain mapping forms the basis for analysing risks
at n-Tier suppliers. The BMW Group continuously endeavours to
increase transparency along the entire supply chain. 7 GRI Index:
2-24, 308-1,414-1
Risk analysis
Our corporate responsibility for environmental and social stand-
ards in the supply chain is institutionalised as part of a multi-
stage due diligence process. We mainly use standardised control
procedures to carry out the due diligence obligations incorpo-
rated in our business processes. The BMW Group also cooper-
ates with initiatives and associations such as the Responsible
Business Alliance (RBA) and Drive Sustainability. In this context,
we follow the guidelines developed by the German Automotive
Industry Dialogue. We also remain committed to establishing an
industry-wide complaints mechanism, among other things.
Due diligence in the supplier network
The BMW Group's overarching approach to respecting human
rights and upholding social standards along the entire value
chain is provided in the chapter on 7 Compliance and Human Rights.
The BMW Group views responsible supply chain management
as an integral part of good corporate governance The develop-
ment of established processes was continued throughout the
year under report. The BMW Group's requirements and the ex-
pectations it places on its suppliers are set out in the 7 BMW Group
Supplier Code of Conduct and contractually enshrined as an integral
part of the BMW Group's Terms and Conditions of Purchase.
7 GRI Index: 2-23, 3-3, 407-1, 408-1
Social and environmental responsibility
The BMW Group is focusing mainly on component traceability
along multistage supply chains, cooperative root cause analysis
to combat any potential quality problems and the collection of
carbon-emissions-related data in the supply chains. In 2024, ef-
forts will be scaled up with suppliers with the aim of further im-
plementing and developing additional "use cases" as well as
scaling these for strategic relevant components through the in-
dustry network. Another key advancement is the provision of dig-
ital product passports, which contain product-specific data for
components such as batteries or even for entire vehicles. Based
on information from the n-tier supply chain via Catena-X, data
are available in particular regarding origin, material composition
and recycling.
Catena-X is the pioneering initiative within the automotive indus-
try for digitalising the supply and value chains between automo-
bile manufacturers, suppliers, sub-suppliers and, in the future,
recycling companies. The digital platform enables partners
within value chains to tackle key challenges facing the industry,
such as enhancing resilience, meeting sustainability goals and
regulatory matters through digital collaboration. After two years
of development work, including a significant contribution from the
BMW Group as consortium leader, a beta test phase was suc-
cessfully conducted in 2023. Among other things, pilot projects
were carried out in conjunction with BMW component produc-
tion, providing valuable insights that will serve to promote inno-
vative data processing methods in a production environment.
Catena-X has been in the rollout phase since October 2023.
For the BMW Group, a digital flow of information throughout the
supply chain is an essential prerequisite for establishing more re-
silient and flexible supply chain management.
[[Digitalisation in the supply chain
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Production and Supplier Network
To Our Stakeholders
113
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
Production and Supplier Network
The year 2023 was characterised by improved supply chain sta-
bility on the one hand, but also by rising material prices driven by
rampant worldwide inflation on the other. The latter resulted in
higher costs for the BMW Group, primarily for raw materials,
semiconductors, energy and transportation. The overall supply
situation also remained challenging in 2023. The supply situa-
tion for semiconductors in particular will remain challenging for
certain technologies in the current financial year. 7 Outlook, Risks
and Opportunities
Supply security
Procuring high-quality components at competitive prices
Recognising innovative solutions at an early stage
Further digitalising processes within the supplier network
Integrating social and ecological standards within the
supplier network
Ensuring security of supply to the production plants
Expanding resilient supply chains within a highly
challenging geopolitical environment
When it comes to purchasing and the supplier network, the main
focus areas are:
The BMW Group's Purchasing and Supplier Network is respon-
sible for the global procurement and quality assurance of produc-
tion materials, raw materials, components, capital goods and
services as well as the in-house production of vehicle compo-
nents.
[[Supply chains and supplier network
PURCHASING AND SUPPLIER
NETWORK
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
Production and Supplier Network
BMW Group Report 2023 To Our Stakeholders
111
3 Abbreviation for all sexual orientations and forms of identity.
Natural disasters pose an additional risk. Extensive flooding in
Slovenia led to delivery difficulties during the year under report.
The prospect of climate change and the increasing number of
extreme weather events are likely to make planning more difficult
going forward. However, the BMW Group is able to mitigate the
effects of these unexpected events through its flexible supply
network and thus largely ensure its ability to deliver vehicles.
To lessen the impact of the war in Ukraine on its European
plants, since 2022 extensive measures have been in place, and
therefore continues to source components from western Ukraine.
At the same time, our partners have established additional pro-
duction sites outside Ukraine. As a result of these various
measures the supply of wiring harnesses to our plants has
largely returned to normal. The situation is, however, being mon-
itored continually.
Expanding resilient supply chains
BMW Group Report 2023 To Our Stakeholders
112
In order to avoid cyber risks and deal effectively with an increas-
ing number of supplier-related incidents, the BMW Group contin-
ues to rely on supplier certification in accordance with the TISAX
automotive standard. When it comes to purchasing materials
both directly and indirectly, TISAX is an integral part of the pro-
curement process and an inherent component of contracts with
suppliers that meet the specific relevance criteria. The initiative
for joint IT security analyses and the regular exchange of infor-
mation via a B2B portal also enable us to make the supplier net-
work more resilient.]]
An interconnected risk management system is fundamental for
managing the supplier network. It takes preventative action when
nominating suppliers, while also reacting quickly in order to iden-
tify and analyse impending supply bottlenecks. The
BMW Group's RiskHub analyses information from external, pub-
lic-ly available data sources with regard to potential risks such as
natural disasters or financial risks. We also employ state-of-the-
art methods derived from the fields of Al and big data analytics.
For selected topics such as the reliable supply of semiconductor
components, we also take the locations of sub-suppliers into ac-
count when assessing overall risk.
Eastern Europe
19.4
Risk management in purchasing
*Direct and indirect purchasing.
15.5
Prior to signing a contract with the BMW Group, if any risks are
identified in the course of the specific risk analysis, our suppliers
are required to implement or expand the necessary preventive or
remediation and control measures by an agreed target date. Our
suppliers are also required to request these from their subcon-
tractors based on their respective risks. The measures, which are
queried, validated and evaluated as part of the sourcing process
using the industry-wide questionnaire from Drive Sustainability,
serve to minimise potential risks or eliminate existing deficien-
cies. Further GRI information, ▾ Sustainability assessment of relevant
supplier locations This online assessment is performed for suppliers
of production-related goods and services with a contract volume
over a certain threshold. Different modules are used depending
on the size of the company being assessed. Implementation
must be successfully completed prior to the start of production.
For suppliers of non-production-related goods and services, this
procedure is also carried out depending on country- and product-
group-specific risks. The extent of the preventive measures is
based on the potential risks, the nature and scope of the busi-
ness activity and the size of the supplier. In addition, we offer
training courses on sustainability in the supply chain, some of
which are mandatory for internal purchasers. These trainings
also address process partners and suppliers on a voluntary ba-
sis.
North America
Total
96.1 Mrd. €
Other Western
Europe 11.9
Other 3.3
China 17.4
in %
Regional distribution of the BMW Group's purchased
volumes*
The BMW Group follows the principle of procuring vehicle com-
ponents close to its production sites, wherever possible. We are
therefore represented by local purchasing teams in all key mar-
kets in order to quickly identify local risks and opportunities and
respond flexibly to the respective market conditions. In the face
of geostrategic aspects, a resilient strategy for the Group's sup-
ply chains is also becoming increasingly important and the
BMW Group takes this fact increasingly into account when se-
lecting its partners.
During the year under report, the BMW Group was generally able
to rely on the stability of its supply chains, despite the problems
caused by geopolitical crises and the availability of critical raw
materials. Price increases on global markets also tended to in-
tensify the tense purchasing situation. The BMW Group RiskHub
plays a key role in making our global supply chains more resilient.
For example, it helps to identify risks at an earlier stage through
the use of artificial intelligence (AI). We see the development of
the Catena-X digital ecosystem as the key to standardised data
transfers throughout our supplier network.
Germany 32.5
The BMW Group has put additional control mechanisms in place
for suppliers in high-risk regions or high-risk product groups. Key
instruments in this respect are audits of environmental and social
standards at supplier locations using cross-industry assessment
programmes provided by the Responsible Business Alliance
(RBA) and the Responsible Supply Chain Initiative (RSCI) of the
VDA. The BMW Group reviewed a total of 95 potential and active
supplier locations using this method during the reporting year
(2022:49). The BMW Group has set itself the goal that all Tier 1
supplier sites that have been assessed meet the locally applica-
ble statutory requirements for sustainability as well as interna-
tional human rights standards (BMW Group minimum require-
ments). In 2023, 17 of the 19 closure assessments confirmed
that all cases of non-compliance with minimum requirements
(priority non-conformities) that were identified in initial ]]
114
BMW Group Report 2023 To Our Stakeholders
200
469
389
416
279
370
in € million
Spending on employee training and development¹
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
Employees and Society
BMW Group Report 2023 To Our Stakeholders
116
* The number of participants takes into account the fact that there are employees who attended
several training events within the reporting year.
2019
2020
2021
2022
2022
2021
2020
2019
5,007
4,517
4,690
4,672
The progress of our Company-wide qualification measures is
also reflected in the number of participants* which, at around 1.4
million, was significantly higher than the previous year (2022: 1
million). The number of training hours per employee also in-
creased in 2023 to an average of 23.7 hours (2022: 21.6).
▾ Further GRI information ]] Standing at a total of € 469 million, in-
vestments in training and further education for employees were
once again higher than the previous year (2022: € 416 million).
7 GRI Index: 404-1,404-2
4,801
Number
Apprentices and participants in future talent programmes
In addition to the wide range of vocational training options, the
BMW Group also offers programmes for top talents: participants
in the "ProMotion" doctoral programme go on to write their doc-
toral dissertations in cooperation with the BMW Group and thus
contribute valuable innovations to the Company. Our trainee pro-
gramme AcceleratiON4 aims to prepare future managers for the
tasks that await them in the future.
In 2023, a total of 1,200 young people started an apprenticeship
or dual study programme at BMW AG (2022: 1,200). The same
number of vocational training and study places were advertised
for the coming year. In the reporting year, the apprenticeships on
offer were expanded to include dual study programmes in Cyber
Security and Environmental Protection. BMW AG continues to of-
fer its apprentices and dual study students permanent employ-
ment at the BMW plants and headquarters after they have com-
pleted their vocational training. 7 GRI Index: 401-1
Specifically, we offer young people approximately 30 apprentice-
ships and 20 dual study programmes at 20 training locations
and 20 branches worldwide, in order to prepare them for their
future career at the BMW Group. The focus is on the future topics
of electrification, digitalisation, automation and sustainability.
The total number of apprentices, dual study students and partici-
pants in the young talent programmes² rose solidly to 5,007³
during the reporting year (2022: 4,690/+6.8%). In 2023, the
training cohort started at the new production site in Debrecen in
Hungary. The BMW Group has now established the successful
model of dual vocational training and instruction in nine countries
outside of Germany. We promote cross-location networking
through the MOVE exchange programme. Apprentices and dual
students are given the opportunity to gain practical experience
both in Germany and abroad.
The BMW Group offers a comprehensive programme with a va-
riety of entry opportunities to attract and promote young talent
and ensure the development of skills within the BMW Group. The
basis for this is the vocational training approach that has grown
over the years, the opportunities to pursue a dual study pro-
gramme and other student development programmes.]]
[[Recruiting and supporting new staff
2023
4,000
[[Attractive employment conditions
In 2023, the BMW Group accelerated the comprehensive devel-
opment of digital skills across the Company with the "Digital
Boost" training campaign. Further training measures in the re-
porting year also focused on the future-oriented fields of electrics
and electronics, data analytics, artificial intelligence, innovative
production technologies and new working methods.
Developing expertise for the future
[[The transformation shaping the automotive industry, particularly
with regard to electrification and digitalisation, is associated with
far-reaching changes. The BMW Group is adopting a forward-
looking approach to the associated challenges facing its employ-
ment structure, by systematically building up and transforming
expertise. As part of our integrative "Just Transition" approach,
we actively facilitate a socially responsible transformation of our
employees through comprehensive qualification and training
1 The BMW Group includes measures that reduce carbon emissions, such as the use of green elec-
tricity, the use of secondary raw materials, new manufacturing processes for raw materials, and
product and material innovations such as biomaterials. Accordingly, compensation measures are
not included.
[[We continue to rely on the Carbon Disclosure Project (CDP) Sup-
ply Chain Programme to assess the performance of the supply
chain in terms of its decarbonisation. This helps suppliers to de-
fine their decarbonisation targets, integrate these into their busi-
ness processes and report on the actual reductions achieved.
Their efforts are linked to a rating from which we derive measures
for supplier development and empowerment. In 2023, 282 sup-
pliers took part in the rating (84% of the production-relevant pur-
chasing volume).]]
current upward trend will reverse by 2026 at the latest thanks to
the implementation of carbon-reducing measures.
Furthermore, we continue to engage an external service provider
to carry out annual reviews relating to decarbonisation measures
in series production. In the course of 2023, the BMW Group re-
viewed compliance with contractually agreed decarbonisation
measures in the supply chain at 72 suppliers (2022: 23). As a
result, the BMW Group reduced the volume of carbon emissions
generated in the supply chain by around 1.7 million t CO₂e during
the reporting period. In 2023, carbon emissions generated in the
supply chain and via logistics on behalf of the BMW Group world-
wide averaged 13.9 t CO₂e per vehicle produced (t CO₂e)³. As ex-
pected, the gradual electrification of the fleet leads to a rise in
emissions generated in the supply chain. We assume that the
In 2023, the number of contractual agreements with suppliers
that specified decarbonisation measures rose to 707 (2022:
468), Including those specifying the use of secondary raw mate-
rials, biomaterials and carbon-reduced steel. In our view, how-
ever, the use of green electricity has the greatest impact on de-
carbonising the supply chain². Accordingly, the BMW Group
specifies its use by direct suppliers (Tier 1) and for energy-inten-
sive processes in the upstream supply chain (n-Tier) as a crite-
rion for awarding new contracts to supply carbon-intensive com-
ponents and materials. During the year under report, we con-
cluded agreements of this kind for 676 contracts (2022: 343
contracts). In addition, since mid-2021 the BMW Group has con-
cluded numerous framework agreements with suppliers regard-
ing the use of green electricity.² In 2023, the BMW Group had 72
valid green electricity framework agreements in place with its
largest suppliers (2022: 46). During the year under report, we
developed an approach to review suppliers' concepts for the use
of green electricity even prior to series production.]]
The BMW Group aims to actively promote decarbonisation in its
own supply chain and reduce carbon emissions along the entire value
chain. For this reason, one of our sourcing criteria requires that
suppliers commit to undertaking decarbonisation measures. We
specifically enable our suppliers with online training via the
BMW Group Partner Academy and additionally provide face-to-
face formats for partner workshops at the BMW Group plant in
Landshut (Germany) as well as other locations. GRI Index: 3-3
Carbon emissions in the supply chain
If necessary, the BMW Group temporarily suspends a given busi-
ness relationship during efforts to mitigate the detected risk.
However, the business relationship will only be terminated if no
other effective means are available and we are unable to further
leverage our ability to exert influence. We endeavour to avoid this
latter situation by carefully selecting our suppliers and empower-
ing and working with them to improve their sustainability perfor-
mance. No existing supplier relationships needed to be termi-
nated due to serious sustainability violations during the year un-
der report. GRI Index: 2-24, 3-3, 308-1, 414-1
Information on possible violations of the BMW Group's sustaina-
bility requirements in the supplier network can be submitted via
the BMW Group Human Rights Contact Supply Chain, among
other options. We also use the standardised RBA Voices com-
plaint mechanism as a complementary measure. Moreover,
whistle-blower systems are in place to detect and report possible
statutory violations. Our aim is to ensure that all substantiated
reports of environmental or human rights violations are rectified
by agreeing on remediation measures. Further information on
whistle-blower systems at the BMW Group can be found in the
chapter Compliance and Human Rights and on the website.
Effectiveness and complaint mechanisms
[[assessments had been redressed. In two cases, the closure as-
sessment carried out was not immediately able to confirm that
the agreed measures had been implemented. However, together
with the suppliers the BMW Group has now implemented these
measures, which will be reviewed by means of a new assess-
ment in 2024. GRI Index: 2-24, 308-2,414-2
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
Production and Supplier Network
2 In-house generation, direct purchase or Energy Attribute Certificates (e.g. guarantees of origin).
3 The procedure for determining the key figures is explained in the glossary. The methodology used
to calculate carbon emissions in the supply chain and related to logistics changed in the 2023 re-
porting year. Glossary.
115
BMW Group Report 2023
To Our Stakeholders
At 31 December 2023, the BMW Group employed a total work-
force of 154,950 people worldwide. This represents a slight in-
crease compared to the previous year (2022: 149,475/+3.7%).
Further GRI information We are, therefore, continuing to build up
employment, particularly in Development and IT, as well as in our
global production network. GRI Index: 2-7, 2-8
[[ Sustainable employment with appealing general conditions is a
cornerstone for individuals who decide to join the BMW Group.
We aim to provide a stable outlook, fostering personal growth
opportunities and empowering individuals to contribute to shap-
ing the Company's future. This forms the basis for the BMW
Group's long-term success when competing for talented profes-
sionals.]]
ATTRACTIVENESS AND
EMPLOYEE DEVELOPMENT
EMPLOYER
EMPLOYEES AND SOCIETY
Unchen
GROUP
BMW GROUP
measures.
122 Corporate Citizenship
118 Health and Performance
Development
115 Employer Attractiveness and Employee
EMPLOYEES AND SOCIETY
← = Q
Other Information
Remuneration Report
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Employees and Society
120 Diversity, Equal Opportunity and Inclusion
2 Indirect: All employees not engaged in clock-controlled work.
1 Direct: Clock-controlled and production employees.
The established "Diversity Week" was expanded in 2023 to be-
come the international "Days of Diversity" for the first time.
Throughout the year, numerous activities such as lectures,
workshops and interactive events for employees - took place at
our locations worldwide, including special events on International
Women's Day and the International Days of Cultural Diversity
and Tolerance. In the reporting year, we also implemented
measures that were adopted in 2022 as part of the revised ver-
sion of BMW AG's general operating and inclusion agreement for
employees with disabilities. Examples of this include our require-
ments for barrier-free access in the areas of Manufacture and IT.
As in previous years, BMW AG in Germany awarded contracts
amounting to around € 42.7 million (2022: € 41.1 million) in
2023 to workshops staffed by people with disabilities.]]
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Risks and Opportunities
To Our Stakeholders
BMW Group Report 2023
127
* The information provided in this section is extraneous to management reports which are not cov-
ered by PwC's audit.
Taking this into account, the Board of Management is not aware
of any circumstances that give rise to doubts regarding the ap-
propriateness and effectiveness of the systems. In particular, no
material cases of non-compliance or systemic weakness were
identified that preclude such appropriateness and effectiveness.
The design and implementation of the internal control system
and the risk management system take into account the size,
structure and complexity of the BMW Group in particular. These
systems are intended to detect, manage and mitigate significant
risks. However, despite the comprehensive analysis of risks in
general, any control and risk management system has inherent
limitations. For this reason, the occurrence of risks cannot be
ruled out in all circumstances.
The ICS (in the narrower sense), the RMS and the CMS are au-
dited independently on a risk-oriented basis by Internal Audit as
part of the "Three Lines" model, with all systems interconnected
by overarching structural elements. Internal Audit's findings are
reported to the Board of Management and the Supervisory
Board on a regular basis.
The Risk Management System (RMS) comprises the entire set of
organisational rules and measures in place to identify, assess,
manage and communicate risks, including system monitoring.
7 Risk and Opportunity Management
The BMW Group's internal control system comprises the follow-
ing: the internal control system for accounting and financial re-
porting, the internal control system for reporting selected non-
financial key figures Internal Control System (ICS in the narrower
sense), the Compliance Management System Compliance
Management System (CMS) and the Internal Audit Function (IAF).
the effectiveness and efficiency of business operations
the propriety of accounting and financial reporting
compliance with the statutory regulations relevant to the
BMW Group
ensure:
The internal control system includes all the principles, instruc-
tions and measures introduced by the Board of Management to
The BMW Group has set up an internal control system and a risk
management system in accordance with the German Corporate
Governance Code.
basis:
The BMW Group complies with recommendation A.5 of the Ger-
man Corporate Governance Code and accordingly provided its
statement in accordance with § 161 of the Stock Corporation Act
www.bmwgroup.com/ezu in December 2023 on the following
OF THE INTERNAL CONTROL SYSTEM AND
RISK MANAGEMENT SYSTEM*
APPROPRIATENESS AND EFFECTIVENESS
← = Q
← = Q
RISKS AND OPPORTUNITIES
137 Climate-Related Risks and Opportunities
Internal
Risk Management in the BMW Group
Risk Evaluation
The risk management process is applicable across the entire
Group and comprises the early identification, analysis and eval-
uation of risks, the use of appropriate risk management tools and
the monitoring and assessment of the measures taken. If no spe-
cific reference is made, risks and opportunities relate to the Au-
tomotive segment.
According to our Group-wide guidelines, all employees and man-
agers have a duty to report risks through the designated report-
ing channels. The key elements of the risk management pro-
cesses and an appropriate risk culture are embedded in the
BMW Group's core values, the Group's extensive rules and reg-
ulations on risk management and in its overall risk strategy. Fur-
thermore, the BMW Group's risk management strategy is contin-
ually being refined in order to reflect new findings and require-
ments. Training programmes and informational events are reg-
ularly conducted throughout the BMW Group, particularly within
the risk management network.
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Risks and Opportunities
BMW Group Report 2023 To Our Stakeholders
128
Other functions such as Group Compliance and the Internal Con-
trol System (ICS) form key interfaces to the risk management
system. In its capacity as an independent control body, Corporate
Audit reviews the RMS established by the Board of Management
on an annual basis.
Risk management is organised as a decentralised, Group-wide
network and steered by a centralised risk management function.
The various BMW Group divisions are represented by Network
Representatives. We draw on the expertise of climate experts in
order to evaluate climate-related risks and opportunities. The re-
sponsibilities and tasks of the centralised risk management func-
tion, Network Representatives and climate experts are docu-
mented and accepted. All material risks are firstly presented for
review to the Risk Management Steering Committee, which is
chaired by Group Controlling. Any material risks are then re-
ported to both the Board of Management and the Supervisory
Board's Audit Committee.
Organisation of risk management
Risks and opportunities (including risks to reputation and cli-
mate-related risks) are considered for the current and subse-
quent financial year. Material Short-Term Risks and Opportunities In
addition, medium-term and long-term risks and opportunities
are also presented in connection with climate change. Climate-
Related Risks and Opportunities
The aim of our risk management system (RMS) is to identify,
measure and actively manage risks, both individual and cumula-
tive, that could pose a threat to the success of the business.
The foundation of BMW Group's business success lies in effec-
tively managing risks and making use of any opportunities. This
is based on an effective risk and opportunity management strat-
egy, which puts us in a position to be able to react quickly and
flexibly to changes in political, economic, environmental, social,
technical or legal conditions. The general risk situation is regu-
larly evaluated as part of this.
RISK AND OPPORTUNITY
MANAGEMENT
RISKS AND OPPORTUNITIES
141 Summary and Outlook
127 Risk and Opportunity Management
130 Material Short-Term Risks and
Opportunities
Control
System
Other Information
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Appropriateness and Effectiveness of the Internal Control System and Risk Management System
Between 15 and 20
20.2
%
Between 8 and 10
9.8
%
2,554,183
Slight increase
20.8
%
Slight increase
Slight decrease
17,096
154,950
€ million
2024
Outlook
2023
Reported
FINANCIAL SERVICES SEGMENT
Return on equity (ROE)
Return on capital employed (ROCE)
Deliveries
EBIT margin
MOTORCYCLES SEGMENT
CO2 emissions BMW Group locations per vehicle produced³
units
Remuneration Report
%
g/km
To Our Stakeholders
BMW Group Report 2023
126
3 Efficiency ratio calculated on the basis of Scope 1 and Scope 2 carbon emissions (i.e. a market-based method according to GHG Protocol Scope 2 guidance; mainly based on the use of emissions factors
for electricity, district heating and fuels of the VDA, each in the most current valid version: 12/2023) and occasionally using local emissions factors; excluding climate-changing gases other than carbon
dioxide from vehicle production (BMW Group manufacturing sites and Motorrad, but excluding partner plants and contract manufacturers), as well as BMW Group non-manufacturing sites (e.g. research
centres, sales centres, offices) divided by the number of vehicles produced (BMW Group manufacturing sites and partner plants, but excluding contract manufacturers).
1 EU-27 countries including Norway and Iceland; with effect from 2021, values are calculated on a converted basis in line with WLTP (Worldwide Harmonised Light Vehicles Test Procedure).
2 Including an allowance for eco-innovations (amounts of minor significance).
Between 14 and 17
17.2
%
Slight increase
209,066
units
Between 8 and 10
Between 21 and 26
22.1
%
8.1
%
Slight reduction
Moderate reduction
Slight increase
Significant increase
0.28
tons
102.1
14.7
Risk
Management
System
Reporting/
Monitoring
Appropriateness
High
Immaterial
Immaterial
Immaterial
to prior year
Classification
Opportunities
Change compared
Change compared
to prior year
Risks
High
High
High
of the risk level
Classification
Sales network
Purchasing
Risks and opportunities relating to operations
Production and technology
BMW Group Report 2023
Strategic and sector-specific risks and opportunities
Changes in legislation and regulatory requirements
Market developments
Macroeconomic risks and opportunities
The following overview provides a summary of the material
short-term risks and opportunities:
Immaterial
In addition, unforeseen events could affect business operations
and hence the BMW Group's results of operations, financial po-
sition and net assets as well as its reputation.
High
Low
Medium
Material
Immaterial
Medium
Medium
Low
Material
Material
Decreased
Medium
Increased
High
Legal risks
Pension obligations
Other financial risks
Liquidity
Raw materials
Foreign currencies
Immaterial
High
Information security, data protection and IT
Financial risks and opportunities
Immaterial
Immaterial
The following sections illustrate potential future developments or
events that could result in a negative (risk) or a positive (oppor-
tunity) deviation from the outlook for 2024 and 2025 and indi-
cate their significance to the BMW Group.
On balance, neither the Board of Management nor the Supervi-
sory Board see any threat to the BMW Group's status as a going
concern at the balance sheet date or at the date on which the
Group Financial Statements were drawn up. As in the previous
year, the current set of risks to the BMW Group are considered to
be manageable. All risks and opportunities that are expected to
materialise have already been addressed in the Outlook Report
as well as in the long-term corporate planning and are accord-
ingly not included in the risk and opportunity assessment below.
Liquidity requirements are currently covered by existing liquidity
as well as the various financing instruments available.
Consistently high inflation with high interest rates and lower real
incomes along with a corresponding widespread drop in demand
may have a negative impact on sales volumes and result in un-
favourable price and product mix effects. A prolonged war be-
tween Russia and Ukraine as well as further escalation of the
conflict in the Middle East could also significantly strain the global
economy. The present fragility of the Chinese economy poses an
extra risk to sales.
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
Risks and Opportunities
To Our Stakeholders
BMW Group Report 2023
129
Internal and external audit
Supervisory
Board
Risk
Management
Performance
Management
Steering
Committee
Board of
Management
Risks relating to the current and subsequent financial year are
shown in the section Material Short-Term Risks and Opportunities.
These risks are evaluated using value-at-risk models and as-
sessed on the basis of uniform loss distribution metrics, thereby
enabling better comparability of risks for both internal and exter-
nal reporting purposes. Risks are evaluated net of any effective
risk mitigation measures (net basis).
Short-term risks
Effectiveness
Compliance
Management
System
The BMW Group uses standardised, suitable methods for meas-
uring all short-term risks, reputational risks and medium to long-
term climate-related risks.
Measures
Analysis
and
Evaluation
Identification
Other Information
← = Q
Risks are classified according to the risk amount (average earn-
ings impact, taking into account the probability of occurrence).
The earnings impact may be significantly higher if the risk actu-
ally materialises (worst-case scenario, confidence level: 99%).
The impact of risks and opportunities is presented separately
without offsetting against each other.
The overall risk situation for the BMW Group deteriorated mod-
erately year-on-year.
MATERIAL SHORT-TERM
RISKS AND OPPORTUNITIES
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Risks and Opportunities
BMW Group Report 2023 To Our Stakeholders
130
Climate-related opportunities are identified progressively as part
of the strategy development process and described in the section
* Climate-Related Risks and Opportunities.
Share of all-electric vehicles in deliveries
CO2 emissions EU new vehicle fleet 1,2
The importance of short-term opportunities for the BMW Group
is classified on a qualitative basis in the categories “material” and
"immaterial". Probable measures aimed at increasing profitabil-
ity are already incorporated in the outlook.
Identifying opportunities is an integral part of the BMW Group's
strategic planning process. The Group's range of products and
services is continually reviewed on the basis of these analyses.
Opportunity management
In accordance with § 289c of the German Commercial Code
(HGB), risks that could have an impact on the non-financial as-
pects referred to in the relevant legislation are reviewed as part
of the reporting process. Material risks in this context are defined
as those stemming from business activities, business relation-
ships and products and services provided by the BMW Group
that are highly likely to have a seriously adverse impact. No ma-
terial non-financial risks were identified during the reporting year.
Alongside the maintenance of a comprehensive system of risk
management, sustainability constitutes a core strategic principle
of the BMW Group. Risks resulting from sustainability issues are
generally identified via the Group-wide risk management
network.
Non-financial risks as reported in the non-financial
statement (NFS)
Risks associated with climate change are presented in the sec-
tion Climate-Related Risks and Opportunities. Climate-related risks are
evaluated as physical and transitory risks in accordance with the
recommendations of the Task Force on Climate-related Finan-
cial Disclosures (TCFD). Transitory risks arise from the transition
to a low-carbon economy and are evaluated with the help of cli-
mate-related risk drivers and qualitative expert assessments.
Physical risks arise due to climate change and are evaluated us-
ing external data on potential natural hazards. Potential short-
term impacts of climate change are already included in the short-
term risks. All short-term risks are evaluated for their climate im-
pact. If a risk is categorised as climate-relevant, the climate-re-
lated portion of the risk is determined. The potential development
of climate-related risks is evaluated for two reporting periods
(medium-term until 2035 and long-term until 2050) and for
three global warming scenarios.
Climate-related risks
Quite apart from the financial consequences, risks can also have
an impact on the BMW Group's reputation. For these purposes,
the BMW Group assesses all material risks with regard to their
impact on its reputation using a scoring model. Moreover, other
overarching topics are monitored by means of regular media
analysis. Any material reputational repercussions are described
in the section Material Short-Term Risks and Opportunities.
Reputational risks
Group-wide effects and trends can be identified by aggregating
all material short-term risks at Group level. For this purpose, the
potential earnings impact of the risks is aggregated, taking cor-
relation effects into account. In order to assess the risk-bearing
capacity of the BMW Group, the aggregated amount of risks is
compared with the risk cover amount (the equity of the
BMW Group recognised for accounting purposes). A limit system
for various risks helps monitor the risk-bearing capacity.
The continuous monitoring of key business processes and strict
cost controls are also essential factors for ensuring high levels of
profitability and returns on capital employed.
Return on capital employed (ROCE)
Deliveries
121
The currencies of emerging countries such as India and Brazil
may benefit from the monetary policies of the EU and USA sta-
bilising in 2024. No further devaluations against the euro and US
dollar are therefore expected at present.
6.5
6.5
6.6
in %
[[Share of employees with severe disabilities at BMW AG¹
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Employees and Society
To Our Stakeholders
Low inflation in China could lead to a more expansionary mone-
tary policy on the part of the central bank of China, potentially
resulting in a depreciation of the renminbi against the euro.
International automobile markets
The generally stable macroeconomic conditions should allow for
slight growth on international automobile markets in 2024
(+3.9%). Growth is expected to be spread across many mar-
kets, particularly the US and China. A higher global supply of new
vehicles is, however, expected to give rise to increasing price
competition, which will also have an effect on prices for pre-
owned vehicles.
International motorcycle markets
The BMW Group expects the world's motorcycle markets in the
500 cc plus class to remain in line with the previous year overall
in 2024. In Europe, market growth is also expected to be in line
with last year's level, with a slight decrease forecast in the USA.
Economic expectations will influence the motorcycle market in
China, while the motorcycle market in Brazil is expected to re-
main in a stable condition in 2024, as in the previous year.
124
6.2
BMW Group Report 2023 To Our Stakeholders Combined Management Report
6.0
2019
16.215.9
15.515.7
17.5
18.7
18.2
in %
Share of women in management positions and in the
total workforce (BMW AG)²
The BMW Group has set targets for the percentage share of
women at all levels of the Company. By 2025, we aim to increase
the share of women in the BMW Group workforce as a whole to
between 20 and 22% and to between 17 to 19% for BMW AG.
We aim to boost the share of women holding management posi-
tions in the BMW Group to 22% by 2025, and to 20% for
BMW AG.
The BMW Group is working continuously to increase the share of
women in the workforce as a whole, and in management func-
tions, in particular. This remains a challenging task in that it is still
the case that more men go through the process of vocational
training, particularly in technical fields, and are, therefore, in the
majority on the labour market.
Increasing the share of women
[[Our employees play a key role in ensuring that diversity, equal
opportunity and inclusion are actively practised. To this end,
many are involved and networked via internal networks. These
include family and women's networks at numerous locations,
and the BMW Group PRIDE association. This association advo-
cates for the interests of the LGBTIQ+ community across coun-
tries. The spirit of cooperation and dialogue with the internal net-
works provides the BMW Group with important impetus and sup-
port for the further development of its commitment.]]
Concepts to promote diversity, equal opportunity and inclusion
have also been developed by the BMW Group in relation to the
composition of the Board of Management and Supervisory
Board. Information on the stipulated diversity criteria and their
implementation is provided in the Corporate Governance Statement.
7 GRI Index: 3-3, 405-1]]
[[The BMW Group is also aware of the need to achieve a high per-
centage of women in our future talents programmes. By doing
so, we aim to ensure that the share of women in the total work-
force and in management positions continues to rise in the fu-
ture. The proportion remained high in the trainee programme Ac-
celeratiON in 2023 at 41% (2022: 45%). The same applied to
the student support programmes (Fastlane, SpeedUp), with a
proportion of around 28% (2022: 31%). For our regular voca-
tional training and instructions, the share of women at BMW AG
in 2023 was 21.9%, and 22.1% in the BMW Group6.
The share of women in the BMW Group workforce as a whole
reached 19.2% (2022: 18.6%). For BMW AG, the share was
17.1% (2022: 16.5%). The share of women in management
positions within the BMW Group has been rising steadily for
many years. Globally, the share of female managers in the
BMW Group stood at 20.8% at the end of the reporting year
(2022: 20.2%). In the last ten years, the number of women in
management positions in BMW AG has almost doubled. When
expressed as a percentage, the share of female managers at
BMW AG was 18.7% at the end of 2023 (2022: 18.2%).
7 Further GRI Information
2023
2021
2020
4.0
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Combined Management Report
Outlook
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
The stable demand situation can also be seen in the Motorcycles
segment, where deliveries are predicted to increase slightly
owing to the full availability of models, including the BMW R
1300 GS. The EBIT margin is expected to be between 8% and
10% and the segment RoCE between 21% and 26%.
The RoE in the Financial Services segment is predicted to finish
between 14% and 17%. As expected, the supply of and demand
for pre-owned vehicles is continuing to stabilise. It is therefore to
be expected that revenues from remarketing lease returns will fall
further as compared to 2023.
Group profit before tax will decrease slightly. As the BMW Group
continues to take a leading role among its competitors in the dig-
italisation and electrification of the vehicle fleet and intends to
strengthen this position, expenses associated with future pro-
jects will remain high in the Automotive segment in 2024. The
production network will also be expanded in 2024 in connection
with the NEUE KLASSE. The decrease in the financial services
business will also contribute to the fall in Group profit before tax.
The aforementioned targets are to be met with a slight growth in
the size of the workforce. Likewise, the share of women in man-
agement positions in the BMW Group is expected to increase
slightly.
The BMW Group's actual business performance may also devi-
ate from current expectations due to the risks and opportunities
discussed below in the Risks and Opportunities section.
BMW Group key performance indicators
GROUP
Profit before tax
Workforce at year-end
Share of women in management positions in the BMW Group
AUTOMOTIVE SEGMENT
EBIT margin
BMW Group Report 2023 To Our Stakeholders
125
A moderate reduction is expected in carbon emissions from
BMW Group plants per vehicle produced (Scope 1 and 2) due to
increased production volumes and BMW making greater use of
green energy.
The BMW Group expects to achieve its target of slightly reducing
the carbon emissions generated by its EU new vehicle fleet by
further improving the overall fuel consumption of its products and
deploying an increasing number of vehicles with electric
drivetrain systems. It is therefore expected that we will continue
to remain significantly under the legal limits.
Other Information
Outlook
← = Q
Expected consequences for the BMW Group
Future developments on international automobile markets have
a direct impact on the BMW Group. A challenging competitive en-
vironment and macroeconomic and geopolitical developments
could all have a significant impact on business performance. The
close cooperation between our sales network and our production
network and our flexible vehicle architecture allow us to respond
to even unforeseeable developments effectively. 7 Risks and
Opportunities
Assumptions used in the outlook
The outlook contains forward-looking statements based on the
BMW Group's expectations and assessments and may be influ-
enced by unforeseeable events. As a result, actual outcomes can
deviate either positively or negatively from the expectations de-
scribed below due to changes in the political and economic envi-
ronment as well as other factors.
The following outlook covers a forecast period of one year and is
based on the composition of the BMW Group during that time.
The outlook takes account of all information available at the time
of reporting that could have an impact on the BMW Group's
performance.
16.0
The expectations contained in the outlook are based on the
BMW Group's forecast for 2024 and reflect its status at the time
of preparation of the Group Financial Statements. The basis for
the preparation of and the principal assumptions used in the
forecasts which consider the consensual opinions of leading
organisations, such as economic research institutes and banks -
are set out below. The BMW Group's outlook takes account of
these assumptions.
It is expected that a fall in inflation and stabilised interest rates in
many countries will allow for a slight increase in demand in 2024.
The number of vehicle deliveries is set to increase slightly against
this backdrop and in light of the full availability of new models
such as the BMW 7 Series and the BMW 5 Series, model
launches such as the BMW X2 and BMW X3, and the renewal of
the MINI product range. Pricing across the product portfolio is ex-
pected to remain at prior year's level.
The BMW Group anticipates an improved situation on the com-
modity markets in 2024 in light of the downward price trend for
precious metals and battery materials in the second half of 2023.
The continued rise in all-electric and electrified vehicle numbers
does, however, mean that expenditure will remain at a high level.
Higher costs for employees are expected in 2024, along with
higher costs from the supply chain, owing to high inflation in pre-
vious years.
In addition, the continued implementation of the electrification
and digitalisation strategy will lead to greater research and de-
velopment costs in 2024. Expenditure related to the NEUE
KLASSE, such as the further development of the sixth generation
of battery technology and manufacturing preparations in the pro-
duction network, will also impact the Group's earnings and result
in greater capital expenditure.
The situation in the Middle East became increasingly volatile at
the end of 2023. The conflict between Israel and Palestine is not
having a significant effect on the BMW Group's business at pre-
sent as the Group does not operate directly in that region. How-
ever, it must be assumed that the threat posed in the Red Sea by
the Houthi militia will cause some logistical challenges in 2024.
Our outlook does not account for any further escalation of the sit-
uation. The BMW Group is monitoring developments.
The war in Ukraine and its potential implications for the
BMW Group's course of business are also being closely moni-
tored. All applicable restrictions resulting from sanctions have
been factored into the outlook.
In view of the growing unpredictability of political developments,
actual macroeconomic and geopolitical developments in some
regions may deviate from expected trends and outcomes. Poten-
tial sources of political uncertainty include policies affecting trade
and customs tariffs, security developments and a possible wors-
ening of international trade conflicts.
Outlook for the BMW Group - key performance indicators
Deliveries of BMW, MINI and Rolls-Royce brand vehicles in the
Automotive segment are expected to rise slightly year-on-year
due to a slight increase in demand, full availability of new models
and model launches. In this context, the share of all-electric ve-
hicles relative to total deliveries is expected to increase signifi-
cantly compared to 2023.
An EBIT margin of between 8 and 10% is forecast for the Auto-
motive segment in 2024. The RoCE for the Automotive segment
is also being affected by the increasing investment in electrifica-
tion and digitalisation, and expected to be between 15 and 20%.
-
16.5
2022
Share of women in management positions and in the
total workforce (BMW Group)²
Currencies of particular importance for the international opera-
tions of the BMW Group are the Chinese renminbi, the British
pound, the US dollar, the Japanese yen and the South Korean
won.
It is expected that inflation in the US and in Europe will continue
to fall, and the BMW Group therefore does not expect any further
interest rate hikes from central banks. Accordingly, the US dollar
is expected to move sideways against the euro in 2024, with the
pound/euro exchange rate also expected to remain stable.
17.1
Valuing and supporting employee commitment
The BMW Group promotes and encourages employees to sup-
port social issues around the world in various ways through its
SOCIAL DRIVE initiative. The first pillar is the annual BMW Group
AWARD for social commitment, which has recognised the out-
standing commitment of individual employees for 12 years. Of
the ten finalists in 2023, four emerged as winners - one of whom
also won the special Doppelfeld Foundation prize. The prize
money of € 10,000 each will be used to fund the relevant charity
projects. The second pillar is the SOCIAL DRIVE IT platform,
which informs employees about specific support needs. The
platform launched in Germany in 2022 and is currently being
rolled out internationally. With our employees' help, we can also
provide more comprehensive support for existing projects, for ex-
ample through volunteer work and monetary donations. The
third pillar is the SOCIAL DRIVE DAYS, which are intended to
strengthen our employees' interest in social commitment.
The BMW Group supports numerous sports and cultural activi-
ties worldwide. For example, the "Opera for All" initiative pro-
vides free access to opera and classical music in Munich, Berlin,
Melbourne and London. In the context of our sports sponsor-
ships, we also contribute, for example, through the scholarship
programme of the Evans Scholars Foundation in conjunction with
the BMW Championships golf tournament.
Culture and Sports for a united world
The BMW Group has been supporting educational projects at its
locations worldwide for many years. With BRIDGE. We are taking the
next step with Educating young people for tomorrow, today - a global and
long-term collaboration with UNICEF that started in 2023. The
collaboration aims to qualify young people in Brazil, China, India,
Mexico and South Africa for careers in the mathematical and
technical fields, while also collecting donations for the education
of children and adolescents in crisis areas within existing plat-
forms, and with the involvement of international subsidiaries and
stakeholders. The BMW Group is thereby making a long-term
contribution to UNICEF's goal of reaching more than ten million
children and adolescents through education. By undertaking this
commitment, we are simultaneously implementing our corporate
citizenship strategy at the local level, for example, through men-
toring and internship opportunities directly at our locations.
Education for future generations
the BMW Foundation Herbert Quandt expands our network with more
than 2,300 Responsible Leaders from over 100 countries on all
continents. As an important partner, the independent corporate
foundation contributes with its activities to the perception of so-
cial responsibility at the BMW Group.
To support young talent, the BMW Group awards full-time schol-
arships for the Global Online Master in Business Administration
(MBA) at the European School of Management and Technology (ESMT)
Berlin as part of the BMW Group Change Maker Fellowships. In addition,
Responsible Leadership for sustainable development
The BMW Group wants to support and bring together people
who are committed to societal needs. The annual One Young
World Summit represents an international networking oppor-
tunity. The BMW Group has been sending a delegation of young
managers to the global forum for sustainable development since
2016, including in 2023. Selected IIH organisations also had the
opportunity to take part in the international event.
We also contribute, for example, by supporting the 7 JOBLINGE
programme. The initiative helps people with a difficult start in life
to begin their professional lives.
The BMW Group is a partner of the Intercultural Innovation Hub (IIH).
This platform has emerged from our long-standing partnership
with the UN Alliance of Civilizations and supports selected organ-
isations around the world that are engaged in concrete projects
promoting intercultural dialogue, peace and diversity, among
other initiatives. For this purpose, they receive support for over a
year in the form of expertise, networking opportunities and finan-
cial resources. The currently funded projects were honoured at an
event in Berlin in May 2023.
Inclusion for equal opportunities
[[As part of its social commitment, the BMW Group is committed
to environmental, economic and social issues outside its core
business. As such, we not only live up to our own aspirations but
also the expectations of society and our stakeholders worldwide.
The BMW Group aims to act in a targeted, long-term and effec-
tive manner. We also provide quick and unbureaucratic assis-
tance in the event of a crisis. We have defined four key topics that
are reflected in our projects on the basis of our core business and
skill sets:
CORPORATE CITIZENSHIP
Currency markets and international interest rate
environment
The Japanese economy is expected to see slower growth in
2024 than in the previous year (+0.8%).
Growth is expected to reach 4.6% in China, where continued up-
heaval in the real estate sector and the resulting drop in con-
sumer confidence are dampening expectations.
The growth rate in the USA is expected to slow to 1.8% in 2024.
Higher interest rates are burdening companies and private
households in that country as well, while continually low unem-
ployment levels are supporting the economy.
Corporate citizenship with impact
The BMW Group's expenditure within the strategic focus areas
in 2023 totalled € 44.2 million (2022: € 38.7 million). This in-
cludes donations for those affected by earthquakes in Turkey,
Syria and China, as well as fires in Hawaii and the floods in Italy.
Beyond financial support, the BMW Group also provides assis-
tance in the form of knowledge transfer, networking opportuni-
ties, projects to promote public infrastructure, and the engage-
ment of its own workforce. We also generate additional societal
impact through memberships in associations and institutions,
the provision of vehicles, including for vocational schools, and
participation in projects aimed at promoting more sustainable
mobility in cities. Shaping the future of mobility In doing so, we aim
to contribute as corporate citizens and play our part in address-
ing major future questions and challenges.]]
123
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Outlook
Group Financial Statements Responsibility Statement and Auditor's Report
← = Q
Remuneration Report
← = Q
OUTLOOK
The outlook and Risks and opportunities of the BMW Group pre-
sented in this report reflect the expected development in 2024
from the perspective of Group management. In line with the
Group's performance management, the outlook covers a period
of one year. Short-term risks and opportunities are managed on
the basis of a two-year assessment period. In addition, we report
on medium- and long-term risks and opportunities arising in con-
nection with climate change.
The continuous forecasting process applied within the
BMW Group ensures that it is constantly ready to take advantage
of opportunities as they arise, but also to react appropriately to
any unexpected risks. The principal Risks and Opportunities are de-
scribed in detail in the section of the same name and concern all
performance indicators. Actual outcomes may, however, deviate
from the outlook due to unexpected events.
Economic outlook
The International Monetary Fund anticipates global growth of
3.1% in 2024. Geopolitical conflicts and the effects of tighter
monetary policy in many countries will be the greatest burdens
on the global economy in 2024. Higher interest rates are affect-
ing consumer spending and investment, with a corresponding ef-
fect on the economy. Further information on political and global
economic risks is also available in the Risks and Opportunities sec-
tion.
Forecasts for the eurozone as a whole indicate slight growth
(+0.6%). France (+0.7%), Italy (+0.5%) and Spain (+1.6%) are
expected to meet or outstrip the average for the eurozone. Ger-
many is expected to record at least a slight increase in economic
output in 2024 (+0.3%), although the continued modest growth
in the global economy is dampening the country's export econ-
omy.
A slight uptick in economic output (+0.4%) is forecast for the UK,
where higher interest rates and continued higher inflation are
slowing growth.
Other Information
Other Information
It is possible that Japan's highly expansionary monetary policy
may come to an end in 2024. If it does, the yen would appreciate
somewhat against the euro compared to its current very low
level.
Responsibility Statement and Auditor's Report
2023
2022
2021
2020
2019
0
0
19.2
18.6
20.8
20.2
18.819.7
17.8
Remuneration Report
19.5
19.3
in %
2019
2020
17.2
2022
2021
Group Financial Statements
Combined Management Report
Employees and Society
BMW Group Report 2023
122
6 Excluding sales companies.
training and instruction (MINT areas) was reported.
5 Up to and including the reporting year 2022, only the proportion of women in technical vocational
"The trainee programme was launched in April 2023 under its new name "AcceleratiON".
To Our Stakeholders
2 For a definition of the term management positions, please refer to the Glossary.
1 The share of employees with severe disabilities is based on the statutory requirements in accord-
ance with the German Social Code (SGB IX).
in the total workforce
in management functions
in the total workforce
in management functions
3 For a definition of the term employee, please refer to the Glossary.
2023
In the trade war between the US and China, the focus is currently
shifting from simple tariff increases to further import and export
restrictions on specific technologies. This could also lead to less
favourable import and export conditions for the BMW Group.
With the recent anti-dumping and anti-subsidy probe launched
against China (the EU is examining, among other things, whether
subsidies for electric vehicles produced in China lead to distorted
competition), the EU is also considering imposing punitive tariffs
on the People's Republic, which in turn increases the risk of a
trade war between the two parties. An escalation of the conflict
Further escalation of the conflict in the Middle East could nega-
tively impact the price of oil, which in turn could lead to rising in-
flation rates.
With regard to the war in Ukraine, there is a risk of a further es-
calation of the conflict and therefore of further sanctions imposed
by Western countries on Russia as well as possible counter-
sanctions and/or retaliatory measures by Russia. Withdrawal of
US support for Ukraine could have major ramifications for the
course of the war.
Economic conditions have an impact on business performance
and hence on the level of earnings generated by the BMW Group.
Unforeseen disruptions in global economic relations can have
highly unpredictable effects. The level of risk continues to be
classified as high.
Macroeconomic risks and opportunities
Due to the particular features of the business model, material
risks and opportunities relating to the Financial Services seg-
ment are presented separately in the section 7 Risk management
system in the Financial Services segment.
Class
Risk amount
€ 0-200 million
Medium
High
The following ranges apply for the purpose of classifying the risk
amount for material short-term risks:
← = Q
could have negative consequences for trade between Europe
and China, resulting in both sales risks and risks in the supply
chain.
Remuneration Report
Other Information
> € 200-1,000 million
> € 1,000 million
Another risk is of recession in Europe and the United States. In
both regions, interest rates were raised considerably in order to
curb inflation. Inflation rates have significantly decreased by this
point and the majority of economies have continued to grow de-
spite the interest rate hikes - labour markets have shown partic-
ular resilience. However, monetary policy measures such as in-
terest rate hikes often take effect with some delay and could
therefore slow down the economy in 2024, posing a risk to sales.
The present fragility of the Chinese economy also represents a
risk to sales. If the situation in the real estate sector were to de-
teriorate further, the potential impacts on the economy would be
significantly felt.
The sales markets of the BMW Group are constantly monitored
in order to minimise risks, meet customer requirements and, at
At the moment, macroeconomic opportunities that could influ-
ence the earnings situation of the BMW Group positively in the
long term are rather unlikely to materialise. If significantly more
positive economic development were to occur in a market due to
stronger fiscal or monetary policy measures, this could certainly
have a positive impact.
Group Financial Statements Responsibility Statement and Auditor's Report
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
Risks and Opportunities
To Our Stakeholders
BMW Group Report 2023
132
The constant change in consumer preferences or an altered
brand perception pose both risks and opportunities. For instance,
the BMW Group could be confronted with short-term disruptions
in both supply and demand during the transition from conven-
tionally powered vehicles to alternative drive systems. The likeli-
hood of market risks occurring may be categorised as high.
Market developments
Changes in trade policies could also have a positive impact on
the BMW Group's earnings in the short to medium term. Any re-
duction in tariff barriers, import restrictions or direct excise duties
could result in lower manufacturing costs or enable products and
services to be offered to customers at more attractive prices. Op-
portunities potentially arising from changes in legislation and
regulations are classified as immaterial.
The legally required fleet-wide carbon emissions target in the EU
has been reduced to 0 g/km for 2035, thus requiring complete
electrification of the passenger car new vehicle fleet by 2035.
Moreover, the European Commission is working on a proposal to
determine if and how vehicles powered exclusively by e-fuels can
be recognised as zero-emission vehicles. In 2026, a review will
take place during which the necessary framework conditions to
achieve the zero emissions target in 2035 will be analysed. Risks
can arise from the availability of renewable energies, inadequate
private and public charging infrastructure as well as limited ac-
cess to resources for the construction of electric drives. A discus-
sion of consumption values and carbon emissions may have an
impact on the Company's reputation.
The BMW Group is seeing increasingly stringent vehicle emis-
sions regulations for conventional drive systems. In December
2023, a political deal was reached in the EU on the Euro 7 reg-
ulation. Risks may arise from the details of the regulation still to
be finalised by the European Commission. In addition to pollutant
emissions, brake particle emissions, tyre abrasion and high-volt-
age battery durability (BEV, PHEV) are also being regulated for
the first time. Following the implementation of Euro 7, additional
targeted tightening measures are anticipated around 2030.
Country- and sector-specific trade barriers can also be subject to
change at short notice. Any tightening up of regulations could ne-
cessitate significantly increased investments and costs, influence
customer behaviour, and lead to interruptions in supply. The risk
is categorised as high.
Strategic and sector-specific risks and opportunities
Changes in legislation and regulatory requirements
The introduction of more stringent legislation and regulations,
particularly regarding emissions, safety and consumer protection
as well as regional vehicle-related purchase and usage taxes,
poses a significant risk for the automobile industry.
To mitigate the effects, sales markets are being monitored on an
ongoing basis, and individual measures are being defined by
standardised processes and committees.
Combined Management Report
Risks and Opportunities
Responsibility Statement and Auditor's Report
BMW Group Report 2023
-
Due to the convincing sustainability performance of its offered products and the acceleration towards a circular economy, the BMW Group may experience advantages arising from higher
customer demand.
Differentiation through the consistent reduction of carbon emissions in the vehicle portfolio by means of the electrification and highly efficient combustion engines can further increase the
BMW Group's market share.
Leveraging BMW tools and other offers to manage carbon emission reduction efforts among Tier 1 suppliers has the potential to be a distinguishing feature for both investors and customers,
raising brand reputation in the process.
Further diversification of the investor base by proactively managing the risks posed by climate change.
An excellent ESG rating for the BMW Group could further enhance the Group's appeal to investors.
An above-average performance compared to industry benchmarks in terms of ESG indicators could lead to heightened appeal to investors.
Improvements in the tax environment and incentives for customers, along with investment grants and easements for climate protection measures in production may
accelerate progress in terms of reducing carbon emissions.
Significantly higher investments in charging infrastructure and in the generation and distribution of hydrogen may give the demand for low-emission vehicles a significant boost
and make it easier to replace the fossil source in production.
- Eligibility to participate in global government initiatives and grants which facilitate the continued acceleration of climate change adaptation efforts (Scope 1 and 2), encompassing tax
reforms, green and digital stimulus packages as well as research and development incentives.
Implementing early-stage adjustments to the supply chain to address climate change enhances its long-term resilience, thereby ensuring business continuity.
Subsidy programmes for alternative drivetrain technologies are helping to increase sales.
Together with its suppliers, the BMW Group helps to reduce carbon emissions along the value chain and to work towards implementing decarbonisation measures. By taking action at an
early stage, the BMW Group will be prepared and also will benefit from a business perspective.
Thanks to its focus on sustainability, the BMW Group can make a valuable social contribution to the prevention of global warming.
← = Q
- With its flexible vehicle architectures and production systems, opportunities arise for the BMW Group in terms of its ability to respond quickly and flexibly to fluctuating customer demand
as well as regulatory and infrastructural differences in its markets.
To Our Stakeholders
Mitigation measures (Scope 1 and 2) can help to reduce energy consumption and operating costs.
By expanding the portfolio of electrified products and developing and producing our own electric drivetrains, batteries and battery cell prototypes, we will be able to safeguard know-how and
system expertise early on. This may result in competitive advantages.
131
Remuneration Report
In the Financial Services segment, the risk of default is factored
into the interest rate when concluding an agreement. Further-
more, the credit portfolio is evaluated on an ongoing basis with
the aim of determining if any impairment allowances need to be
made for financial receivables. This evaluation is based on sta-
tistical methods and takes into account the following aspects,
among others: the creditworthiness of the customer, the cus-
tomer's payment history and the economic context in the cus-
tomer's region. The amount allocated to credit risks remains cat-
egorised as medium.
Other Information
← = Q
[[Climate-related opportunities
The BMW Group also sees economic opportunities on the 1.5°C
trajectory arising from adjustments to products, production pro-
cesses and the value chain required to reach this goal. The op-
portunities identified are also distributed across the five dimen-
sions.]]
[[DIMENSION
Technology
Market and competition
Capital and financial market
Politics, legal affairs and regulatory framework
Society
Transitory opportunities
-
By embracing the circular economy, the BMW Group is contributing towards achieving its decarbonisation target within the supply chain and reducing its dependence on primary materials,
also in terms of their availability, costs and ESG risks.
the same time, capitalise on opportunities in terms of sales
growth and pricing. Opportunities arising as a result are classified
as immaterial.
Low
All BMW Group plants have implemented measures for risk
avoidance and reduction. These include, for example, predictive
maintenance. The risk of production downtime due to parts sup-
ply is reduced via measures related to logistics, purchasing and
the use of the production network.
BMW Group:
[[RISK DIMENSION
Technology
Market and competition
Capital and financial market
Politics, legal affairs and regulatory framework
Society
Transitory climate risks
-
-
Innovations in sustainable technologies are fostered, accelerating the prevalence of electromobility. For the BMW Group, this may have a negative impact on deliveries
and the residual value of existing products. In the areas of Production and Purchasing, remanence costs and impairment risks may result from changing processes and equipment.
The digital connectivity between companies and products to support decarbonisation is increasing in order to streamline processes and better manage emissions. Risks for the BMW Group
result from the time delay until such technologies can be used if, for example, some areas of the supply chain cannot provide the relevant
standards and interfaces quickly enough.
The following table illustrates the transitory climate risks for the
Significant technological innovations may make product and production technologies, which are in use or in the pipeline today (from energy storage to recycling), as well as investments in
these innovations, obsolete or challenge their efficiency. In terms of infrastructure (such as new fuel options, charging technologies for electric vehicles),
Due to a global focus on sustainable products, energy prices and commodities costs are rising. This has a direct impact on manufacturing costs for the BMW Group and
may go on to affect deliveries. Furthermore, credit and residual value risks in the Financial Services segment may also be impacted.
Existing and new competitors are accelerating the production of electrified vehicles. If products and business models are perceived as being more attractive by customers,
this may have the corresponding impact on deliveries by the BMW Group.
Any serious failure to comply with sustainability or quality standards and providing incorrect information accordingly, could cause disruptions in the supply chain or a shortfall of individual
suppliers to deliver.
A good ranking in the ESG ratings has a positive effect on the perception of a company on the capital market and has a favourable effect on investment decisions. Investment and
financing decisions by investors or lenders depend on a good ESG rating. Short-term and unforeseeable regulatory changes may reduce the appeal of a company on the capital market and
increase refinancing costs if it is not possible to react to the changes in the regulatory framework in time.
This may impact the credit rating and refinancing costs of the BMW Group.
The short-notice termination of government subsidies to promote low-carbon mobility may reduce the demand for electrified vehicles.
Uneven adjustments of prices for carbon emissions could have a negative impact on the macro- and microeconomic situation of a national economy, causing distortions in the credit risk, for
example.
Any short-notice tightening of legislation or regulations in the BMW Group's main markets (EU, US, China) may exceed the speed at which BMW Group and its suppliers can respond and pose
risks in terms of delivery volume, costs and residual values.
Production processes must quickly be changed to green energy sources and resource-friendly facilities. The BMW Group already consistently implements known requirements. However,
additional costs may result if additional requirements are announced at short notice.
For suppliers, stricter requirements regarding circular economy, recycling and avoiding the use of resources may lead to higher costs in the short term.
Fast rising and/or selectively discriminating regional vehicle-related purchase and usage taxes may lead to higher costs or a decrease
in deliveries.
they may jeopardise the availability and acceptance of planned or expected conditions for the customer.
Around the world, people's environmental awareness is increasing. Social discussions arising from a perceived worsening of the climate's health may lead to changes in mobility patterns
and/or customer preferences that may vary by region. This may require us to adapt the product portfolio, which may impact deliveries and residual values for vehicles.
← = Q
Remuneration Report
Operational risks
Operational risks result from any form of ineffective or defective
internal processes, systems, external events or human error. The
aim is to systematically record and quantify all risks except for
those listed in the paragraphs above. Because the risks arise in
a wide range of areas of the Company, such as IT security or sup-
plier management, the close dovetailing of these areas is essen-
tial and ensures that there is adequate transparency regarding
the current risk situation of the entire division. All individual oper-
ational risks are recorded in a system and appropriate mititgation
measures are implemented. The risk amount is categorised as
medium.
137
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Risks and Opportunities
CLIMATE-RELATED RISKS
AND OPPORTUNITIES
Risks and opportunities relating to production and technologies
Plant downtime is the main risk affecting production. Disruptions
to production can have various causes, including equipment and
tool shortages, supplier bottlenecks, scarcity or shortages of pro-
duction resources such as gas or electricity, as well as problems
with logistics. Furthermore, IT disruptions caused by cyber-
attacks, for example, are playing an increasingly significant role
in disruptions to the supply chain and production. Damage to the
factory infrastructure, caused by fire or natural events such as
hail, storms or heavy rainfall, can lead to production downtime.
The risk level for the occurrence of such risks is assessed as high.
[[Climate changes may have an impact on the BMW Group busi-
ness model. Consequently, the company analyses a range of cli-
mate scenarios, identifies and evaluates climate-related risks
and opportunities and takes the relevant measures. 7 GRI Index:
201-2
During the 2023 reporting year, all material risks and opportuni-
ties for the BMW Group were analysed in terms of their sensitivity
regarding three different climate scenarios in accordance with
the TCFD. For the medium-term period until 2035, we distin-
guish between transitory and physical climate risks. For the long-
term period until 2050, the evaluation focuses on the physical
climate risks.
Climate scenarios
The BMW Group uses three scenarios to identify and evaluate
climate-related risks, which are based on the scenarios of the
Shared Socioeconomic Pathways (SSP) of the Intergovernmen-
tal Panel on Climate Change (IPCC).
These climate scenarios range from a low-emissions scenario
with global warming of <+1.5 °C (Paris Agreement, SSP1-2.6),
a medium scenario with warming of an average of +2.5 °C (mid-
dle of the road, SSP2-4.5) to >+4 °C (fossil-fuelled development,
SSP5-8.5).
The BMW Group has committed to aligning its business activities
with the low-emissions scenario of the Paris Agreement and has
consistently based its long-term corporate planning on this.
7 Carbon Emissions
Transitory climate risks
Transitory climate risks arise from the transition to a low-emis-
sions economy across all sectors that is necessary in order to
mitigate climate change. These risks become particularly appar-
ent when conditions change more quickly and/or differently than
expected. The transitory climate risks were identified and evalu-
ated along five different risk dimensions.]]
138
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Risks and Opportunities
Group Financial Statements
Responsibility Statement and Auditor's Report
The BMW Group follows the recommendations of the TCFD by
continuously refining processes for reporting and the internal
steering of climate-related risks and opportunities.
139
BMW Group Report 2023
To Our Stakeholders
low
high
Short-term
Scenarios medium-term (2035)
Scenarios long-term (2050)
"today"
Risk dimension
Paris
Agreement
The middle
of the road
Fossil
development
Paris
Agreement
The middle
Risk profile
of the road
Production/
distribution
disruption
Supply chain
Risk profile
low
| high ]]
140
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Risks and Opportunities
Group Financial Statements
Fossil
development
Society
and regulations
Politics, law
Combined Management Report
Risks and Opportunities
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
[[The following graphic juxtaposes the risk dimensions of the tran-
sitory risks with the global warming scenarios. Potential impacts
are grouped into five different levels.
In the Paris Agreement global warming scenario, the potential
transitory risks are deemed the highest over the medium term as
a result of the fast-paced, sometimes unforeseeable develop-
ments. It cannot be ruled out that more decisive measures will
have to be taken globally in the next few years in order to achieve
the <+1.5°C target. For the BMW Group, this is reflected primar-
ily in the risk dimensions of "Politics, legal affairs and regulatory
framework", as well as "Market and competition". Regulatory re-
quirements introduced at short notice may enter into force, which
could have an impact on products, production and supply chains.
In the "Market and competition" risk dimension, risks may also
increase due to higher demand and the resulting higher prices for
select (scarce) raw materials on the one hand and due to rising
energy prices on the other.
[[Transitory climate risks
Scenarios medium-term (2035)
Short-term
"today"
Risk dimension
Paris
Agreement
The middle
of the road
Fossil
development
Technology
Physical climate risks
In addition to the transitory risks, the BMW Group also evaluates
physical risks. In doing so, the increasing frequency and intensity
of acute extreme weather events, such as heatwaves, storms
and floods, are taken into account, along with longer-term
changes such as in terms of temperature and rainfall.
In order to measure such risks, we draw on external data that
evaluate the development of acute and persistent natural phe-
nomena across the global warming scenarios and across time.
For the BMW Group, this may result in damage to assets such as
buildings, vehicles or parts on the one hand, and on the other
hand, such events may lead to downtime at BMW Group sites or
at suppliers' sites.
Physical climate risks also increase for the BMW Group particu-
larly in the long-term >+4 °C scenario. This leads to a higher risk
both for the BMW Group's production sites and also for suppliers'
sites. The risks regarding interruptions to production and distri-
bution as well as risks in the supply chain are shown in the con-
text of global warming scenarios over a medium-term (2035)
and long-term (2050) period:]]
[[ Physical climate risks
Market and
competition
Capital and
financial market
To a limited degree, interest rate risks are deliberately accepted
in order to make use of the associated return potential. Risks
thereby result when there is a partial mismatch between fixed in-
terest rate periods, which means they are rated as low. The as-
sociated opportunities are classed as material.
Interest rate risks
Other Information
They arise primarily when leased vehicles are sold after they are
returned at the end of the leasing period. A negative deviation
from the residual value forecast results in a residual value risk,
while a positive deviation represents a residual value oppor-
tunity.
In view of the higher incidence of observed attacks, the risk
amount - despite extensive security measures - is still classified
as high.
In order to protect vehicle functions from manipulation, we have
introduced processes such as standardised safety assessments
and regular penetration tests. However, risks in this regard can
never be fully ruled out due to the high complexity and increasing
connectivity.
Information and data can also be compromised by a lack of risk
awareness and inappropriate behaviour. The main direct conse-
quences would be negative effects on Group revenues, disrup-
tion in production, or reputational damage. For this reason, the
BMW Group has launched an interactive programme to provide
regular training for every employee on the correct way to handle
dangerous emails.
Protecting information, for example from unauthorised access or
misuse, has the highest priority. In conjunction with risk manage-
ment requirements, risks relating to information security, data
protection and IT are systematically documented, allocated ap-
propriate measures by the departments concerned and continu-
ously monitored with regard to threat level and risk mitigation.
Regular analyses and controls as well as tight security manage-
ment policies ensure an appropriate level of security.
However, despite continuous testing and preventive security
measures, it is impossible to completely eliminate risks in this
area. All authorised persons are required to treat information
such as confidential business, customer and employee data with
great care, use information systems securely and handle risks in
a transparent manner. Uniform requirements that apply through-
out the Group are documented in a comprehensive set of rules
and guidelines. A consistently applied policy of updating such
rules and regulations to the current situation, coupled with regu-
lar communication, awareness-raising and training measures,
form the basis for a high level of security and risk awareness in
general.
Financial risks and risks relating to the use of financial
instruments
Currency risks and opportunities
As an internationally operating enterprise, the BMW Group con-
ducts business in a variety of currencies, thus giving rise to cur-
rency risks and opportunities. A substantial portion of Group rev-
enues, production, other purchases and funding occur outside
the eurozone.
The BMW Group manages currency risks at both the strategic
(medium to long term) and operational level (short to medium
term). Over the medium and long term, it is possible to ramp up
production or purchase volumes in foreign currency regions (nat-
ural hedging). Currency risks are managed in the short to me-
dium term and for operational purposes by means of hedging on
financial markets, the primary objective of which is to improve
planning reliability for the BMW Group as a whole. Regularly up-
dated cash-flow-at-risk models are used to limit currency risks
and identify opportunities. The risk amount associated with cur-
rency risks is classified as high. The strengthening of the euro in
2023 has led to an increased level of risk compared to the pre-
vious year.
Depending on exchange rate fluctuations, opportunities may
also arise, which means they can be considered material.
Risks and opportunities relating to raw materials prices
As a manufacturing company, the BMW Group is subject to price
risks, particularly in relation to the raw materials used in vehicle
production.
Digitalisation and automation across all areas of the business
and its products offer a wide range of opportunities for the
BMW Group. Especially in the field of artificial intelligence, poten-
tial uses as well as risks are evaluated on a continuous basis. At
the same time, information technology (IT) requirements regard-
ing the confidentiality, integrity and availability of information are
becoming increasingly strict. The threat level has continued to
rise over recent years. Increasing geopolitical conflicts also con-
tribute to the rise in cyberattacks. Moreover, legal and regulatory
requirements are becoming ever stricter worldwide, which could
also necessitate higher investments in hardware and software.
The analysis of raw materials price risks is based on planned pur-
chases of raw materials and components containing those prod-
ucts. A cash-flow-at-risk model is deployed to measure risks re-
lating to raw materials prices. Price fluctuations for raw materials
such as precious metals, non-ferrous metals, raw materials for
batteries and steel, and also energy, are hedged using financial
derivatives and supply contracts with fixed pricing arrangements.
Liquidity risks
The major part of the Financial Services segment's credit financ-
ing and leasing business is refinanced on capital markets. The
risk of restricted access to funds is deemed low.
The liquidity concept, based on the experience gained during the
global financial crisis, is rigorously adhered to and continuously
developed. In the Financial Services segment, the use of the
"matched funding principle" ensures that liquidity risks are gen-
erally avoided.
Solvency is assured at all times throughout the BMW Group by
adhering to liquidity ratios and using a broadly diversified range
of refinancing sources.
The liquidity position is monitored continuously and managed
through the Group-wide planning of financial requirements and
funding. Further information on risks in conjunction with financial
instruments is provided in 7 Note [40] to the Group Financial State-
ments.
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Combined Management Report
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Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
The prices of many raw materials continue to be subject to un-
certainty on commodity markets. Accordingly, the risk amount
associated with raw materials prices is classified as medium, but
there are also material opportunities. This risk is lower than in the
previous year due to the decline in prices of raw materials.
← = Q
Each lease contract is assigned a forecasted sales value for the
vehicle at the end of the lease term. Current market trends are
taken into consideration within the routine portfolio evaluation. In
addition, the portfolio composition (e.g. by drivetrain type) is an-
alysed on an ongoing basis. Relevant changes and their impacts
are incorporated into the portfolio evaluation. The residual value
calculation models, as well as the portfolio evaluation models,
are continually being refined.
Overall, the risks arising from the sales network can be catego-
rised as low.
A variety of measures are also being taken to prevent and coun-
teract longer downtimes of manufacturing equipment due to tar-
geted cyberattacks.
Potential natural hazards are already taken into account when
selecting a site and through the implementation of measures
during construction. The risk posed by natural hazards or fire is
reduced by the use of on-site fire services and employee training.
Risks resulting from property-related damage and damage due
to downtime, as well as transport damage to vehicles already
manufactured, are transferred to highly solvent insurance com-
panies. Due to the volatility of the international insurance mar-
kets, the BMW Group itself bears significant risks today. This so-
lution may become increasingly relevant if premiums and de-
ductibles continue to rise.
Potential short-term changes to the relevant legislation and reg-
ulations or changes in their national interpretation by the author-
ities may jeopardise our ability to receive type approvals in good
time and, in extreme cases, may lead to the non-admission of a
vehicle derivative, sub-market or even a complete market. This,
along with a delayed start of production for new models, could
lead to sales losses. Numerous control points have been imple-
mented as part of the homologation process in order to identify
and mitigate risks.
Product recalls can lead to additional costs. The BMW Group es-
tablishes appropriate provisions for statutory and non-statutory
warranty obligations. It cannot be ruled out, however, that addi-
tional costs could be incurred that are either not covered or not
fully covered by these provisions. Despite the deployment of
thorough quality assurance processes, such risks can always
arise if the materials and/or processing procedures used prove
insufficient - in some cases years after a product has been
launched. A high number of recalls could also have a negative
impact on the BMW Group's reputation. Further information on
risks in conjunction with provisions for statutory and non-statu-
tory warranty obligations is provided in 7 Note [34] to the Group
Financial Statements.
The BMW Group sees opportunities relating to production pro-
cesses primarily in the competitive edge gained from mastering
new and complex technologies. Given the long lead times in-
volved in developing new products, additional opportunities are
not expected to have a significant earnings impact on the
BMW Group.
Risks and opportunities relating to purchasing
The greatest risk relating to purchasing comes from supply
shortages due to supplier bottlenecks. Production problems at
the supplier level could lead to consequences caused by in-
creased expenditure for the BMW Group due to production inter-
ruptions and a corresponding reduction in vehicle sales. Supply
bottlenecks may also have a negative impact on the reputation
of the BMW Group if customer demand cannot be met as
expected.
Potential reasons for the failure of suppliers to deliver include the
lack of availability of raw materials, energy and other input ma-
terials, the occurrence of natural hazards and/or fires, develop-
ments in the security situation of a country, IT-related risks and
non-compliance with sustainability or quality standards. The risk
is categorised as high.
During the selection of suppliers a standardised assessment of
risk criteria is part of the sourcing process.
The BMW Group continuously strives to align its sales strategies
with future trends, prioritising the needs of both prospective and
current customers as the focal point of its operations. Opportuni-
ties arising as a result are classified as immaterial.
An increasing complexity within the supplier network, particularly
with sub-suppliers over which the BMW Group has only an indi-
rect influence, as well as a lack of solvency on the part of suppli-
ers, may influence the delivery of supplies to plants. A prevention
programme was put in place in order to identify relevant devel-
opments early on and define individual measures.
The rising threat of cyberattacks along the entire value chain af-
fects both the security of supply and the protection of expertise
relevant to the BMW Group. In order to optimise the level of in-
formation security throughout the entire value and supply chain,
the BMW Group requires its suppliers to provide proof of ade-
quate information security certification. Purchasing and Supplier
Network
Cost advantages gained by developing local supplier structures
near BMW plants in addition to innovative manufacturing tech-
nologies could lead to lower material expenses for the
BMW Group. Opportunities arising as a result are classified as
immaterial.
Risks and opportunities relating to the sales network
In order to sell its products and services, the BMW Group oper-
ates a global sales network comprising subsidiaries, importers,
branches and independent dealerships. The insolvency of deal-
erships may have a negative impact on global vehicle sales and
the range of services available to our customers.
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To Our Stakeholders
Combined Management Report
Risks and Opportunities
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Additional risks arise from the inflation-related price increases of
recent years and the resulting demands from suppliers, which
can have a negative impact on earnings. In addition to price risks,
the number of suppliers at risk of insolvency which the
BMW Group must support to maintain supplier operations is
increasing.
Other financial risks
Information security, data protection and IT
The BMW Group works together with banks to ensure that the
available liquidity is optimally invested in order to hedge against
financial market risks (particularly currency, commodity and in-
terest rate risks) using derivative financial instruments and to
protect payments made in advance. Counterparty risk denotes
the risk that the BMW Group will not receive, or not receive in full,
the payments due to it in connection with the investment and
hedging transactions referred to above. A value-at-risk model is
employed to measure counterparty risk, taking into account the
creditworthiness of the banks and the business volumes in-
volved. Risk is managed using a limit system, which includes
daily monitoring of the extent to which limits are being utilised at
the level of the individual counterparties.
Combined Management Report
Risks and Opportunities
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
The following table provides an overview of the material short-
term risks and opportunities in the Financial Services segment:
Credit risk
Residual value
Interest rate changes
Operational risks
of the risk level
Medium
BMW Group Report 2023 To Our Stakeholders
High
Medium
Risks
Change
compared
to prior year
Classification
Immaterial
Material
Material
Opportunities
Change
compared
to prior year
Credit risks and opportunities
There may be positive effects in the ongoing assessment of the
portfolio's creditworthiness that lead to a reduction of the overall
risk and therefore constitute an opportunity. The BMW Group
continues to classify potential opportunities in this area as imma-
terial. In order to take account of the volatile economic environ-
ment, parameters within the credit awarding process were re-
viewed and adjusted to factor in or not accept declining credit
ratings.
Residual value risks and opportunities
Residual value risks are classified as high in terms of their risk
level, while residual value opportunities are deemed significant.
Other financial risks worth mentioning include counterparty risks
as well as those arising in connection with investments in other
entities.
Low
136
Classification
The risk associated with other financial risks is classified as me-
dium. Potential opportunities resulting from the revaluation of in-
vestments are evaluated as immaterial.
The BMW Group holds equity investments of varying amounts in
numerous entities. The recoverability of these investments is
monitored on an ongoing basis as part of a standardised pro-
cess. However, risks from impairment losses could still arise.
Risk management in the Financial Services segment is based on
the requirements of the supervisory authorities, which are imple-
mented consistently worldwide. Climate-related risks are also
taken into account and analysed at regular intervals, thereby
considering a medium-term period in the future. > Climate-Related
Risks and Opportunities
Risks and opportunities relating to pension obligations
Future pension obligations are financed largely via external pen-
sion funds or trust constructs that are legally separate from the
BMW Group. Externally managed funds are invested on capital
markets in a broadly diversified portfolio with a view to enabling
future pension payments to be disbursed out of pension assets.
These arrangements greatly reduce the need to fund pension
payments out of ongoing operations. Fluctuations in pension
provisions and the related pension assets give rise to risks that
may have varying effects due to the differences in accounting
standards between IFRS and HGB.
The risk associated with pension provisions based on IFRS val-
uations is categorised as medium. Material opportunities can
arise if the value of pension assets on the capital markets devel-
ops favourably or if pension provisions decreased at a more pro-
nounced rate than the related assets.
Pension obligations are chiefly measured by projecting future
payouts, gauged with a current discount rate derived from mar-
ket yields from top-rated corporate bonds. This discount rate is
subject to market fluctuations and therefore influences the level
of pension obligations in terms of present value. Changes in
other parameters, such as inflation rates and life expectancy,
also impact the amount as well as the duration of future pension
payments. Regulatory requirements may also affect the amount
of pension obligations.
The fluctuation of pension assets reflects the volatility of various
asset classes on capital markets. Investments are broadly diver-
sified (interest-bearing securities, equities, real estate and other
asset classes).
Reevaluations on the liabilities and assets sides are recognised
net of deferred taxes through other comprehensive income and
hence directly in equity of the BMW Group (within revenue re-
serves). Further information on risks in conjunction with pension
provisions is provided in 7 Note [33] to the Group Financial State-
ments.
Legal risks
The level of risk from legal risks is classified as medium.
The potential financial impact of the matters covered under con-
tingent liabilities, including those related to legal and warranty
risks, cannot be conclusively assessed at this stage.
International movements of goods require compliance with ex-
tensive export control regulations. In addition to goods-related
restrictions, international trading may also involve personal,
country-specific and end-use-related restrictions. In particular,
non-compliance with applicable EU and US export control regu-
lations could result in significant legal consequences for the
BMW Group. In light of its strong presence in the USA and China,
any intensification of the trade dispute between the two countries
could be a potential source of additional risk exposure.
BMW Group companies are subject to governmental tax and
customs audits in each country where they operate, potentially
resulting in back taxes, retrospective customs duties, interest,
penalties and similar payments. Payments of this nature may, for
instance, result from the non-recognition of inter-company trans-
fer prices in the countries concerned. Further substantial legal
risks may emerge from contested interpretations of tax or cus-
toms legislation. The findings of the tax audit in the countries are
effective for the audit period and, if applicable, in subsequent
years. Risk management relating to tax and customs legislation
is enshrined in the BMW Group's RMS. In order to minimise ma-
terial procedural tax and customs risks, the BMW Group has set
up a comprehensive Tax Compliance Management System (Tax
CMS) that is already being applied in its major entities in Ger-
many, China and, since the end of 2023, Austria, and will be
rolled out successively in other major countries.
The BMW Group recognises appropriate levels of provision for
lawsuits and risks. In addition, a part of these risks is insured to
an economically reasonable extent. Nevertheless, it cannot be
ruled out that damages may occur in excess of the insured
amounts. In accordance with International Financial Reporting
Standards (IFRS), the required information is not provided if the
BMW Group concludes that disclosure of the information could
seriously prejudice the outcome of the relevant legal proceed-
ings. Further information on contingent liabilities is provided in
Note [39] to the Group Financial Statements.
Like all entities with international operations, the BMW Group is
confronted with legal disputes, alleged claims relating in particu-
lar to warranty and product liability or intellectual property rights
infringements and proceedings initiated by government agen-
cies. Any of these could, amongst other consequences, have an
adverse impact on the Group's reputation. Such proceedings are
typical for the sector, may result as a consequence of realigning
product or purchasing strategies to changed market conditions,
or are antitrust related. Particularly in the US market, class action
lawsuits and product liability risks can have substantial financial
consequences and cause damage to the Group's reputation.
More rigorous application, interpretation of, or changes to, exist-
ing regulations could result in a greater number of recalls.
The central goal of risk management in the Financial Services
segment is the continuous assurance of risk-bearing capacity.
Limits are assigned depending on the type of risk. Various value-
at-risk models are used for this purpose, which are validated at
regular intervals. The confidence level used in this model is con-
servative. Care is always taken to ensure that the coverage
amounts based on the equity of the Financial Services segment
are sufficient.
Regular stress tests are carried out to support this model. These
are another indicator of potential risk management measures
and create a high degree of transparency with regard to extreme,
realistic events, particularly in volatile times.
135
Risk management system in the Financial Services segment
Risk management in the Financial Services segment is based on
various pillars; namely, the prevailing risk culture, the risk strat-
egy and the defined risk appetite for the various types of risk. In
addition to this, there are a wide range of guidelines in place
worldwide that are implemented by the individual companies in
the Group.
A Compliance Management System is in place across the
BMW Group to, among other things, encourage its representa-
tive bodies, executives and staff members worldwide to consist-
ently act in a lawful manner. Further information on this can be
found in the chapter 7 Compliance and Human Rights.
← = Q
Remuneration Report
Other Information
Group Financial Statements
Combined Management Report
Risks and Opportunities
To Our Stakeholders
BMW Group Report 2023
Responsibility Statement and Auditor's Report
Risk-reducing
Compliance
reporting
including sanctions
compliance measures("remediation")
Three-Stage Approach of the Compliance Management System
Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
9
As part of the CMS, the Group's HR department oversees the Ex-
ternal Workforce Compliance programme, which is designed to
safeguard the BMW Group from the repercussions of collabora-
tions with employees from external entities that are not compli-
ant with labour law. In the reporting period, External Workforce
Compliance was restructured to ensure that the requirements for
10
6
compliant contracts for work and labour are even more firmly
rooted in the procurement of services and cooperation with ser-
vice providers.
The compliance programme Compliance for Regulated Financial
Services Units takes into account the particularities of the
Compliance risk assessment
Legal Compliance Code and
compliance regulations
Compliance communication
and training
1
2
3
4
Compliance IT system
and processes
5
Compliance consulting
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Compliance and Human Rights
RESPOND
143
141
One component of the CMS is the compliance programme Data
Privacy Protection, which is the responsibility of the department
Group Data Privacy Protection. This is based on the directive Pri-
vacy Corporate Rules and the so-called Binding Corporate Rules,
which contractually protect the transfer of employee data within
the BMW Group. Implementation of the programme is validated
through regular reporting by affiliated companies and independ-
ent audits carried out by Group Data Privacy Protection.
Compliance monitoring
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Risks and Opportunities
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
SUMMARY AND OUTLOOK
[[The material short-term risks, reputational risks and climate-re-
lated risks may point towards potential challenges for the
BMW Group. The BMW Group actively considers the risks and
corresponding opportunities and takes them into account in de-
cision-making and planning processes. Drawing on internal and
external momentum, the risk management system is being con-
tinuously refined.]]
142
BMW Group Report 2023
To Our Stakeholders
The Quality Management department is responsible for Product
Compliance as part of the CMS with a focus on preventing in-
fringements of product-related laws and official regulations as
well as ensuring compliance with directly associated require-
ments for products within the BMW Group's Automotive and Mo-
torcycles segments. During the reporting year, there was a ex-
pansion of the Detect processes in particular, aimed at enhanc-
ing preventive activities. This expansion was accompanied by
the implementation of new training and communication formats.
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Compliance and Human Rights
Other Information
← = Q
COMPLIANCE AND HUMAN RIGHTS
Compliance lays the foundation for the long-term success of the
BMW Group. Compliance builds trust in our products and brands
and shapes our public image. Compliance means much more to
the BMW Group than simply complying with applicable laws and
BMW Group directives around the globe. It forms part of our iden-
tity, our understanding of leadership and our living culture of in-
tegrity. Compliance creates a binding framework for all our busi-
ness activities worldwide.
Compliance as a corporate function
Compliance is the managerial responsibility of the Board of Man-
agement of BMW AG, executed by creating an appropriate regu-
latory and supervisory framework, as well as through regular and
ad hoc reporting, accompanied by clear communications. This
approach is based on the core belief that compliance with applic-
able laws and related internal regulations is the responsibility of
all employees. As role models, managers are tasked with an-
choring compliance culture in their area of responsibility and en-
suring compliance requirements and processes are imple-
mented accordingly. GRI Index: 2-23
In addition to being responsible for the Company-wide Compli-
ance Management System, the Chief Compliance Officer also
manages the Group Compliance division and briefs the Board of
Management and Supervisory Board of BMW AG at regular
intervals.
Compliance Management System (CMS)
The BMW Group's Company-wide Compliance Management
System (CMS) reinforces the culture of compliance and integrity
and helps reduce sanction and liability risks, as well as risks aris-
ing from other (non-) financial disadvantages, such as reputa-
tional risks. The CMS focuses on adequacy and effectiveness
and is based on the Prevent, Detect, Respond model, which de-
fines specific preventive, monitoring, control and response
measures. Clear assignment of roles and responsibilities is also
essential.
The CMS is tailored to the BMW Group's risk situation and ad-
dresses all relevant compliance topics. Group-wide, these in-
clude anti corruption and fraud prevention, anti-money-launder-
ing, antitrust and human rights compliance, export control com-
pliance, data privacy protection and product compliance. In the
reporting year, the already established compliance programmes
External Workforce Compliance and Compliance for regulated Fi-
nancial Services Units were incorporated into the CMS. Respon-
sibility for Data Privacy Protection, Product Compliance, External
Workforce Compliance and Compliance for Regulated Financial
Services Units outside Group Compliance lies with independent
departments. GRI Index: 2-27, 205-1, 205-3, 206-1
Further development of CMS
The CMS is reviewed on a regular basis and refined as needed.
This primarily involves evaluating strategic focus topics, legal
and regulatory requirements and trends, best practices as well
as industry standards, all of which are taken into account from a
risk perspective. The objective is to consistently improve the
CMS. The BMW Group is an active member of various associa-
tions and interest groups, including the German Institute for
Compliance e. V. (DICO), at Board level.
During the reporting period, a key area of focus was the updating
and further development of the compliance regulatory land-
scape. This included an update of the BMW Group Code of Conduct
as the central policy for the BMW Group's expectations of its em-
ployees in terms of compliance with applicable legal provisions
and internal regulations. An analysis of the BMW Group's activi-
ties to further improve antitrust compliance was also carried out.
Further priority areas emerged in the context of export control,
due to the war in Ukraine, and in anti-money-laundering efforts,
due to the increase in legislative initiatives as well as in anticipa-
tion of changes to the business model aiming to intensify direct
sales.
Remuneration Report
PREV
7
The Financial Services segment has established its own dedi-
cated risk management unit, which works closely with the central
Group Compliance function as part of the CMS. On the basis of
an annual analysis, it identifies the possible need for adjustments
and defines appropriate measures. Group-wide implementation
by the BMW Group's financial services companies is continu-
ously reviewed and reported on to the management of the Fi-
nancial Services segment on a quarterly basis.
BMW AG is the guarantor for all obligations under the
agreement regarding the joint venture BMW Brilliance
Automotive Ltd. in China. This agreement generally grants
an extraordinary right of termination to either joint venture
partner in the event of a change of control at either one of
the parties, or if more than 25% of the shares of the other
party are acquired by a third party either directly or
indirectly or if the other party is merged with another legal
entity. Termination of the joint venture agreement may lead
to the dissolution of the joint venture, with an optional
purchase right for BMW AG (or the partner) to acquire the
shares of the other partner or to the liquidation of the joint
venture company.
An agreement concluded with an international consortium
of banks relating to a syndicated credit line, which was not
being utilised at the balance sheet date, entitles the lending
banks to give extraordinary notice to terminate the credit
line, such that all outstanding amounts, including interest,
would fall due with immediate effect if one or more parties
jointly acquire direct or indirect control of BMW AG. The term
"control" is defined as the acquisition of more than 50% of
the share capital of BMW AG, the right to receive more than
50% of the dividend, or the right to direct the affairs of the
Company or appoint the majority of members of the
Supervisory Board.
Significant agreements of the Company which are subject to
a change of control provision following a takeover bid
BMW AG is party to the following major agreements, which con-
tain provisions that would apply in the event of a change of con-
trol or the acquisition of control as a result of a takeover bid:
According to § 5 (5) of the Articles of Incorporation, the Board of
Management is authorised, with the approval of the Supervisory
Board, to increase the share capital during the period up to and
including 15 May 2024 by up to € 282,625 for the purposes of
an Employee Share Programme by issuing new non-voting
shares of preferred stock, which carry the same rights as existing
non-voting shares of preferred stock (Authorised Capital 2019).
The subscription rights of existing shareholders are excluded. No
conditional capital was in place at the reporting date.
In accordance with the resolution taken at the Annual General
Meeting on 11 May 2022, the Board of Management is author-
ised until 10 May 2027 to acquire treasury shares (ordinary
and/or non-voting preferred shares) representing a total of up to
10% of the share capital in place at the date on which the reso-
lution was adopted or if lower - at the date on which the au-
thorisation is exercised.
The Board of Management is authorised to buy back shares and
sell repurchased shares in situations specified in § 71 AktG, for
example to avert serious and imminent damage to the Company
and/or to offer shares to persons either currently or previously
employed by BMW AG or one of its affiliated companies.
Authorisations of the Board of Management, in particular
with respect to the issuing or buying back of shares
← = Q
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Responsibility Statement and Auditor's Report
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Disclosures Relevant for Takeovers and Explanatory Comments
BMW Group Report 2023
149
Amendments to the Articles of Incorporation must comply with
§§ 179 et seq. AktG. Amendments must be decided upon by the
shareholders at the Annual General Meeting (§ 119 (1) no. 6,
§ 179 (1) sentence 2 AktG). The Supervisory Board is authorised
to adopt amendments to the Articles of Incorporation that only
concern the wording (§ 179 (1) sentence 2 in conjunction with
§ 15 (3) of the Articles of Incorporation). Resolutions are passed
at the Annual General Meeting by a simple majority of shares
cast unless otherwise explicitly required by binding provisions of
law or, if a majority of share capital is required, by a simple ma-
jority of shares represented in the vote (§ 21 (1) of the Articles of
Incorporation).
The appointment or removal of members of the Board of Man-
agement is based on the rules contained in §§ 84 et seq. AktG
in conjunction with § 31 of the German Co-Determination Act
(MitbestG).
Statutory regulations and provisions contained in the
Articles of Incorporation governing the appointment and
removal of members of the Board of Management and
changes to the Articles of Incorporation
-
Control of voting rights when employees participate in
capital and do not directly exercise their control rights
Like all other shareholders, employees exercise their control
rights pertaining to any shares they have acquired in conjunction
with the Employee Share Programme and/or the share-based
remuneration programme directly on the basis of relevant legal
provisions and the Company's Articles of Incorporation.
BMW AG has entered into framework agreements with
credit institutions for trading in derivative financial
instruments (ISDA Master Agreements). In the event of a
significant deterioration in creditworthiness, the contracting
parties are entitled to terminate the agreement with
immediate effect if the deterioration in creditworthiness
results from a direct or indirect acquisition of the majority of
the capital in a contracting party, which confers the right to
elect the majority of the Supervisory Board members (or a
-
bid
Compensation agreements with members of the Board of
Management or with employees in the event of a takeover
The software licence agreements concluded between
BMW AG and Google LLC for the use of "Projected Mode"
in BMW vehicles' head units grant both parties the right to
extraordinary termination in the event of a change of control
(not further defined in the agreement).
BMW AG has entered into an agreement with Great Wall
Motor Company Limited to establish the joint venture
Spotlight Automotive Ltd. in China. The underlying joint
venture agreement generally grants an extraordinary right
of termination to either joint venture partner in the event that
- either directly or indirectly - more than 25% of the shares
of the other party are acquired by a third party or the other
party is merged with another legal entity. The termination of
the joint venture agreement may result in the sale of the
shares to the other joint venture partner, or in the liquidation
of the joint venture entity.
The development collaboration agreement between
BMW AG, FCA US LLC and FCA Italy S.p.A., relating to the
development of technologies used in conjunction with
automated vehicles, may be terminated by any of the
contracting parties if certain competitors in the technology
sector acquire and subsequently hold at least 30% of the
voting shares of one of the other contractual parties.
takes over or loses control of BMW AG, with control defined
as (i) holding or having control over more than 50% of the
voting rights, (ii) the possibility to control more than 50% of
voting rights exercisable at Annual General Meetings on all
or nearly all matters, or (iii) the right to determine the
majority of members of the Board of Management or the
Supervisory Board. Furthermore, a change in control occurs
if competitors of the HERE Group, or certain potential
competitors of the HERE Group from the technology sector,
acquire at least 25% of the share capital or voting rights of
BMW AG. If none of the other shareholders acquire these
shares, the other shareholders are entitled to resolve that
There Holding B.V. be dissolved.
← = Q
Other Information
Remuneration Report
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Disclosures Relevant for Takeovers and Explanatory Comments
To Our Stakeholders
BMW Group Report 2023
150
BMW AG is party to the shareholder agreement relating to
There Holding B.V., which is the majority shareholder of the
HERE Group. In accordance with the shareholder
agreement, each contracting party is required to offer its
directly or indirectly held shares in There Holding B.V. for
sale to the other shareholders in the event of a change of
control. A change of control of BMW AG arises if a person
Several supply and development contracts between
BMW AG and various industrial customers relating to the
sale of components for drivetrain systems, grant an
extraordinary right of termination to the relevant industrial
customer in specified cases of a change in control at
BMW AG (for example if BMW AG merges with a third party
or is taken over by a third party; an automobile manufacturer
acquires more than 50% of the voting rights or share capital
of BMW AG).
-
BMW AG and Mercedes-Benz Group AG have entered into
a joint venture agreement relating to mobility services, which
includes the areas of ride-hailing and vehicle charging, and
entitles both Mercedes-Benz Group AG and BMW AG
(hereafter referred to as "principals") to initiate a bidding
procedure in the event that (i) the other principal receives
notice in accordance with § 33 of the German Securities
Trading Act (WpHG) that including shares attributed
pursuant to § 34 WpHG - a shareholding of more than 50%
has been attained or, in accordance with § 20 of the
German Stock Corporation Act (AktG) that a shareholding of
more than 50% has been attained, or (ii) a shareholder or a
third party including shares attributed pursuant to § 30
WpHG - holds more than 50% of the voting rights or shares
in the other principal, or (iii) the other principal has concluded
a control agreement as a dependent company. The
outcome of such a bidding procedure is that the joint venture
will go to the principal making the highest bid.
comparable body) on a contracting party, from any other
transaction that enables control over a contracting party or
from a merger or transfer of assets. In the event of
extraordinary termination, all current transactions will be
settled.
Shares with special rights that confer control rights
There are no shares with special rights that confer control rights.
21.5
21.55
Direct or indirect investments in capital exceeding 10% of
voting rights
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Combined Management Report Group Financial Statements
Disclosures Relevant for Takeovers and Explanatory Comments
BMW Group Report 2023 To Our Stakeholders
148
* Information according to § 289a and § 315a HGB.
Contractual holding period arrangements also apply to ordinary
shares acquired by Board of Management members and certain
senior vice presidents in conjunction with share-based remuner-
ation programmes. 7 Remuneration Report (on shareholding periods for
members of the Board of Managers)
When the Company issues non-voting preferred shares or ordi-
nary shares to employees in conjunction with its Employee Share
Programme, these shares are generally subject to a Company-
imposed blocking period of four years in compliance with private
law, calculated from the beginning of the calendar year in which
the shares were issued.
As of 31 December 2023, the Company owned a total of
5,161,255 ordinary and preferred treasury shares (2022:
16,760,957), from which the Company has no rights pursuant
to § 71 b AktG. The Company regularly provides information
about the current status of the share buyback on its website.
Restrictions affecting voting rights or the transfer of shares
In addition to ordinary shares, the Company has also issued non-
voting preferred shares. Further information can be found in the
section Composition of subscribed capital.
(c) uniform payment of any other dividends on ordinary and
preferred shares, provided the shareholders do not resolve
otherwise at the Annual General Meeting.
(b) payment of an advance dividend of € 0.02 per € 1 par
value on non-voting preferred shares, and
(a) subsequent payment of any arrears on dividends on non-
voting preferred shares in the order of accruement,
financial services business and the risks and regulations in-
volved. The specific focus of the programme – in addition to the
proper implementation of other compliance topics - is on legis-
lative and regulatory monitoring, consumer protection and the
implementation of financial services supervisory requirements.
Based on the information available to the Company, the follow-
ing direct or indirect shareholdings exceeded 10% of the voting
rights at the end of the reporting period:1
in %
Stefan Quandt, Germany
AQTON SE, Bad Homburg v. d. Höhe, Germany
0.2
17.2
17.24
17.23
9.4
26.62
of voting rights
of voting rights
0.2
The BMW Group has not concluded any compensation agree-
ments with members of the Board of Management or with em-
ployees for situations involving a takeover offer.
Indirect share
5 Controlled entities, of which 3% or more are attributed: Susanne Klatten Beteiligungs GmbH.
4 Controlled entities, of which 3% or more are attributed: AQTON GmbH & Co. KG für Automobilwerte.
3 Controlled entities, of which 3% or more are attributed: AQTON Verwaltung GmbH, AQTON GmbH & Co. KG für Automobilwerte.
2 Controlled entities, of which 3% or more are attributed: AQTON SE, AQTON Verwaltung GmbH, AQTON GmbH & Co. KG für Automobilwerte.
Based on voluntary notifications provided by the listed shareholders as at 31 December 2023.
Susanne Klatten Beteiligungs GmbH, Bad Homburg v. d. Höhe, Germany
AQTON GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe, Germany
Susanne Klatten, Germany
AQTON Verwaltung GmbH, Bad Homburg v. d. Höhe, Germany
Direct share
The Company's non-voting preferred shares are shares as de-
fined in §§ 139 et seq. AktG, which carry a cumulative preferen-
tial right in terms of the allocation of profit and for which voting
rights are excluded. These shares confer voting rights only in ex-
ceptional cases stipulated by law, in particular if the preference
amount has either not been paid or not been paid in full within
one year and the arrears are not paid in the subsequent year
alongside the full preference amount due for that year. With the
exception of voting rights, holders of preferred shares are entitled
to the same rights as holders of ordinary shares. In addition, § 25
(3) of the Articles of Incorporation confers preferential treatment
to the non-voting preferred shares with regard to the appropri-
ation of the Company's unappropriated profit. Accordingly, the
unappropriated profit is required to be appropriated in the follow-
ing order:
The percentages of the shareholdings with voting rights dis-
closed above may have changed subsequent to the stated date
if these changes were not required to be reported to the Com-
pany. As the Company's shares are issued to bearer, the Com-
pany is generally aware of changes in shareholdings only if such
changes are subject to mandatory notification requirements.
€ 662,839,475) and, in accordance with § 5 of the Articles of
Incorporation, is subdivided into 579,795,667 ordinary shares
(90.78%) (2022: 601,995,196/90.82%), each with a par value
of € 1 and 58,920,408 (9.22%) (2022: 60,844,279/9.18%)
non-voting preferred shares, each with a par value of € 1. The
Company's shares are issued to the bearer.
Compliance and notification systems
Employees with questions or concerns relating to compliance
can discuss these matters with their managers or relevant de-
partments and, specifically, with the Compliance functions. The
Reports regarding potential compliance violations can also be
submitted anonymously and confidentially in several languages
via the BMW Group SpeakUP Line notification system or via the
ombudsperson. Checking effectiveness
The BMW Group protects information providers in two ways:
first, individuals may provide information without disclosing their
identity; second, no one providing information faces retaliatory
action. All queries and concerns relating to compliance are doc-
umented and processed using a Group-wide electronic case
management system. If necessary, Corporate Audit, Corporate
Security, the legal departments or the Works Council may be
brought in. GRI Index: 2-16
CMS monitoring and controls
The CMS provides differentiated monitoring levels for reviewing
observance and implementation of compliance rules and pro-
cesses at regular intervals. In addition to the direct checks per-
formed by Compliance Responsibles as business managers,
risks are further reduced by additional measures integrated into
business processes, which generally form part of the Internal
Control System.
Compliance investigations are carried out when the need arises
or ad hoc as part of the Detect function of central Group Compli-
ance. These include internal investigations in connection with of-
ficial investigations, which serve to clarify the facts internally.
Risk-based compliance audits aimed at identifying specific com-
pliance risks are focused on antitrust law. In 2023, export control
and anti-money-laundering efforts were incorporated as new
topics. Corporate Audit also monitors adherence to compliance
requirements by business managers, as well as selected ele-
ments of the CMS.
All control checks are geared towards reducing compliance risks.
Any infringements are immediately remedied, with an emphasis
on reducing the risk of repeat offences as far as possible. Where
infringements can be traced to an individual, that person will be
appropriately sanctioned, in accordance with the processes de-
fined for this purpose.
As part of the annual review of the BMW Group CMS, its appro-
priateness and effectiveness are assessed on the basis of de-
fined criteria. In addition to the assessment of the Compliance
Responsibles, the measurement also takes into account the as-
sessment of compliance and other governance functions. Our
overall statement on the adequacy and effectiveness of the In-
ternal Control and Risk Management System, including the
CMS, can be found in the section 7 Appropriateness and Effectiveness
of the Internal Control System and Risk Management System.
Regular compliance reporting to the Board of Management
and Supervisory Board
The Board of Management and Supervisory Board of BMW AG,
the Audit Committee (a committee of the Supervisory Board) and
the Company's other executive committees are briefed regularly
(at least twice a year), as well as on a case-by-case basis, by the
CCO.
145
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Compliance and Human Rights
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
IT-based compliance systems are used for transparent and effi-
cient documentation, assessment and approval of compliance-
relevant matters Group-wide. This includes topics such as
money laundering and sanctions lists, exchange activities with
competitors, business partner due diligence and verifying the le-
gal admissibility of benefits in kind. The data collected in this way
forms the basis for the compliance risk assessment.
Other Information
Digitalisation supports compliance
Compliance training
DETECT
Compliance investigations
In the Financial Services segment, compliance is incorporated
into the target management process. Integration of specific tar-
gets into strategic steering helps monitor implementation. A
management system also supports the process of identifying
risks arising from non-compliance with internal and external reg-
ulations at an early stage. 7 GRI Index: 3-3
The rights and duties of shareholders derive from the German
Stock Corporation Act (AktG) in conjunction with the Group's Ar-
ticles of Incorporation, the full text of which is available at
7 www.bmwgroup.com. The right of shareholders to have their
shares individually certified is excluded in accordance with the
Articles of Incorporation. The voting power attached to each
share corresponds to its par value. Each € 1 of par value of share
capital represented in a vote entitles the holder to one vote (§ 19
no. 1 of the Articles of Incorporation).
8
Notification system
COMPLIANCE CULTURE
144
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Compliance and Human Rights
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Company-wide compliance network
Relevant compliance risks are identified in the business depart-
ments on the basis of internal guidelines; an initial assessment
is then made and measures taken to mitigate them. Around 200
managers Group-wide perform these tasks for their area of re-
sponsibility as operational Compliance Responsibles.
Specialist departments worldwide are supported in their work by
the central Group Compliance function, as well as the network of
business unit and division Compliance Officers (heads of relevant
compliance functions), supplemented by around 80 local Com-
pliance Officers (heads of local compliance functions) at
BMW AG's international subsidiaries. Every Compliance Officer
is tasked with implementing the CMS and compliance pro-
grammes for defined topics in their area of activity, as well as
identifying and realising division-specific compliance measures.
Compliance training opportunities are continuously refined for
specific target groups. The online training courses with case
studies and test questions, repeated every two years, strength-
ens the compliance culture and reinforces compliant behaviour.
More than 95,500 staff and managers worldwide have so far
completed the Compliance Essentials training and 51,500 have
received the Antitrust Compliance training. This offering is sup-
plemented by target-group-specific classroom training on anti-
trust compliance as well as online training courses on data pri-
vacy and product compliance. 7 GRI Index: 205-2
← = Q
Compliance contact serves as a further point of contact for both
employees and external parties.
1 Disclosures pursuant to § 289 and § 315 HGB.
The principal features of the BMW Group's ICS are a role-based
approach embedded throughout the organisation, a clearly de-
fined control environment that is underpinned by a combination
of risk assessment procedures, control activities, information and
communication, and monitoring activities.
Both the system itself and the methods applied are subject to
continuous improvement, with its functionality being assessed
on a regular basis. Notwithstanding the measures taken, every
control system is subject to inherent limitations, given that it is
not possible to prevent all incorrect disclosures or detect them in
a timely manner.
Relevant BMW Group working instructions and guidelines for
recognising, measuring and allocating items to accounts as well
as definitions of non-financial performance indicators are avail-
able to all employees via the BMW Group's intranet system. New
reporting standards are assessed for their potential impact on
the BMW Group's reporting.
The principle of segregation of duties is taken into account for all
IT systems that are relevant for accounting and financial report-
ing. ICS requirements are also embedded in the ongoing devel-
opment of all IT systems used in these areas. Furthermore, the
BMW Group deploys data analysis tools to identify and subse-
quently eliminate any weaknesses detected in its processes
and/or control systems.
Responsibilities for ensuring the appropriateness and effective-
ness of ICS procedures for accounting and financial reporting
processes as well as those relating to non-financial performance
indicators are clearly defined in a role-based model and allocated
to the relevant line and process managers. They report annually
on their assessment of the ICS for accounting and financial re-
porting processes and the processes for non-financial perfor-
mance indicators. The assessment takes into account the results
of internal and external audits as well as the results of continuous
monitoring. The results of the assessment are gathered and doc-
umented in a centralised IT system. Both the Board of Manage-
ment and the Audit Committee are informed about the status of
the ICS on an annual basis. The Board of Management and,
where appropriate, the Supervisory Board, are promptly in-
formed in the event of any significant changes to the ICS.
2 Committee of Sponsoring Organizations of the Treadway Commission.
147
BMW Group Report 2023
To Our Stakeholders
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Disclosures Relevant for Takeovers and Explanatory Comments
Remuneration Report
Other Information
← = Q
[[ Respect for human rights
DISCLOSURES RELEVANT FOR TAKEOVERS*
As of 31 December 2023, the subscribed capital (share capital)
of BMW AG amounted to € 638,716,075 (2022:
AND EXPLANATORY COMMENTS
In principle, the aim of every appropriate and effective ICS is to
prevent potential risks in external financial and non-financial re-
porting or reduce the likelihood of potential risks materialising.
The ICS is based on the "three lines" model, including a clear def-
inition of how the various functions are required to interact with
one another in order to manage risks. As a component of the
second line, the ICS serves as the link between the operating
units (first line) and Corporate Audit (third line).
Internationally acknowledged standards for internal control sys-
tems were taken into account when designing the various ele-
ments of the ICS deployed by the BMW Group (e.g. COSO
model²).
Composition of subscribed capital
The BMW Group fulfils its social responsibility to protect human
rights. Our Group-wide approach, which is subject to continuous
improvement, is based on established due diligence processes
that encompass our own business operations, our supply chains
as well as other business partners. The individual steps include
a risk analysis, prevention, control and mitigation measures,
7 Complaint mechanisms, review of effectiveness and reporting.
The focus is on topics where the BMW Group has identified high
risks in terms of human rights and environmental aspects and
where it has a certain level of influence. We place particular em-
phasis on our global, extensive and highly complex supply chain.
We offer comprehensive details about the multistage due dili-
gence process for upholding human rights within the supplier
network in the section Purchasing and Supplier Network.
Internationally recognised guidelines for the protection of human
rights set the benchmark for the BMW Group's entire value chain.
We regard them as specific demands placed on ourselves, our
supply chain and other business partners. They are closely inter-
linked with the Human rights compliance programme and the
7 BMW Group Code of Conduct and anchored in the following specific
Company-wide policies:
Joint Declaration on Human Rights and Working Conditions:
Commitment to value-driven corporate governance,
formulated in collaboration with employee representatives
and the trade union.
7 BMW Group Code on Human Rights and Working Conditions:
Guidance for employees, suppliers and authorised sales
partners regarding the BMW Group's efforts to safeguard
human rights and ensure fair working conditions.
7 Declaration of Principles on Respect for Human Rights and Related
Environmental Standards: Approach and processes regarding
the implementation of the German Supply Chain Due
Diligence Act (LkSG).
7 BMW Group Supplier Code of Conduct: The BMW Group's
requirements and expectations for its global supplier
network in accordance with internationally recognised
sustainability standards and guidelines.
The BMW Group has established clear responsibilities across the
organization for implementing and monitoring due diligence ob-
ligations. Within the BMW Group, responsibility rests with the re-
spective departments and the management of the Group enti-
ties, while outside the BMW Group it lies with the relevant busi-
ness partners and suppliers. Central functions such as Group
Compliance and Sustainability in the Supply Chain oversee and
monitor compliance with due diligence obligations in the relevant
area. The BMW Group Human Rights Officer, who was ap-
pointed by the Board of Management of BMW AG at the end of
2021 as one of the requirements of the LKSG, also assumes a
support and monitoring function.
The ICS for financial reporting has the task of ensuring that sig-
nificant accounting and financial reporting processes deployed
within the BMW Group are both accurate and reliable. The ICS
for non-financial reporting focuses primarily on the further devel-
opment of the processes used to gather data as the basis for re-
porting the non-financial performance indicators disclosed in the
BMW Group Report.
7 GRI Index: 2-23, 2-241]
146
In the reporting period, we focused on further developing the ex-
isting due diligence processes following the first-time application
of the LkSG. In addition to the policy statement published at the
end of 2022, this includes the further development of the risk
analysis for our own business operations. In 2023, we have also
updated the Human Rights Code and integrated the topic of hu-
man rights into the BMW Group Code of Conduct.
To Our Stakeholders
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Internal Control System
Remuneration Report
Other Information
← = Q
INTERNAL CONTROL SYSTEM
The Internal Control System (ICS) is part of the BMW Group's
overall system of internal governance and based on a set of
monitoring measures and control activities that are integrated in
processes and organisational structures with a view to ensuring
the accuracy of external financial and non-financial reporting.
The requirements for the design and structure of ICS procedures
incorporated in accounting and financial reporting processes as
well as those used to generate selected non-financial infor-
mation included in the BMW Group Report are defined on a
Group-wide basis.
BMW Group Report 2023
861
481
1,100
- 440
16,870
59
16,009
3,281
12,009
3,530
3,471
17,327
16,870
13,590
13,109
457
3,090
13,109
- 10
- 51
- 10
3,530
- 1,235
247
1,396
- 1,313
-6,859
- 17,984
-7,346
27
- 10,592
- 9,042
-705
104
- 502
99
-184
6
27
-750
The reconciliation of liabilities from financing activities is presented in note [36] to the Group Financial Statements.
- 107
BMW Group Report 2023
Revenue
reserves
Translation
differences
Marketable
securities
Derivative
financial
instruments
Costs of
hedging
Treasury
shares
Equity
attributable to
shareholders
of BMW AG
Non-
controlling
interests
Total
31
663
2,432
85,425
11,290
-584
1,728
- 1,154
- 1,278
87,125
11,584
-12,165
reserves
158
Capital
Note
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Statement of Changes in Equity for Group
Remuneration Report
Other Information
← = Q
STATEMENT OF CHANGES
IN EQUITY FOR GROUP
in € million
1 January 2023
Net profit
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2023
Dividend payments
Treasury shares acquired
Treasury share redemption
Reclassification resulting from share redemption
Other changes
31 December 2023
Accumulated other equity
Subscribed
capital
- 10,790
-530
-515
- 50
157
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Cash Flow Statement for Group and Segments
Remuneration Report
Other Information
← = Q
CASH FLOW STATEMENT
FOR GROUP AND SEGMENTS
in € million
Payments out of equity
Payments into equity
Treasury shares acquired
Payment of dividends to shareholders of BMW AG
Payment of dividends to non-controlling interests
Intragroup financing and equity transactions
Interest paid¹
Proceeds from issue of non-current financial liabilities
Repayment of non-current financial liabilities
Change in other financial liabilities
Cash inflow/outflow from financing activities
6
Effect of exchange rate on cash and cash equivalents
- 3,179
- 4,772
-219
-86
65
32
59
28
- 583
-649
4,163
- 459
- 14
- 147
1,957
1,220
1,890
991
28
111
-9,548
- 9,373
- 547
Effect of changes in composition of Group on cash and cash equivalents
Cash and cash equivalents as at 1 January
- 1,455
- 1,485
- 1,455
2,076
- 2,998
- 2,961
-7,139
-186
-222
- 1,031
- 521
9
9
20,633
16,050
34
11,614
-22,430
-26,102
- 1,485
Change in cash and cash equivalents
- 3,827
- 3,827
Cash and cash equivalents as at 31 December
With the exception of interest for lease liabilities, interest relating to financial services business is classified as revenues/cost of sales.
2 Includes in the financial year 2022 the elimination of the non-cash revaluation effect of the investment in BMW Brilliance amounting to € 7,649 million.
Automotive
Group
(unaudited supplementary information)
Financial Services
(unaudited supplementary information)
2023
-20
2022
2023
-20
2022
2023
2022
85
85
- 1,222
- 1,278
-1,222
- 1,278
- 5,430
- 5,430
91,288
controlling
875
- 1,455
- 5,282
- 1,278
- 1,278
- 1,278
2
2
2
-3,827
107
107
- 1,139
-607
- 1,746
4,173
2,427
31
663
107
-3,827
20,180
679
766
75,132
17,941
641
18,582
745
- 146
- 109
1,973
-903
1,560
38
1,598
18,686
-146
- 109
1,973
-903
19,501
2,432
85,425
- 584
- 107
02 Group reporting entity and consolidation principles
The BMW Group Financial Statements include BMW AG and all
material subsidiaries over which BMW AG - either directly or in-
directly exercises control. This also includes 62 structured en-
tities, consisting of asset-backed financing arrangements and
special purpose funds. In some cases, contractual agreements
are in place with the asset-backed securities companies to offset
their losses in connection with residual value risks arising from
the receivables sold to them.
In relation to fully consolidated companies, the following changes
took place in the Group reporting entity in the financial year
2023:
Included at 31 December 2022
Included for the first time in 2023
No longer included in 2023
Included at 31 December 2023
Germany
Foreign
Total
20
184
204
18
18
15
15
20
187
207
All consolidated subsidiaries have the same year-end as BMW
AG with the exception of BMW India Private Ltd. and BMW India
Financial Services Private Ltd., whose year-ends are 31 March
in accordance with local legal requirements. Interim financial
statements are prepared as at 31 December for the two compa-
nies with divergent reporting dates.
When assessing whether an investment gives rise to a controlled
entity, an associated company, a joint operation or a joint ven-
ture, the BMW Group considers contractual arrangements and
other circumstances, as well as the structure and legal form of
the entity. Discretionary decisions may also be required. If indi-
cations exist of a change in the judgement of (joint) control, the
BMW Group undertakes a new assessment.
- 117
-
74,366
Approval for the publication of the Group Financial Statements
was granted by the Board of Management on 12 March 2024.
The income statement for the BMW Group and segments is pre-
sented using the cost of sales method.
1,728
- 1,154
- 1,278
87,125
4,163
91,288
160
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
NOTES TO THE GROUP FINANCIAL STATEMENTS
PRINCIPLES
01 Basis of preparation
The consolidated financial statements of Bayerische Motoren
Werke Aktiengesellschaft (BMW Group Financial Statements or
Group Financial Statements) at 31 December 2023 were drawn
up in accordance with International Financial Reporting Stand-
ards (IFRS), as endorsed by the European Union (EU), and the
supplementary requirements of § 315e (1) of the German Com-
mercial Code (HGB). Pursuant to § 325 HGB, the Group Finan-
cial Statements and the Group Management Report are required
to be submitted electronically to the operator of the German
Company Register and made accessible via that agency's web-
site. Bayerische Motoren Werke Aktiengesellschaft (BMW AG),
which has its seat in Germany, Munich, Petuelring 130, is regis-
tered in the Commercial Register of the District Court of Munich
under the number HRB 42243. BMW AG manufactures automo-
biles and motorcycles in the premium segment.
The Group Financial Statements have been drawn up in euros.
All amounts are disclosed in millions of euros (Є million) unless
stated otherwise.
Key figures presented in this report have been rounded in ac-
cordance with standard commercial practise. In certain cases,
this may mean that values do not add up exactly to the stated
total and that percentages cannot be derived from the values
shown.
In order to provide a better insight into the results of operations,
financial position and net assets of the BMW Group, and going
beyond the requirements of IFRS 8 (Operating Segments), the
Group Financial Statements also include an income statement
and a balance sheet for the Automotive, Motorcycles, Financial
Services and Other Entities segments. The Group Cash Flow
Statement is supplemented by a statement of cash flows for the
Automotive and Financial Services segments. Inter-segment
transactions relate primarily to internal sales of products, the pro-
vision of funds for Group companies and the related interest. A
description of the nature of the business and the major operating
activities of the BMW Group's segments is provided in 7 note 46
(Explanatory notes to segment information).
- 251
362
2
24
-1,222
2,000
-1,222
-1,222
-95
172
77
42
31
639
2,456
89,072
- 2,083
-29
699
-658
- 500
89,596
3,327
-24
119
- 2,000
- 1,485
12,165
- 118
- 1,499
78
- 1,201
496
-2,244
-268
-2,512
11,172
- 1,499
78
- 1,201
496
9,046
607
9,653
- 5,430
-5,430
- 6,915
11,290
92,923
BMW Group Report 2023
Subscribed
capital
Capital
reserves
Revenue
reserves
Translation
differences
Marketable
securities
financial
instruments
Costs of
hedging
Treasury
shares
Equity
attributable to
shareholders
Non-
of BMW AG
interests
Total
31
661
2,325
71,705
17,941
- 438
Note
159
Derivative
31 December 2022
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Statement of Changes in Equity for Group
Remuneration Report
Other Information
← = Q
STATEMENT OF CHANGES
IN EQUITY FOR GROUP
in € million
1 January 2022
Net profit
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2022
Dividend payments
Treasury shares acquired
Subscribed share capital increase out of
Authorised Capital
Premium arising on capital increase relating to
preferred stock
Other changes
Accumulated other equity
-222
- 1,346
3,587
- 1,808
- 154
113
745
-118
-332
24
1,077
- 142
33
18,582
12,165
2022
2023
Note
Total comprehensive income attributable to shareholders of BMW AG
Total comprehensive income attributable to non-controlling interests
Total comprehensive income
Items that can be reclassified to the income statement in the future
Other comprehensive income for the period after tax
Currency translation foreign operations
Other comprehensive income from equity accounted investments
Income taxes
Costs of hedging
Derivative financial instruments
Marketable securities (at fair value through other comprehensive income)
Items not expected to be reclassified to the income statement in the future
2,801
766
- 1,557
26
in € million
AT 31 DECEMBER 2023
BALANCE SHEET FOR GROUP AND SEGMENTS
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Balance Sheet for Group and Segments at 31 December 2023
Combined Management Report
To Our Stakeholders
BMW Group Report 2023
154
19,501
9,046
Income taxes
679
20,180
9,653
1,598
-2,512
19
853
-2,394
199
- 1,772
- 458
281
22
607
ASSETS
Remeasurement of the net liability for defined benefit pension plans
in € million
2,084
212
183
14,366
8,100
17,941
11,290
Attributable to shareholders of the BMW AG
1
40
17
601
857
641
875
Attributable to non-controlling interests
85
995
786
-71
2,532
2,101
212
183
14,967
2,492
-72
786
995
FOR GROUP
STATEMENT OF COMPREHENSIVE INCOME
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Statement of Comprehensive Income for Group
To Our Stakeholders Combined Management Report
BMW Group Report 2023
153
27.33
17.69
14
Net profit/loss
Diluted earnings per share of preferred stock in €
17.67
14
Diluted earnings per share of common stock in €
27.33
17.69
14
Basic earnings per share of preferred stock in €
Dilutive effects
27.31
17.67
14
Basic earnings per share of common stock in €
85
27.31
Intangible assets
↑
= Q
13
Deferred tax
1,191
643
481
256
1,522
588
3,073
1,387
26
Financial assets
-114
- 140
50,482
50,657
50,368
50,517
25
Receivables from sales financing
-36,472
-36,612
23,020
23,084
28
2,431
1,758
3,216
3,340
104,191
105,174
701
767
75,403
75,318
154,722
155,918
Non-current assets
35,249
2,325
2,852
28
25
2,612
2,296
1,030
1,537
28
Other assets
- 121
- 100
-1,313
23
22
517
506
18
14,775
420
443
14,697
21,220
19,439
21,776
20,022
21
2022
2023
2022
2023
2022
2023
2022
216
2023
2023
2022
2023
Note
(unaudited supplementary
information)
(unaudited supplementary
information)
Eliminations
Other Entities
Financial Services
(unaudited supplementary
information)
Motorcycles
(unaudited supplementary
information)
Automotive
(unaudited supplementary
information]
Group
2022
8,957
185
370
1,351
1,197
Other investments
420
443
24
Investments accounted for using the equity method
-7,047
-7,297
49,867
50,415
42,820
366
43,118
Leased products
121
94
491
533
31,514
34,639
32,126
35,266
22
Property, plant and equipment
1
23
18,582
12,165
Net profit/loss
24,568
29,689
Gross profit
19,347
18,315
- 30,437
- 19,298
-16,231
8
11
2022
2023
2022
2023
2022
35,122
2023
36,227
-31,548
-2,628
-2,656
- 104,324
- 109,920
- 118,042
- 125,809
8
3,176
3,214
22,357
19,278
558
548
1,230
967
1,377
1,045
10
Other operating income
57
66
- 33
-34
- 1,543
- 1,559
123,602
- 296
- 8,801
- 9,195
– 10,616
- 11,025
9
Selling and administrative expenses
49
2,084
8
11
4,685
4,679
-303
132,277
142,610
155,498
STATEMENTS
GROUP FINANCIAL
03
99%>
53
231 List of Investments at 31 December 2023
228 Segment Information
203 Other Disclosures
182 Notes to the Balance Sheet
180 Notes to the Statement of Comprehensive Income
173 Notes to the Income Statement
160 Principles
152 BMW Group Report 2023 To Our Stakeholders Combined Management Report
160 Notes to the Group Financial Statements
156 Cash Flow Statement for Group and Segments
154 Balance Sheet for Group and Segments at 31 December 2023
153 Statement of Comprehensive Income for Group
152 Income Statement for Group and Segments
← EQ
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Combined Management Report Group Financial Statements
To Our Stakeholders
BMW Group Report 2023
151
158 Statement of Changes in Equity for Group
6
Group Financial Statements
Remuneration Report
7
2022
2023
2022
2023
2022
2023
Note
Cost of sales
Revenues
in € million
information)
Responsibility Statement and Auditor's Report
Income Statement for Group and Segments
Eliminations
(unaudited supplementary
Other Entities
Financial Services
(unaudited supplementary
information)
(unaudited supplementary
information)
(unaudited supplementary
information]
Group
Motorcycles
Automotive
O
FOR GROUP AND SEGMENTS
INCOME STATEMENT
← = Q
Other Information
(unaudited supplementary
information)
58,999
6
121
-87
42
- 93
12
-1
8,283
- 339
9,510
-1,386
1,194
-1,118
42
- 87
7,701
- 67
8,937
- 1,272
12
Financial result
Other financial result
1,846
3,237
- 1,539
-2,372
- 6
1,198
-866
- 25
Profit/loss before tax
-37
-339
- 209
29
-673
-861
-57
-75
- 3,951
-3,685
- 4,927
- 4,931
- 11
13
122
1,334
995
- 100
3,205
2,962
269
258
18,918
12,642
23,509
17,096
Income taxes
7
8
- 57
3,055
257
259
10,635
12,981
13,999
18,482
Profit/loss before financial result
35
54
- 192
-3
3,163
- 100
-1
-2
- 1,072
- 1,148
- 1,330
- 1,227
10
Other operating expenses
6
-4
14
13
- 128
63
- 13
2,200
-1,502
251
-656
11
Interest and similar expenses
- 1,871
- 4,103
1,543
3,403
6
5
5
- 203
7
1,389
422
701
11
Interest and similar income
- 100
- 159
- 100
-159
24
Result from equity accounted investments
147
739
5,011
38,315
62,550
-2,122
-42,247
1,671
1,817
147,024
143,628
246,926
250,890
Total equity and liabilities
- 81,299
- 81,296
-79,565
-79,572
13,768
29,059
72,056
76,190
856
920
58,995
60,404
84,421
87,001
Current provisions and liabilities
44,844
49,028
239
226
37,032
150,392
149,413
118,127
118,799
Change in other operating assets and liabilities
Change in provisions
Change in trade payables
Change in trade receivables
Change in inventories
Changes in working capital
Change in receivables from sales financing
Change in leased products
Result from equity accounted investments
Other non-cash income and expense items²
Depreciation and amortisation of tangible and intangible assets
Other interest and similar income/expenses¹
35,226
Interest received¹
Profit/loss before tax
in € million
FOR GROUP AND SEGMENTS
CASH FLOW STATEMENT
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Cash Flow Statement for Group and Segments
Group Financial Statements
156 BMW Group Report 2023 To Our Stakeholders Combined Management Report
- 169,981
- 163,074
Income taxes paid
21,034
18,683
37
1,224
1,401
35
Current tax
6
7
519
558
123
128
6,668
8,547
1,045
7,316
34
Other provisions
- 46,105
- 41,850
- 42,201
- 39,117
- 121
- 3,783
-2,633
- 100
315
34,515
1,185
36,092
33,037
59,620
9,240
Cash inflow/outflow from operating activities
886
123
Other liabilities
11
4
852
1,071
494
566
12,763
13,906
14,120
15,547
38
141
Trade payables
13,366
15,065
25,718
25,392
1,646
1,680
40,727
42,130
36
Financial liabilities
215
215
-3
57,629
Total investment in intangible assets and property, plant and equipment
Proceeds from the disposal of investment assets and other business units
1,616
15
218
400
1,315
531
1,607
- 20
-70
-866
- 154
- 939
- 187
- 125
-179
156
- 3,835
- 115
- 4,135
- 130
- 31
- 310
-2,674
-523
- 2,715
816
1,471
854
53
2
101
115
103
116
102
102
- 12
.9
- 8,867
- 10,688
- 9,050
1,870
- 10,881
488
14,782
17,675
23,523
17,542
1,356
3,168
- 2,041
-447
- 1,970
1,735
47
9,145
- 3,649
1,888
-3,622
683
-487
-698
- 4,229
- 3,472
- 4,512
- 5,049
3,205
2,962
18,918
12,642
2022
453
2023
2023
2022
23,509
17,096
2023
(unaudited supplementary information)
(unaudited supplementary information)
Group
Financial Services
Automotive
Cash inflow/outflow from investing activities
Proceeds from the sale of marketable securities and investment funds
Investments in marketable securities and investment funds
2022
Proceeds from subsidies for intangible assets and property, plant and equipment
Proceeds from the disposal of intangible assets and property, plant and equipment
Expenditure for acquisitions, net of cash acquired
Expenditure for investment assets
1,417
3
3,236
2,794
- 999
100
159
100
159
8
-11
- 7,433
103
- 7,392
718
179
32
8,433
8,826
8,566
8,974
2
5
-228
-350
-206
-515
6
32
815
897
20,795
59,128
210
611
3,530
45,222
45,218
970
1,050
71,621
68,310
92,204
94,972
Current assets
3,090
21
36
13,109
13,590
16,870
17,327
Cash and cash equivalents
- 81,855
- 78,727
54,857
57,638
5,020
Total assets
250,890
246,926
143,628
Other Entities
Financial Services
(unaudited supplementary
information)
Motorcycles
(unaudited supplementary
information]
Automotive
(unaudited supplementary
information]
Group
AT 31 DECEMBER 2023
BALANCE SHEET FOR GROUP AND SEGMENTS
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Balance Sheet for Group and Segments at 31 December 2023
Combined Management Report
3,753
To Our Stakeholders
155
- 169,981
- 163,074
- 81,858
- 78,734
56,249
118,799
118,127
149,413
150,392
1,671
1,817
147,024
BMW Group Report 2023
4
7
31,576
25
Receivables from sales financing
1
114
184
143
102
3,869
3,875
4,127
4,162
30
36,838
Trade receivables
693
802
905
18,679
22,121
20,005
23,719
29
29
Inventories
- 88,123
- 84,340
524
(unaudited supplementary
information)
35,340
35,340
24,925
9,602
7,596
28
Other assets
415
186
134
102
547
911
1,096
36,838
1,199
Current tax
-3
766
692
560
558
3,841
2,888
5,164
4,131
26
Financial assets
27
Eliminations
(unaudited supplementary
information)
in € million
Note
2,786
2,601
2,765
2,797
13
Deferred tax
156
158
83
80
8,206
7,559
8,445
7,797
34
Other provisions
77
77
20
17
9
7
233
326
339
-
2,603
3,447
226
21,253
71,217
70,966
Non-current provisions and liabilities
485
39,654
36,848
721
808
6,840
8,041
6,199
427
7,065
Other liabilities
32,249
16,343
18,003
2
2
2,730
2,726
53,469
52,880
36
Financial liabilities
37
- 38,878
33
- 42,577
Accumulated other equity
85,425
89,072
31
Revenue reserves
2,432
2,456
31
Capital reserves
663
639
31
31
Subscribed capital
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
EQUITY AND LIABILITIES
Pension provisions
- 2,071
Treasury shares
- 41,652
48,894
56,031
17,737
16,573
67,234
61,971
91,288
92,923
Equity
4,163
3,327
- 117
Non-controlling interests
I
I
I
I
87,125
89,596
31
Equity attributable to shareholders of BMW AG
I
- 1,278
- 500
31
I
20,215
33,813
13.7
15.2
Remuneration Report
property, plant and equipment is written down according to
scheduled usage-based depreciation as a general rule on a
straight-line basis - over the useful lives of the assets. Depreci-
ation is recorded as an expense in the income statement.
The following useful lives are applied throughout the BMW
Group:
in years
Factory and office buildings, residential buildings, fixed
installations in buildings and outside facilities
8 to 50
Plant and machinery
Other facilities, factory and office equipment
3 to 30
2 to 25
The useful life of the plant and equipment is reviewed regularly
and extended or shortened as necessary. This review also takes
account of the impact of climate-related aspects on useful lives,
for example due to changes in demand patterns or regulatory re-
quirements. This assessment is based on the assumptions used
for long-term corporate planning purposes and product-related
decisions, as described above. Climate-related aspects have an
indirect impact on the utilisation of property, plant and equip-
ment. Adjustments to the useful lives of items of plant and ma-
chinery are avoided by a combination of flexible manufacturing
arrangements (independent of drivetrain type and capable of
handling all vehicle generations) and asset-preservation
measures. The useful lives of plant and machinery that are used
exclusively for internal combustion vehicle production are also
covered by the most up-to-date planning assumptions. For ma-
chinery used in multiple-shift operations, depreciation rates are
increased to account for the additional utilisation. If there is any
indication of impairment of property, plant and equipment, an im-
pairment test is performed as described above for intangible as-
sets.
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
-
Other Information
← = Q
A lease arises for IFRS 16 purposes either when an actual legal
rental/lease agreement for property, plant and equipment is
in place or when other contractual arrangements are in place that
are equivalent to a lease in substance. Depending on the specific
facts and circumstances of each individual case, power purchase
agreements and long-term supply contracts for battery cells may
also constitute a lease.
The BMW Group recognises a right-of-use asset and a liability
for the outstanding lease payments with effect from the date on
which the leased asset becomes available for use by the BMW
Group. The cost of the right-of-use asset is the sum of the
amount at which the lease liability is initially measured, any lease
payments made at or before the lease commencement date, any
initial direct costs incurred by the lessee and the estimated costs
of dismantling, removing or restoring the leased asset. Lease in-
centives granted by the lessor are deducted. Right-of-use assets
are depreciated on a straight-line basis over the shorter of the
useful life of the leased asset and the expected lease term. If
ownership of the leased asset is automatically transferred at the
end of the lease term or the exercise of a purchase option is re-
flected in the lease payments, the right-of-use asset is depreci-
ated on a straight-line basis over the expected useful life of the
leased asset. Right-of-use assets are reported in the balance
sheet within the relevant line items for property, plant and equip-
ment. The depreciation expense on right-of-use assets is re-
ported in the income statement in cost of sales as well as in sell-
ing and administrative expenses.
The lease liability is measured on initial recognition at the present
value of the future lease payments. Subsequent to initial recog-
nition, the carrying amount of the lease liability is increased to
reflect interest on the lease liability and reduced, without income
statement impact, by the lease payments made. Lease liabilities
are reported within financial liabilities, while interest expense is
reported as part of net interest result. In the cash flow statement,
both the repayment portion and the interest portion of lease pay-
ments are shown as cash outflows from financing activities.
The lease payments to be taken into account to measure the
right-of-use asset and the lease liability comprise fixed pay-
ments, variable lease payments that depend on an index or an
interest rate as well as amounts expected to be payable under
residual value guarantees. If it is reasonably certain that a pur-
chase or lease extension option will be exercised, the relevant
payments are also included. Payments for periods for which the
lessee has an option to terminate a lease unilaterally are only in-
cluded in the lease payments if it is reasonably certain that the
termination option will not be exercised. For the purposes of as-
sessing options, the BMW Group takes account of all facts and
circumstances that create an economic incentive to exercise or
not to exercise the option.
IFRS 16 requires that lease payments are discounted as a gen-
eral rule using the interest rate implicit in the lease. However,
since the interest rate in leases entered into by the BMW Group
cannot readily be determined, amounts are discounted on the
basis of the incremental borrowing rate.
The incremental borrowing rate comprises the risk-free interest
rate in the relevant currency for matching maturities plus a pre-
mium for the credit risk. Specific risks attached to an asset are
generally not taken into account, given that collateral received in
the context of alternative financing arrangements is not relevant
within the BMW Group.
Determining which items are to be counted as lease payments -
including the issue of the lease term underlying those payments
- and which discount rate to apply involves using estimates and
assumptions that may differ from actual outcomes.
As lessee, the BMW Group makes use of the application exemp-
tions available for short-term leases and leases of low-value
assets.
Group products recognised by BMW Group entities as leased
products under operating leases are measured at manufactur-
ing cost and all other leased products at acquisition cost, in each
case including initial direct costs. All leased products are depre-
ciated over the period of the lease using the straight-line method
down to their expected residual value.
Where the recoverable amount of a lease exceeds the asset's
carrying amount, changes in residual value expectations are rec-
ognised by adjusting scheduled depreciation prospectively over
the remaining term of the lease. If the recoverable amount is
lower than the asset's carrying amount, an impairment loss is
recognised for the shortfall. A test is carried out at each balance
sheet date to determine whether an impairment loss recognised
in prior years no longer exists or has decreased. In such cases,
the carrying amount of the asset is increased to the recoverable
amount, at a maximum up to the amount of the asset's amor-
tised cost.
Assumptions and estimations are required regarding future re-
sidual values, since these represent a significant part of future
cash inflows. Relevant factors to be considered include the trend
in market prices and demand on the pre-owned automobile mar-
ket. The expected change in the drive-system mix going forward,
which is subject to regular analysis, is also taken into account.
The BMW Group has developed and implemented methods and
processes that enable sustainability aspects of residual value
risks, particularly climate-related aspects, to be appropriately as-
sessed and managed. A scenario-based approach is applied to
quantify the impact of the transition towards zero-emissions mo-
bility and factor in the technological progress of the products in-
volved, resulting potentially in the need to adjust the estimated
residual values of both internal combustion and electrified vehi-
cles. However, the transition to new drive systems will stretch
over a period of time. Under these circumstances, regulatory as-
pects, customer behaviour and the structure of the product range
all have to be taken into account. To varying degrees, the afore-
mentioned aspects will play a role in bringing about changes to
the existing product portfolio over the coming years. The nature
of these planned changes can already be anticipated today to
some extent, highlighting potential but calculable risks for future
operations. Disproportionate risks can only arise in the
168
Notes to the Group Financial Statements
The cost of internally constructed plant and equipment com-
prises all costs which are directly attributable to the manufactur-
ing process as well as an appropriate proportion of production-
related overheads. This includes production-related depreciation
and amortisation as well as an appropriate proportion of admin-
istrative and social costs. Financing costs are not included in ac-
quisition or manufacturing cost unless they are directly attribut-
able to the asset. The carrying amount of items of depreciable
All items of property, plant and equipment are measured at ac-
quisition or manufacturing cost less accumulated depreciation
and accumulated impairment losses.
In conjunction with the impairment tests for cash-generating
units, sensitivity analyses are performed for the main assump-
tions in order to rule out that possible changes to the assump-
tions used to determine the recoverable amount would result in
the requirement to recognise an impairment loss. Even in the
case of a 10% deterioration in the individual measurement as-
sumptions, an impairment loss would not arise. If the WACC were
to develop as in the previous year, the value in use calculated for
the Financial Services cash-generating unit would fall slightly be-
low its carrying amount in 2024. The BMW Group does not, how-
ever, expect the WACC to develop as in the previous year.
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
162
A closing rate of RUB 100.62 (2022: 77.12) to the euro was ap-
plied at 31 December 2023 to translate foreign currency items
denominated in Russian roubles. The BMW Group has been able
to execute transactions at this rate.
The restrictions currently in place for payments continue to re-
strict the transfer of liquid funds from Russia. Developments in
this area are reviewed by the BMW Group on a regular basis. In
total, the Russian companies hold around 4% (2022: 5%) of the
BMW Group's cash and cash equivalents.
Major uncertainties remained at 31 December 2023 with re-
spect to the ongoing Russia-Ukraine war. The current sanctions
and the countermeasures taken significantly restrict economic
activities with Russia and also have an impact on the Russian
companies of the BMW Group.
03 Other significant events
Russia-Ukraine war
The other changes to the Group reporting entity do not have a
material impact on the results of operations, financial position
and net assets of the Group.
On 30 September 2021, the BMW Group signed an agreement
with the Huachen Group to acquire all of the shares of Brilliance
Automobile Manufacturing Co., Ltd., a Huachen Group subsidi-
ary. The transaction will not, however, be completed.
On 6 November 2023, the BMW Group signed an agreement
with the Mercedes-Benz Group AG to establish a company in
China with the aim of developing a charging infrastructure there.
Approval has been granted by the antitrust authorities. The BMW
Group will hold a 50% stake in the newly founded entity. It will
be included in the BMW Group Financial Statements as a joint
venture using the equity method.
On 19 July 2023, the BMW Group signed an agreement with the
companies of the Mercedes-Benz Group AG, the Stellantis
Group, the Honda Group, the Hyundai Motor Group and the Gen-
eral Motors Company Group to establish a company in Canada
with the aim of developing charging infrastructure in North Amer-
ica. Following approval by the relevant antitrust authorities, the
transaction was completed on 18 October 2023, with the BMW
Group holding a 16.67% stake. Although this is below 20%, the
newly founded entity is included in the BMW Group Financial
Statements as an associated company using the equity method,
reflecting the fact that the BMW Group is represented on the
management board and therefore has significant influence.
On 11 February 2022, via its subsidiary BMW Holding B.V., the
BMW Group increased its shareholding in the BMW Brilliance Au-
tomotive Ltd. (BMW Brilliance) joint venture from 50% to 75%
with the acquisition of a further 25% of BMW Brilliance's shares.
BMW Brilliance has been fully consolidated in the Group Finan-
cial Statements since that date. With regard to the figures re-
ported for the previous financial year, it should therefore be noted
that BMW Brilliance is only included for the relevant part of 2022
(i.e. from 11 February onwards). If BMW Brilliance had been fully
included in the Group Financial Statements with effect from 1
January 2022, Group revenues and profit after tax for the finan-
cial year 2022 would have amounted to € 145,521 million and
€ 18,842 million respectively. The remeasurement of the previ-
ously held shares resulted in a gain of € 7,649 million on first-
time consolidation, which was recognised in income from invest-
ments within the line item "Other financial result" in the previous
year. Detailed information is provided in 7 BMW Group Report 2022,
note [3] to the Group Financial Statements.
Associated companies and joint ventures are accounted for us-
ing the equity method, with measurement on initial recognition
based on acquisition cost.
In the case of a joint venture, the parties which have joint control
only have rights to the net assets of the arrangement.
The BMW Group's largest joint operation is Spotlight Automotive
Limited (Spotlight), which has been operated together with the
Chinese automobile manufacturer Great Wall Motor Company
Limited (Great Wall) since 2019, jointly developing and manu-
facturing electric vehicles for the MINI and Great Wall brands in
China. The BMW Group and Great Wall each hold 50% of the
joint operation's equity.
In the case of a joint operation, the parties that have joint control
of the arrangement have rights to the assets, and obligations for
the liabilities, relating to the arrangement. Assets, liabilities, rev-
enues and expenses of a joint operation are recognised propor-
tionately in the Group Financial Statements on the basis of the
BMW Group entity's rights and obligations (proportionate con-
solidation). The impact of joint operations on the Group Financial
Statements is of minor significance.
The risk-adjusted discount rate, calculated using a capital asset
pricing model (CAPM), also takes into account specific peer-
group information relating to beta-factors, capital structure data
and borrowing costs. No environmental, social and governance
(ESG)-related adjustments were made to the WACC.
161
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
BMW Group Report 2023
Remuneration Report
← = Q
-
An entity is deemed to be controlled if BMW AG either directly
or indirectly has power over it, is exposed or has rights to vari-
able returns from it and has the ability to influence those returns.
-
An entity is classified as an associated company if BMW AG -
either directly or indirectly - has the ability to exercise significant
influence over the entity's operating and financial policies. As a
general rule, the Group is assumed to have significant influence
if it holds 20% or more of the entity's voting power.
Joint operations and joint ventures are forms of joint arrange-
ments. Such an arrangement exists when a BMW Group entity
jointly carries out activities with a third party on the basis of a
contractual agreement.
Other Information
Remuneration Report
To Our Stakeholders Combined Management Report
Responsibility Statement and Auditor's Report
Fair values are determined on the basis of valuation models. Ob-
servable market price, tenor and currency basis spreads are
taken into account in the measurement of derivative financial in-
struments. Furthermore, the Group's own credit risk and that of
counterparties is taken into account on the basis of credit default
swap values for market contracts with matching terms.
The BMW Group applies the option to recognise the credit risks
arising from the fair values of a group of derivative financial as-
sets and liabilities on the basis of their total net amount. Portfo-
lio-based valuation adjustments (credit valuation adjustments
and debit valuation adjustments) to the individual derivative fi-
nancial assets and financial liabilities are allocated using the rel-
ative fair value approach (net method).
Where hedge accounting is applied, changes in fair value of de-
rivative financial instruments are presented as part of other fi-
nancial result in the income statement or within other compre-
hensive income as a component of accumulated other equity,
depending on whether the hedging relationship is classified as a
fair value hedge or a cash flow hedge.
Fair value hedges are mainly used to hedge interest rate risks
relating to financial liabilities. The currency basis is not desig-
nated as part of the hedging relationship in the case of cross cur-
rency interest rate hedges accounted for as fair value hedges.
Accordingly, changes in the market value of such components
are recorded as costs of hedging within accumulated other eq-
uity. Amounts accumulated in equity are reclassified to other fi-
nancial result within the income statement over the term of the
hedging relationship.
In addition, for selected fixed-interest assets, a portion of the in-
terest rate risk is hedged on a portfolio basis in accordance with
170
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
← = Q
Derivative financial instruments are used within the BMW
Group for hedging purposes in order to reduce currency, interest
rate, fair value and market price risks. Derivative financial instru-
ments are recognised as of the trade date, measured at their fair
value. Depending on their market value at measurement date,
these financial instruments are reported in the balance sheet line
items "Financial assets" or "Financial liabilities".
IAS 39. The designated hedged items (underlying transactions)
are reported in the balance sheet as receivables from sales fi-
nancing or financial liabilities. Interest rate risks are hedged on
the basis of the present value of net cash flows relating to fixed
income assets (on the asset side) less cash flows relating to vari-
able-rate financing (on the liabilities side). The net cash flow de-
termined in this way is hedged by purchasing corresponding in-
terest rate swaps that have the effect of reducing the interest rate
risk. Hedge relationships are terminated and redesignated on a
monthly basis at the end of each reporting period, thereby taking
account of the constantly changing content of each portfolio.
-
The time values of option transactions and the interest compo-
nent - including the currency basis of forward currency con-
tracts are not designated as part of the hedging relationship in
the case of currency hedges accounted for as cash flow hedges.
Changes in the fair value of such components are recorded as
costs of hedging on a separate line within accumulated other
equity. Amounts recorded in accumulated other equity from cur-
rency hedges are reclassified to cost of sales when the related
hedged item is recognised in profit or loss.
In the case of raw materials hedges that are accounted for as
cash flow hedges, the hedging instruments are designated in full
as part of the hedging relationship. Amounts recorded in accu-
mulated other equity are included in the carrying amount of in-
ventories on initial recognition. Ineffectiveness arising on cash
flow hedges is recognised directly in cost of sales, whereas the
impact of prematurely terminated hedging relationships is recog-
nised in other operating income and expenses.
Deferred income taxes are recognised for all temporary differ-
ences between the tax and accounting bases of assets and lia-
bilities, including differences arising on consolidation procedures,
as well as on unused tax losses and unused tax credits, when it
is probable that they can be utilised. As an exception to this, de-
ferred tax assets and liabilities resulting from the implementation
of the Pillar Two rules are not recognised. Further information is
provided in note 5.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply to the period when the asset is real-
ised or the liability settled, based on tax rates and tax laws that
have been enacted or substantively enacted at the balance sheet
date.
The recoverability of deferred tax assets is assessed at each bal-
ance sheet date on the basis of planned taxable income in future
financial years. If with a probability of more than 50% future tax
benefits will not be realised, either in part or in total, a valuation
allowance is recognised on the deferred tax assets. The calcula-
tion of deferred tax assets requires assumptions to be made with
regard to the level of future taxable income and the timing of re-
covery of deferred tax assets. These assumptions take account
of forecast operating results, announced legislative changes in
connection with climate change and the impact on earnings of
the reversal of taxable temporary differences. Since future busi-
ness developments cannot be predicted with certainty and to
some extent cannot be influenced by the BMW Group, the meas-
urement of deferred tax assets is subject to uncertainty.
Deferred tax liabilities on taxable temporary differences arising
from investments in subsidiaries, branches and associated com-
panies as well as interests in joint arrangements are not recog-
nised if the Group is able to control the timing of the reversal and
it is probable that the temporary difference will not reverse in the
foreseeable future. This is particularly the case if it is intended
that profits will not be distributed, but rather will be used to main-
tain the substance and expand the volume of business of the en-
tities concerned.
Current income taxes are calculated within the BMW Group on
the basis of tax legislation applicable in the relevant countries. To
the extent that judgement was necessary to determine the treat-
ment and amount of tax items presented in the financial state-
ments, there is in principle a possibility that local tax authorities
may take a different position.
As a general rule, each income tax treatment is considered inde-
pendently when accounting for uncertainties in income taxes.
If it is not considered probable that an income tax treatment will
be accepted by the local tax authorities, the BMW Group uses the
most likely amount of the tax treatment when determining tax-
able profit and the tax base.
Inventories of raw materials, supplies and goods for resale are
generally stated at the lower of average acquisition cost and net
realisable value.
Work in progress and finished goods are stated at the lower of
manufacturing cost and net realisable value. Manufacturing cost
comprises all costs which are directly attributable to the manu-
facturing process as well as an appropriate proportion of produc-
tion-related overheads. This includes production-related depre-
ciation and amortisation and an appropriate proportion of ad-
ministrative and social costs. Financing costs are not included in
the acquisition or manufacturing cost of inventories.
Inventories also include vehicles held for sale in the financial ser-
vices business, measured at their amortised cost or lower net re-
alisable value.
Cash and cash equivalents comprise mainly cash on hand and
cash at bank with an original term of up to three months. With the
exception of money market funds, cash and cash equivalents are
measured at amortised cost.
Fair value hedge ineffectiveness is generally recognised in other
financial result.
Financial assets include in particular marketable securities and
shares in investment funds as well as derivative financial instru-
ments.
Input factors available on the market, such as ratings and prob-
abilities of default, are used to calculate valuation allowances for
cash and cash equivalents, financial assets, receivables from
subsidiaries and receivables from companies in which an invest-
ment is held. In the case of marketable securities and investment
funds, the BMW Group usually applies the option not to allocate
financial assets with a low default risk to different stages. Accord-
ingly, assets with an investment grade rating are always allo-
cated to stage 1.
Loss allowances on trade receivables are determined primarily
on the basis of information relating to overdue amounts. Further-
more, both positive and negative economic scenarios are used
alongside the latest forecasts of key performance indicators
when determining the level of valuation allowances. These sce-
narios are based on local analyses and take into account, for ex-
ample, anticipated political and economic developments.
Remuneration Report
Other Information
Notes to the Group Financial Statements
← = Q
event of unexpected regulatory changes that would also be to the
detriment of customers. In addition to these various considera-
tions, the vehicle portfolio subject to residual value risks is re-
measured on a quarterly basis, allowing new aspects to be incor-
porated in the valuation at an early stage. In this case, valuations
relevant for new business which are subject to the same turn of
events would also be adjusted. The forecasting models used by
the BMW Group are subject to regular review and can be supple-
mented where appropriate to include aspects relating to changes
in the market.
Using this approach, upward or downward adjustments can be
made to the forecast value on the basis of a range of scenario
analyses. The assumptions are based on internally available his-
torical data and current market data as well as on forecasts of
external institutions. Furthermore, assumptions are regularly val-
idated by comparison with external data. Certain types of con-
tracts require a high degree of judgement when deciding whether
they give rise to operating leases or receivables from sales
financing.
Investments accounted for using the equity method are
measured - provided no impairment has been recognised - at
cost of investment adjusted for the Group's share of earnings
and changes in equity capital. If there is any indication that an
investment is impaired, an impairment test is performed on the
basis of the discounted cash flow method. An indicator exists, for
example, in the event of a serious shortfall compared to budget,
the loss of an active market or if funds are required to avoid
insolvency.
With the exception of lease receivables financial assets are
measured on initial recognition at their fair value. Financial as-
sets include, in particular, other investments, receivables from
sales financing, finance-related receivables, trade receivables
and cash and cash equivalents. As a general rule, initial recogni-
tion takes place as soon as the BMW Group becomes a party to
a contract. In the case of so-called "regular way" purchases or
sales of non-derivative financial assets, initial recognition takes
place at the settlement date. Financial assets are derecognised
when contractual cash flows attached to them have expired or
are transferred and all significant risks and rewards have been
passed on to the acquirer.
Depending on the business model and the structure of contrac-
tual cash flows, financial assets are classified as measured at
amortised cost, at fair value through comprehensive income or at
fair value through profit or loss. The category "measured at fair
value through comprehensive income" at the BMW Group com-
prises mainly marketable securities and investment funds used
for liquidity management purposes. In the BMW Group, selected
marketable securities, shares in investment funds, money mar-
ket funds and convertible bonds are measured at fair value
through profit or loss, as their contractual cash flows do not solely
represent payments of principal and interest.
The BMW Group does not make use of the option to measure
equity instruments at fair value through other comprehensive in-
come or debt instruments at fair value through profit or loss.
The market values of financial instruments measured at fair
value are determined on the basis of market information avail-
able at the balance sheet date, such as quoted prices or using
appropriate measurement methods, in particular the discounted
cash flow method.
Items reported under other investments within the scope of
IFRS 9 are measured at fair value through profit or loss. Invest-
ments in subsidiaries, joint arrangements and associated com-
panies that are not material to the BMW Group are also included
in other investments.
Receivables from sales financing are measured as a general
rule at amortised cost using the effective interest rate method.
As part of its asset-backed securities (ABS) financing activities,
the BMW Group transfers some of its receivables from sales fi-
nancing - primarily retail customer and dealership financing re-
ceivables - to structured companies, which in turn securitise
them and place them on the capital market as collateralised
securities.
The transferred receivables are not derecognised and therefore
remain on the BMW Group's balance sheet. For this reason, re-
ceivables from sales financing fulfil the criteria of the "hold" busi-
ness model.
Receivables from sales financing also include finance lease re-
ceivables which are measured at the amount of the net invest-
ment in the lease. This balance sheet line item also includes op-
erating lease receivables at the end of the reporting period. The
related vehicles are reported within the line item "Leased
products".
Forward-looking information (for instance forecasts of key per-
formance indicators) is also taken into account if, based on past
experience, such indicators show a substantive correlation to ac-
tual credit losses.
Loss allowances relating to the balance sheet line item “Receiv-
ables from sales financing" are determined primarily on the basis
of past experience with credit losses, current data on overdue re-
ceivables, rating classes and scoring information.
The BMW Group derecognises financial assets when it has no
reasonable expectation of recovery. This may be the case, for in-
stance, if the debtor is deemed not to have sufficient assets or
other sources of income to service the debt.
In addition, post-model adjustments are recorded if the risk is not
fully covered by the standard models.
As a general rule, the BMW Group assumes that a receivable is
in default if it is more than 90 days overdue or if there are objec-
tive indications of insolvency, such as the opening of insolvency
proceedings. Credit-impaired assets are identified as such on the
basis of this definition of default. In the case of credit-impaired
assets which had not been credit-impaired at the time they were
acquired or originated, an impairment allowance is recognised at
an amount equal to lifetime expected credit losses (stage 3). This
is the case regardless of whether the general or simplified ap-
proach is applied. In the case of stage 3 assets, interest income
is calculated on the asset's carrying amount less any impairment
loss.
The BMW Group applies the simplified approach described in
IFRS 9 to operating lease and trade receivables, whereby the
amount of the loss allowance is measured subsequent to the in-
itial recognition of the receivable on the basis of lifetime expected
credit losses (stage 2 – simplified approach). For the purposes of
allocating an item to stage 2, it is irrelevant whether the credit
risk of the assets concerned has increased significantly since in-
itial recognition.
Group Financial Statements
← = Q
Other Information
Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
169
With the exception of receivables from operating leases and
trade receivables, the BMW Group applies the general approach
described in IFRS 9 to determine impairment of financial assets.
Under the general approach, loss allowances are measured on
initial recognition on the basis of the expected 12-month credit
loss (stage 1). If the credit loss risk at the end of the reporting
period has increased significantly since initial recognition, the im-
pairment allowance is measured on the basis of lifetime ex-
pected credit losses (stage 2 - general approach). The measure-
ment of the change in default risk is based on a comparison of
the default risk at the date of initial recognition and at the end of
the reporting period. The default risk at the end of each reporting
period is determined on the basis of credit checks, current key
performance indicators and any overdue payments.
Group Financial Statements
Notes to the Group Financial Statements
Other Information
167
04 Foreign currency translation and measurement
Earnings per share are calculated as follows: basic earnings per
share are calculated for common and preferred stock by dividing
the net profit for the year (after non-controlling interests) that is
attributable to each category of stock, by the average number of
shares of each category in circulation. Net profit for the year is
accordingly allocated to the different categories of stock. The
portion of the net profit that is not being distributed is allocated
to each category of stock based on the number of outstanding
shares. Profits available for distribution are determined directly
on the basis of the dividend proposals or resolutions for common
and preferred stock. Diluted earnings per share are calculated
and separately disclosed in accordance with IAS 33.
Public sector grants are not recognised until there is reasonable
assurance that the conditions attaching to them have been com-
plied with and the grants will be received. The resulting income
is recognised in cost of sales over the periods in which the costs
occur that they are intended to compensate. Information on the
accounting policy changes applied for the first time from the fi-
nancial year 2023 relating to government grants received for as-
sets as well as to investment tax credits is provided in ▾ note 5.
← = Q
Notes to the Group Financial Statements
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2023
165
Revenues also include interest income from financial services. In-
terest income arising on finance leases as well as on retail cus-
tomer and dealership financing is recognised using the effective
interest method and reported as interest income on credit financ-
ing within revenues.
Revenues from leases of own-manufactured vehicles are recog-
nised at Group level in accordance with the requirements for
manufacturer or dealer leases. In the case of operating leases,
revenues from lease payments are recognised on a straight-line
basis over the lease term. Finance leases, on the other hand, are
accounted for as a sale. At the lease commencement date, rev-
enues are recognised at the amount of the fair value of the leased
asset and reduced by any unguaranteed residual value of vehi-
cles that are expected to be returned to the Group at the end of
the lease term. In addition, initial direct costs are recognised as
cost of sales at the lease commencement date.
Revenues from the sale of products, for which repurchase ar-
rangements are in place, are not recognised immediately in full.
Instead, revenues are either recognised proportionately or the
difference between the sales and repurchase price is recognised
in instalments over the term of the contract depending on the na-
ture of the agreement. In the case of vehicles sold to a dealership
that are expected to be repurchased in a subsequent period as
part of leasing operations, revenues are not recognised at Group
level at the time of the sale of the vehicle. Instead, assets and
liabilities relating based on the right of return of these vehicles
are recognised.
expected value, and in the case of multi-component contracts,
allocated to all performance obligations unless directly attribut-
able to the sale of a vehicle.
Revenues from customer contracts include in particular reve-
nues from the sale of products (primarily new and pre-owned ve-
hicles and related products) as well as revenues from services.
Revenue is recognised when control is transferred to the dealer-
ship or retail customer. In the case of sales of products, this is
usually at the point in time when the risks and rewards of owner-
ship are transferred. Revenues are stated net of settlement dis-
count, bonuses and rebates as well as interest and residual value
subsidies. The consideration arising from these sales usually
falls due for payment immediately or within 30 days. In excep-
tional cases, a longer payment may also be agreed. In the case
of services, control is transferred over time. Consideration for the
rendering of services to customers usually falls due for payment
at the beginning of a contract and is therefore deferred as a con-
tract liability. The deferred amount is released over the service
period and recognised as revenue in the income statement. As a
rule, amounts are released on the basis of the expected expense
trend, as this best reflects the performance of the service. If the
sale of products includes a determinable amount for services
(multiple-component contracts), the related revenues are de-
ferred and recognised as income in the same way. Variable con-
sideration components, such as bonuses, are measured at the
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Intangible assets are measured on initial recognition at acquisi-
tion or manufacturing cost. Subsequently, intangible assets with
finite useful lives are amortised on a straight-line basis over their
useful lives of between three and 20 years. Impairment losses
are recognised where necessary. Intangible assets with indefi-
nite useful lives are tested annually for impairment. Internally
generated intangible assets mainly comprise development costs
for vehicle, module and architecture projects.
← = Q
The impact of climate change has been taken into account by
the Board of Management when preparing the Group Financial
Statements. As a matter of principle, the Group Financial State-
ments are prepared in accordance with the BMW Group's long-
term corporate plan, as approved by management, taking into
account issues relevant for climate change such as the transfor-
mation to electric mobility, regulatory requirements and changes
in production conditions. In this context, the BMW Group incurs
expenditure on research and development for electrified models,
invests in resource-saving production facilities for the manufac-
ture of electrified automobiles and, in particular, is gradually con-
verting its production processes from fossil fuels to green energy
by concluding long-term power purchase agreements for elec-
tricity and gas from renewable sources.
As a consequence of joining the Business Ambition for 1.5°C
campaign led by the Science Based Target initiative (SBTI), the
BMW Group pursues validated SBTi Near Term Targets for the
year 2030, which are incorporated in the Group's long-term cor-
porate plan.
The targets set include a reduction in average carbon emissions
of 80% per vehicle produced in our own plants and locations
(Scope 1 and Scope 2), an average reduction of more than 50%
per kilometre driven in the use phase (Scope 3 downstream) and
an average reduction of more than 20% per vehicle in the supply
chain (Scope 3 upstream).
In line with the recommendations of the Taskforce for Climate-
related Financial Disclosures (TCFD), both physical and transi-
tion-related risks and opportunities are taken into account in the
Group's internal performance management system and in con-
junction with the preparation of the Group Financial Statements.
These aspects, referred to below as "climate-related aspects",
are highly relevant for the preparation of the Group Financial
Statements, particularly in the case of assumptions, judgements
and estimations relating to future developments that impact the
BMW Group and its environment, and are therefore included in
their assessment.
More detailed information on how climate-related aspects are
taken into account for recognition and measurement purposes is
provided below, particularly in the comments on property, plant
and equipment, leased products and the performance of impair-
ment tests. This includes an indication of the extent to which cli-
mate-related aspects have been taken into account in the esti-
mations and assumptions for the recognition and measurement
of balance sheet items.
06 Accounting policies, assumptions, judgements and
estimations
BMW Group Report 2023
Development costs are capitalised if all of the criteria specified
by IAS 38 are met. They are measured on the basis of direct
costs and directly attributable overhead costs. Project-related
capitalised development costs are amortised on a straight-line
basis following the start of production over the estimated product
life (usually five to 12 years).
Intangible assets also include emission allowances and similar
rights arising from programmes aimed at reducing carbon or
other climate-damaging emissions (for example in conjunction
with the EU Emissions Trading System or vehicle-related emis-
sions regulations in the USA or China). These allowances and
rights are carried at cost and, in the event that they are allocated
free of charge, recorded at a value of zero. Amounts are derec-
ognised when they are returned or, in exceptional cases, when
they are sold or expire. In parallel to the recognition of these al-
lowances and rights as assets, provisions are recognised in ac-
cordance with IAS 37 corresponding to the amount of obligations
expected to arise in conjunction with the related emissions regu-
lations. Provisions are measured on the basis of the expected
value of the allowances or rights that are to be returned.
12.4
13.7
15.4
15.6
12.4
13.7
2022
2023
Financial Services
Motorcycles
BMW Brilliance
Automotive excluding BMW Brilliance
in %
The following pre-tax discount factors were applied:
Amounts are discounted on the basis of a market-related cost of
capital rate. Impairment tests are performed for accounting and
financial reporting purposes and using a risk-adjusted pre-tax
cost of capital (WACC) for the Automotive (excluding BMW Bril-
liance), BMW Brilliance and Motorcycles cash-generating units.
In the case of the Financial Services cash-generating unit, a pre-
tax cost of equity capital is used, as is customary in the sector.
By analogous application of the procedures used for the other
cash-generating units, the value in use is also determined for the
BMW Brilliance cash-generating unit in view of the time period
since the acquisition date.
Assumptions also take into account the impact of climate-related
aspects and the influence of other sustainability factors on busi-
ness performance and the product portfolio, for example as a re-
sult of changes in demand patterns, regulatory requirements or
changes in production conditions. In line with the BMW Group's
strategy process and the ongoing transformation to electric mo-
bility, the detailed forecast takes account of key assumptions
such as the planned increase in the share of electrified automo-
biles to over 50% and the required level of expenditure on re-
search and development for vehicle models with battery-electric
drives. Other matters to be considered are the scale of future in-
vestments in resource-saving production facilities (including any
expected efficiency improvements), the cost of converting pro-
duction processes from fossil fuels to renewable energy sources
and, last but not least, the expected impact on the current leasing
portfolio.
For the purposes of calculating cash flows beyond the planning
period, a perpetual annuity return is assumed which does not
take growth into account. Forecasting assumptions are adjusted
to current information and regularly compared with external
sources. The assumptions used take account in particular of ex-
pectations of the profitability of the product portfolio, future mar-
ket share development, macroeconomic developments (such as
currency, interest rate and raw materials prices) as well as the
legal environment and past experience.
If there is any indication of impairment of intangible assets, or
if an annual impairment test is required (i.e. intangible assets
with an indefinite useful life, intangible assets during the devel-
opment phase and goodwill), an impairment test is performed.
Each individual asset is tested separately unless the cash flows
generated by the asset are not sufficiently independent from the
cash flows generated by other assets or other groups of assets.
In these cases, impairment is tested at the level of a cash-gener-
ating unit, which is the norm for the BMW Group.
For the purpose of the impairment test, the carrying amount of
an asset (or a cash-generating unit) is compared with the recov-
erable amount. The first step of the impairment test is to deter-
mine the value in use. If the value in use is lower than the carrying
amount, the next step is to determine the fair value less costs to
sell and compare the amount so determined with the asset's car-
rying amount. If the fair value is lower than the carrying amount,
an impairment loss is recognised, reducing the carrying amount
to the higher of the asset's value in use or fair value less costs to
sell.
If the reason for a previously recognised impairment loss no
longer exists, the impairment loss is reversed up to the level of
the recoverable amount, but no higher than the amortised acqui-
sition or manufacturing cost. Impairment losses on goodwill are
not reversed. As part of the process of assessing recoverability,
it is generally necessary to apply estimations and assumptions -
in particular regarding future cash inflows and outflows and the
length of the forecast period which could differ from actual
amounts. Actual amounts may differ from the assumptions and
estimations used if business conditions develop differently to
expectations.
-
The BMW Group determines the value in use of intangible assets
on the basis of a present value computation. The cash flows used
for this calculation are derived from the long-term corporate plan
approved by management, corresponding to a forecast period of
six years.
Goodwill arises when the cost of acquiring a business exceeds
the Group's share of the net fair value of the assets, liabilities and
contingent liabilities identified during the acquisition.
166
← = Q
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report Other Information
Notes to the Group Financial Statements
← = Q
BMW Group Report 2023
164
To Our Stakeholders Combined Management Report
Also with a view to increasing consistency with internal perfor-
mance management, with effect from the financial year 2023
advance payments to suppliers are reported within other assets.
At 31 December 2022, advance payments to suppliers amount-
ing to € 259 million were reported within inventories. Prior year
figures have not been adjusted on the grounds of immateriality.
151.98
1,412.98
1,346.97
1,435.44
141.11
156.58
0.85
0.87
0.89
0.87
7.08
7.66
7.36
7.86
1.05
1.08
1.07
1.11
The impact of the changes in accounting policy is not material for
the results of operations, financial position and net assets of the
BMW Group.
The financial statements of consolidated companies which are
presented in a foreign currency are translated using the modified
closing rate method. Under this method, assets and liabilities are
translated at the closing exchange rate, while income and ex-
penses are translated at the average exchange rate. Differences
arising on foreign currency translation are presented in "Accu-
mulated other equity". In the single entity accounts of BMW AG
and its subsidiaries, foreign currency receivables and payables
are measured on initial recognition using the exchange rate pre-
vailing at the date of first-time recognition. Advance payments to
suppliers or from customers in a foreign currency that result in
the addition of non-monetary assets or liabilities are recorded at
the exchange rate prevailing at the date of payment. At the end
of the reporting period, foreign currency receivables and pay-
ables are measured using the closing exchange rate. The result-
ing unrealised gains and losses, as well as realised gains and
losses arising on settlement, are recognised in the income state-
ment, in line with the underlying substance of the transaction.
Non-monetary balance sheet line items denominated in foreign
currencies are rolled forward on the basis of historical exchange
rates.
The exchange rates of currencies which have a material impact
on the Group Financial Statements were as follows:
1 euro =
US dollar
Chinese renminbi
138.02
British pound
Japanese yen
Argentina has fulfilled the definition of a hyperinflationary econ-
omy since 1 July 2018. Since that date, IAS 29 (Financial Re-
porting in Hyperinflationary Economies) has therefore been ap-
plied for the BMW subsidiary in Argentina. The price indices pub-
lished by the Federación Argentina de Consejos Profesionales de
Ciencias Económicas (FACPCE) are used to adjust non-mone-
tary asset, liability and income statement line items. The result-
ing effects are not material for the BMW Group.
Closing rate
Average rate
31.12.2023
2023
2022
South Korean won
1,357.16
31.12.2022
BMW Group Report 2023
23.5.2023
1.1.2023
1.1.2023
1.1.2023
1.1.2023
In May 2017 the IASB published IFRS 17 Insurance Contracts.
The Standard replaces IFRS 4 and contains new rules relating to
the recognition, measurement, presentation and disclosure re-
quirements for insurance contracts. In a Group-wide project, the
BMW Group examined the impact of adopting IFRS 17 for exist-
ing agreements. The BMW Group offers various products that
meet the definition of an insurance contract in accordance with
IFRS 17. However, for the majority of these products, either an
exemption applies (e.g. for warranty agreements) or the insur-
ance arrangements qualify as fixed-fee service contracts, which
can continue to be accounted for in accordance with IFRS 15 due
to the option available in IFRS 17. In some markets, however,
products are offered (e.g. comprehensive vehicle insurance) that
are required to be accounted for in accordance with IFRS 17.
These contracts can be accounted for using the premium alloca-
tion approach, which is essentially the same as the accounting
method already being applied for such contracts. In the financial
year 2023, insurance premiums for insurance contracts amount-
ing to € 89 million were recognised in other income within the
line item "Revenues". At 31 December 2023, insurance liabilities
for the remaining terms of these contracts amounted to € 289
million.
In May 2023, the IASB published International Tax Reform - Pil-
lar Two Model Rules (Amendments to IAS 12) which sets out a
mandatory exemption to the accounting for deferred taxes in
conjunction with the global minimum taxation (Pillar Two). The
amendments provide for a temporary exemption from recognis-
ing deferred taxes resulting from the implementation of the Pillar
Two rules. The exemption has accordingly been applied by the
BMW Group. The amendments also include disclosures in the
notes to explain the impact of the introduction of minimum taxa-
tion on affected entities. The introduction of the Pillar Two regu-
lations is not expected to have any significant impact on the
BMW Group Financial Statements.
Date of mandatory application EU
Other financial reporting standards and revised standards issued
by the IASB that have not yet been applied are not expected to
have any significant impact on the BMW Group Financial State-
c Accounting policy changes in the financial year 2023
In order to increase consistency between internal performance
management and external reporting, the following accounting
policies were changed in the financial year 2023.
Government grants related to assets were previously reported as
deferred income and recognised through profit or loss over the
accounting periods in which the costs occur that they are in-
tended to compensate. With effect from the financial year 2023,
government grants relating to assets are deducted from the car-
rying amount of the relevant assets and therefore now recog-
nised in profit or loss over the respective useful lives of the assets
in the form of reduced depreciation/amortisation. In this context,
the accounting treatment applied for investment tax credits was
also changed. Instead of being recognised immediately as a re-
duction of income tax expense, with effect from the financial year
2023 investment tax credits are also deducted from the carrying
amount of the related assets. The income statement impact is
therefore also spread over the respective useful lives of the as-
sets in the form of lower depreciation/amortisation expense. The
change in accounting policy has not been applied retrospectively
on the grounds of immateriality. Prior-year figures have therefore
not been adjusted.
163
Deferred income for government grants relating to assets at 31
December 2022 amounted to € 465 million or 0.19% of Group
total assets at that date. At 31 December 2023, the correspond-
ing amount was € 370 million.
ments.
Date of mandatory application IASB
b Financial reporting pronouncements issued by the IASB, but not
yet applied
Insurance Contracts
International Tax Reform -
Pillar Two Model Rules
Group Financial Statements
Notes to the Group Financial Statements
To Our Stakeholders Combined Management Report
Date of issue by IASB
18.5.2017
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
05 Financial reporting rules
a Financial reporting standards applied for the first time in the
financial year 2023
← = Q
Standards and Revised Standards significant for the BMW Group
and applied for the first time in the financial year 2023:
Standard/Interpretation
IFRS 17
Amendments to IAS 12
New expenditure for capitalised
429
In the financial year 2022, expenses for impairment allowances
included the write-down of receivables from a non-consolidated
Russian subsidiary, which negatively impacted the Other Entities
segment. Detailed information is provided in the BMW Group
Report 2022, note [4] to the Group Financial Statements.
-2,604
- 2,819
2022
Exchange gains
development costs
458
240
Amortisation
2,387
2,265
Income from the reversal of provisions
521
Net interest result comprises the following:
2023
6,624
7,538
Research and development expenses
11 Net interest result
in € million
Group Financial Statements
7,755
125,809
1,157
Income from the reversal of impairment
118,042
Manufacturing costs are reduced by public-sector subsidies in
the form of reduced taxes on assets and reduced consumption-
based taxes amounting to € 107 million (2022: € 115 million).
Impairment losses recognised in the income statement 2023 in
connection with receivables from sales financing amounted to
€ 168 million (2022: € 649 million). In view of the fact that the
impairment losses are of minor importance compared to total
Group cost of sales, they have not been disclosed separately in
the income statement.
174
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Responsibility Statement and Auditor's Report
7,178
Remuneration Report
Notes to the Group Financial Statements
← = Q
Research and development expenses are as follows:
10 Other operating income and expenses
in € million
2023
2022
Other operating income and expenses comprise the following
items:
Research and development expenditure
Other Information
allowances and write-downs
4,927
79
The tax increases due to non-deductible expenses were mainly
attributable to withholding tax expenses.
The tax reductions due to tax-exempt income reported for the
previous year related primarily to the non-tax-relevant gain rec-
ognised in conjunction with the remeasurement of the BMW
Group's previous at-equity interest in BMW Brilliance.
Valuation allowances on tax loss carryforwards and temporary differences
Valuation allowances on capital losses
21.0%
28.8%
Effective tax rate
4,931
Actual tax expense
18
Other variances included a net positive amount of € 304 million
(2022: net negative amount of € 54 million) attributable to de-
ferred tax effects relating to prior periods.
266
Eliminations
31
-7
Effects from tax rate changes
Liabilities
18
-284
Tax expense (+) / benefits (-) for prior years
1,396
Other variances
2
Netting
Net
in € million
2023
2022
Gains on the disposal of assets
378
394
1,457
1,987
264
Deferred taxes
263
4,674
58
18
2022
2023
2022
2023
Deferred tax liabilities
Deferred tax assets
5,176
2,775
15
Expenses for service contracts, telematics
and roadside assistance
Other cost of sales
Cost of sales
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Related party disclosures comprise information on associated
companies, joint ventures and non-consolidated subsidiaries as
well as individuals which have the ability to exercise a controlling
or significant influence over the financial and operating policies
of the BMW Group. This includes all persons in key positions of
the Company, as well as close members of their families or inter-
mediary entities.
In the case of the BMW Group, this also applies to members of
the Board of Management and the Supervisory Board. Details
relating to these individuals and entities are provided in 7 note [41]
and in the list of investments disclosed in 7 note [47].
Share-based remuneration programmes that provide for set-
tlement in shares or a cash payment with a direct obligation to
invest in shares of BMW AG common stock are measured at their
fair value at grant date. The related expense is recognised as
personnel expense in the income statement over the vesting pe-
riod and offset against capital reserves.
Share-based remuneration programmes expected to be settled
in cash are revalued to their fair value at each balance sheet date
between the grant date and the settlement date and on the set-
tlement date itself. The expense is recognised as personnel ex-
pense in the income statement over the vesting period and pre-
sented in the balance sheet as a provision.
BMW Group Report 2023 To Our Stakeholders Combined Management Report
The share-based remuneration programme for Board of Man-
agement members and senior heads of department entitles
BMW AG to elect whether to settle its commitments in cash or
with shares of BMW AG common stock. Based on the decision to
settle in cash, the share-based remuneration programmes for
Board of Management members and senior heads of depart-
ment are accounted for as cash-settled, share-based remunera-
tion programmes. Further information on share-based remuner-
ation programmes is provided in a note [42].
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
NOTES TO THE INCOME STATEMENT
07 Revenues
173
Revenues by activity comprise the following:
172
The recognition and measurement of provisions for litigation
and liability risks necessitate making assumptions in order to
determine the probability of liability, the amount of claim and the
duration of the legal dispute. The assumptions made, especially
the assumption about the outcome of legal proceedings, are sub-
ject to a high degree of uncertainty. The appropriateness of as-
sumptions is regularly reviewed, based on assessments under-
taken both by management and external experts, such as law-
yers. If new developments arise in the future that result in a dif-
ferent assessment, provisions are adjusted accordingly.
Provisions
171
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report Other Information
Notes to the Group Financial Statements
← = Q
If the recognition criteria relevant for provisions are not fulfilled
and the outflow of resources on fulfilment is not unlikely, the po-
tential obligation is disclosed as a contingent liability.
Financial liabilities, with the exception of lease liabilities, are
measured on first-time recognition at their fair value. For these
purposes, transaction costs are taken into account except in the
case of financial liabilities allocated to the category "measured at
fair value through profit or loss". Subsequent to initial recognition,
liabilities are - with the exception of derivative financial instru-
ments - measured at amortised cost using the effective interest
method.
In the case of funded plans, the pension obligation is offset
against plan assets measured at their fair value. If the plan as-
sets exceed the pension obligation, the surplus is tested for re-
coverability. In the event that the BMW Group has a right of reim-
bursement or a right to reduce future contributions, it reports an
asset (within Other financial assets), measured on the basis of
the present value of the future economic benefits attached to the
plan assets. For funded plans, in cases where the obligation ex-
ceeds plan assets, a liability is recognised under pension provi-
sions.
The calculation of the amount of the provision requires assump-
tions to be made with regard to discount rates, pension trends,
employee fluctuation and the life expectancy of employees,
among other things. Discount rates are determined by reference
to market yields at the end of the reporting period on high-quality
fixed-interest corporate bonds.
Net interest expense on the net defined benefit liability or net in-
terest income on the net defined benefit assets are presented
separately within the financial result. All other costs relating to
allocations to pension provisions are allocated to costs by func-
tion in the income statement.
Past service cost arises where a BMW Group company intro-
duces a defined benefit plan or changes the benefits payable un-
der an existing plan. This cost is recognised immediately in the
income statement. Similarly, gains and losses arising on the set-
tlement of a defined benefit plan are recognised immediately in
the income statement.
Remeasurement of the net liability can result from changes in the
present value of the defined benefit obligation, the fair value of
the plan assets or the asset ceiling. Remeasurement can result,
amongst others, from changes in financial and demographic pa-
rameters, as well as changes following the portfolio develop-
ment. Remeasurements are recognised immediately through
other comprehensive income and ultimately in equity (within rev-
enue reserves).
Other provisions are recognised when the BMW Group has a
present legal or factual obligation towards a third party arising
from past events, the settlement of which is probable and when
the amount of the obligation can be reliably estimated. Provi-
sions with a remaining period of more than one year are meas-
ured at their net present value.
The measurement of provisions for statutory and non-
statutory warranty obligations (statutory, contractual and
voluntary) involves estimations. In addition to manufacturer
warranties prescribed by law, the BMW Group offers various fur-
ther standard (assurance type) warranties depending on the
product and sales market. No provisions are recognised for ad-
ditionally offered service packages that are treated as separate
performance obligations.
Provisions for statutory and non-statutory warranties are recog-
nised at the point in time when control over the goods is trans-
ferred to the dealership or retail customer or when it is decided
to introduce new warranty measures. With respect to the level of
the provision, estimations are made in particular based on past
experience of damage claims and processes. Future potential re-
pair costs and price increases per product and market are also
taken into account. Provisions for warranties for all companies of
the BMW Group are adjusted regularly to take account of new
information, with the impact of any changes recognised in the in-
come statement. Further information is provided in note 34. Sim-
ilar estimates are also made in conjunction with the measure-
ment of expected reimbursement claims.
Provisions for pensions are measured using the projected unit
credit method. Under this method, not only obligations relating to
known vested benefits at the reporting date are recognised, but
also the effect of future expected increases in pensions and sal-
aries. The calculation is based on independent actuarial valua-
tions which take into account the relevant biometric factors.
in € million
2022
2023
Interest income on credit financing and finance leases includes
interest calculated on the basis of the effective interest method
totalling € 4,081 million (2022: € 3,656 million). This interest
income is not reported separately in the income statement as it
is not significant compared to total Group revenues.
08 Cost of sales
Cost of sales comprises:
in € million
2023
2022
Manufacturing costs
82,549
76,760
Cost of sales relating to financial services
business
The services included in vehicle sale contracts that will be recog-
nised as revenues in subsequent years represent only an insig-
nificant portion of expected revenues. Accordingly, use has been
made of the practical expedient contained in IFRS 15, permitting
an entity not to disclose information on a quantitative basis due
to the short-term nature of items and the lack of informational
value of such disclosures.
27,764
thereof: interest expense relating to
financial services business
3,554
2,114
Research and development expenses
7,538
6,624
Warranty expenditure
3,782
3,209
27,517
The major part of revenues expected to arise from the Group's
order book at the end of the reporting period relates to the sale
of vehicles. Revenues resulting from those sales will be recog-
nised in the next financial year.
Other income relates mainly to the Automotive segment and the
Financial Services segment.
Revenues from the sale of products and related goods are gen-
erated primarily in the Automotive segment and, to a lesser ex-
tent, in the Motorcycles segment. Revenues from the sales of
products previously leased to customers, income from lease in-
stalments and interest income on credit financing and finance
leases are allocated to the Financial Services segment.
Sales of products and related goods
118,769
Sales of products previously leased to customers
14,262
Income from lease instalments
11,664
106,678
15,040
11,872
Interest income on credit financing and
finance leases
5,279
4,129
Revenues from service contracts, telematics and
roadside assistance
3,648
3,394
Other income
1,876
155,498
Revenues
1,497
142,610
Revenues recognised from contracts with customers in accord-
ance with IFRS 15 totalled € 138,190 million (2022:
€ 126,384 million), spread across the first, second and fifth cat-
egories of the above table and proportionately to other income.
An analysis of revenues by segment is shown in the explanatory
comments on segment information provided in ♬ note [46].
2,780
44
Interest and similar expenses
Net interest result
Capital losses
Selling and administrative expenses relate mainly to expenses
for marketing and communication, personnel and IT.
Sundry operating expenses
-345
- 231
Other interest and similar expenses
- 180
- 219
Other operating expenses
- 1,227
- 11
- 1,330
Other operating income and expenses
-182
47
2,895
-4
-656
- 1
251
45
673
thereof to subsidiaries
Income from the reversal of provisions includes income arising
on the reassessment of risks from legal disputes. The expense
for additions to provisions includes litigation and other legal risks.
Income from the reversal of and expenses for the recognition of
impairment allowances and write-downs relate mainly to impair-
ment allowances on receivables.
-9
- 88
Expense for additions to provisions
- 399
- 307
Interest and similar income
701
422
4,934
4,425
Total selling and administrative expenses
Net interest expense on the net defined benefit
liability for pension plans
11,025
Expense for impairment allowances and
write-downs
Net interest impact on other long-term
-15
- 260
provisions
-467
481
Loss on the disposal of assets
-67
10,616
6,191
Expenses for impairment allowances recognised on receivables
from contracts with customers amounted to € 15 million
(2022: € 61million).
In the previous year, steepening yield curves had a positive im-
pact on the discount unwinding result.
- 142
and participations
Expenses from investments in subsidiaries
-439
Deferred tax expense (+) / deferred tax income (-)
35
22
thereof from subsidiaries:
5,370
- 179
Current tax expense
85
2023
in € million
Income from investments in subsidiaries
and participations
2022
2023
in € million
Taxes on income of the BMW Group can be classified according
to their origin as follows:
13 Income taxes
7,949
Interest expense from unwinding the discounting of other non-
current provisions on the one hand and interest income from ad-
justing the discount rate on the other are netted and, as in previ-
ous years, reported as a net interest effect within interest
expense.
thereof relating to temporary differences
2022
5,069
- 142
- 992
175
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
1,167
-457
4,927
Income taxes
- 1,215
Income (+) and expenses (-) from financial
instruments
850
18
thereof relating to tax loss carryforwards and
tax credits
7,770
-57
Result on investments
4,931
6,091
Administrative expenses
Selling expenses
17,096
2022
2023
Tax rate applicable in Germany
Profit before tax
in € million
The allocation of deferred tax assets and liabilities to balance
sheet line items at 31 December is shown in the following table:
The difference between the expected tax expense based on the
underlying tax rate for Germany and actual tax expense is ex-
plained in the following reconciliation:
← = Q
23,509
Other Information
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
176
Deferred taxes for non-German entities are calculated on the ba-
sis of the relevant country-specific tax rates. These ranged in the
financial year 2023 between 9.0% and 40.0% (2022: between
9.0% and 40.0%).
30.9
30.9
15.1
15.1
Remuneration Report
15.8
in € million
30.9%
Equity accounted
802
632
Non-deductible expenses
Tax loss carryforwards
- 2,203
-217
Tax-exempt income
Sundry other assets
30.9%
Tax increases (+) / tax reductions (-) due to:
-1,047
-786
Variances due to different tax rates
Leased products
Property, plant and equipment
7,264
5,283
Expected tax expense
Intangible assets
Other investments
15.8
solidarity surcharge
Municipal trade tax rate
German income tax rate
Corporate tax rate including
Other interest and similar income
691
422
Sundry operating income
316
274
thereof from subsidiaries
37
20
09 Selling and administrative expenses
Other operating income
1,377
in € million
2023
2022
Exchange losses
-401
-444
Net interest income on the net defined benefit
liability for pension plans
10
1,045
45
Sundry other financial result
- 1,215
5.5
5.5
Solidarity surcharge
15.0
15.0
Corporate tax rate
2022
2023
in %
Deferred taxes are determined on the basis of tax rates which
are currently applicable or expected to apply in the relevant na-
tional jurisdictions when the amounts are recovered. After taking
account of an average municipal trade tax multiplier rate (Hebe-
satz) of 430% (2022: 430%), the underlying income tax rate for
Germany was as follows:
Two calculation have been analysed for the BMW Group, taking
into account the statutory temporary simplification rules (for so-
called "transitional safe harbours"). Based on the results of the
analysis to date, the tax expense arising in the relevant jurisdic-
tions is estimated to be immaterial for the BMW Group. The BMW
Group is already applying the exemption relating to the recogni-
tion of deferred tax assets and liabilities in connection with Pillar
Two. Further information is provided in 7 note 5.
The BMW Group falls within the scope of the OECD Pillar Two
model rules aimed at ensuring a global minimum taxation rate of
15%. Under these rules, the BMW Group will be required pay a
top-up tax to the extent that the Pillar Two specific tax rate in
each jurisdiction where it operates falls below the minimum rate
of 15%. The Pillar Two model rules have been implemented in
Germany with effect for financial years beginning after 31 De-
cember 2023. The BMW Group is therefore not subject to a Pillar
Two tax expense for the financial year 2023. The impact of the
Pillar Two model rules from the financial year 2024 onwards is
currently being assessed. For this purpose, the jurisdictions that
could be affected by a top-up tax based on a preliminary Pillar
The tax income resulting from the change in the valuation allow-
ance on deferred tax assets relating to tax losses available for
carryforward and temporary differences amounted to € 19 mil-
lion (2022: expense of € 103 million).
The tax expense was reduced by € 33 million (2022: € 71 mil-
lion) as a result of utilising tax loss carryforwards, for which de-
ferred assets had not previously been recognised and in conjunc-
tion with previously unrecognised tax credits and temporary
differences.
The negative sundry other financial result was attributable in par-
ticular to the unfavourable fair value development of interest rate
hedges as a consequence of the decline in yield curves and port-
folio effects. The previous year's figure included the positive im-
pact of interest rate hikes in the financial year 2022.
The year-on-year decrease in the result on investments was due
in particular to the exceptionally high remeasurement gain rec-
ognised in the previous year on the BMW Group's previous at-
equity interest in BMW Brilliance in conjunction with that entity's
full consolidation in the financial year 2022. Further information
on this matter is provided in the BMW Group Report 2022, note [3] to
the Group Financial Statements.
In addition to the investment result, the other financial result in-
cludes income and expenses arising on the measurement of
stand-alone derivatives and fair value hedge relationships, as
well as income and expenses from the measurement and sale of
marketable securities and shares in investment funds.
8,937
- 1,272
Other financial result
1,167
44
3,686
6.00*
5
4
Income from variable lease payments for
finance leases
81
110
Income from variable lease payments for
operating leases
2022
2023
in € million
b As lessor
Information on right-of-use assets, lease liabilities as well as fur-
ther explanatory comments are provided in 7 note [6], ^ note [20],
note [22] and note [36].
Cash outflows for leases in the financial year 2023 amounted to
€ 675 million (2022: € 681 million). In addition, cash outflows
for right-of-use assets paid in advance amounted to € 674 mil-
lion (2022: € 732 million).
commence.
The BMW Group is also party to long-term supply contracts for
battery cells that give rise to fixed and variable payment obliga-
tions. Based on the current interpretation, these arrangements
include a lease component in accordance with IFRS 16. The fixed
payment obligations arising in conjunction with such IFRS 16
compatible contracts amount to € 749 million and will fall due
with effect from the financial year 2026 after series deliveries
The BMW Group is party to leases at the end of the reporting
period which have not yet commenced. These leases are ex-
pected to give rise to future cash outflows amounting to
€ 480 million (2022: € 873 million).
3
4
Financial income on the net investment in
finance leases
1,127
1,025
2022
2023
2022
2023
thereof PwC GmbH
PwC International
Services provided during the financial year 2023 by the Group
auditor PricewaterhouseCoopers GmbH Wirtschaftsprüfungs-
gesellschaft, Frankfurt am Main, Munich branch, on behalf of
BMW AG and subsidiaries under its control relate to the audit of
financial statements and other attestation services. The audit of
financial statements comprises mainly the audit of the Group Fi-
nancial Statements and the separate financial statements of
BMW AG and subsidiaries, and all work related thereto, including
the review of the Interim Group Financial Statements. Other at-
testation services include mainly project-related audits, comfort
letters and statutorily prescribed, contractually agreed or volun-
tarily commissioned attestation work. No tax advisory or other
services were provided in the financial year 2023 or in the previ-
ous year.
↑
Fee expense
in € million
The fee expense pursuant to § 314 (1) no. 9 HGB recognised in
the financial year 2023 for the Group auditor and the PwC net-
work of audit firms amounted to € 19 million (2022: € 20 mil-
lion) and consists of the following:
17 Fee expense for the Group auditor
1,601
1,919
retail customers under finance leases
Selling profit on the sale of vehicles leased to
Audit of financial statements
Other attestation services
Tax advisory services
Other services
18
Other Information
Responsibility Statement and Auditor's Report
Automotive
94
8,474
8,440
98
56
66
Interest expense arising on the measurement of
lease liabilities
17
12
Expenses relating to variable lease payments not
included in the measurement of lease liabilities
146,727
134,607
3,552
152,111
139,779
3,794
77
81
Expenses for leases of low-value assets and
short-term leases
2023
2022
Motorcycles
12,170
Notes to the Group Financial Statements
Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
179
Most of the expenses for leases of low-value assets and short-
term leases relate to low-value assets.
Personnel expenses include € 44 million (2022: € 40 million) of
costs relating to workforce measures.
Of the average number of employees, 995 (2022: 953) are at-
tributable to one proportionately consolidated entity within the
Automotive segment.
Remuneration Report
13,932
1,066
1,174
Other
1,385
1,377
Financial Services
11,481
14,721
2022
17
5
2,801
- 1,808
102
80
-256
33
-154
113
745
-118
- 332
24
1,077
- 142
2022
-507
2,350
-1,301
451
1,598
-2,512
853
-2,394
199
-1,772
- 458
2023
281
26
742
868
-2,299
- 102
- 1,557
766
22
5
Other comprehensive income for the period after tax
Currency translation foreign operations
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
180
Variable lease payments are based on distance driven. The
agreements have, in part, extension and purchase options.
These amounts relate mainly to public sector grants aimed at the
promotion of regional structures as well as to subsidies received
for plant expansions and development.
18 Government grants and government assistance
Income from asset-related and performance-related grants,
amounting to € 98 million (2022: € 118 million) and € 215 mil-
lion (2022: € 172 million) respectively, was recognised in the in-
come statement in 2023.
6
6
20
19
2
1
1
Remuneration Report
Other Information
← = Q
NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME
Other comprehensive income from equity accounted investments
Income taxes
thereof reclassifications to the income statement
thereof gains/losses arising in the period under report
Costs of hedging
thereof reclassifications to the income statement
thereof gains/losses arising in the period under report
Derivative financial instruments
Items that can be reclassified to the income statement in the future
thereof reclassifications to the income statement
Marketable securities (at fair value through other comprehensive income)
Items not expected to be reclassified to the income statement in the future
Income taxes
Remeasurement of the net liability for defined benefit pension plans
in € million
Other comprehensive income for the period after tax comprises
the following:
19 Disclosures relating to the statement of comprehensive
income
thereof gains/losses arising in the period under report
2023
= Q
2022
Deferred tax assets and deferred tax liabilities are netted for
each relevant tax entity if they relate to the same tax authorities.
Capital losses available for carryforward in the UK which do not
relate to ongoing operations decreased due to changes in con-
solidated group companies and exchange rate factors and stood
at € 1,845 million (2022: € 1,856 million) at the end of the year
under report. As in previous years, deferred tax assets recog-
nised on these tax losses amounting to € 461 million (2022:
€ 464 million) were fully written down since they can only be uti-
lised against future capital gains.
A net surplus of deferred tax assets over deferred tax liabilities
amounting to € 95 million (2022: € 1,966 million) is reported for
entities that have suffered tax losses in the financial year 2023
or the preceding year. The basis for the recognition of deferred
taxes is the BMW Group business model or management's as-
sessment that there is material evidence that the entities will
generate future taxable profit, against which deductible tempo-
rary differences can be offset.
Tax loss carryforwards relating to Germany and foreign opera-
tions amounted to € 601 million (2022: € 711 million). This in-
cludes tax losses available for carryforward amounting to
€ 382 million (2022: € 416 million), on which a valuation allow-
ance of € 129 million (2022: € 141 million) was recognised on
the related deferred tax asset. Of these loss carryforwards,
€ 349 million (2022: € 382 million) can be used indefinitely,
while € 33 million (2022: € 34 million) expires after one to three
years.
Notes to the Group Financial Statements
← = Q
The change in deferred taxes relating to amounts recognised
with income effect or without income effect is shown in the fol-
lowing reconciliation:
Other Information
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
177
1,007
Remuneration Report
366
in € million
Deferred tax expense (-)/ income (+) recognised through income statement
Change in deferred taxes recognised directly in equity
203
- 519
227
142
439
744
Deferred taxes at 1 January (assets (+)/ liabilities (-))
- 1,007
2023
No deferred taxes are recognised on taxable temporary differ-
ences arising from investments in subsidiaries, associated com-
panies and joint ventures if the BMW Group is able determine the
timing of the reversal of the temporary differences and it is prob-
able that the temporary differences will not reverse in the fore-
seeable future, in particular in view of the fact that there is no in-
tention to distribute the profits, but rather to use them to maintain
substance and reinvest in the companies concerned. Temporary
differences of this kind, for which no deferred taxes were recog-
nised, amounted to € 36,081 million (2022: € 32,882 million).
No computation was made of the potential impact of income
taxes on the grounds of proportionality.
The effects in connection with the first-time consolidation of
BMW Brilliance in the previous year gave rise primarily to net de-
ferred tax liabilities relating to the remeasurement of the assets
acquired and liabilities assumed as part of the purchase price
allocation.
Deferred taxes at 31 December (assets (+) / liabilities (-))
Effects in connection with the first-time consolidation of BMW Brilliance
Exchange rate impact and other changes
thereof relating to fair value gains and losses on financial instruments and marketable securities recognised directly in equity
thereof relating to the remeasurements of net liabilities for defined benefit pension plans
thereof from currency translation
2022
2,765
2,797
1,758
4,573
4,575
11
19
4,636
5,012
1,027
464
212
182
3,495
3,334
1,281
1,478
461
800
4,162
4,379
2,431
- 13,740
-13,471
- 13,740
- 13,471
-464
-461
-245
-185
in € million
16,268
16,207
16,548
1,880
2,332
- 190
24
16,505
-3
17.67
€
59,035,325
58,776,197
number
597,924,318
27.31
579,941,360
1,613.3
1,040.0
€ million
16,327.7
10,250.3
€ million
number
Е
17.69
27.33
- 326
2023
In terms of accounting for leases as a lessee, the following ex-
penses are included in the income statement:
a As lessee
Leases
16
Average number of employees
The average number of employees during the financial year was:
The total pension expense for defined contribution plans of the
BMW Group amounted to € 179 million (2022: € 175 million).
Employer contributions paid to state pension insurance schemes
totalled € 806 million (2022: € 750 million).
8.52
6.02*
€
8.50
12 Other financial result
€
17,941.0
11,290.3
← = Q
2022
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
← = Q
178
-
Deferred tax liabilities on expected dividends amounted to
€ 187 million (2022: € 199 million) and related primarily to divi-
dends from foreign subsidiaries.
- 1,007
- 1,312
-62
- 25
-366
€ million
The tax returns of BMW Group entities are checked regularly by
German and foreign tax authorities. Taking account of numerous
factors including interpretations, commentaries and legal deci-
sions relating to the various tax jurisdictions as well as past ex-
perience adequate provision has been made, to the extent
identifiable and probable, for potential future tax obligations.
Notes to the Group Financial Statements
-
Net profit attributable to the shareholders of BMW AG
2023
14 Earnings per share
Social insurance expenses
Pension and welfare expenses
Personnel expenses
in € million
The income statement includes personnel expenses as follows:
Wages and salaries
In the case of preferred stock, the calculation of earnings per
share and the average number of shares in circulation only takes
account of shares of preferred stock that are entitled to receive a
dividend in each of the relevant financial years. As in the previous
year, diluted earnings per share correspond to basic earnings per
share.
* Proposal by the Board of Management.
Dividend per share of preferred stock
Dividend per share of common stock
Average number of common stock shares in circulation
Average number of preferred stock shares in circulation
Basic/diluted earnings per share of common stock
Basic/diluted earnings per share of preferred stock
Profit attributable to preferred stock
Profit attributable to common stock
15 Personnel expenses
Capital reserves include mainly premiums arising from the issue
of shares, and totalled € 2,456 million (2022: € 2,432 million).
Capital reserves
BMW AG is authorised to issue shares of non-voting preferred
stock amounting to nominal € 5.0 million prior to 15 May 2024.
At the end of the reporting period, 0.3 million shares of these
amounting to € 0.3 million remained available for issue.
All Company stock is issued to bearer. Preferred stock, to which
no voting rights are attached, bears an additional dividend of
€ 0.02 per share.
BMW AG's issued share capital totalling € 638,716,075 com-
prises 579,795,667 shares of common stock, each with a par
value of € 1, and 58,920,408 shares of non-voting preferred
stock, each with a par value of € 1. The issued share capital and
the number of shares were reduced by € 24,123,400 in 2023
following the redemption of 22,199,529 shares of common
stock and 1,923,871 shares of preferred stock. These treasury
shares had been acquired in conjunction with the first share buy-
back programme 2022/2023. The amount of the share capital
reduction was reclassified to capital reserves.
Number of shares issued at 31 December
Treasury shares
Shares in circulation at 31 December
Responsibility Statement and Auditor's Report
Shares in circulation at 1 January
Number of shares issued
31 Equity
← = 9
Other Information
Remuneration Report
Group Financial Statements
Notes to the Group Financial Statements
Combined Management Report
To Our Stakeholders
Preferred stock
Shares issued in conjunction with Employee Share Programme
Less: shares repurchased and withdrawn from circulation
Common stock
entitled to receive a dividend, a correspondingly amended reso-
lution concerning the appropriation of profit will be submitted to
the Annual General Meeting.
2022
On 3 May 2023, the Board of Management of BMW AG ap-
proved a second share buyback programme via the stock ex-
change. Under this programme, BMW AG is authorised to ac-
quire treasury shares of common and preferred stock amounting
to a maximum of € 1.65 billion and € 0.35 billion respectively.
The programme commenced immediately following completion
of the first buyback programme and will run until 31 December
2025 at the latest.
In conjunction with this authorisation, on 30 June 2022 the
Board of Management of BMW AG resolved the first of a number
of share buyback programmes via the stock exchange. Under
this initial programme, BMW AG was authorised to acquire treas-
ury shares of common and preferred stock amounting to a max-
imum of € 1.85 billion and € 0.15 billion respectively. The share
buyback programme was launched in July 2022 and completed
on 30 June 2023.
At the Annual General Meeting of BMW AG held on 11 May
2022, the shareholders authorised the Board of Management to
acquire treasury shares via the stock exchange, up to a maxi-
mum of 10% of the share capital in place at the date of the res-
olution and to redeem those shares without any further resolu-
tion by the Annual General Meeting. The buyback authorisation
remains valid until 10 May 2027.
Treasury shares
Accumulated other equity comprises amounts recognised di-
rectly in equity resulting from the translation of the financial
statements of foreign subsidiaries, changes in the fair value of
derivative financial instruments and marketable securities, costs
of hedging recognised directly in equity as well as the related de-
ferred taxes.
Accumulated other equity
The proposed distribution was not recognised as a liability in the
Group Financial Statements.
BMW Group Report 2023
The number of shares entitled to receive a dividend may change
prior to the Annual General Meeting. In this case, based on an
unchanged distribution per share of common and preferred stock
The proposal for the appropriation of unappropriated profit takes
into account 4,218,363 treasury shares of common stock and
942,892 treasury shares of preferred stock held directly or indi-
rectly by the Company at 31 December 2023. In accordance with
§ 71b of the German Stock Corporation Act, these shares are not
entitled to receive a dividend.
The Board of Management and the Supervisory Board propose
that the unappropriated profit of BMW AG for the financial year
2023 amounting to € 3,802,488,470.32 be utilised to pay a div-
idend of € 6.02 for each share of preferred stock entitled to re-
ceive a dividend, and a dividend of € 6.00 for each share of com-
mon stock entitled to receive a dividend, and that the remaining
amount be transferred to revenue reserves. Based on the num-
ber of shares at 31 December 2023 entitled to receive a divi-
dend, the proposed dividend represents a total payout of € 3.8
billion.
Revenue reserves include the non-distributed earnings of com-
panies consolidated in the Group Financial Statements. In addi-
tion, remeasurements of the net defined benefit obligation for
pension plans are also presented in revenue reserves.
Revenue reserves
11,105,885 15,312,007
575,577,304 586,683,189
4,218,363 15,312,007
579,795,667 601,995,196
601,995,196
586,683,189
59,404,304
1,439,975
1,448,950
59,395,329
1,448,950
60,844,279
1,417,813
57,977,516
942,892
58,920,408
59,395,329
2022
2023
2023
190
2023
70
thereof non-current
9,602
7,596
1,030
1,537
10,632
9,133
Other assets
1,457
thereof current
Sundry other assets*
4,170
Other assets (non-financial instruments)
477
517
Prepaid expenses
872
819
240
420
3,351
59
* Presentation adjusted compared to previous year.
Out of the total amount recognised for inventories at 31 Decem-
ber 2023, inventories measured at net realisable value
amounted to € 1,346 million (2022: € 1,940 million). Write-
downs to net realisable value in the financial year 2023
amounted to € 189 million (2022: € 112 million), while rever-
sals of write-downs amounted to € 13 million (2022: € 11 mil-
lion).
-1
Exchange rate impact and other changes
Balance at 31 December
-3
Utilised
-5
-2
Reversed
34
17
Collateral assets comprise mainly customary collateral (banking
deposits) arising on the sale of asset-backed financing instru-
ments.
Allocated
59
Balance at 1 January
2022
in € million
Expenses for impairment losses and income from the reversal of
impairment losses are not significant for the BMW Group and are
therefore not reported separately in the income statement.
In the case of trade receivables, collateral is generally held in the
form of vehicle documents and bank guarantees so that the risk
of bad debt loss is very limited.
Impairment allowances on trade receivables in accordance with
IFRS 9 developed as follows:
At 31 December 2023, the carrying amounts of inventories ex-
pected to be realised after more than 12 months amount to € 86
million (2022: € 98 million).
The expense recorded in conjunction with inventories during the
financial year 2023 amounted to € 81,497 million (2022:
€ 76,014 million).
32
1,310
- 138
156
574
357
1,109
986
128
218
98
164
3
1
77
144
96
113
162
68
Current financial liabilities, provisions and liabilities
Non-current financial liabilities, provisions and liabilities
in € million
2023
YOUR NOW
IONITY
THERE
2022
2023
2022
2023
2022
DISCLOSURES RELATING TO THE BALANCE SHEET
Non-current assets
Current assets
thereof cash and cash equivalents
Equity
3
1
77
159
738
519
1,112
987
Provisions and liabilities
119
157
165
107
139
129
Net assets
77
159
573
316
Financial information relating to equity accounted investments is
summarised in the following tables (from a 100% perspective):
196
RECONCILIATION OF AGGREGATED FINANCIAL INFORMATION
573
412
973
858
28
36
41
26
137
129
91
121
124
81
2
Assets
412
Notes to the Group Financial Statements
Other Information
265
52
38
22,518
21,408
Impairment losses amounting to € 553 million
305
(2022:
In 2023, public sector grants totalling € 252 million
(2022: €0 million) were deducted from the acquisition cost of
leased products for the first time. These amounts relate mainly
to investment tax credits in the form of tax credits for electric ve-
hicles. It is expected that the investment tax credits can be uti-
lised. The actual utilisation of investment tax credits will, how-
ever, depend on the extent to which they can be offset against
income tax liabilities and is therefore subject to a degree of
uncertainty.
185
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
€ 527 million) were recognised on leased products in 2023 as a
consequence of changes in residual value expectations. Income
from the reversal of impairment losses amounted to € 274 mil-
lion (2022: € 282 million).
1,512
1,813
between three and four years
between four and five years
later than five years
Minimum lease payments
In 2023, government grants totalling € 121 million (2022:
€0 million) were deducted from the acquisition cost of property,
plant and equipment for the first time. These amounts relate
mainly to public sector grants aimed at the promotion of regional
structures as well as to subsidies received for plant expansions.
The regular review of the useful lives of items of property, plant
and equipment subject to systematic depreciation takes into ac-
count the assumptions contained in the long-term corporate
plan, and hence the ongoing transformation towards electric mo-
bility as well as the associated short- and medium-term impact
on the product portfolio. The review of useful lives did not lead to
any material adjustments in the financial year 2023.
23 Leased products
Minimum lease payments of non-cancellable operating leases
fall due as follows:
in € million
within one year
31.12.2023
31.12.2022
9,601
9,606
between one and two years
6,872
6,522
between two and three years
3,875
3,465
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
- 12
thereof from continuing operations
Total comprehensive income
-43
-12
-43
- 12
THERE
Together with AUDI AG, Mercedes-Benz Group AG and other
companies, the BMW Group holds shares in THERE. HERE In-
ternational B.V. (HERE) is an associated company of THERE.
HERE's digital maps are laying the foundations for the next gen-
eration of mobility and location-based services, providing the ba-
sis for new assistance systems and, ultimately, fully automated
driving.
The at-equity loss reported for THERE for 2023 amounted to
€ 77 million (2022: loss of € 40 million). The loss mainly arose
due to impairment losses recognised in relation to THERE's as-
sociated company HERE.
186
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
-43
← = Q
2022
DISCLOSURES RELATING TO
THE INCOME STATEMENT
Profit/loss after tax
24 Investments accounted for using the equity method
Investments accounted for using the equity method comprise an
interest in the joint venture YOUR NOW Holding GmbH (YOUR
NOW), Munich, as well as interests in the associated companies
IONITY Holding GmbH & Co. KG (IONITY), Munich, IONNA LLC
(IONNA), Torrance, Solid Power Inc. (Solid Power), Wilmington,
Delaware and THERE Holding B.V. (THERE), Rijswijk.
YOUR NOW
Together with Mercedes-Benz Group AG, the BMW Group offers
mobility services via the YOUR NOW joint venture.
The at-equity loss reported for YOUR NOW for the financial year
2023 amounted to € 82 million (2022: loss of € 357 million). In
the previous year, impairment losses were recognised in relation
to the YOUR NOW subsidiary FREE NOW.
IONITY
The BMW Group operates the entity IONITY in collaboration with
Mercedes-Benz Group AG, the Ford Motor Company, the
Volkswagen Group and the Hyundai Motor Group. IONITY'S
business model envisages the construction and operation of
high-performance charging stations for battery-powered vehi-
cles in Europe.
On 1 November 2021, a contract was signed with GRP III HPC
Lux S.à.r.l. (Blackrock) for the provision of financing amounting
to € 500 million for the further expansion of the charging net-
work. The existing shareholders are also investing an additional
€ 200 million. With effect from 28 April 2022, following comple-
tion of the transaction, Blackrock became IONITY's largest
shareholder. As a result, the former joint venture became an as-
sociated company of the BMW Group.
The at-equity profit reported for IONITY amounted to € 12 mil-
lion (2022: €5 million). This includes remeasurement effects
arising in conjunction with the transaction with Blackrock.
IONNA
In 2023, the BMW Group, together with the Mercedes-Benz
Group AG, the Stellantis Group, the Honda Group, the Hyundai
Motor Group and the General Motors Company Group, founded
the company IONNA in Canada with the aim of developing a
charging network in North America. The BMW Group holds
16.67% of the associated company IONNA.
IONNA's earnings are not significant for the BMW Group Finan-
cial Statements 2023.
Solid Power
The BMW Group holds shares in Solid Power, an industry-lead-
ing manufacturer of solid-state batteries for electric vehicles.
Joint development partnerships are in place with Solid Power
with a view to securing the supply of solid-state batteries for fu-
ture generations of electric vehicles. The investment meets the
criteria of an associated company and is accounted for using the
equity method.
The at-equity loss reported by Solid Power for 2023 amounted
to € 12 million (2022: loss of € 19 million). In both financial
years, the carrying amount of the investment was written down
in the BMW Group Financial Statements.
in € million
2023
973
858
Group's interest in net assets
Stage 2
Stage 3
65,733
64,382
21,622
21,326
Stage 1
in € million
Simplified
Total
87,355
85,708
Impairment allowances at 1 January 2023
576
General
31.12.2022
*Including operating leases.
Receivables from sales financing
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
25 Receivables from sales financing
Receivables from sales financing comprise the following:
Impairment allowances on receivables from sales financing in
accordance with IFRS 9, which only arise within the Financial
Services segment, developed as follows:
↑
= Q
in € million
31.12.2023
Credit financing for retail customers and
dealerships*
Finance lease receivables
935
35
- 11
2,145
-20
62
Write-off of receivables
-1
-24
1
-98
-124
Changes in risk parameters
Other changes
- 8
- 5
-1
-2
- 16
- 19
2
187
26
Derecognition and origination of receivables
Reclassification to Stage 1
5
-47
-1
-43
Reclassification to Stage 2
-23
234
-39
172
Reclassification to Stage 3
-3
-52
215
159
54
- 143
- 337
53
Income taxes
Profit/loss after tax
thereof from continuing operations
thereof from discontinued operations
Other comprehensive income
Total comprehensive income
* Prior year figures restated.
271
357
130
80
11
598
46
32
Interest expense
- 131
Interest income
Scheduled depreciation
38
78
87
62
299
255
Carrying amount
38
78
87
62
299
255
DISCLOSURES RELATING TO THE INCOME STATEMENT
Revenues
Profit/loss before financial result
Right-of-use assets arising from leases of land and buildings re-
late primarily to logistics and office premises and, to a lesser ex-
tent, to selling and production premises. In order to secure these
premises and, in the interests of flexibility, the property rental
agreements concerned often contain extension and termination
options.
-774
- 51
- 134
- 168
- 797
-54
-53
- 339
-134
- 3
51
24*
2
- 9
-117
-776°
-54
- 339
-27
- 53
- 800
-1
- 1
3
23
18
2
2
2
9
8
3
- 5
25
8
- 168
-54
Expected reimbursement claims
As in the previous year, no financing costs were recognised as a
cost component of property, plant and equipment in 2023.
22 Property, plant and equipment (including right-of-use
assets arising from leasing)
Unrealised interest income
21,761
22,080
Net investment in finance leases without
loss allowances
Income tax assets totalling € 1,199 million (2022: € 1,096 mil-
lion) include claims amounting to € 29 million (2022: € 26 mil-
lion), which are expected to be settled after more than one year.
Claims may be settled earlier than this depending on the timing
of the underlying proceedings.
19
2,372
29
836
3,914
3,935
27 Income tax assets
5,061
5,191
688
2,018
Loss allowances
458
28 Other assets
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
2
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
189
21,326
21,622
Net investment in finance leases
435
5,694
5,857
5,164
4,131
23,779
24,452
20
Financial assets
32
760
942
Other
Loans to third parties
4,146
4,134
5,469
Derivative instruments
5,677
6,272
thereof non-current
Other assets comprise:
due within one year
due between one and two years
due between two and three years
due between three and four years
due between four and five years
6,232
3,073
1,387
8,237
5,518
379
404
34
18
4,386
2,926
3,438
2,170
31.12.2022
31.12.2023
6,385
thereof current
Marketable securities and investment funds
29 Inventories
30 Trade receivables
thereof non-current
259
11
Advance payments to suppliers
Receivables from companies in which an
4,127
3
4,162
524
693
financial services business
114
98
Deposits
Net carrying amount
2
investment is held
48
847
Advance payments'
1,846
1,987
Other taxes
5,971
3,506
Other assets (financial instruments)
4,125
4,159
thereof current
20,005
23,719
Inventories
50
Vehicles held for sale in the
-43
-52
Allowances for impairment of stage 3
12,563
16,103
Finished goods and goods for resale
Work in progress, unbilled contracts
4,317
2,263
leased products
Return right assets for future
in € million
31.12.2022
31.12.2023
in € million
31.12.2022
31.12.2023
in € million
Trade receivables comprise the following:
Gross carrying amount
Inventories comprise the following:
31.12.2023
4,232
454
455
Collateral assets
3,424
3,722
Raw materials and supplies
- 16
- 18
Allowances for impairment of stage 2 -
simplified approach
1,036
642
Receivables from subsidiaries
3,235
3,190
4,186
31.12.2022
6,560
7,112
7,107
35
3
381
87
3
90
9
291
Participations
1,020
27
112
57
1,102
253
340
subsidiaries
Investments in non-consolidated
Reclassification to Stage 3
in € million
The carrying amount of the corresponding liabilities from asset-
backed financing transactions at 31 December 2023 stood at
€ 12,089 million (2022: € 11,603 million). The fair value of
these liabilities at that date was € 12,148 million
(2022: € 11,635 million).
was
The carrying amount of receivables from sales financing trans-
ferred, but not derecognised at 31 December 2023 stood at
€ 15,152 million (2022: € 14,487 million). The fair value of
those receivables
date
at that
€ 15,332 million
(2022: € 14,428 million).
For the purposes of ABS financing, only the senior tranches of
the issued securities are sold to external investors. Subordinated
tranches are retained by the BMW Group. Furthermore, the BMW
Group retains the exposure to interest rate risk in many transac-
tions for which it concludes corresponding interest rate deriva-
tives. The risk of delayed payments by debtors is reduced in the
majority of ABS financing agreements by cash reserves financed
by the BMW Group. Due to the risks remaining with the BMW
Group, the ABS financing arrangements did not result in the de-
recognition of the securitised financial assets.
As part of its ABS financing activities, the BMW Group transfers
some of its receivables from sales financing – primarily retail cus-
tomer and dealership financing receivables - to structured com-
panies, which in turn securitise them and place them on the cap-
ital market as collateralised securities.
2,189
643
36
929
581
Impairment allowances at 31 December 2023
-166
5,112
32
-21
23
- 8
184
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
21 Intangible assets
Intangible assets mainly comprise capitalised development costs
on vehicle, module and architecture projects as well as rights re-
acquired in conjunction with a business acquisition. Also included
are subsidies for tool costs, licences, purchased development
projects, emissions allowances, software and purchased cus-
tomer bases.
Other intangible assets include brand-name rights amounting to
€ 96 million (2022: € 95 million) which are allocated to the Au-
tomotive segment and are not subject to scheduled amortisation
since their useful life is deemed to be indefinite. The brand-name
rights are, to an extent, subject to a limited right of ownership.
Intangible assets also include goodwill of € 33 million
(2022: € 33 million) allocated to the Automotive excluding BMW
Brilliance cash-generating unit (CGU) and goodwill of
€ 1,107 million (2022: € 1,182 million) allocated to the BMW
Brilliance CGU. Goodwill amounting to € 347 million
(2022: € 347 million) related to the Financial Services CGU.
As in the previous year, there was no requirement to recognise
impairment losses or reversals of impairment losses on intan-
gible assets in 2023.
As in the previous year, no financing costs were recognised as a
cost component of intangible assets in 2023.
In 2023, government grants totalling € 2 million (2022: €0 mil-
lion) were deducted from the acquisition cost of intangible assets
for the first time. These grants include public sector funds aimed
at promoting development.
3 Including assets under construction amounting to € 2,502 million.
Stage 1
2 Including advance payments for right-of-use assets amounting to € 160 million.
1,241
42
1,060
988
Other investments
1,360
36
147
60
1,483
119
- 18
23
- 8
132
1,351
1 Thereof expense amounting to € 23 million recognised in profit or loss.
Stage 2
Stage 3
General
To Our Stakeholders Combined Management Report
BMW Group Report 2023
188
Derecognition and origination of receivables
Write-off of receivables
2,145
599
35
935
576
Impairment allowances at 31 December 2022
42
2
-3
96
-53
Group Financial Statements
134
Responsibility Statement and Auditor's Report
Other Information
in € million
31.12.2022
31.12.2023
26 Financial assets
Financial assets comprise:
due later than five years
Gross investment in finance leases
due between one and two years
due between two and three years
due between three and four years
due between four and five years
due later than five years
due within one year
in € million
Finance leases are analysed as follows:
The estimated fair value of vehicles held as collateral for credit-
impaired receivables at the end of the reporting period totalled
€ 488 million (2022: € 455 million). The carrying amount of as-
sets held as collateral and taken back as a result of payment de-
fault amounted to € 19 million (2022: € 35 million).
Impairment allowances include € 95 million (2022: € 99 million)
on credit-impaired receivables relating to finance leases.
An additional risk allowance for expected credit losses was rec-
ognised to take account of the negative impact on retail customer
and dealership business, to the extent not covered by the stand-
ard loss provisioning models (post-model adjustments). The
level of the additional risk allowance is reviewed regularly and
has been reduced compared to the previous year, as the weaker
macroeconomic environment has already been partially taken
into account in the standard models. However, in view of the on-
going unfavourable macroeconomic prospects and geopolitical
uncertainties, the additional risk allowance remains in the mid-
three-digit million range.
Notes to the Group Financial Statements
← = Q
Remuneration Report
No impairment losses were recognised in 2023, as in the previ-
ous year.
3
44
- 18
Reclassification to Stage 2
- 21
- 2
- 22
3
Reclassification to Stage 1
1,599
567
35
550
447
Impairment allowances at 1 January 2022
Total
Simplified
241
2
- 37
-2
85
Changes in risk parameters
Other changes
- 103
-87
-15
- 1
170
-24
2
77
115
138
177
-1
-36
186
-2
599
Before tax
- 154
78
- 35
113
745
After tax
Income taxes
-332
1,077
- 118
24
-142
Before tax
182
45
9,147
18,077
16,027
1,096
53,847
Leased products
275
41,370
73,306
5,436
3,412
3
- 2,730
2,6472
7,537
52,893
7,072
- 109
536
To Our Stakeholders Combined Management Report
BMW Group Report 2023
182
1,598
- 790
2,388
-2,512
305
- 2,817
199
199
- 1,772
- 1,772
- 1,808
- 82
22
26
26
- 1,115
442
- 1,557
546
-220
766
1,960
- 841
2,801
- 1,272
- 104
Group Financial Statements
373
Property, plant and equipment
3,251
office equipment
Other facilities, factory and
131
838
141
7
134
14
979
7
48
787
40
7
145
thereof right-of-use assets from
leases
10,165
14,190
30,738
4,506
I
3,457
213
31,574
44,928
4,542
1,407
-1
63,760
164
155
1,585
29
1,884
construction in progress
Advance payments made and
62
91
63
48
I
41
1
154
393
48
1
2
131
thereof right-of-use assets from
leases
907
1,229
2,295
447
370
28
2,344
3,524
479
68
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
2023
2022
1,659
299
473
-27
1,512
4,449
422
444
-114
4,541
thereof right-of-use assets from
leases
The hedging effects of derivative financial instruments that are
subsequently recycled to the acquisition cost of inventories are
not included in other comprehensive income after tax.
13,295
8,709
359
1
996
-74
8,147
21,957
538
356
998
112
-413
21,442
13,248
buildings on third party land
In 2023, other comprehensive income from equity accounted in-
vestments was a positive amount of € 26 million and is reported
in the Group Statement of Changes in Equity within currency
translation differences. In the previous year, the amounts re-
ported for equity accounted investments comprised a negative
amount of € 395 million within currency translation differences
and positive amounts of € 220 million and € 93 million within
derivative financial instruments and costs of hedging respec-
tively.
Other comprehensive income from equity accounted investments
Currency translation foreign operations
4,827
5,890
3,4123
1,884
5,292
5,146
41,180
32,126
10,073
22,390
42,820 44,700
Investments accounted for using the
equity method
5,352
402
5,094
Other comprehensive income
Income taxes
240
181
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Income taxes on components of other comprehensive income
are as follows:
in € million
Remeasurement of the net liability for defined benefit pension plans
Marketable securities (at fair value through other comprehensive income)
Derivative financial instruments
Costs of hedging
660
Land, titles to land, buildings, including
21,776
20,022
10,684
Value
Current Reclassifi-
cations adjustments¹
year
2,387
9,449
23,028
1,152
2,604
21,576
Development costs
1.1.2023 differences
Disposals 31.12.2023
cations
Disposals 31.12.2023 31.12.2023 31.12.2022
1,152
Translation
consolidated
companies Additions
1.1.2023 differences
in € million
Translation
to changes in
Additions due
Carrying amount
Depreciation and amortisation
Acquisition and manufacturing cost
20 Analysis of changes in Group tangible, intangible and investment assets 2023
NOTES TO THE BALANCE SHEET
Notes to the Group Financial Statements
← = Q
Reclassifi-
12,344
12,127
Goodwill
13,954
1,228
3,857
-104
11,429
33,976
1,386
2,766
-609
33,205
Intangible assets
8,087
6,191
3,270
76
1,470
- 104
1,980
9,461
234
162
-534
10,067
Other intangible assets
1,562
1,487
1,487
-75
1,562
3,563
2,493
69
41,739
-3
701
43
3
1,717
141
303
444
1,273
838
Other facilities, factory and
office equipment
3,524
979
-54
268
91
448
3,519
2,295
-27
395
15
1
430
2,248
1,271
1,229
1
thereof right-of-use assets from
leases
thereof right-of-use assets from
leases
14,929
35
101
-16
1,102
Participations
291
234
89
-1
90
323
58
6
14,190
2,790
Plant and machinery
44,928
-471
3,221
1,520
2,773
46,425
30,738
-222
3,726
-14
2,732
31,496
3,029
154
-4
49
41,180
10,073
-323
5,117
3,521
42,453
35,266
32,126
-86
5,591
5,748
9,830
43,118
42,820
77,719
52,948
Investments accounted for using the
660
168
145
683
240
240
443
420
Investments in non-consolidated
subsidiaries
381
-6
After tax
equity method
18,338
18,927
-534
43
156
63
- 1
47
42
67
89
91
2
Advance payments made and
construction in progress
3,412
-81
405
4,050²
- 1,967
1
5,818
5,8183
3,412
Property, plant and equipment
73,306
- 1,019
518
8,674
3,760
Leased products
52,893
1,152
42
405
115
11,429
946
3,739
- 31
8,667
33,205
978
3,073
9,546
- 83
21,647
Intangible assets
1,027
21,776
8,087
411
1,474
-31
948
10,067
443
254
8,349
-68
1,975
Other intangible assets
380
1,562
1,980
5
12,980
buildings on third party land
Plant and machinery
2,229
3,029
1,512
106
484
1,134
4,541
137
701
625
- 11
13
Land, titles to land, buildings, including
thereof right-of-use assets from
leases
13,295
8,147
339
1,000
34
7,452
21,442
412
1,168
934
2,830
36
16,886
9,434
5
3,363
5
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
183
3 Including assets under construction amounting to € 4,565 million.
2 Including advance payments for right-of-use assets amounting to € 79 million.
1 Thereof expense amounting to € 115 million recognised in profit or loss.
1,351
1,197
Notes to the Group Financial Statements
278
115
12
132
1,475
93
107
1,483
Other investments
1,060
963
189
- 19
1,562
- 19
Analysis of changes in Group tangible, intangible and investment assets 2022
-22
Depreciation and amortisation
1,197
Acquisition and manufacturing cost
- 15
385
Goodwill
12,127
9,449
530
2,265
7,714
Disposals 31.12.2022 31.12.2022 31.12.2021
Reclassifi-
Value
cations adjustments¹
Current
year
1.1.2022 differences
11,573
530
Disposals 31.12.2022
21,576
Translation
business
1.1.2022 differences combinations
Additions
Carrying amount
in € million
Translation
Development costs
19,287
2,819
Reclassifi-
cations
Additions
arising on
10.1
288,713
12.0
2,340,547
315,196
286,265
6,239
2,382,305
5,912
2,461,269
6,179
2,255,637
2,564,025
3,776
1,980,740
352,729
5,455
2,089,801
2,166,644
2,205,841
6.4
2,554,183
0.2
- 1.0
6,032
0.8
271,121
2,661,922
2,003,782
2.04
To Our Stakeholders
295,358
BMW Group Report 2023
12
12
-0.2
1 Training for BMW Group employees and temporary staff at consolidated companies worldwide. Data is collated on the basis of direct input by participants and, to a small extent, by extrapolation. Data also includes e-learning formats.
2 Deliveries including BMW Brilliance Automotive Ltd. also for the period prior to full consolidation in the Group Financial Statements (2019: 538,612 units, 2020: 602,247 units, 2021: 651,236 units, 1 January to 10 February 2022: 96,133 units).
3 Production including BMW Brilliance Automotive Ltd. also for the period prior to full consolidation in the Group Financial Statements (2019: 536,509 units, 2020: 602,935 units, 2021: 700,777 units, 1 January to 10 February 2022: 58,507 units).
4 Efficiency indicator calculated from the absolute energy consumption (adjusted for CHP losses) of automobile production (BMW Group plants excluding partner plants and contract manufacturing) divided by the number of units produced (BMW Group plants and partner plants, excluding contract
manufacturing).
1,542,514
1,545,490
1,956,514
11.7
1,845,271
221,988
215,932
187,500
168,104
187,116
-7.5
1.97
2.13
2.10
2.12
2.8
292,922
6,021
2,399,632
MINI
2,325,179
Total³
Rolls-Royce
BMW³
Production by brand
Total²
Rolls-Royce
MINI
BMW²
Deliveries by brand
AUTOMOTIVE SEGMENT
Energy consumption per vehicle produced (in MWh)"
Spending on employee training and development (in € million)¹
OTHER NON-FINANCIAL PERFORMANCE FIGURES
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
To Our Stakeholders
BMW Group in Figures
BMW Group Report 2023
11
Combined Management Report
GROUP
302,138
5,586
2,521,514
MOTORCYCLES SEGMENT
BMW
2,537,504
292,582
3,756
7.2
2,252,793
2,100,689
2,213,790
2,028,841
2,184,939
347,465
5,100
12.7
469
Production
416
279
370
Change in %
2023
2022
2021
2020
2019
New contracts with retail customers
FINANCIAL SERVICES SEGMENT
389
Group Financial Statements
To Our Stakeholders Combined Management Report Group Financial Statements
Report of the Supervisory Board
Remuneration Report
100
5
5
Johann Horn
100
5
5
Susanne Klatten
Heinrich Hiesinger
100
8
5
8
5
Rachel Empey
100
100
5
5
4
5
8
5
Dominique Mohabeer
100
5
5
1
100
5
100
5
5
100
80
1
5
8
5
100
100
100
18
5
18
5
100
5
100
5
17
5
100
100
18
5
17
Bernhard Ebner
17
17
5
5
Marc Bitzer
100
5
5
Christiane Benner
5
100
18
5
18
5
Kurt Bock
100
100
100
18
100
5
20
Chairman of the Supervisory Board
Norbert Reithofer
Yours
M
On behalf of the Supervisory Board
Munich, March 2024
We are confident that the Board of Management and the BMW Group's workforce will con-
tinue to pursue the BMW Group's chosen path of sustainable and digitalised mobility in
2024, and we eagerly await the launch of the NEUE KLASSE in 2025.
20
With their great dedication and an outstanding collaborative effort during the past financial
year, the members of the Board of Management and the employees of the BMW Group
worldwide successfully defended the BMW brand's leading position in the global premium
segment and significantly expanded the share of electric mobility in Group sales. We there-
fore wish to express our deep thanks and appreciation to all of them.
The Supervisory Board acknowledged and approved the combined Non-financial (Group)
Statement drawn up by the Board of Management. Following a preparatory review con-
ducted by the Presiding Board as well as a further review at Supervisory Board level, the
Statement on Corporate Governance drawn up by the Board of Management was also ap-
proved by the Supervisory Board.
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Combined Management Report Group Financial Statements
Report of the Supervisory Board
To Our Stakeholders
Expression of appreciation by the Supervisory Board
BMW Group Report 2023
BMW Group Report 2023
Combined Management Report Group Financial Statements
Statement of the Chairman of the Board of Management
Chairman of the
Board of Management
Oliver Zipse
That is what the BMW Group stands for, like no other company. It is one of the reasons why
you, our shareholders, continue to stand by us.
At the BMW Group, we call it continuous progress.
We deliver what we say we are going to do – systematically, without making excuses, con-
sistently and reliably. Becoming a little bit better every day - that is what I expect from the
Company and from myself. That is how we move forward - bringing ambitious goals closer
and gradually turning them into reality. Society likes to talk about the transformation of mo-
bility and the automotive industry.
You know your Company: we always think ahead.
LADIES AND GENTLEMEN:
To Our Stakeholders
DEAR SHAREHOLDERS,
-
BOARD OF MANAGEMENT
STATEMENT OF THE
CHAIRMAN OF THE
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Strong today – strong tomorrow.
100
19
Based on the preparatory work of the Audit Committee, the Supervisory Board and the
Board of Management jointly prepared the Remuneration Report for the financial year 2023
in accordance with § 162 AktG. At the request of the Audit Committee, PwC reviewed the
contents of the Remuneration Report, reported to both the Audit Committee and the Super-
visory Board on the results of the review, and confirmed that the Remuneration Report com-
plies with the financial reporting provisions contained in § 162 AktG in all material respects.
The Audit Committee and the Supervisory Board also carefully examined the combined
Non-financial (Group) Statement for the year ended 31 December 2023. Following an in-
depth explanation of the statement by the Board of Management, representatives of PwC
presented the key findings of their audit and answered additional questions posed by the
members of the Supervisory Board. Based on the "limited assurance” audit performed by
PwC on those parts of the Management Report and certain sustainability disclosures in the
integrated BMW Group Report 2023 that were not subject to a reasonable assurance en-
gagement, PWC issued an unqualified opinion, signed for the second time by Michael Popp
(Wirtschaftsprüfer) and for the first time by Annette Fink.
Sibylle Wankel
Anke Schäferkordt
Christoph M. Schmidt
Vishal Sikka
André Mandl
Gerhard Kurz
Jens Köhler
100
5
* Member of the Supervisory Board since 18 January 2023.
5
5
5
100
5
5
100
5
100
19
18
To Our Stakeholders
€ 6.00 for each share of common stock entitled to receive a dividend and € 6.02 for each
share of preferred stock entitled to receive a dividend and to transfer the remaining amount
to other revenue reserves. We consider the proposal appropriate and have therefore ap-
proved it.
Furthermore, in both the Audit Committee and the full Supervisory Board, we examined the
Board of Management's proposal to use the unappropriated profit to pay a dividend of
Based on a thorough examination conducted by the Audit Committee and the Supervisory
Board, we concurred with the results of the external audit. In accordance with the final result
of this examination, no objections were raised. At our meeting held on 14 March 2024, we
accordingly approved the Group and Company Financial Statements of BMW AG for the fi-
nancial year 2023. The Company Financial Statements for the year ended 31 December
2023 have therefore been adopted.
In the course of their audit work, they did not identify any facts inconsistent with the con-
tents of the Declaration of Compliance pursuant to § 161 of the German Stock Corporation
Act (AktG) jointly issued by the Board of Management and the Supervisory Board.
The representatives of the external auditors confirmed that the risk management system
established by the Board of Management is capable of identifying at an early stage any de-
velopments that might threaten the Company's going-concern status. They also confirmed
that no material weaknesses in the internal control system and risk management system
were identified with regard to the financial reporting process.
At the two respective meetings, the Board of Management provided a detailed explanation
of the reporting documents submitted to the Audit Committee and the Supervisory Board.
The representatives of the external auditor reported on the main findings of their audit and
answered questions put to them by members of the Audit Committee and the Supervisory
Board, partially without the presence of the members of the Board of Management. Both
the Audit Committee and the Supervisory Board gave meticulous consideration to the key
audit matters and the related audit procedures.
At its meeting held on 13 March 2024, the Audit Committee diligently examined and delib-
erated on these documents before they were considered in detail at the plenary session of
the Supervisory Board on 14 March 2024.
BMW Group Report 2023
Immediately after authorising their issue, the Board of Management submitted the Com-
pany and Group Financial Statements for the financial year 2023 and the Combined Man-
agement Report (including the Combined Non-financial (Group) Statement) to the Supervi-
sory Board. The auditor's long-form audit reports were also submitted to the Supervisory
Board in a prompt manner. In order to facilitate preparations, drafts of these documents had
already been made available to the Supervisory Board in advance.
The Company Financial Statements and the Group Financial Statements of BMW AG for the
financial year ended 31 December 2023, including the Combined Management Report, on
which PwC has issued unqualified audit opinions, were authorised by the Board of Manage-
ment on 12 March 2024. These audit opinions were signed for the fifth consecutive finan-
cial year by independent auditor Petra Justenhoven (Wirtschaftsprüferin) and, for the second
time, by Michael Popp (Wirtschaftsprüfer) as the auditor responsible for the performance of
the engagement.
PwC was appointed external auditor for the financial year 2023. PwC initially conducted a
review of the condensed Interim Group Financial Statements and the Interim Group Man-
agement Report for the first half of 2023 and presented its findings to the Audit Committee.
No issues were identified that might indicate that the condensed Interim Group Financial
Statements and Interim Group Management Report had not been prepared in accordance
with the applicable provisions in all material respects.
Review of financial statements and the profit distribution proposal
← = Q
Other Information
Remuneration Report
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Report of the Supervisory Board
At its meeting held on 29 February 2024, the Audit Committee initially gave in-depth con-
sideration to the preliminary version of the Company and Group Financial Statements and
the Combined Management Report (including the combined Non-financial (Group) State-
ment and the information on the EU taxonomy) as well as the draft version of the auditor's
long-form reports.
Responsibility Statement and Auditor's Report
Plenum Committees
Presiding
Board/
The Mediation Committee, which is prescribed by law, did not need to convene during the
financial year under report.
The Nomination Committee held one meeting in the financial year 2023 in which it dis-
cussed the composition of shareholder representatives on the Supervisory Board. Taking
into account the composition requirements resolved by the Supervisory Board and the rec-
ommendations of the German Corporate Governance Code, the Nomination Committee is-
sued recommendations for the Supervisory Board's election proposals to the Annual Gen-
eral Meeting to be held in 2024.
In its role as a preparatory body, in the course of 2023 the Personnel Committee convened
four times to deliberate on the remuneration of, and succession planning for, the Board of
Management. The review of the appropriateness of the Board of Management's remunera-
tion for the financial years 2022 and 2023 and the determination of the factors for the
Board of Management's variable remuneration for those years were the subjects of thor-
ough preparation within the Personnel Committee. The determination of financial and ESG
targets for the Board of Management's remuneration for the financial year 2024 was also
discussed in great detail. In addition, the Personnel Committee prepared for the change of
remuneration consultant in the financial year 2023. The renewal of the anticipatory resolu-
tion on the approval of loans and transactions by BMW Bank GmbH was also on the
agenda.
The Audit Committee received regular reports on the state and development of significant
legal proceedings and internal investigations and, in individual cases, discussed product-
and emissions-related proceedings with external legal advisors brought in for that purpose.
In its report on the audit of over-the-counter derivatives entered into by BMW AG during the
financial year 2022, the external auditor confirmed to the Audit Committee the effectiveness
of the system in place at BMW AG in complying with the regulatory requirements of the Eu-
ropean Market Infrastructure Regulation.
The head of Corporate Audit presented us with the key audit findings and plans for further
internal audits. The Chief Compliance Officer of the BMW Group reported on the structural
development of the compliance management system, the implementation of operational
measures and further planning. The report also addressed the implementation of the Ger-
man Supply Chain Due Diligence Act. In addition, we received a report on the BMW Group's
tax and customs control system from the responsible head of department.
We also addressed the topic of climate-related risks. We regularly monitor the further devel-
opment of the internal control system for non-financial reporting with regard to the Group's
sustainability-related targets.
At its meeting in July 2023, the Audit Committee considered the effectiveness and appropri-
ateness of the BMW Group's internal control system (including the Corporate Audit func-
tion), the compliance management system and the risk management system. In the half-
yearly risk reports, we addressed the principal risks facing the BMW Group and their classifi-
cation. We focused particularly on geopolitical risks and the resulting risk scenarios, espe-
cially for supply chains and sales markets, as well as measures to mitigate these risks.
The Board of Management informed the Audit Committee regarding the implementation of
the first share buyback programme (which the Audit Committee had already approved in
2022), the redemption of the shares on 18 July 2023 and related reduction in share capital,
as well as the second share buyback programme resolved by the Board of Management in
May 2023.
The Quarterly Statements were presented to us for discussion by the Audit Committee prior
to their publication by the Board of Management. Representatives of the external auditors
were also present when the Half-Year Financial Report was discussed in early August
2023.
The Audit Committee also examined the combined Non-financial Statement of BMW AG
and the BMW Group for the financial year 2022, which was part of the BMW Group Report
2022. The Audit Committee had representatives from PwC explain the results of their audit.
We have again engaged PwC to conduct a "limited assurance" audit of the Non-financial
(Group) Statement for the financial year 2023, to the extent that it relates to parts of the
management report that are not subject to a "reasonable assurance" audit. Going beyond
the formal review required by law, the Audit Committee also engaged PwC to audit the con-
tents of the Remuneration Report for the financial year 2023.
The Audit Committee also specified supplementary audit focus areas. Moreover, it approved
the scope of the non-audit services to be performed, and received regular reports from PwC
regarding these services. At its meetings, the Audit Committee discussed the quality of the
audit in depth on several occasions. In particular, it received a report from the relevant de-
partment on the Group's experience with the audit of the financial statements for the finan-
cial year 2022 and on the results of the survey conducted within the Group for this purpose.
Based on this report, the auditor's description of the quality assurance measures under-
taken, and the Audit Committee's own experience with the auditor, the audit was found be
of good quality.
The Audit Committee concluded that PwC's fee proposal for the audit of the Company and
Group Financial Statements and the BMW Group Report 2023, as well as for the review of
the Half-Year Report 2023, was appropriate in light of the scope of its tasks. The Commit-
tee therefore issued the corresponding contracts to PwC following its election at the Annual
General Meeting in May 2023.
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
Report of the Supervisory Board
BMW Group Report 2023
16
In March 2023, the focus was on preparing for the Supervisory Board meeting at which the
financial statements for the financial year 2022 were discussed and examined. After verify-
ing the matter of independence, the Audit Committee recommended to the Supervisory
Board that PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft ("PwC") be
elected auditor at the Annual General Meeting 2023. There were no indications of conflicts
of interest, grounds for exclusion or lack of independence on the part of the auditor.
Unless a particular committee was responsible, the Presiding Board prepared the topics for
the plenary meetings at its four meetings in cooperation with the Board of Management and
senior heads of department. It also put forward proposals for reporting within the Supervi-
sory Board. The Presiding Board focused especially on the corporate strategy and its sus-
tainability-related aspects, in addition to longer-term corporate planning. The report on the
BMW Group's position was discussed in detail at every meeting of the Presiding Board.
The Audit Committee convened eight times in total.
The Supervisory Board has established a Presiding Board and four committees. At each
subsequent Supervisory Board meeting, the Chairman of the Audit Committee, Dr Bock,
and myself reported in detail on the work of the Presiding Committee and the other commit-
tees. Further information on the duties, composition and working methods of the Presiding
Board as well as the various other committees is provided in the Statement of Corporate
Governance on the BMW Group website.
Description of Presiding Board activities and committee work
The Supervisory Board is careful to avoid any conflicts of interest in the course of its deliber-
ations and decision-making processes. No conflicts of interest occurred in the financial year
2023.
17
In late 2023, we reviewed the effectiveness of the work of the Supervisory Board and its
committees with the aid of a questionnaire, and discussed the findings in our subsequent
meeting. Cooperation both within the Supervisory Board and with the Board of Manage-
ment was unanimously perceived as constructive and trustworthy. In the current financial
year, we intend to act on proposals to explore certain topics in greater depth, such as bat-
tery technology and the circular economy concept.
BMW Group Report 2023
Combined Management Report
Meetings
Presiding
Board/
Martin Kimmich*
Stefan Quandt
Stefan Schmid
Presiding
Board/
Plenum Committees
Plenum Committees
5
Members of the
Supervisory Board
Norbert Reithofer
The attendance rate at Supervisory Board meetings was 99%, and 100% for the meetings
held by the various committees and the Presiding Board. The meetings were held in person,
with individual members participating virtually only in justified exceptional cases. Three meet-
ings of the Audit Committee that dealt with the quarterly reports were held as hybrid meet-
ings, with individual members connected by either telephone or video call as planned. Indi-
vidual meeting attendance can be seen in the table below:
Disclosure of attendance at meetings by individual members
With regard to the employee representatives, in January 2023 Dr Martin Kimmich was ap-
pointed to succeed the departing long-serving First Deputy Chairman of the Supervisory
Board, Manfred Schoch, for his remaining term of office. Dr Kimmich has been Chairman of
the Munich Works Council and the BMW AG Works Council since 2022.
There were no changes to the composition of the Supervisory Board during the past year on
the shareholder representative side. The Annual General Meeting elected Dr Kurt Bock to
the Supervisory Board for a further term of office of approximately four years. He was sub-
sequently appointed as Deputy Chairman of the Supervisory Board, member of the Presid-
ing Board and of the Personnel Committee as well as member and Chairman of the Audit
Committee.
Composition of the Supervisory Board, the Presiding Board and the Supervisory
Board's committees
On 1 November 2023, Jochen Goller was appointed as member of the Board of Manage-
ment responsible for Customer, Brands and Sales. Mr Goller has been at the BMW Group
since 1999 and has headed up activities in the China region since 2018. In Jochen Goller,
we have appointed an internationally experienced sales manager with particular expertise in
the Chinese market to the Board of Management.
On 31 October 2023, Pieter Nota left the Board of Management by mutual agreement, also
in line with the BMW Group's succession plans. After becoming the member of the Board of
Management responsible for Customer, Brands and Sales in 2018, Mr Nota was a key fig-
ure in driving forward the sale of all-electric models and the digitalisation of the customer
interface. He was also responsible for introducing a pioneering agency model for direct
sales in selected markets. We wish to thank Pieter Nota for his excellent work and valuable
inspiration.
On 12 May 2023, Walter Mertl was appointed as member of the Board of Management re-
sponsible for Finance. He joined the BMW Group in 1998 and was most recently responsi-
ble for corporate controlling. Mr Mertl has embodied the Group's commitment to sustainable
profitability during the transformation for many years.
Dr Nicolas Peter left the Board of Management on 11 May 2023 by mutual agreement as
part of a succession arrangement following three decades of successful work at the BMW
Group. As the Board of Management member responsible for Finance, he played a key role
in shaping the development of the BMW Group with his profound expertise, entrepreneurial
flair and vision. His work served to further cement the Group's excellent reputation, both on
the capital market and in the public eye. We are greatly indebted to Nicolas Peter for his out-
standing contribution.
The Supervisory Board extended the mandate of Oliver Zipse, the Chairman of the Board of
Management.
The Supervisory Board resolved to extend the term of office of one member and appointed
two new members to the Board of Management in the financial year 2023.
Composition of the Board of Management
← = Q
Report of the Supervisory Board
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders
Attendance in %
The onboarding programme for new Supervisory Board members was also continued in
2023. As part of the programme, new members are given an insight into the BMW Group's
key business areas and planning processes by representatives of internal specialist depart-
ments. The programme also includes an introduction to the ongoing work of the Supervisory
Board.
I also met with investor representatives on a regular basis to discuss topics specific to the
Supervisory Board during the financial year 2023. We touched on corporate governance
issues such as succession planning for the Supervisory Board, the system for the Board of
Management's remuneration and the future format of the Annual General Meeting as well
as committee work and the Supervisory Board's handling of geopolitical risks.
The Supervisory Board also closely monitored developments relating to major strategic
collaborations. In 2023, the focus was once again on the Chinese market in particular, with
respect to both the BMW Brilliance Automotive joint venture and the cooperation with Great
Wall Motors for the local production of an all-electric MINI. We were also informed about the
status of the investments in YOUR NOW.
At each meeting, the Board of Management updated us on current issues and projects re-
lated to strategy development work and implementation. The Board of Management also
reported on recent events such as the Group's successful appearance at the IAA Mobility in
Munich, the world premiere of the all-electric BMW iX2 and the BMW X5 Hydrogen at the
Japan Mobility Show, and the implementation of the major internal training programme
"Digital Boost".
Board. Further topics covered by the Board of Management's extensive report were market
strategies focusing particularly on China and Europe, the resilience of supply chains, and the
holistic, Group-wide performance programme. The report was rounded off with an analysis
of the competition and the outlook for the BMW Group's product portfolio.
Corporate strategy, including sustainability, remained high on the Supervisory Board's
agenda. Following an analysis of the current situation in the automotive industry and the
ramifications of geopolitical developments, the Board of Management presented us with a
detailed strategy for implementing the automotive transformation. The strategy covered the
topics of electrification, digitalisation and sustainability, highlighting in particular the circular
economy concept as a key element of the Group's sustainable corporate approach. The
BMW Group's ambitious decarbonisation targets for2030 were also reaffirmed. With regard
to digitalisation, the Board of Management has placed the NEUE KLASSE at the centre of
its strategy, making it the benchmark for a holistic customer experience. The Board of Man-
agement also described the digitalisation of key business processes to the Supervisory
In its reports on the BMW Group's position, the Board of Management kept us well in-
formed at each meeting regarding current developments and the Group's overall perfor-
mance. A regular topic of discussion at Supervisory Board meetings was the development
of current sales trends based on figures analysed by brand, segment and market region, for
both the BMW Group and its competitors. There was also a keen focus on electrified vehi-
cles and an overview of the Group's key financial indicators and liquidity situation.
We continuously and thoroughly monitored the governance of the BMW Group based on in-
depth reports received from the Board of Management and provided its members with pru-
dent advice on the management and strategic development of the Group. We focused in
particular on driving forward the Group's electrification strategy and expanding it to include
all segments and markets, as well as on implementing the corporate strategies adopted in
the fields of digitalisation and sustainability. At each of the five plenary sessions of the Su-
pervisory Board (including one two-day meeting), we held detailed discussions with the
Board of Management regarding the Group's position. The Board of Management also kept
the Supervisory Board well informed regarding any matters of significance outside the
framework of formal meetings. Furthermore, I discussed matters personally and on a regu-
lar basis with the Chairman of the Board of Management. In addition, the Chairman of the
Audit Committee maintained a direct line of contact with the Board of Management member
responsible for Finance as well as with the external auditor's representatives outside of
meetings. We regularly dealt with internal Supervisory Board issues and personnel-related
matters without the presence of the Board of Management. Our cooperation, both within
the Supervisory Board and its committees and with the Board of Management, was con-
ducted in a spirit of trust, respect and constructiveness. Detailed documents on the main
topics of each meeting were distributed to the members in advance. Moreover, the share-
holder and employee representatives regularly prepared for the meetings in separate pre-
liminary discussions.
The Supervisory Board again performed the duties incumbent upon it with the utmost dili-
gence throughout the financial year 2023.
Focus of Supervisory Board activities during the past financial year
← = Q
Remuneration Report Other Information
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Report of the Supervisory Board
At Supervisory Board meetings we regularly addressed the topics of sustainability and
ESG. In a report on recent developments within the Group, the Board of Management in-
formed us about the cooperation with IONITY on rapid charging networks, the conversion of
BMW Group plants in Oxford and Swindon to enable the manufacturing of all-electric MINI
vehicles, and the successful outcome of the local referendum held in Irlbach-Straßkirchen on
the proposed construction of a new BMW Group plant to manufacture high-voltage batter-
ies, among other things. Furthermore, we were very pleased to note that the BMW Group
was presented with awards for activities relating to its sustainability strategy, conferred by a
management consultancy and the magazine "Automobilwoche", which voted the Group
number one in the automobile manufacturer category. Moreover, the Fair Pay Innovation
Lab awarded the BMW Group a gold medal in the category "Fair Pay Leader".
Within the framework of a presentation on the perception of the sustainability of the BMW
Group and its brands, we examined the objectives of the Group's corporate ESG strategy in
greater detail and looked at corporate communication regarding sustainability issues as well
as their media coverage. Regarding the energy transformation within the BMW Group as
well as decarbonisation at Group sites, we were informed in particular about the further im-
provement of energy management and the strategy involving the transition to renewable
energy sources at the BMW Group's existing production sites by 2030. We were also pro-
vided with reports on plans for new structures where no fossil fuels will be used (such as the
plant in Debrecen, where production is scheduled to begin in 2025).
To Our Stakeholders
13
Chairman of the Supervisory Board
Norbert Reithofer
2024 promises to be an exciting year for the BMW Group with a record number of product
launches. We firmly believe that, thanks to the enthusiasm and precision of our strong
workforce, we will master the challenges ahead and continue to set ourselves apart from
the competition with our wide range of products across all brands and drivetrain types.
The enthusiastic response to the presentation of the BMW VISION Neue Klasse at IAA
Mobility in Munich clearly demonstrates that the BMW Group is on the right path.
We also achieved a great deal in terms of sustainability in 2023, as our vehicle fleet once
again attained figures well within the EU's target limit for fleet carbon emissions.
We look back on 2023 as a successful financial year in which the BMW Group continued
to make decisive progress in ramping up electromobility. This is impressively demon-
strated by the fact that all-electric automobiles now make up nearly 15% of total sales.
The record high achieved in 2023 for total deliveries across all drivetrain types, and the
leading position of the BMW brand in the global premium segment further demonstrate
that the BMW Group's flexible drivetrain strategy is the right approach. Rigorous, far-
sighted decision-making have made this overall corporate success possible, ensureing
that the Group remains resilient, especially in volatile times.
DEAR SHAREHOLDERS,
REPORT OF THE
SUPERVISORY BOARD
Report of the Supervisory Board
← = Q
Other Information
BMW Group Report 2023
With the BMW Group's support, Supervisory Board members attended advanced training
courses on various topics during 2023. At our July meeting held at the BMW Group's Leip-
zig plant, the subject of which was "BMW Group Production - Electrified. Digital. Sustaina-
ble", we discussed the topic of sustainability in production and energy generation at BMW
Group sites. In September, we took a first in-depth look at the Group's technology, architec-
ture and product strategy for the period as of 2025, and more closely at the strategic mod-
ules of the NEUE KLASSE. The members of the Supervisory Board then tested new BMW,
MINI and Rolls-Royce models at the BMW M Driving Academy in Maisach. This involved a
drive on the A8 motorway in the new BMW 5 Series sedan, where we tried out the level 2+
Highway Assistant. In addition, we were presented with BMW brand design vehicles, sup-
plemented by a preview of the NEUE KLASSE. A talk by a renowned Chinese economics
expert on the state of the Chinese economy in the wake of the coronavirus pandemic and on
opportunities for multinational corporations provided some interesting insights into the Chi-
nese market. The Supervisory Board held two hybrid meetings in October and November at
which the heads of the responsible internal departments and an external consultant pro-
vided us with a comprehensive update on non-financial reporting and the EU taxonomy, fo-
cusing on implementation by the BMW Group. We also delved more deeply into the complex
processes involved in implementing and reviewing the ambitious decarbonisation targets
within the supply chain as well as the main levers for decarbonisation in this area.
14
To Our Stakeholders
In December 2023, the Board of Management presented the budget for the financial year
2024. After exhaustive discussion with the Board of Management, we gave the budget our
approval.
The BMW Group's long-term business plan was the subject of comprehensive examina-
tion by the Supervisory Board. In view of the ramp-up of electric mobility in an environment
that remains challenging and volatile, the focus was on safeguarding growth and returns.
The Board of Management informed us about plans for the various vehicle and corporate
segments and ambitious long-term targets, while confirming its key objectives for growth,
market shares and profitability. We were presented with key financial indicators for each
segment, in addition to opportunities and risks for the planning period. After thorough ex-
amination, the Supervisory Board approved the long-term business plan drawn up by the
Board of Management.
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
BMW Group Report 2023
15
In December 2022, the Supervisory Board agreed to the plan to hold the Annual General
Meeting 2023 on a virtual basis in accordance with the regulations applicable at the time. In
March 2023, the detailed concept proposed by the Board of Management was approved.
With regard to the Annual General Meeting 2024, the Board of Management explained the
reasons for its decision in favour of the virtual format to the Supervisory Board.
In conjunction with the report on HR-related strategies, we looked at the BMW Group's at-
tractiveness as an employer, employee performance and commitment, and workforce avail-
ability. The Board of Management also brought us up to date on the status of the Group's
diversity concepts and the extent to which targets have been achieved regarding the pro-
portion of women employed at various levels.
BMW Group Report 2023
In addition, key topics from the Board of Management's individual areas of
responsibility were on our agenda. Markets in the USA, Canada and Mexico as well as the
"fourth pillar" markets, in particular India, South Korea and Japan, were the subject of an in-
depth sales report. We discussed regional resilience and the growth strategy for these mar-
kets in great depth.
In the highly detailed risk report, we were brought up to date with the structure and working
methods of the risk management system. A key focus of the report was on geopolitical risks,
especially in the areas of purchasing/supply chains and sales markets as well as the
presentation of measures to mitigate risk. On the subject of information security with a focus
on IT security, we were informed about the organisation and functioning of the information
security management system and the structure of the IT security risk model, as well as the
measures derived from it and their effectiveness. The Board of Management also reported
on the business performance, sector-specific risk profile and current projects of the Finan-
cial Services segment. In addition, we received a report on key topics relating to the Group's
treasury system, such as funding, liquidity management, hedging strategies for price and
currency risks and the current state of share buyback programmes.
The Supervisory Board examined the Board of Management's remuneration in great de-
tail. It reviewed the target structure, maximum remuneration and expected remuneration for
the Board of Management for the financial year 2023, considering in particular the Group's
performance and the development of remuneration for senior executives and employees in
Germany over the past few years. Based on a comparative study conducted by an external
independent remuneration consultant and subsequent oral advice, we concluded that the
remuneration paid to Board of Management members for the financial year 2022 and the
target remuneration for 2023 were appropriate. Detailed information on the Board of Man-
agement's remuneration for the financial year 2023 is provided in the Remuneration Re-
port. In December 2023, following thorough preparation by the Personnel Committee, we
adopted the variable remuneration targets applicable to Board of Management members
for the financial year 2024, taking into account the budget for 2024, the long-term business
plan and the BMW Group's corporate strategy, including its ESG goals.
At each meeting, the Board of Management informed us about the current status of important
legal framework conditions and regulatory projects. These included in particular the EU's reg-
ulations regarding fleet carbon emissions in conjunction with the EU's "Fit for 55" package
and the Euro 7 emissions standards.
measures.
We also dealt with the Group's compliance management system in great depth. In his an-
nual report, the Chief Compliance Officer presented changes to the structure and content of
the BMW Group's compliance management system and the revision of compliance regula-
tions. The report also addressed the implementation of the German Supply Chain Due Dili-
gence Act and the handling of individual cases. Moreover, at the Compliance Days in Mu-
nich, the Chief Compliance Officer relayed a message from the Chairman of the Board of
Management that set the "tone from the top", and addressed operational prevention
In the Declaration of Compliance with the German Corporate Governance Code issued in
December 2023, the Board of Management and the Supervisory Board confirmed that they
have complied with the recommendations of the Code as amended on 28 April 2022 with-
out exception and will continue to fully comply with them in future.
In the course of our work on corporate governance, we further developed and updated
parts of the Supervisory Board's skills matrix, which was introduced in 2022. Based on a
self-assessment, we concluded that the composition of the Supervisory Board at 31 De-
cember 2023 fully meets the targets stipulated in the diversity concept and the competency
profile.
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Combined Management Report Group Financial Statements
Report of the Supervisory Board
The Board of Management updated the members of the Supervisory Board biannually on
the current status of the level of attainment of defined financial KPIs and the KPIs for our
ESG targets, such as deliveries of all-electric automobiles, fleet carbon emissions, attrac-
tiveness as an employer, and diversity.
Attendance
129
4
-131
- 531
7
-464
1,796
88,734
39,808
-23
31.12.2023
Other changes
Basis adjustments from
hedge accounting
1,135
-563
- 1,825
41,084
Changes due to
exchange rate factors
Changes due to the
acquisition or disposal
of companies
Cash inflows/outflows
1.1.2023
Liabilities from customer deposits (banking)
Asset-backed financing transactions
Bonds
in € million
Liabilities related to financing activities can be reconciled as
follows:
Notes to the Group Financial Statements
← = Q
20,085
Other Information
16,511
-247
662
Other (excluding interest payable)
Financial liabilities towards companies in which an investment is held
3,292
-54
1,634
1,712
Commercial paper
2,539
355
-64
-516
2,764
Lease liabilities
5,824
49
-279
- 1,201
7,255
Liabilities to banks
18,016
15
10
1,727
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
31.12.2022
3
41,084
19,362
-471
- 142
-3
18,746
Liabilities from customer deposits (banking)
16,702
- 658
410
-11
68
16,511
Liabilities to banks
9,079
- 1,613
- 25
- 186
7,255
Lease liabilities
2,420
Other changes
Basis adjustments from
hedge accounting
- 3,321
1,011
- 8,107
To Our Stakeholders Combined Management Report
BMW Group Report 2023
200
Similarly, potential future cash outflows amounting to
€ 1,639 million (2022: € 1,608 million) (undiscounted) have not
been taken into account in the measurement of lease liabilities
as it is not reasonably certain that the leases will be renewed (or
not terminated). These cash outflows relate to periods of up to
90 years (2022: up to 61 years).
Planned future cash outflows from variable lease payments,
which are not taken into account in the measurement of lease
liabilities, are expected to amount to € 42 million
(2022: € 43 million).
94,196
10,990
42,479
40,727
1,484
-38
Liabilities relating to financing activities
493
1,194
354
90,057
Changes due to the
acquisition or disposal
in € million
Bonds
Asset-backed financing transactions
1.1.2022
51,498
Cash inflows/outflows
of companies
Changes due to
exchange rate factors
- 1,709
18,746
261
1
2,539
688
1,367
484
Lease liabilities
7,255
669
2,399
4,187
5,824
684
1,272
3,868
Liabilities to banks
16,511
14
3,274
13,223
18,016
8
3,883
14,125
Liabilities from customer deposits (banking)
18,746
10,851
7,895
20,085
12,388
7,697
533
Asset-backed financing transactions
1,369
2,764
95,010
742
10,267
42,613
42,130
Financial liabilities
1,063
230
138
695
1,046
206
108
732
1,712
1,712
3,292
3,292
5,061
1,457
2,142
1,462
4,400
927
2,124
1,349
Other
Commercial paper
Derivative instruments
862
77
41,084
22,306
Provisions for obligations for personnel and social expenses
comprise mainly obligations relating to performance-related re-
muneration components, workforce measures as well as pre-
retirement part-time working arrangements and long-service
awards.
Depending on when claims occur, it is possible that the BMW
Group may be called upon to fulfil the warranty or guarantee ob-
ligations over the whole period of the warranty or guarantee.
Warranty provisions include amounts recognised in connection
with the exhaust gas recirculation cooler. Expected reimburse-
ment claims at 31 December 2023 amounted to € 819 million
(2022: € 872 million) and are disclosed within other assets (see
7 note [28]).
* Presentation adjusted compared to previous year.
Other provisions
Other obligations*
7,316
15,761
- 1,783
- 5,356
- 585
8,355
184
992
13,954
1,388
2,818
- 841
- 576
- 57
1,227
30
119
2,916
1,304
1,443
- 210
- 677
1,202
6
The provisions for other obligations cover numerous specific
risks and uncertain obligations, in particular for litigation and lia-
bility risks as well as risks relating to the order backlog.
7,758
35 Income tax liabilities
Current income tax
199
11,020
39,808
7,754
21,471
10,583
Total
than five years
and five years
Maturity later
Maturity between one
Maturity within
one year
Total
than five years
Maturity later
Maturity between one
and five years
Maturity within
one year
Bonds
in € million
31.12.2022
31.12.2023
Financial liabilities of the BMW Group comprise the following:
36 Financial liabilities
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
liabilities totalling € 1,401 million
(2022: € 1,224 million) include € 50 million (2022: € 58 mil-
lion) which are expected to be settled after more than 12 months.
Liabilities may be settled earlier than this depending on the tim-
ing of the underlying proceedings.
2,764
0.2
1,374
27
-1
43
-44
-748
704
366
366
366
196
894
- 698
benefit liability
Net defined
Effect of limitation of the
net defined benefit asset
to the asset ceiling
Total
Plan assets
18,383
benefit obligation
17,685
Defined
27
27
- 317
-317
-6
667
- 673
- 107
107
- 353
- 353
- 353
- 155
= Q
- 155
329
-174
-174
458
-317
329
-174
458
458
329
-6
↑
thereof pension provisions
To Our Stakeholders Combined Management Report
BMW Group Report 2023
194
The defined benefit pension plans are administered by BMW
Pension Trustees Limited, Farnborough, and BMW (UK) Trustees
Limited, Farnborough, both trustee companies which act inde-
pendently of the BMW Group. BMW (UK) Trustees Limited, Farn-
borough, is represented by ten trustees and BMW Pension Trus-
tees Limited, Farnborough, by five trustees. A minimum of one
third of the trustees must be elected by plan participants. The
trustees represent the interests of plan participants and decide
on investment strategies. Funding contributions to the funds are
determined in agreement with the BMW Group.
Defined benefit plans exist in the UK which are closed for all plan
participants. Vested benefits remain in place. New benefits are
covered by contributions made to a defined contribution plan.
UK
The assets of the German pension plans are invested by BMW
Trust (a German association) in accordance with a CTA. The rep-
resentative bodies of the association are the Board of Directors
and the Members' General Meeting. BMW Trust currently has
seven members and three members of the Board of Directors
elected by the Members' General Meeting. The Board of Directors
is responsible for investments, drawing up and deciding on in-
vestment guidelines as well as monitoring compliance with those
guidelines. The members of the association can be employees,
employee representatives, senior executives and members of the
Board of Management of BMW AG. An ordinary Members' Gen-
eral Meeting takes place once every calendar year, and deals with
a range of matters, including receiving and approving the associ-
ation's annual report, ratifying the activities of the Board of Direc-
tors and adopting changes to the association's statutes.
plan with lifelong pension benefits remains in place which is now
closed to new entrants. The pension benefit is calculated by mul-
tiplying a fixed amount by the number of completed years of ser-
vice. Only employees who have not agreed to a one-time option
to switch to the defined contribution system will receive future in-
creases in entitlements under this plan.
Two employer-funded pension plans are in place that are based
on defined contributions for which the level of benefits depends
on developments on the capital markets. Benefits granted by the
two plans are funded by a combination of the payment of fixed
monthly contributions by the Company, a deferred remuneration
option for employees and a matching contribution by the Com-
pany. Further contributions are made on the basis of the BMW
Group's performance. A further plan is in place that is funded en-
tirely out of deferred remuneration. Due to the minimum interest
rate guaranteed by the BMW Group, these plans are all classified
as defined benefit plans in accordance with IAS 19. In addition to
the above plans, an employer-funded, defined benefit pension
Employer-funded as well as employee-funded benefit plans exist
in Germany. In addition to retirement benefits, pension benefits
also include disability and surviving dependents' benefits. The
level of ongoing pension payments is adjusted in accordance with
§ 16 of the Company Pensions Act (Betriebsrentengesetz).
Germany
The most significant of the BMW Group's pension plans are de-
scribed below.
- 143
- 57
- 1
4
- 45
-53
- 97
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
31 December 2023
Translation differences and other changes
Pensions and other benefits paid
Employee contributions
Transfers to fund
Changes in the limitation of the net defined benefit asset to the asset ceiling
Gains (-) or losses (+) arising from experience adjustments
Gains (-) or losses (+) arising from changes in demographic assumptions
Gains (-) or losses (+) arising from changes in financial assumptions
thereof assets
Gains (-) or losses (+) on plan assets, excluding amounts included in interest income
Gains (-) or losses (+) arising from settlements
Past service cost
Interest expense (+)/income (-)
Current service cost
EXPENSE/INCOME
1 January 2023
in € million
The change in the net defined benefit liability for pension plans
can be derived as follows:
Notes to the Group Financial Statements
REMEASUREMENTS
89
-106
-17
462
462
462
- 201
- 201
- 201
6,417
-7,471
6,417
-7,471
- 7,471
6,417
34
34
34
10
21
- 11
- 349
338
415
-262
-262
-367
-367
To Our Stakeholders Combined Management Report
BMW Group Report 2023
196
- 143
339
196
894
- 698
- 18,383
415
17,685
52
336
-284
-6
697
- 703
-106
106
-367
-52
415
1,165
Net defined
benefit liability
EXPENSE/INCOME
1 January 2022
in € million
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Current service cost
To Our Stakeholders Combined Management Report
195
-57
427
370
799
-429
- 19,347
18,918
17
BMW Group Report 2023
339
Interest expense (+)/income (-)
Gains (-) or losses (+) arising from settlements
Effect of limitation of the
net defined benefit asset
to the asset ceiling
1,187
-22
- 25,011
Total
Plan assets
benefit obligation
24,989
Defined
Due to the fact that there is no right of reimbursement or right to
reduce future contributions to the fund, the amount of plan assets
reported for the UK pension plan has been limited to the amount
of the obligations.
Commercial paper
Past service cost
31 December 2022
Pensions and other benefits paid
Employee contributions
Transfers to fund
Changes in the limitation of the net defined benefit asset to the asset ceiling
Gains (-) or losses (+) arising from experience adjustments
Gains (-) or losses (+) arising from changes in demographic assumptions
Gains (-) or losses (+) arising from changes in financial assumptions
Gains (-) or losses (+) on plan assets, excluding amounts included in interest income
REMEASUREMENTS
Translation differences and other changes
Group Financial Statements
427
157
2,327
2,140
3,262
29,243
33,227
Total cash flows
181,321
184,606
Total capital
CASH FLOW STATEMENT
51.9%
51.5%
Proportion of total capital
DISCLOSURES RELATING TO THE
94,196
95,010
Total financial liabilities
40,727
42,130
2,193
16,352
18,823
11,044
In addition, a career trend component, which is plan-dependent
and lies within a range of 0.25% to 0.50%, is taken into account
in the measurement of pension obligations in Germany (2022:
career trend of 0.25% to 0.50%).
The assumptions stated below, which depend on the economic
situation in the relevant country, are used to measure the defined
benefit obligation of each pension plan. The following weighted
average values have been used for Germany, the UK and other
countries:
In the case of defined benefit plans, the BMW Group is required
to pay the benefits it has granted to present and past employees.
Defined benefit plans may be covered by provisions or pension
assets. In Germany, pension obligations of the BMW Group are
almost entirely covered by assets transferred to BMW Trust e.V.,
Munich (BMW Trust), in conjunction with a Contractual Trust Ar-
rangement (CTA) (funded plan). In addition, funded plans also
exist in the UK as well as in the USA, Switzerland, Belgium and
Japan. In the meantime, all of the main defined benefit plans
have been closed for new entrants and replaced by defined con-
tribution plans.
33 Pension provisions
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Current liabilities
Group Financial Statements
BMW Group Report 2023
192
- 4,268
-621
9,756
9,773
4,059
3,601
12,344
To Our Stakeholders Combined Management Report
Germany
53,469
Non-current liabilities
The capital structure at the end of the reporting period was as
follows:
A key aspect in the selection of financial instruments is the ob-
jective to achieve matching maturities for the Group's financing
requirements. In order to reduce non-systematic risk, the BMW
Group uses a variety of financial instruments available on the
world's capital markets to achieve diversification.
In order to manage its capital structure, the BMW Group uses
various instruments, including the amount of dividends paid to
shareholders and share buybacks. Moreover, the BMW Group
actively manages debt capital, carrying out funding activities with
a target debt structure in mind.
The BMW Group is not subject to any unified external minimum
equity capital requirements. Within the Financial Services seg-
ment, however, there are a number of individual entities which
are subject to equity capital requirements of relevant regulatory
banking authorities.
The capital structure is managed in order to meet needs arising
from changes in economic conditions and the risks of the under-
lying assets.
The BMW Group's objectives with regard to capital management
are to safeguard over the long-term the Group's ability to con-
tinue as a going concern and to provide an adequate return to
shareholders.
Capital management disclosures
On 19 September 2023, the Board of Management resolved a
share buyback programme for shares of common stock for em-
ployees ("Share Buyback Programme Employee Shares 2023")
which was carried out during the period from 8 November to 27
November 2023. The acquisition of shares of common stock un-
der this programme serves the sole purpose of fulfilling the obli-
gations arising from the Employee Share Programme. Based on
the applications received from eligible employees, 1,290,000
shares of common stock were bought back and subsequently
sold to employees at a preferential price of € 71.47 per share.
These shares are entitled to receive dividends for the first time
with effect from the financial year 2023.
Up to 31 December 2023, a total of 942,892 shares of preferred
stock had been bought back via the stock exchange at an aver-
age price per share of € 90.15 and a total acquisition cost of
€ 85 million, corresponding to 0.14% of share capital. The
shares concerned are held by BMW AG as treasury shares at the
end of the reporting period.
Up to 31 December 2023, a total of 4,218,363 shares of com-
mon stock had been bought back via the stock exchange at an
average price per share of € 98.38 and a total acquisition cost of
€ 415 million, corresponding to 0.64% of share capital. The
shares concerned are held by BMW AG as treasury shares at the
end of the reporting period.
Based on the authorisation granted by the Annual General Meet-
ing on 11 May 2022, the Board of Management of BMW AG re-
solved on 18 July 2023 (with effect as of 18 July 2023) to re-
deem the shares acquired by the Company as part of the first
share buyback programme (22,199,529 shares of common
stock and 1,923,871 shares of preferred stock each with a nom-
inal value of € 1) and to reduce the Company's share capital from
€ 663 million to € 639 million. This corresponds to around 3.6%
of share capital prior to the redemption of the shares and the re-
duction of issued share capital.
The shares are being acquired with the purpose of either re-
deeming them at a later date and reducing share capital or using
them in conjunction with the Employee Share Programme.
← = 9
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
191
in € million
Equity attributable to shareholders of BMW AG
Proportion of total capital
Non-current financial liabilities
Current financial liabilities
Equity attributable to shareholders of BMW AG increased during
the financial year by 2.8%, primarily reflecting the increase in
revenue reserves.
48.1%
48.5%
Current assets
87,125
89,596
Non-current assets
31.12.2022
31.12.2023
DISCLOSURES RELATING TO THE
BALANCE SHEET
52,880
Total comprehensive income
INCOME STATEMENT
Revenues
DISCLOSURES RELATING TO THE
2022
2023
in € million
Financial information relating to BMW Brilliance is summarised
in the following table from a 100% perspective (2022: from
11 February 2022):
Total comprehensive income allocated to the other shareholders
of BMW Brilliance amounts to € 615 million (2022: € 580 mil-
lion). A dividend of € 1,447 million (2022: € 1,445 million) was
distributed to these shareholders during the financial year 2023.
At 31 December 2023, non-controlling interests in BMW Bril-
liance amounted to € 2,970 million (2022: € 3,709 million).
The 25% non-controlling interests of other shareholders in the
subsidiary BMW Brilliance represent a significant item in the
BMW Group's balance sheet.
32 Non-controlling interests
Profit after tax
United Kingdom
Other
in %
11,508
12,528
17,685
18,918
869
891
5,287
5,306
11,529
12,721
31.12.2022
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
Total
6,079
6,134
740
741
77
77
118
193
196
370
143
153
32
Other
24
193
894
799
15
2
879
797
18,383
19,347
21
United Kindgom
Germany
thereof assets
13.8
Weighted duration of all pension obligations in years
2.26
2.17
2.53
2.24
Pension level trend
5.88
5.57
14.2
4.73
3.67
3.19
Discount rate
31.12.2022
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
4.54
144
13.1
12.8
thereof pension provisions
Carrying amounts
Effect of limiting net defined benefit asset to asset ceiling
Fair value of plan assets
Present value of defined benefit obligations
in € million
Based on the measurement principles contained in IAS 19, the
following balance sheet carrying amounts apply to the Group's
pension plans:
Notes to the Group Financial Statements
← = Q
13.7
Other Information
Responsibility Statement and Auditor's Report
Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
193
Mortality Table 2018 G issued by Prof. K. Heubeck (with invalidity rates reduced by 70%)
S3PA Tables and CMI_2020 model with improvement factor of 1.25%
United Kingdom
Germany
The following mortality tables are applied in countries in which
the BMW Group has significant defined benefit plans:
12.8
Remuneration Report
Responsibility Statement and Auditor's Report
thereof pension provisions
thereof assets
Other Information
Other provisions changed during the year as follows:
34 Other provisions
198 BMW Group Report 2023 To Our Stakeholders Combined Management Report
-0.2
- 37
-0.2
-40
decrease of 0.10%
0.2
37
Remuneration Report
increase of 0.10%
Career trend
- 2.9
- 509
- 2.8
-533
decrease of 1 year
2.8
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Bonus and price reductions*
Statutory and voluntary warranty obligations, product guarantees
Obligations for personnel and social expenses
in € million
15,761
Other provisions
2,818
1,443
Other obligations
Bonus and price reductions
492
3,249
Statutory and voluntary warranty obligations, product guarantees
Obligations for personnel and social expenses
combinations
1.1.2023
in € million
business
arising on
Additions
Notes to the Group Financial Statements
← = Q
8,251
Translation
2.7
increase of 1 year
in € million
in %
in € million
31.12.2022
31.12.2023
Change in defined benefit obligation
In the UK, the sensitivity analysis for the pension level trend also
takes account of restrictions due to caps and floors.
estimates made on the basis of the specified sensitivities are only
possible with this restriction. The calculation of sensitivities using
ranges other than those specified could result in a dispropor-
tional change in the defined benefit obligation.
It is only possible to aggregate sensitivities to a limited extent.
Since the change in obligation follows a non-linear pattern,
The sensitivity analysis provided below shows the extent to
which changes in individual factors - independently of each other
- could influence the defined benefit obligation at the end of the
reporting period.
100.0
100.0
100.0
100.0
100.0
100.0
7.5
7.3
40.5
in %
Discount rate
increase of 0.75%
- 1,418
Average life expectancy
- 1.7
- 307
- 1.7
-319
decrease of 0.25%
1.8
322
1.7
515
325
Pension level trend
9.2
1,632
8.8
1,671
decrease of 0.75%
- 7.8
- 1,379
-7.5
increase of 0.25%
40.8
differences
Reversal of
discounting
- 1,922
- 156
2,106
7
3,317
2,337
8,251
- 629
- 2,181
-372
3,820
141
872
6,600
within one year
31.12.2022
Reversed
Utilised
discounting
- 103
3,249
2,287
1,121
88,734
-1,272
- 3,532
1,349
129
- 11,287
103,347
Liabilities relating to financing activities
662
Additions
-14
- 18
724
Other (excluding interest payable)
-2,082
44
- 150
2,188
Financial liabilities towards companies in which an investment is held
1,712
- 30
Additions
differences
Reversal of
-44
1,979
2,964
- 41
- 2,061
47
1,782
-12
4,333
9,650
- 326
within one year
31.12.2023
Reversed
Utilised
-2,674
391
4,243
- 235
thereof due
1,144
-761
- 105
1,677
Translation
business
combinations
1.1.2022
arising on
Additions
9,240
17,037
- 1,005
- 6,428
thereof due
476
-335
1,383
2,746
-533
- 932
38
1,399
-44
1,545
8,568
6.7
40
35.8
50
78
15
27
35
51
28
78
28
27
1,082
Money market funds
51
Real estate funds
665
1,082
thereof non-investment grade
(funds without a rating)
thereof mixed funds
Absolute return funds
Other
289
232
thereof investment grade
1,024
4
1
55
682
340
341
Debt instruments
9,830
12,924
131
149
4,392
4,288
8,401
9,630
Total with quoted market price
290
1
14,067
9,769
51
53
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
in € million
The BMW Group is exposed to risks arising both from defined
benefit plans and defined contribution plans with a minimum re-
turn guarantee. The discount rates used to calculate pension ob-
ligations are subject to market fluctuations and therefore influ-
ence the level of the obligations. Furthermore, changes in other
actuarial parameters, such as expected rates of inflation, also
have an impact on pension obligations. In order to reduce cur-
rency exposures, a substantial portion of plan assets is either in-
vested in the same currency as the underlying plan or hedged by
means of currency derivatives. As part of the internal reporting
procedures and for internal management purposes, financial
risks relating to the pension plans are reported using a value-at-
risk approach by reference to the pension deficit. The investment
strategy is also subject to regular review together with external
consultants, with the aim of ensuring that investments are struc-
tured to match the timing of pension payments and the expected
development of pension obligations. In this way, fluctuations in
pension provisions recognised in the balance sheet are reduced.
In the financial year 2024, disbursements out of plan assets are
expected to exceed the employer's contributions to plan assets
by € 298 million. Plan assets of the BMW Group include own
transferable financial instruments amounting to € 17 million
(2022: € 7 million).
32
31.12.2022
1,155
665
Total
Other
United Kingdom
Germany
Plan assets in Germany, the UK and other countries comprised
the following:
Depending on the cash flow profile and risk structure of the pen-
sion obligations involved, plan assets relating to defined benefit
plans are invested in a diversified portfolio.
Notes to the Group Financial Statements
← = Q
232
336
31.12.2023
Equity instruments
4,343
4,237
5,436
5,479
thereof investment grade
2,119
10,495
10,851
51
6.6
31.12.2022
4,343
6,101
6,561
Debt instruments
2,770
37
41
14
2,068
2,729
4,237
332
53
399
332
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
197
18,383
19,347
741
740
6,134
6,079
11,508
12,528
Total plan assets
5,459
The defined benefit obligation relates to current employees, pen-
sioners and former employees with vested benefits as follows:
Germany
United Kingdom
Other
35.6
336
59.5
59.2
35.6
35.2
56.7
57.1
57.7
5,280
58.2
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
Defined benefit obligation
Former employees with vested benefits
Current employees
in %
31.12.2022
610
Pensioners
1,742
73
Cash and cash equivalents
1,053
700
622
455
431
Real estate
4
4
thereof non-investment grade
63
687
55
682
8
5
591
(funds without a rating)
32
73
1
466
3,107
Absolute return funds
2,898
Total without quoted market price
2,388
2,612
590
347
435
thereof mixed funds
604
1,791
1,587
Other
1,485
518
2
640
1,437
52
843
0.5
BMW China Capital B.V.
fixed
CNY 3,000 million
3.4
3.7
BMW Canada Inc.
CAD 700 million
3.5
6.8
3.0
fixed
GBP 950 million
fixed
3.3
10.0
NOK 1,000 million
fixed
2.7
3.7
fixed
5.6
1.1
Commercial paper comprises the following:
GBP 100 million
CHF 600 million
Issuer
Group Financial Statements
BMW Finance N.V.
Other liabilities comprise the following items:
variable
37 Other liabilities
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Combined Management Report
To Our Stakeholders
BMW Group Report 2023
202
BMW US Capital, LLC
= Q
4.0
19
5.4
14
(in %)
nominal interest rate
Weighted average
Weighted average
maturity period
(in days)
EUR 1,303 million
USD 2,210 million
in relevant currency
(ISO Code)
Issue volume
↑
BMW International Investment B.V.
in relevant currency
12.0
fixed
3.8
1.7
EUR 1.000 million
variable
(in %)
nominal interest rate
maturity period
(in years)
(ISO Code)
Interest
BMW Finance N.V.
Issuer
Weighted average
Weighted average
Issue volume
Bonds comprise the following:
Notes to the Group Financial Statements
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
201
in € million
EUR 19,000 million
7.4
1.5
fixed
EUR 500 million
fixed
3.4
7.1
USD 14,795 million
fixed
5.4
2.9
USD 2,550 million
variable
BMW US Capital, LLC
3.2
1.0
10.0
fixed
2.6
7.5
USD 1,000 million
fixed
2.9
6.6
HKD 1,224 million
fixed
3.2
2.8
CNY 9,500 million
AUD 273 million
Bonuses and sales aides
Other
Payables to other companies in which an investment is held
Level hierarchy in accordance with IFRS 13
Level hierarchy in accordance with IFRS 13
31.12.2022
31.12.2023
*Presentation adjusted compared to previous year.
Raw material market price risks
Combined interest rate/currency risks
Currency risks
Interest rate risks*
Derivative instruments (liabilities)
Other risks
Raw material market price risks
Combined interest rate/currency risks*
Level 1
Currency risks
Derivative instruments (assets)
Loans to third parties
Cash equivalents
Other investments
Marketable securities and investment funds
in € million
Disclosures relating to financial instruments measured at fair value
The carrying amounts of financial instruments measured at fair
value are allocated to the measurement levels pursuant to
IFRS 13 as follows:
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Interest rate risks*
Level 2
Level 3
Level 1
1,390
373
318
2,319
2
58
1,495
324
437
472
768
1,278
1,684
794
In the previous year, derivative instruments used to hedge raw
material price risks amounting to € 71 million were reclassified
from Level 3 to Level 2 as sufficient observable market data was
available for the first time for the instruments concerned.
As a general rule, any transfers between fair-value hierarchy lev-
els are made at the end of the relevant reporting period.
8
1
10
1,272
839
164
765
390
3,048
306
1,864
Level 3
Level 2
To Our Stakeholders Combined Management Report
BMW Group Report 2023
208
= Q
Asset-backed financing transactions
Bonds
Receivables from sales financing - finance and operating leases
Financial liabilities
Receivables from sales financing - credit financing
in € million
For all other financial instruments not listed here that are meas-
ured at amortised cost, the carrying amount corresponds to the
fair value. For this reason, they are not presented separately.
In the case of financial liabilities, own credit risk is taken into ac-
count based on credit default swaps available on the market, so
that the fair values of these items are allocated to Level 2.
The fair values of receivables from sales financing are measured
using the discounted cash flow method, taking into account cus-
tomer-specific credit risk. In view of the fact that these allow-
ances are calculated in part on the basis of internal information,
receivables from sales financing are allocated to Level 3 in the
level hierarchy in accordance with IFRS 13.
The fair values are generally determined using the discounted
cash flow method, taking into account the relevant risk of default.
For the purposes of fair value measurement using the discounted
cash flow method, expected future cash flows are discounted on
the basis of up-to-date interest rate curves observable on the
market.
The following table shows the fair values and carrying amounts
of financial assets and liabilities that are measured at amortised
cost and whose carrying amounts differ from their fair value.
cost
Disclosures relating to financial instruments measured at amortised
Notes to the Group Financial Statements
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
207
27,086
390
19,651
2,764
390
3,032
1,639
Not allocated to an
IFRS 9 category
At fair value through
profit or loss
Liabilities from customer deposits (banking)
2,987
Liabilities to banks
31.12.2022
↑
7,255
7,302
5,824
5,906
16,511
15,939
18,016
17,591
18,746
18,542
20,085
19,951
41,084
42,173
39,808
40,919
21,900
22,600
22,263
23,539
63,808
65,237
65,092
67,307
Carrying
amount
Fair value
Carrying
amount
Fair value
31.12.2023
31.12.2022
1,174
519
75
67
23
724
Derivative
instruments
unquoted equity
instruments
Convertible bonds
instruments
Additions
1 January 2022
in € million
Unquoted equity
Options on
Disposals
824
1
765
31 December 2023
Level transfer
-26
1
-25
Currency translation differences
- 39
57
-2
-94
the income statement
58
- 6
- 12
Financial
Gains and losses recognised in the income statement are re-
ported within the line item "Other financial result" and included a
net negative amount of € 39 million (2022: net positive amount
of € 14 million) relating to unrealised items.
849
2
8
839
31 December 2022
-71
-71
Level transfer
33
1
32
Currency translation differences
14
2
2
14
the income statement
Gains (+)/losses (-) recognised in
7
7
accumulated other equity
Gains (+)/losses (-) recognised in
-23
- 5
75
814
Level 3
instruments
Gains (+)/losses (-) recognised in
accumulated other equity
Gains (+)/losses (-) recognised in
-59
The convertible bonds that have been classified to Level 3 are
primarily used as instruments in advance of future financing
rounds relating to private equity investments. Valuations are
therefore performed in accordance with the IPEV guidelines.
In addition, equity instruments that are held outside the private
equity fund are measured using the income approach. This in-
volves discounting cash flows on the basis of current business
cases using the weighted average cost of capital to determine
the fair value of the financial instrument. Changes in fair values
determined in connection with adjustments to significant input
factors are not material for the BMW Group.
Since the pricing from the financing rounds is considered to be
the decisive input factor for the valuation, increases and de-
creases in valuation give rise to a similar change in the equity
instrument that is recognised in the income statement.
specific contribution margins. Key liquidity-specific performance
indicators are cash on hand, cash burn rates and prospects for
future financing rounds.
As part of the process of analysing valuations, the external fund
manager reviews the investment-specific milestones, including
an analysis of financial, technical and liquidity-specific perfor-
mance indicators, among others. Based on this analysis, it is
considered whether the price of the most recent financing round
is accept-able as a reasonable market valuation, in particular for
early-stage or growth-phase investments. Key performance in-
dicators used for the purpose of milestone analysis are depend-
ent on the business model underlying the investment. Typical
technical key performance indicators relate to licenses and pa-
tents held, the stage of technology development such as evi-
dence of feasibility and prototypes, market entries, customer and
user growth and appointments to key management positions.
Key financial performance indicators used are revenues, EBITDA
and the corresponding growth rate and/or development of
Financial instruments allocated to Level 3 relate mainly to invest-
ments in a private-equity fund. The valuation of unlisted equity
instruments is determined primarily using the market-based ap-
proach. In particular, the financing rounds that take place within
the private equity sector - usually on a regular basis at intervals
of approximately 12 to 24 months – represent a significant input
factor for these purposes. In addition, the investment advisor
provides the external fund manager with relevant, investment-
specific information on an ongoing basis (at least quarterly). The
latter subsequently assesses the underlying individual com-
panies in accordance with the guidelines for International Private
Equity and Venture Capital Valuations (IPEV).
2
8
839
Fair value
31.12.2022
58
1
765
Fair value
31.12.2023
Options on unquoted equity instruments
Convertible bonds
Unquoted equity instruments
in € million
Financial instruments measured at fair value using input factors
not based on observable market prices are allocated to Level 3.
The fair values of these financial instruments are shown in the
following table:
← = 9
Notes to the Group Financial Statements
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2023
209
Mandatory conversions are usually structured in such a way that
the number of shares to be received depends on the future share
price. Due to the generally short maturities, the instruments are
subject to only insignificant fluctuations in value. Irrespective of
this fact, impairment tests are performed at regular intervals.
381
The fair value of the options that the BMW Group holds in shares
of such investee companies is measured primarily on the basis
of a binomial model, taking into account the respective conditions
under which the options were granted. The comments provided
on the income-based approach used to measure equity instru-
ments held outside the private equity fund apply analogously for
the purposes of determining the relevant entity value that is
taken into account when measuring the fair value of the options.
The exercise price for share options arising in conjunction with
the private equity fund is generally low, verging towards zero.
Consequently, financing rounds have a direct impact on the fair
value of the options. In this respect, the valuation of options and
assessment of their impact on sensitivity is similar to the
210
1
4
-54
99
99
849
2
8
839
Financial
instruments
Level 3
Derivative
instruments
instruments
Convertible bonds
instruments
Disposals
Additions
1 January 2023
in € million
Options on
unquoted equity
Unquoted equity
The balance sheet carrying amount of Level 3 financial instru-
ments developed as follows:
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
approach taken to unquoted equity instruments, as described
above.
108,073
7,276
17,298
23,508
Other financial commitments
Furthermore, several BMW Group entities have been facing a
number of diesel emissions-related court claims in England and
Wales since November 2021 as well as in Scotland since March
2023. In November 2023, the High Court approved a group liti-
gation regarding the proceeding in England and Wales. In De-
cember 2023, the court ordered that at least three out of the 16
pending court proceedings against OEMS will proceed to trial
from October 2024 onwards. The proceedings against two other
OEMs have already been selected, and the selection of other
OEM proceedings is expected to follow in March 2024. In Scot-
land, the court also approved the combination of relevant claims
in group proceedings. It is estimated that any sued BMW Group
entities will have to file their statement of defence in April 2024.
Given that proceedings are still at an early stage, the probability,
amount or timing of any liability cannot be determined at present.
Further disclosures pursuant to IAS 37.86 cannot be provided at
present.
In addition, the KBA determined in February 2024 that two func-
tionalities of the emission control system of the BMW vehicle
model X3 with 2.0 litre diesel engine (EU5), built between Sep-
tember 2010 and March 2014 do not comply with legal require-
ments. The KBA views these functionalities as prohibited defeat
devices. The BMW Group has filed a timely objection against this
decision. Corrective measures are currently being coordinated
with the responsible type approval authorities. Furthermore, the
BMW Group is investigating whether and to what extent function-
alities of the emission control systems of this and other past die-
sel vehicle models comply with legal requirements and is in dia-
logue with the responsible authorities in this regard. Also, against
the background of the development in case law referred to
above, it is possible that further authorities and/or courts find
fault with functionalities of the emission control systems or deem
them as non-compliant with legal requirements. Given that the
investigations will take some time, it is not currently possible to
make any disclosures pursuant to IAS 37.86 with regard to pos-
sible measures to be taken, possible effects on administrative
and civil court proceedings and any financial risks that may be
related thereto.
In several recent judgements, the European Court of Justice has
ruled on emission control systems in diesel vehicles and has sig-
nificantly tightened requirements pertaining to the justification of
these systems. As a result of these new judgements by the Eu-
ropean Court of Justice, the interpretation of regulatory require-
ments for emission control systems is evolving. This is reflected,
amongst other things, by the fact that established administrative
practices of type approval authorities are being questioned from
numerous sides. This development leads to a reassessment of
civil proceedings pending in Germany due to the emissions per-
formance of BMW and MINI diesel vehicles. According to previ-
ously established case law of German national courts, damage
claims could only be asserted on the basis of intentional damage
inflicted in a manner offending common decency. In its most re-
cent judgements linked to proceedings against other manufac-
turers and taking into account the case law of the European Court
of Justice, the German Federal Court of Justice has ruled that a
manufacturer can also be held liable for negligent breach of EU
homologation standards and on the basis of a far-reaching re-
versal of the burden of proof to the detriment of the manufac-
turer. An increase in the effort and complexity of the defence in
individual cases, an increasing number of new court proceedings,
increased legal risks and increased financial expenditure are to
be expected. Further disclosures pursuant to IAS 37.86 cannot
be provided at present.
Following a request for legal assistance from the Korean author-
ities in 2020 in connection with leaks in exhaust gas recirculation
modules in BMW Group vehicles, the Munich public prosecutor's
office initiated an investigation and searched BMW Group offices
in Munich and Steyr in June 2022. Potential risks for the BMW
Group cannot be quantified at the present time. Further disclo-
sures pursuant to IAS 37.86 cannot be provided at present.
← = 9
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
204
In March 2022, the European Commission (EC) conducted in-
spections at the premises of automobile manufacturers and as-
sociations located in several member states. In parallel, the EC
sent out formal requests for information to several automobile
manufacturers, including BMW AG. The inspections and re-
quests for information concern possible collusion in relation to
the collection, treatment and recovery of end-of-life vehicles and
light commercial vehicles. The inspections were conducted in co-
ordination with the UK Competition and Markets Authority, which
has initiated formal proceedings in respect of the UK market. The
competition authorities allege that car manufacturers (i) coordi-
nated the remuneration to be paid to dismantlers for the provi-
sion of their services and (ii) agreed that issues related to end-
of-life vehicles should be dealt with in a non-competitive way.
Appropriate risk provisions were recognised in the second quar-
ter 2022 in connection with these investigations. At the current
stage of the investigations, further risks for the BMW Group in
connection with the proceedings of the two authorities cannot be
quantified at present. In December 2023, the South Korean anti-
trust authority conducted an inspection at the premises of sev-
eral car manufacturers, including BMW Korea. The investigation
by the South Korean antitrust authority has the same back-
ground as the investigations of the European Commission and
the UK Competition and Markets Authority. Due to the early stage
of this investigation, it is also not possible to provide further in-
formation in this regard. Further disclosures pursuant to IAS
37.86 cannot be provided at present.
In addition to liabilities, provisions and contingent liabilities, the
following commitments exist for the BMW Group at the end of the
reporting period:
estimated at present. Further disclosures pursuant to IAS 37.86
cannot be provided at present.
Beginning in 2014, regulatory authorities have ordered the BMW
Group to recall various vehicle models in conjunction with airbags
supplied by the Takata group of companies. Provision for the
costs involved has been recognised within warranty provisions.
In addition to the risks already covered by warranty provisions, it
cannot be ruled out that further vehicles of the BMW Group will
be affected by future recall actions. Further disclosures pursuant
to IAS 37.86 cannot be provided at present.
In relation to these allegations, numerous class action lawsuits
have been brought in the USA and Canada in the second half of
2017, as well as several individual customers' lawsuits in South
Korea in June 2018. In the USA, the customer class actions were
withdrawn in August 2021 and the dealer class action was dis-
missed in the final instance in June 2022. In Canada, the class
action lawsuits have been discontinued without any payments
made by BMW. The individual customers' lawsuits in South Ko-
rea remain at an early stage. Further civil lawsuits based on the
allegations are possible going forward. Further disclosures pur-
suant to IAS 37.86 cannot be provided at present.
In April 2023, the South Korean antitrust authority imposed a
fine of approximately 13 billion South Korean won (approxi-
mately € 9 million). BMW AG will no longer take action against
the authority's decision.
In addition, respective antitrust proceedings were opened
against BMW AG by the Chinese State Administration for Market
Regulation in March 2019 and the Korea Fair Trade Commission
in May 2020. Possible risks for the BMW Group in connection
with the antitrust proceedings in China cannot be currently fore-
seen, neither in terms of their outcome nor the amounts involved.
The EU Commission's antitrust proceedings were settled on 8
July 2021 (see note [10] to the BMW Group Financial State-
ments for the financial year 2021 included in the BMW Group
Report 2021).
The BMW Group determines its best estimate of contingent lia-
bilities on the basis of the information available at the date of
preparation of the Group Financial Statements. This assessment
may change over time and is adjusted regularly on the basis of
new information and circumstances. A part of the risks is covered
by insurance.
Other contingent liabilities mainly comprise risks relating to taxes
and customs duties.
1,112
1,358
1,969
1,801
89
22
94
In May 2023, the National Highway Traffic Safety Administration
(NHTSA), an agency of the US federal government, requested a
recall of airbags in the USA that are equipped with airbag inflat-
ors produced by ARC Automotive. Further implications for the
BMW Group in other regions outside of North America as well as
implications from class action lawsuits, which have been brought
in this context against the BMW Group in the USA, cannot be
in € million
31.12.2023
31.12.2022
Loans to third parties
Marketable securities and investment funds
Other derivative instruments
Fair Value Hedges
Cash Flow Hedges
Derivative instruments
Financial assets
Receivables from sales financing
Other investments
ASSETS
in € million
The carrying amounts of financial instruments are assigned to
IFRS 9 categories in the following table:
40 Financial instruments
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2023
205
1,912
2,252
Purchase commitments for intangible assets
5,758
7,712
Purchase commitments for property, plant
and equipment
80
63
66
31.12.2022
1,613
3,633
3,359
7,651
7,998
11,939
9,768
1,047
1,079
255
241
51
38
5,777
2,963
4,809
5,447
31.12.2022
31.12.2023
Other liabilities
Other liabilities (non-financial instruments)
Sundry
Other advance payments received for orders
Social security
Other taxes
Deferred income
Contract liabilities
Other liabilities (financial instruments)
Deposits received
Payables to subsidiaries
1,412
Other
130
237
31.12.2023
Contingent liabilities
Guarantees
Litigation
Investment subsidies
in € million
The following contingent liabilities existed at the balance sheet
date:
39 Contingent liabilities and other financial commitments
Contingent liabilities
OTHER DISCLOSURES
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
203
Trade payables mainly have a remaining term of up to one year.
38 Trade payables
Grants comprise mainly public sector funds to promote regional
structures and which have been invested in the production plants
in Brazil, China, Germany, Mexico, Austria and South Africa
amongst others. The grants are partly subject to holding periods
for the assets concerned of up to five years and/or minimum em-
ployment figures or minimum production figures. Grants and
subsidies awarded before 31 December 2022 are released to
income over the useful life of the assets to which they relate.
Deferred income includes down payments received on leases
with customers as well as deferred grants.
Contract liabilities relate to obligations for service and repair work
as well as telematics services and roadside assistance agreed to
be part of the sale of a vehicle (in some cases multi-component
arrangements). An amount of € 4,239 million (2022:
€ 3,146 million) was released from contract liabilities in the fi-
nancial year and recognised as revenues from contracts with
customers.
27,233
25,748
2,241
2,643
13,053
13,337
237
120
Cash and cash equivalents
Trade receivables
Other assets
Asset-backed financing transactions
3,292
Commercial paper
18,016
Liabilities from customer deposits (banking)
5,824
Liabilities to banks
39,808
Bonds
income
At amortised cost
At fair value through
other comprehensive
Not allocated to an
IFRS 9 category
At fair value through
profit or loss
income
At amortised cost
At fair value through
other comprehensive
31.12.2023
Financial liabilities
LIABILITIES
in € million
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Notes to the Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
206
7,603
32,467
20,085
3,464
Derivative instruments
Fair Value Hedges
729
51
255
1,063
14,120
18,746
1,712
16,511
7,255
41,084
2,539
729
2,073
1,598
112,068
8,171
38
Total
Remaining other liabilities
investment is held
Payables to other companies in which an
241
Payables to subsidiaries
Other liabilities
15,547
1,046
Trade payables
Other
Lease liabilities
Other derivative instruments
Cash Flow Hedges
Refund liabilities for future leased products
2,908
31,345
43
2,127
1,913
957
427
2,046
444
1,525
21,900
348
1,003
IFRS 9 category
Not allocated to an
31.12.2022
63,808
22,263
286
911
65,092
At fair value through
profit or loss
income
At amortised cost
At fair value through
other comprehensive
Not allocated to an
IFRS 9 category
At fair value through
profit or loss
income
At amortised cost
At fair value through
other comprehensive
31.12.2023
2,908
88,086
530
1
3,184
2,127
88,036
Total
1,489
6,770
1,218
Remaining other assets
454
455
Collateral assets
50
48
investment is held
Receivables from companies in which an
1,036
642
Receivables from subsidiaries
4,127
10
16,860
1,272
16,055
4,162
143
236
57
347
8
26
17
146
within
662
2,938
1,004
318
1,152
21
968
2,459
934
80,444
7,472
560
1,068
1,068
89,544
80,528
5,853
504
968
87,853
2,145
Further disclosures relating to credit risk - in particular with re-
gard to the amounts of impairment losses recognised - are pro-
vided in the explanatory notes to the relevant categories of re-
ceivables in notes [25] and [30].
214
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
2,189
Remuneration Report
19
251
71,882
1,901
509
74,292
388
71,418
975
446
72,839
370
Gross carrying amount of
financial assets with medium
credit ratings
8,311
1,600
3,971
22
12,314
797
8,792
3,726
37
40
12,555
841
Gross carrying amount of
financial assets with poor
credit ratings
Total
32
Other Information
← = Q
Notes to the Group Financial Statements
11,308
23,450
9,150
43,908
11,951
24,710
9,496
46,157
8,161
12,996
21,157
8,057
Total
11,470
3,998
1,386
850
6,234
4,456
2,594
775
7,825
14,280
4,037
8
18,325
19,527
Maturity later
than five years
Maturity between
one and five years
Maturity within
one year
Liquidity risk
The following table shows the maturity structure of expected
contractual cash flows (undiscounted) for financial liabilities:
in € million
NON-DERIVATIVE FINANCIAL LIABILITIES
Bonds
Asset-backed financing transactions
Liabilities to banks
Liabilities from customer deposits (banking)
Trade payables
Lease liabilities
Commercial paper
Other financial liabilities
DERIVATIVE FINANCIAL LIABILITIES
With gross settlement
Cash outflows
Cash inflows
With net settlement
Cash inflows / outflows
Total financial liabilities
31.12.2023
31.12.2022
Maturity within
Maturity between
one year
one and five years
Maturity later
than five years
Total
credit ratings
13,285
financial assets with good
Total
2,667
2,040
2,755
Net amount after offsetting
Non-derivative financial assets and liabilities are only offset if a
legally enforceable right currently exists and it is actually in-
tended to offset the relevant amounts. No financial assets and
liabilities have been netted in the BMW Group due to the fact that
the necessary requirements for netting have not been met.
Gains and losses on financial instruments
The following table shows the net gains and losses arising on
financial instruments in accordance with IFRS 9:
in € million
2023
2022
Financial instruments measured at fair value through other comprehensive income
113
1,287
- 154
-161
1,438
Financial assets measured at amortised cost
Financial liabilities measured at amortised cost
-482
-652
-67
209
212
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Responsibility Statement and Auditor's Report
Remuneration Report Other Information
Financial instruments measured at fair value through profit or loss
Group Financial Statements
Notes to the Group Financial Statements
- 188
-95
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Offsetting of financial instruments
Derivative financial instruments of the BMW Group are subject to
legally enforceable master netting agreements or similar con-
tracts. However, receivables and payables relating to derivative
financial instruments are not netted due to non-fulfilment of the
stipulated criteria. Offsetting would have the following impact on
the carrying amounts of derivatives:
31.12.2023
31.12.2022
-228
in € million
Assets
2,926
Liabilities
Assets
Liabilities
4,400
4,386
Gross amount of derivatives which can be offset in case of insolvency
Cash collateral
- 1,638
-1,638
-2,118
5,061
-2,118
-1
Balance sheet amount as reported
← = Q
Net gains and losses arising on financial instruments measured
at fair value through other comprehensive income relate to
changes in the fair value of marketable securities. Further details
are provided in note [19]. Total interest income arising on finan-
cial assets measured at fair value through other comprehensive
income amounted to € 82 million (2022: € 37 million) and total
interest expense to € 18 million (2022: € 10 million).
Net gains and losses arising on financial instruments measured
at fair value through profit and loss mainly include results from
the fair value measurement of stand-alone derivatives, market-
able securities and shares in investment funds, as well as other
financial assets.
213
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
Receivables from sales financing are allocated to internally de-
fined rating categories based on credit risk. The classification into
creditworthiness levels is based on default probabilities. The re-
lated gross carrying amounts in accordance with IFRS 9 are al-
located as follows:
in € million
Gross carrying amount of
4,186
Stage 1
Stage 3
General
Simplified
31.12.2023
Total
Expected
credit loss
Stage 1
Stage 2
Stage 3
General
Simplified
31.12.2022
Stage 2
4,232
65
104
Net gains and losses arising on financial assets measured at
amortised cost include mainly exchange rate gains/losses and
impairment losses/reversals.
Net gains and losses arising on financial liabilities measured at
amortised cost comprise mainly exchange rate gains/losses.
Financial instruments measured at amortised cost are some-
times subject to carrying amount adjustments that are recog-
nised through profit or loss as part of the application of hedge
accounting. These carrying amount changes are largely neutral-
ised by the offsetting changes in fair value arising on hedging
transactions and for this reason are not reported in the figures for
net gains and losses.
Total interest income arising on financial assets measured at
amortised cost relates mainly to the interest income earned on
credit financing and reported within revenues. Total interest ex-
penses arising on financial instruments measured at amortised
cost amounted to € 2.5 billion (2022: € 1.7 billion).
Credit risk
The BMW Group is exposed to counterparty credit risks if con-
tractual partners, for example a retail customer or a dealership,
are unable or only partially able to meet their contractual obliga-
tions. Information on the management of credit risk for receiv-
ables from sales financing is provided in the Combined Manage-
ment Report. ( Outlook and Risks and Opportunities)
Notwithstanding the existence of collateral accepted, the carry-
ing amount of financial assets (with the exception of derivative
financial instruments) generally represents the maximum credit
risk. In addition, the credit risk is increased by additional unu-
tilised loan commitments in the dealership financing line of busi-
ness. Total dealership financing credit risk at the end of the re-
porting period therefore amounted to € 32,149 million (2022:
€ 31,163 million).
In the case of all relationships underlying non-derivative financial
instruments, in order to minimise the credit risk and depending
on the nature and amount of exposure, collateral is required,
credit information and references obtained or historical data
based on the existing business relationship, in particular pay-
ment behaviour, reviewed.
In the case of trade receivables, customers are regularly as-
sessed with regard to their credit risk. Depending on contractual
status, necessary measures, such as dunning procedures, are
initiated in good time.
The credit risk relating to cash deposits and derivative financial
instruments is minimised by the fact that the Group only enters
into such contracts with parties of first-class credit standing.
Within the financial services business, items financed for retail
customers and dealerships (such as vehicles, facilities and prop-
erty) serve as first-ranking collateral with a recoverable value.
Security is also put up by customers in the form of collateral asset
pledges, asset assignment and first-ranking mortgages, supple-
mented where appropriate by warranties and guarantees. Items
previously held as collateral that are subsequently acquired re-
late mainly to vehicles. As a rule, these assets can be converted
into cash at short notice through the dealership organisation.
Creditworthiness testing is an important aspect of the BMW
Group's credit risk management. Every borrower's creditworthi-
ness is tested for all credit financing and lease contracts entered
into by the BMW Group. In the case of retail customer financing,
creditworthiness is assessed using validated scoring systems in-
tegrated in the purchasing process.
In the area of dealership financing, creditworthiness is assessed
by means of ongoing credit monitoring and an internal rating sys-
tem that takes account not only of the material credit standing of
the borrower, but also of qualitative factors, such as past reliabil-
ity in business relations.
The credit risk on trade receivables is assessed mainly on the
basis of information relating to overdue amounts. The gross car-
rying amounts of these receivables are allocated in accordance
with IFRS 9 to overdue ranges used for management purposes
as follows:
in € million
31.12.2023
31.12.2022
Not overdue
1-30 days overdue
31-60 days overdue
61-90 days overdue
3,718
3,871
339
208
42
31
29
11
More than 90 days overdue
Total
Expected
credit loss
3,337
14
16,636
Raw material price exposures
31.12.2023
31.12.2022
9,033
10,153
This exposure is compared to all hedges that are in place. The
net cash flow surplus represents an uncovered risk position. The
cash-flow-at-risk approach involves showing the impact of po-
tential raw materials market price fluctuations on operating cash
flows on the basis of probability distributions. Volatilities and
correlations serve as input factors to assess the relevant proba-
bility distributions.
The potential negative impact on earnings is calculated at the re-
porting date for each raw materials category for the following fi-
nancial year on the basis of current market prices and exposure
with a confidence level of 95%. The risk mitigating effect of cor-
relations between the various categories of raw materials is
taken into account when the risks are aggregated.
The following table shows the potential negative impact for the
BMW Group resulting from fluctuations in prices across all cate-
gories of raw materials, measured on the basis of the cash-flow-
at-risk approach. The risk at each reporting date for the following
financial year was as follows:
in € million
Cash flow at risk
31.12.2023
in € million
31.12.2022
1,115
217
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
Disclosures on hedging measures
The following disclosures on hedging measures include deriva-
tives of fully consolidated companies that are designated as a
hedging instrument. The amounts shown are stated before de-
ferred taxes and take account of additional effects arising from
the application of the modified closing rate method.
1,045
The nominal amounts of hedging instruments were as follows:
The starting point for analysing raw materials price risk is to iden-
tify planned purchases of raw materials or components contain-
ing raw materials, the so-called "exposure". At each reporting
date, the exposure for the following financial year amounted to:
Causes of hedge ineffectiveness are seen potentially only for
counterparty credit risk. However, in view of the processes that
have been established for credit risk management, ineffective-
ness is not expected to arise.
sure.
In view of the fact that own credit risk is excluded from the hedg-
ing relationship, ineffectiveness is expected to be low.
For selected fixed-interest assets, part of the interest rate risk is
hedged on a portfolio basis. In this case, swaps are used as the
hedging instrument. Hedge relationships are terminated and re-
designated on a monthly basis at the end of each reporting pe-
riod, thereby taking account of the constantly changing content
of each portfolio.
In light of the reform and replacement of certain benchmark in-
terest rates, some of the BMW Group's hedging relationships
have been redesignated to take account of alternative bench-
mark interest rates.
216
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
The economic relationship between the hedged item and the
hedging instrument is based essentially on the fact that they
have the same basis and term. The BMW Group designates only
the commodity price index-linked raw materials surcharge, which
is specified in the purchase contracts of vehicle components, as
a hedged item. The proportion of the hedged risk component as
a percentage of the total fair value depends on the specific types
of vehicle component involved. Other price components con-
tained in the contract are not designated as being part of the
hedge relationship as no effective hedging instruments exist for
these components.
← = Q
In the case of CAD CDOR and PLN WIBOR, uncertainty remains
as to the exact timing and nature of the changes. Non-derivative
financial instruments that have not been converted to an alterna-
tive interest rate at 31 December 2023 all relate to the CAD
CDOR, with a nominal liability amount of € 171 million
(2022: € 242 million). Derivative financial instruments that have
not been converted to an alternative interest rate at 31 Decem-
ber 2023 all relate to the PLN WIBOR, with a nominal amount of
€ 584 million (2022: € 100 million).
The BMW Group applies a value-at-risk approach throughout the
Group for internal reporting purposes and to manage interest
rate risk.
This approach is based on a historical simulation in which the
potential future fair value losses of the interest rate portfolios are
compared across the Group with expected amounts on the basis
of a holding period of 250 days and a confidence level of
99.98%. The risk mitigating effect of correlations between the
various portfolios is taken into account when the risks are aggre-
gated.
In the following table the potential volumes of fair value fluctu-
ations - measured on the basis of the value-at-risk approach –
are compared with the expected value for the interest-rate-sen-
sitive exposures of the BMW Group:
in € million
Value at risk
31.12.2023
1,967
31.12.2022
2,097
Raw materials price risk
The BMW Group is exposed to market price risks on raw mater-
ials. In order to hedge these risks, the Group mainly uses forward
commodity contracts. As part of the implementation of the risk
management strategy, the extent to which risk exposures should
be hedged is decided at regular intervals and the corresponding
hedging ratio defined. Items are hedged on the basis of a con-
stant ratio of one to one between hedging instrument and risk
exposure.
The transition to the newly created or revised benchmark interest
rates is being managed, monitored and assessed with regard to
risk management implications as part of a multidisciplinary pro-
ject. The tasks of the conversion project includes the continual
monitoring of regulatory developments, the initiation of neces-
sary changes to systems, processes, risk and measurement
models as well as the clarification of the associated accounting
and financial reporting implications. In the financial year 2023,
all contracts based on USD LIBOR were converted to alternative
benchmark interest rates (€ 412 million).
The following table shows the average hedging rates of the fi-
nancial instruments used by the BMW Group to hedge significant
currency risk exposures:
Currency risks
EUR/CNY
791
Raw material price risks
3,519
5,329
Nickel (EUR/t)
Palladium (EUR/oz)
Nominal amounts of
hedging instruments
34,130
43,787
9,417
31.12.2023
31.12.2022
961
2,270
7,398
7,120
18,916
17,309
1,465
1,958
31.12.2022
Maturity
later than
five years
Information on average interest hedge rates is not provided,
since interest rate derivatives designated as hedging instru-
ments are used exclusively to hedge items in fair value hedges.
The hedge rates therefore correspond in each case to the current
market interest rate level.
Most of the hedges used in this context relate to variable yield
curves relating to the euro, US dollar and British pound currency
areas.
Maturity
2,313
908
Copper (EUR/t)
Combined interest/currency
risks
EUR/GBP
EUR/KRW
31.12.2023
31.12.2023
31.12.2022
7.40
7.54
0.87
0.87
1,405.05
1,354.27
The following table shows the average hedging rates of the fi-
nancial instruments used by the BMW Group to hedge significant
raw materials risk exposures:
Maturity
within
Maturity
between one
in € million
one year
and five years
Maturity
later than
five years
Currency risks
22,648
18,328
Raw material price risks
Interest rate risks
7,055
19,169
8,626
Aluminium (EUR/t)
Interest rate risk is managed through the use of interest rate de-
rivatives. As part of the implementation of the risk management
strategy, interest rate risks are monitored and managed at regu-
lar intervals. The interest rate contracts used for hedging pur-
poses comprise mainly swaps, which, if hedge accounting is ap-
plied, are accounted for as fair value hedges. The economic re-
lationship between the hedged item and the hedging instrument
is based on the fact that the main parameters of the hedged item
and the related hedging instrument (e.g. start date, term and cur-
rency) are the same. Items are hedged on the basis of a constant
ratio of one to one between hedging instrument and risk expo-
73,954
31.12.2022
31.12.2023
73,510
12,650
598
31,393
1,150
20,537
280
-413
1,017
13,087
319
33,943
- 19,096
- 13,172
18,145
- 594
- 19,387
- 12,807
- 732
- 32,926
- 1,614
- 2,398
-249
- 4,261
1,201
1,993
378
3,572
-32,862
- 1,469
4
-522
15,512
35
15,547
14,080
40
14,120
497
1,460
882
2,839
533
1,460
1,094
3,087
3,298
3,298
1,714
1,714
191
146
174
511
305
181
202
688
-951
- 1,614
211
- 2,398
- 4,261
As an enterprise with worldwide operations, the BMW Group
conducts business in a variety of currencies, from which currency
risks arise. In order to hedge currency risks, the BMW Group
holds, as at 31 December 2023, derivative financial instruments
mostly in the form of forward currency contracts and currency
swaps.
As part of the implementation of the risk management strategy,
the extent to which risk exposures should be hedged is decided
at regular intervals. The economic relationship between the
hedged item and the hedging instrument is based essentially on
the fact that they are denominated in the same currency and
have the same maturities. Items are hedged on the basis of a
constant ratio of one to one between hedging instrument and risk
exposure.
Causes of hedge ineffectiveness are seen potentially only for
counterparty credit risk. However, in view of the processes that
have been established for credit risk management, ineffective-
ness is not expected to arise.
The BMW Group measures currency risk using a cash-flow-at-
risk model. The analysis of currency risk is based on forecast
foreign currency transactions which could result in exposures to
surpluses of foreign currency cash inflows and cash outflows. At
the end of the reporting period, the overall currency exposure -
in each case for the following year and determined by aggregat-
ing the individual currency exposures based on their absolute
amount was as follows:
in € million
Currency exposure
Interest rate risk
Interest rate risks arise when funds are borrowed and invested
with differing fixed-rate periods or differing terms. At the BMW
Group, all items subject to, or bearing, interest are exposed to
interest rate risk and can therefore affect both the assets and li-
abilities side of the balance sheet.
The fair value of the Group's interest rate portfolios was as fol-
lows at the end of the reporting period:
31.12.2023
31.12.2022
Further information is provided in the 7 Outlook and ▾ Risks and
Opportunities sections of the Combined Management Report.
Currency risk
39,157
in € million
Currency exposures include short positions amounting to
€ 2,136 million (2022: € 3,604 million).
The currency exposure is compared to all hedges that are in
place. The net cash flow surplus represents an uncovered risk
position. The cash-flow-at-risk approach involves showing the
impact of potential exchange rate fluctuations on operating cash
flows on the basis of probability distributions. Volatilities and cor-
relations serve as the main input factors to determine the rele-
vant probability distributions.
The potential negative impact on earnings is calculated at the re-
porting date for each currency for the following financial year on
the basis of current market prices and exposures with a confi-
dence level of 95%. The risk mitigating effect of correlations be-
tween the various currencies is taken into account when the risks
are aggregated.
The following table shows the potential negative impact for the
BMW Group for the following year resulting from unfavourable
changes in exchange rates, measured on the basis of the cash-
flow-at-risk approach.
in € million
Cash flow at risk
31.12.2023
31.12.2022
493
530
Fair values of interest rate portfolios
43,179
Currency, interest rate and raw materials market price risks of the
BMW Group are managed at a corporate level.
Protection against such risks is provided in the first instance
though natural hedging which arises when the values of non-de-
rivative financial instruments have matching maturities and
amounts (netting). Derivative financial instruments are used to
reduce the risk remaining after netting.
The principal market risks to which the BMW Group is exposed
are currency risk, interest rate risk and raw materials market price
risk.
1,201
1,993
378
3,572
54,680
40,590
10,819
106,089
56,732
46,065
11,546
114,343
The cash flows from non-derivative financial liabilities comprise
principal repayments and the related interest. The amounts dis-
closed for derivative financial liabilities comprise only cash flows
relating to derivatives that have a negative fair value at the bal-
ance sheet date. It should be noted that, due to the various yield
curves used, a net positive cash flow may arise from inflows/out-
flows relating to derivative instruments with negative fair values.
At 31 December 2023, credit commitments available at short
notice to dealerships which had not been called upon at the end
of the reporting period amounted to € 13,218 million (2022:
€ 16,044 million).
Solvency is assured at all times by managing and monitoring the
liquidity situation on the basis of a rolling cash flow forecast.
The resulting funding requirements are covered by a variety of
instruments placed on the world's financial markets, with the aim
to minimise risk by matching maturities with financing require-
ments and in alignment with a dynamic target debt structure.
As a further reduction of risk, a syndicated credit line totalling
€ 8 billion (2022: € 8 billion) from a consortium of international
banks is available to the BMW Group. Intra-group cash flow fluc-
tuations are balanced out by the use of daily cash pooling ar-
rangements. Further information is provided in the Combined
Management Report.
215
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Market risks
- 249
* Presentation adjusted compared to previous year.
Currency risks
Remuneration Report
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
219
2 Presentation adjusted compared to previous year.
Prior year figures adjusted due to corrected currency translation.
-3,431
-254
162
118
The following table shows key information on hedged items for
each risk category as well as the balances of designated compo-
nents within accumulated other equity:
2,845
156
2,660
Combined interest rate/currency risks²
2,870
309
49,899
1,414
1,956
288
49,236
Interest rate risks²
1,832¹
5171
78
1,119
520
31.12.2023
Balances in accumulated
Raw material price risks
Currency risks
Cash Flow Hedges
in € million
-75
2,605
- 1,401
41,854
13,443
-1,206
2,377
-1,654
2,161
31.12.2022
Terminated
hedge
relationships
Change in
value of
hedged items
Liabilities
Assets
Terminated
hedge
relationships
Continuing
hedge
relationships
Change in
value of
hedged items
Liabilities
Assets
Balances in accumulated
other equity
Carrying amounts
other equity
Carrying amounts
Continuing
hedge
relationships
552
1,494
9,473
-2,161
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
218
*Presentation adjusted compared to previous year.
9,949
48,442
35,825
hedging instruments
Nominal amounts of
5,936
3,537
Other Information
Raw material price risks
1,764
166
Combined interest/currency
risks*
9,034
19,350
9,473
Interest rate risks*
21,392
22,649
and five years
one year
in € million
915
The following table provides information on the nominal
amounts, carrying amounts and fair value changes of contracts
designated as hedging instruments:
in € million
Cash Flow Hedges
1,387
325
8,848
44,041
1,654
211
1,200
40,976
Change in fair value
of designated
components
31.12.2022
= Q
↑
Liabilities
Assets
Nominal amounts
components
Liabilities
Assets
Nominal amounts
of designated
Change in fair value
Carrying amounts
Carrying amounts
31.12.2023
Fair Value Hedges
Raw material price risks
Currency risks
Fair Value Hedges
Interest rate risks²
117
1 Prior year figures adjusted due to corrected currency translation.
2 Presentation adjusted compared to previous year.
1,654
1,057
15
- 244
-274
662
-3
- 1,783
2,026
Costs of
hedging
Designated
component
Costs of
hedging
- 103
Costs of
hedging
Designated
component
Costs of
hedging
component
Designated
Costs of
hedging
Costs of
hedging
Costs of
hedging
component
Designated
Raw material price risk
Combined
interest/
currency risk'
Interest rate
risk*
Costs of
hedging
1
- 2,161
1,832
-3
- 1,783
2,026
- 895
- 1,206
- 1,018
2,377
Closing balance at 31 December
291
Reclassification to acquisition costs for inventories
-17
3
- 110
2
Combined interest rate/currency risks²
578
135
-150
733
- 1,153
for terminated hedge relationships
for continuing hedge relationships
Reclassification to profit or loss
Change in fair value during the reporting period
517
- 18
- 2,281
Currency risks
Raw material price risk
739
Interest rate
risk
Combined interest/currency risks*
Interest rate risks*
Fair Value Hedges
Raw material price risks
Currency risks
Cash Flow Hedges
in € million
Hedge relationships give rise to the following effects:
Notes to the Group Financial Statements
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
220
257
2,647
43,970
10,979
Maturity
between one
662
2,026
- 1,8321
-5171
The accumulated amount of hedge-related fair value adjust-
ments is a negative amount of € 11 million (2022: negative
amount of € 283 million) for assets and a negative amount of
€ 1,551 million (2022: positive amount of € 2,880 million) for li-
abilities.
interest/
currency risk
*Presentation adjusted compared to previous year.
Designated components and costs of hedging within accumu-
3,433
in € million
Currency risks
lated other equity changed as follows:
Combined
2022
3
- 18
- 1,539
- 395
2,300
2023
3
1
13
2
Hedge ineffectiveness
recognised in
income statement
Change of designated
components in other
comprehensive income
351
- 1,868
Opening balance at 1 January
765
Change in costs of
hedging in other
comprehensive income
2022
Hedge ineffectiveness
recognised in
income statement
Change of designated
components in other
comprehensive income
Change in costs of
hedging in other
comprehensive income
2023
In the event of death or invalidity, special rules apply for early
payment of share-based remuneration components (matching
components) based on the target amounts, and the holding pe-
riod is also dropped for shares of common stock that were ac-
quired with share-based remuneration components. Where the
service contract is terminated prematurely and the Company has
an extraordinary right of termination, or if the Board member re-
signs without the Company's agreement, entitlements to
amounts as yet unpaid relating to share-based remuneration
(matching components) are forfeited; a personal cash invest-
ment amount will be settled based on the target amount.
To Our Stakeholders Combined Management Report
Up to and including financial year 2021, eligible senior depart-
ment heads committed to invest 26% of their earnings-related
bonus in shares of BMW AG common stock and to hold the ac-
quired shares for four years. For the investment obligation, BMW
AG granted an amount corresponding to the entire investment
amount as a net subsidy.
Participants receive one additional share of common stock or the
equivalent value in cash for every three shares of common stock
held once the four-year holding requirement has been fulfilled, at
the Company's discretion.
The Board of Management members in office on the balance
sheet date hold 112,969 shares of BMW common stock with a
holding obligation arising from share-based remuneration for fi-
nancial years 2019 to 2022 (2022: 118,604).
gross amount of the bonus that, net of tax and deductions, had
to be invested in shares of the Company's common stock (up to
and including financial year 2017, the investment component
amounted to 20% of the total bonus after tax, which the Board
of Management members received plus tax and social security
as additional cash remuneration). This amount was also subject
to a four-year holding period and on expiry thereof the Board of
Management members received one additional share of the
Company's common stock or the equivalent value in cash
(matching component) for every three shares of common stock
held, at BMW AG's discretion.
224
BMW Group Report 2023
Group Financial Statements
← = Q
The total expense arising from the share-based remuneration
component for eligible active and former Board of Management
members and senior department heads was € 1,598,368 in fi-
nancial year 2023 (2022: € 638,715).
Remuneration Report
Other Information
Notes to the Group Financial Statements
The expenses and the corresponding allowance against revenue
reserves for the personal cash investment amount of the eligible
active Board of Management members and senior department
heads amount to € 21,776,062 (2022: € 20,175,614).
The share-based remuneration component is revalued at its fair
value at each balance sheet date between the grant date and the
settlement date and on the settlement date itself. The expense
for such programmes is recognised in the income statement (as
personnel expense) on a straight-line basis over the vesting pe-
riod of the options and in the balance sheet as a provision.
The remuneration system does not provide for any further
matching components for the members of the Board of Manage-
ment from financial year 2021 or for the senior department
heads from financial year 2022.
For financial years up to and including financial year 2020,
Board of Management members received an earmarked cash
amount (investment component) corresponding to 45% of the
The cash settlement of the share-based remuneration compo-
nent is measured at fair value on the balance sheet date (closing
price of BMW AG common stock in Xetra trading on 31 Decem-
ber 2023).
The total carrying amount of the provision for the share-based
remuneration component for eligible active and former Board of
Management members and senior department heads was
€ 5,982,815 on 31 December 2023 (2022: € 6,971,951).
Responsibility Statement and Auditor's Report
Payment of the personal cash investment amount is made after
the Annual General Meeting at which the Financial Statements
are presented for the relevant financial year. The shares of com-
mon stock are purchased immediately after the personal cash in-
vestment amount has been paid out and are subject to a holding
period of four years from the date of purchase. The RoCE com-
ponent and the strategic focus target component each make up
half of the target amount for the personal cash investment
amount. For the RoCE component, a RoCE factor is determined
based on the RoCE achieved in the Automotive segment for the
grant year. For the strategic focus target component, a minimum
of two strategic focus targets are defined prior to the start of the
financial year. Minimum, target and maximum values are defined
and factors are assigned for the RoCE in the Automotive seg-
ment and for each strategic focus target. The relevant factors are
determined after the end of the financial year based on the extent
to which targets were achieved.
Remuneration Report
Senior department head and Board of Management programme
Both the share-based remuneration programme for members of
the Board of Management that was in force in the reporting year
and the share-based remuneration programme for eligible sen-
ior department heads serve to reward long-term entrepreneurial
conduct with sustainable business management in mind.
Business relationships with non-consolidated companies are
small in scale.
BMW Brilliance has been fully consolidated as a subsidiary of the
BMW Group since 11 February 2022 (see note 2). Goods and
services performed (mainly vehicle components for further pro-
cessing) for BMW Brilliance up to the date of first-time consoli-
dation in 2022 totalled € 1,330 million. Supplies and services
received in the same period amounted to € 106 million and com-
prised mainly vehicles and services.
43 Declaration with respect to the Corporate Governance
Code
BMW Trust e.V., Munich, administers assets on a trustee basis
to secure obligations relating to pensions in Germany and is
therefore a related party of the BMW Group in accordance with
IAS 24. This entity has no assets of its own. It had no income or
expenses during the period under report. BMW AG bears ex-
penses on an immaterial scale and performs services for BMW
Trust e.V.,
Munich.
The BMW Foundation Herbert Quandt, Munich, is an independ-
ent corporate foundation and, due to the BMW Group's signifi-
cant influence, qualifies as a related party according to IAS 24.
The BMW Group made donations to the BMW Foundation Her-
bert Quandt during the financial year 2023 totalling € 6.0 million
(2022: € 5.9 million) for ongoing foundation work and other ser-
vices. No other transactions arose.
223
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Board of Management members and eligible senior department
heads receive an earmarked cash amount (personal cash invest-
ment amount) that is, net of tax and deductions, to be invested
in shares of BMW AG common stock. This amount depends on
the achievement of certain financial and non-financial targets in
the past financial year (vesting year).
Responsibility Statement and Auditor's Report
Notes to the Group Financial Statements
← = Q
42 Share-based remuneration
The BMW Group has three share-based programmes: one for
eligible employees, one for eligible senior department heads and
one for members of the Board of Management.
Employee Share Programme
Within the scope of the Employee Share Programme in the finan-
cial year 2023, eligible BMW Group employees were granted
shares of BMW AG common stock on preferential terms (for in-
formation on the number and price of the shares of common
stock issued see note [31]). At their discretion, participants in the
programme were able to purchase packages of 10, 20, 30, 40
or 50 shares of common stock (2022: 10, 20, 35, 50 or 65
shares of preferred stock) with a discount of € 20.00 (2022:
€ 16.00) on each share as compared to the market price (aver-
age closing price in Xetra trading in the period 1 to 6 November
2023: € 91.47). Employees who are currently employed by
BMW AG or a wholly owned subsidiary of BMW AG based in Ger-
many were able to partake in the programme, insofar as the sub-
sidiary's management had decided to participate. Employees
were required to have been in their positions for at least one year
without interruption at the time the programme was announced
and had to remain in their positions until the shares of common
stock were transferred.
The shares of common stock acquired in the scope of the Em-
ployee Share Programme are subject to a vesting period of four
years calculated from 1 January of the year in which the shares
of common stock were acquired. These shares of common stock
are entitled to receive dividends for the first time with effect from
the financial year 2023.
A total of 1,290,000 shares of common stock were transferred
to employees in the reporting year (2022: 1,439,975 shares of
preferred stock). The 1,290,000 shares of common stock were
acquired in the scope of the Employee Share Programme. The
1,439,975 shares of preferred stock in the previous year
stemmed from Authorised Capital 2019. BMW AG's Board of
Management decides each year whether to continue the
programme.
As at 31 December 2023, the BMW Group recorded personnel
expenses resulting from the Employee Share Programme relat-
ing to the difference between the market price and the dis-
counted price for the shares of common and preferred stock, re-
spectively, purchased by employees totalling € 28 million (2022:
€ 23 million).
Other Information
The Board of Management and the Supervisory Board of
Bayerische Motoren Werke Aktiengesellschaft have issued the
prescribed Declaration of Compliance with the recommendations
of the "Government Commission on the German Corporate Gov-
ernance Code" required by § 161 of the German Stock Corpora-
tion Act (AktG). The declaration has been made permanently
available on the Company's website www.bmwgroup.com/ezu.
In accordance with the Articles of Incorporation, each member of
the Supervisory Board of BMW AG who does not exercise any
additional function relevant to remuneration receives fixed remu-
neration of € 200,000 p.a. in addition to the reimbursement of
his or her reasonable expenses, plus an attendance fee of
€ 2,000 for every plenary meeting that the member has
attended.
The expenses recorded in accordance with IFRS in financial year
2023 for remuneration for the active members of the Board of
Management and Supervisory Board are broken down as
follows:
A provision has been established for pension obligations to for-
mer members of the Board of Management and their depend-
ants in accordance with IAS 19 totalling € 101.6 million
(2022: € 93.5 million).
The remuneration system for members of the Supervisory Board
does not include any stock options, value appreciation rights
comparable to stock options or any other share-based remuner-
ation components.
Members of the Supervisory Board who perform a function rele-
vant to remuneration such as the Chairman or Deputy Chairman
of the Supervisory Board or the chairmen or members of com-
mittees, provided these committees meet on at least three days
in the financial year, receive higher remuneration because of
these additional requirements.
in € million
Overview of the remuneration of the Supervisory Board*
Factor Amount in € p.a.
Member of the Supervisory Board
Chairman of the Supervisory Board
Deputy Chairman of the Supervisory Board
Chairman of the Audit Committee
Chairman of another committee
Member of the Audit Committee
Member of another committee
1.00
200,000
There are provisions for pension obligations to active members
of the Board of Management in accordance with IAS 19 totalling
€ 16.5 million (2022: € 16.6 million).
3.00
2.00
400,000
2.25
450,000
2.00
400,000
2.00
400,000
17
600,000
44 Remuneration for members of the Board of Manage-
ment and the Supervisory Board
Total remuneration of former members of the Board of Manage-
ment and their dependants amounted to € 11.9 million
(2022: € 9.7 million). This remuneration also includes the con-
tributions accrued in connection with the departures of Dr Peter
and Mr Nota. Some of these amounts have not yet been paid out.
Total expense
in € million
Remuneration for the members of the
Board of Management
Short-term benefits
2023
2022
32.9
Other long-term benefits
3.2
33.8
3.1
The costs for the active members of the Board of Management
arising from share-based remuneration, which was in force until
2020 inclusive, amounted to € 0.2 million (2022: € 0.1 million).
The provision for the share-based remuneration component
amounts to € 0.9 million (2022: € 1.2 million).
Benefits resulting from termination of the Board
5.4
Share-based remuneration
0.2
0.1
Remuneration for the members of the Supervisory Board
Short-term benefits
5.8
5.5
47.5
42.5
mandate
2022
- Maximum amount of earnings component p. a.:
2023
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
Seen from the perspective of BMW Group entities, the volume of
significant transactions with the above-mentioned entities was
as follows:
in € thousand
DELTON Health AG
DELTON Logistics S.à r.l.
SOLARWATT GmbH
Responsibility Statement and Auditor's Report
ALTANA AG
In total, the following amounts of goods and services were sup-
plied to or received from other joint ventures and associated
companies:
in € million
Other joint ventures and associated companies
Supplies and services performed
Supplies and services received
Receivables at 31 December
Payables at 31 December
2023
2022
UnternehmerTUM GmbH
2023
Group Financial Statements
222
1.50
221 BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
41 Related party relationships
BMW Group Report 2023 To Our Stakeholders Combined Management Report
The following individuals and entities are related parties in ac-
cordance with IAS 24:
The Board of Management and the Supervisory Board of
the BMW Group
Associated companies, joint ventures, non-consolidated
subsidiaries, BMW Trust and BMW Foundation Herbert
Quandt
Transactions of Group companies with related parties were
carried out, without exception, in the normal course of business
of each of the parties concerned and conducted at market condi-
tions, i.e. conditions that are also granted to other third-party
manufacturers.
No loans were granted by entities of the BMW Group to members
of the Board of Management and the Supervisory Board in the
financial year 2023, nor were any contingent liabilities entered
into on their behalf. During the year under report, members of the
Board of Management and the Supervisory Board concluded
contracts with BMW Group entities on customary market terms
and conditions for the purchase of vehicles, other services (in-
cluding maintenance and repair work) and the investment of
cash deposits in the low single-digit million range relating to the
Board of Management.
Stefan Quandt, Germany, is a shareholder and Deputy Chairman
of the Supervisory Board of BMW AG. He is also the sole share-
holder and Chairman of the Supervisory Boards of DELTON
Health AG, Bad Homburg v.d.H., and DELTON Technology SE,
Bad Homburg v.d.H., as well as the sole shareholder of DELTON
Logistics S.à r.l. Grevenmacher.
During the financial year 2023, DELTON Logistics S.à r.l. – via
its subsidiaries - performed logistic-related services for the BMW
Group. In addition, the DELTON companies held by Stefan
Quandt acquired vehicles from the BMW Group by way of
leasing.
Stefan Quandt, Germany, is also the indirect majority share-
holder of SOLARWATT GmbH, Dresden. Cooperation arrange-
ments are in place between BMW Group and SOLARWATT
GmbH, Dresden, within the field of electric mobility. The focus of
this collaboration is on the provision of complete photovoltaic so-
lutions for rooftop systems and carports to BMW i customers. In
addition, SOLARWATT GmbH purchases battery cells and re-
lated components for home battery storage applications as part
of a supply project. In addition to the deliveries of goods de-
scribed above, SOLARWATT GmbH, Dresden, also purchased
vehicles from the BMW Group by way of leasing during the finan-
cial year 2023.
Susanne Klatten, Germany, is a shareholder and member of the
Supervisory Board of BMW AG and also a shareholder and Dep-
uty Chairwoman of the Supervisory Board of ALTANA AG, Wesel.
In 2023, ALTANA AG, Wesel, acquired vehicles from the BMW
Group, mainly by way of leasing.
Susanne Klatten, Germany, is also the sole shareholder and
Chairwoman of the Supervisory Board of UnternehmerTUM
GmbH, Garching. In 2023, the BMW Group bought in services
from UnternehmerTUM GmbH, Garching, mainly in the form of
consultancy and workshop services.
Stefan Quandt and Susanne Klatten as well as companies
controlled by them
2022
2023
2022
361
361
118
108
3,387
3,215
71
29
Supplies and services performed
794
Supplies and services received
2023
2022
4
4
2023
86
2022
63
2023
Payables at 31 December
2022
Receivables at 31 December
1,066
2,740
2,900
2023
2022
2,058
2,058
16
15
753
768
9,698
19,667
29
7
986
1,004
21,452
16,282
60
33
3,083
349
11
17
300,000
*If a Supervisory Board member performs more than one of the functions referred to above, their
remuneration is measured only on the basis of the function that is remunerated with the highest
amount.
BMW Group companies did not grant any loans to members of
the Board of Management or the Supervisory Board in the 2023
financial year, nor did they enter into any contingent liabilities in
their favour. In the year under review, members of the Board of
Management and the Supervisory Board concluded contracts
with BMW Group companies for the purchase of vehicles, other
services (maintenance and repair work) and cash deposits at
arm's length conditions.
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
Segment information by operating segment is as follows:
in € million
External revenues
Inter-segment revenues
Total revenues
Segment result
Result from equity accounted investments
Capital expenditure on non-current assets
Depreciation and amortisation on non-current assets
Automotive
Motorcycles
Financial Services
Other Entities
Reconciliation
to Group figures
Group
2023
2022
To Our Stakeholders Combined Management Report
2023
BMW Group Report 2023
The success of the Other Entities segment is assessed on the
basis of profit or loss before tax. The corresponding measure of
segment assets used to manage the Other Entities segment is
total assets less asset-side income tax items and intragroup
investments.
45 Events after the end of the reporting period
No events have occurred after the balance sheet date with a par-
ticular significance for the results of operations, financial position
or net assets of the BMW Group.
228 BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
SEGMENT INFORMATION
46 Explanatory notes to segment information
Information on reportable segments
For the purposes of presenting segment information, the activi-
ties of the BMW Group are divided into operating segments in ac-
cordance with IFRS 8. The segmentation follows the internal
management and reporting system and takes account of the or-
ganisational structure of the BMW Group based on the various
products and services of the reportable segments.
The activities of the BMW Group are broken down into the oper-
ating segments Automotive, Motorcycles, Financial Services and
Other Entities.
Within the Automotive segment, the BMW Group develops, man-
ufactures, assembles and sells automobiles powered with all-
electric drive systems, plug-in hybrid systems and highly efficient
combustion engines, as well as spare parts, accessories and mo-
bility services under the BMW, MINI and Rolls-Royce brands.
BMW and MINI brand products are sold in Germany through
branches of BMW AG and by independent, authorised dealer-
ships. Sales outside Germany are handled mainly by subsidiary
companies and by independent import companies in some mar-
kets. Rolls-Royce brand vehicles are sold in selected markets via
subsidiary companies and elsewhere by independent, authorised
dealerships.
Activities relating to the development, manufacture, assembly
and sale of motorcycles as well as spare parts and accessories
are reported in the Motorcycles segment.
Automobile and motorcycle leasing, retail and dealership financ-
ing, multi-brand fleet business, customer deposit business and
insurance activities are the main activities allocated to the Finan-
cial Services segment.
Holding and Group financing companies are reported in the Other
Entities segment. This segment also includes the operating com-
pany Bavaria Lloyd Reisebüro GmbH, which is not allocated to
one of the other segments.
Internal management and reporting
Segment information is prepared as a general rule in conformity
with the accounting policies adopted for preparing and presenting
the Group Financial Statements. Exceptions to this general prin-
ciple include the treatment of inter-segment warranties, the earn-
ings impact of which is allocated to the respective segments on
the basis used internally to manage the business. In addition, in-
tragroup repurchase agreements between the Automotive and
Financial Services segments pursuant to IFRS 15, impairment al-
lowances on intragroup receivables and changes in the value of
consolidated other investments pursuant to IFRS 9 are also ex-
cluded. Intragroup leasing arrangements are not reflected in the
internal management and reporting system on an IFRS 16 basis
and therefore, in accordance with IFRS 8, do not give rise to any
changes in the presentation of segment information. Inter-seg-
ment receivables and payables, provisions, income, expenses
and profits are eliminated upon consolidation. Inter-segment rev-
enues are based on market prices. Centralised cost components
are included in the respective segments, without resulting in cash
flows.
The role of "chief operating decision maker" with respect to re-
source allocation and performance assessment of the reportable
segment is embodied in the full Board of Management. For this
purpose, different measures of segment performance as well as
segment assets are taken into account in the operating
segments.
The Automotive and Motorcycles segments are managed on the
basis of return on capital employed (ROCE). The relevant meas-
ure of segment results used is therefore profit before financial re-
sult. Capital employed is the corresponding measure of segment
assets used to determine how to allocate resources. Capital em-
ployed is calculated as the sum of intangible assets, property,
plant and equipment and net working capital, the latter compris-
ing inventories as well as trade receivables less trade payables.
Further information is provided in the section "Managing oper-
ational performance at segment level" within the Combined Man-
agement Report.
The success of the Financial Services segment is measured on
the basis of return on equity (RoE). Profit before tax therefore rep-
resents the relevant measure of segment earnings. The measure
of segment assets in the Financial Services segment corresponds
to net assets, defined as total assets less total liabilities.
229
- Agreement entitling the BMW Group to reclaim variable remuneration already paid out in the event of specified serious incidences of non-compliance, incorrect calculation bases or incorrect financial statements
― Amounts may also be clawed back in principle after a member has left the Board
2022
2022
123,602
3,214
3,176
36,227
35,122
11
8
- 16,231
- 19,298
155,498
142,610
12,981
10,635
259
257
2,962
3,205
- 100
995
994
8,417
17,096
23,509
― Earnings factor is derived from an allocation matrix determined in advance based on the parameters "profit attributable to shareholders of BMW AG" and "Group post-tax return on sales" in the vesting year
―The earnings factor is 1.0 in case of a profit attributable to shareholders of BMW AG amounting to € 5.3 billion and a post-tax return on sales of 5.6%
2023
- 19,298
7
2023
2022
2023
2022
2023
2022
118,266
105,834
3,255
3,194
33,976
33,581
1
1
155,498
142,610
14,011
17,768
-41
- 18
2,251
1,541
10
- 16,231
- Agreement to withhold variable remuneration in the event of specified serious compliance violations or (withholding amounts provisionally) in the event of reasonable suspicions of such
― Amounts may also be withheld in principle after a member has left the Board
Clawback
Malus and clawback rules
Malus
- Additional trend analysis over at least three financial years
- Composition of performance factor:
-50% cross-divisional targets with ESG criteria
-40% other cross-divisional targets
-10% individual targets
― Criteria for cross-divisional targets with ESG criteria include in particular: Innovation performance (environmental, e. g. reduction of carbon emissions), development of the BMW Group's reputation based on
ESG aspects (e.g. corporate culture, promotion of integrity and compliance), adaptability, attractiveness as an employer, leadership performance
- Criteria for the other cross-divisional targets include in particular: Market position compared to competitors, innovation performance (economic), development of the BMW Group's reputation based on
non-ESG-related aspects (e. g. perception on capital markets, brand strength), customer orientation
― Measurement parameters and target values are determined before the start of the financial year
- Performance factor may not exceed 1.8
- Maximum amount of performance component p. a.:
― € 0.855 million (first period of office = first remuneration level)
- € 1.035 million (from second period of office or fourth year of mandate = second remuneration level)
- € 1.890 million (Chairman of the Board of Management)
― Earnings component of bonus rewards attainment of financial targets and is beneficial for earnings-related aspects of business strategy
- Performance component of bonus motivates the pursuit of non-financial strategic targets and is therefore beneficial for the long-term development of the BMW Group
Strategic relevance
Share-based remuneration
Personal cash investment amount
Calculation
― Requirement for Board of Management members to invest an earmarked cash amount (personal cash investment amount), net of tax and deductions, in shares of BMW common stock immediately after
disbursement
― Payment as part of the next payroll run after the Annual General Meeting at which the Financial Statements are presented for the relevant vesting year
― Requirement for Board of Management members to hold the acquired shares of common stock for at least four years; this requirement remains in effect for individuals who step down from the Board of
Management (share ownership guideline)
― Assessment period of five years in total (one year for determining the personal cash investment amount, four years holding requirement)
- Relevant period is the vesting year
- Target amount p. a. (at 100% target achievement):
― Primarily qualitative, non-financial criteria, expressed in terms of a performance factor, aimed at measuring the Board member's contribution to sustainable and long-term performance and corporate
orientation
- € 1.050 million (Chairman of the Board of Management)
― € 0.855 million (first period of office = first remuneration level)
- € 1.035 million (from second period of office or fourth year of mandate = second remuneration level)
― € 1.890 million (Chairman of the Board of Management)
226
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
COMPONENT
Bonus (continued)
Performance component
(at 100% target achievement corresponds
to
50% of target amount)
Parameters/measurement base, applicable amounts
Assessment period one year
- Base amount p. a. (50% of target bonus amount):
- € 0.475 million (first period of office = first remuneration level)
- € 0.575 million (from second period of office or fourth year of mandate = second remuneration level)
-Formula: 50% of target amount x performance factor
― € 1.10 million (first period of office = first remuneration level)
― € 1.28 million (from second period of office or fourth year of mandate = second remuneration level)
― € 2.35 million (Chairman of the Board of Management)
- Formula: 50% of target amount x RoCE factor
― ROCE factor is derived from the ROCE achieved in the Automotive segment for the vesting year
― Minimum, target and maximum values for ROCE are defined before the start of the financial year
― ROCE factor may not exceed 1.8
- Maximum amount of ROCE component p. a.:
― € 0.990 million (first period of office = first remuneration level)
― € 1.152 million (from second period of office or fourth year of mandate = second remuneration level)
- € 2.115 million (Chairman of the Board of Management)
- Target amount of strategic focus target component p. a. (50% of target amount for personal cash investment amount):
― € 0.55 million (first period of office = first remuneration level)
― € 0.64 million (from second period of office or fourth year of mandate = second remuneration level)
- € 1.175 million (Chairman of the Board of Management)
- At least two strategic focus targets derived from the strategic plan
- Weighting of the strategic focus targets is decided before the start of the financial year
- Formula in the event of two strategic focus targets with equal weighting p.a.:
25% of target amount for personal cash investment amount x factor for strategic focus target 1 + 25% of target amount for personal cash investment amount x factor for strategic focus target 2
― Minimum, target and maximum values are defined before the start of the financial year
-Factor for each strategic focus target may not exceed 1.8
- Maximum amount of strategic focus target component p. a.:
- € 0.990 million (first period of office = first remuneration level)
― € 1.152 million (from second period of office or fourth year of mandate = second remuneration level)
― € 2.115 million (Chairman of the Board of Management)
-50% of the personal cash investment amount within the target structure depends on the ROCE and is therefore directly linked to a key target for the corporate strategy and reflects BMW AG's aspiration to
generate a significant premium on the cost of capital
―The remaining 50% of the personal cash investment amount encourages achievement of strategic focus targets and therefore contributes to business performance in key strategic areas
-Commitment to purchase shares of the Company's common stock and the four-year holding period provide additional motivation to support the Company's long-term development
― € 1.175 million (Chairman of the Board of Management)
― € 0.64 million (from second period of office or fourth year of mandate = second remuneration level)
― € 0.55 million (first period of office = first remuneration level)
- Target amount of ROCE component p. a. (50% of target amount for personal cash investment amount):
- 50% of target amount depends on ROCE achieved in the Automotive segment (ROCE component)
-50% of the target amount depends on the achievement of predefined strategic focus targets (strategic focus target component)
- Capped at 180% of target amount
- Payment after the Annual General Meeting at which the Financial Statements are presented for the relevant vesting year
227
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
- 159
← = Q
COMPONENT
Share-based remuneration (continued)
RoCE component
(at 100% target achievement corresponds
to
50% of target amount)
Strategic focus target component
(at 100% target achievement corresponds
to
50% of target amount)
Strategic relevance
Parameters/measurement base, applicable amounts
Notes to the Group Financial Statements
―The earnings factor is 1.5 in case of a profit attributable to shareholders of BMW AG amounting to € 6.9 billion and a post-tax return on sales of 7.3%
―The earnings factor is 0 in case of a profit attributable to shareholders of BMW AG below € 3.0 billion or a post-tax return on sales of below 3.0%
-Earnings factor may not exceed 1.8
- 100
- 100
Total Group capital expenditure on
non-current assets
30,367
26,637
Reconciliation of depreciation and
amortisation on non-current assets
Total for reportable segments
Elimination of inter-segment items
Total Group depreciation and
amortisation on non-current assets
18,701
-4,136
14,565
14,456
18,550
- 4,094
The reconciliation of segment figures to the corresponding total
Group figures shows the inter-segment items. Revenues with
other segments result mainly from the sale of vehicles, for which
the Financial Services segment has concluded a financing or
lease contract. Eliminations of inter-segment items in the recon-
ciliation to the Group profit before tax, capital expenditure and
depreciation and amortisation mainly result from the sale of ve-
hicles in the Automotive segment, which are subsequently ac-
counted for as leased vehicles in the Financial Services segment.
In the reconciliation of segment assets to Group assets, elimina-
tions relate mainly to intragroup financing balances.
Eliminations
Group
Rest of the Americas
Other regions
5,386
4,941
2,926
3,003
3,068
2,787
285
332
2,903
-7,297
3,255
15,689
250,890
23,072
- 169,981
246,926
China
18,829 15,413 44,012
40,833 41,881 13,961
43,175
16,087
USA
31,845
28,751
19,106
18,919
Total for reportable segments
36,319
31,675
Rest of Europe
39,848
36,032
22,158
19,350
Elimination of inter-segment items
-5,952
- 5,038
Rest of Asia
12,805
- 163,074
- 7,047
98,406
Chairman of the Board of Management:
― € 1.05 million p. a. (from second period of office or fourth year of mandate = second remuneration level)
― € 0.90 million p. a. (first period of office = first remuneration level)
Member of the Board of Management:
Bonus
VARIABLE REMUNERATION
COMPONENTS
Strategic relevance
Retirement benefits
Compensation payments
Fringe benefits
Base salary
Parameters/measurement base, applicable amounts
FIXED REMUNERATION COMPONENTS
COMPONENT
The remuneration of members of the Board of Management and the Supervisory Board is structured as follows:
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Notes to the Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
225
-€ 1.95 million p. a.
155,498 142,610
Base salary is paid monthly on a pro rata basis
The Supervisory Board may award payments to compensate for loss of salary from a previous employment relationship and to cover relocation costs in the case of new entrants
Defined contribution system with a guaranteed minimum return
96,722
- Formula: 50% of target amount x performance factor
― € 1.050 million (Chairman of the Board of Management)
― € 0.575 million (from second period of office or fourth year of mandate = second remuneration level)
― € 0.475 million (first period of office = first remuneration level)
- Base amount p. a. (50% of target bonus amount):
― Payment as part of the next payroll run after the Annual General Meeting at which the Financial Statements are presented for the relevant vesting year
-Assessment period one year
- Capped at 180% of target amount
- € 2.10 million (Chairman of the Board of Management)
― € 1.15 million (from second period of office or fourth year of mandate = second remuneration level)
- € 0.95 million (first period of office = first remuneration level)
- Target amount p. a. (at 100% target achievement):
50% of target amount)
(at 100% target achievement corresponds
to
Earnings component
(sum of earnings component and
performance component)
Bonus
- Fixed remuneration components are required for remuneration to be competitive in order to attract and retain qualified members of the Board of Management
- The base salary counteracts the temptation to take disproportionately high risks in order to achieve short-term goals, and thus contributes to the long-term development of the Company
Chairman of the Board of Management: € 700,000
Member of the Board of Management: € 400,000
Pension contribution p. a.:
Benefits based on amounts credited to individual savings accounts for contributions paid and interest earned, various forms of disbursement
Contractual agreement, main points: non-cash benefits from the use of company cars and the BMW chauffeur service, insurance premiums, contributions towards security systems, employee discounts
Elimination of inter-segment items
Total Group assets
on non-current assets
Reconciliation of capital expenditure
Segment assets
Investments accounted for using the equity method
31.12.2022 31.12.2023
31.12.2023
66,168
31.12.2022
443
62,519
420
1,190
1,127
31.12.2023 31.12.2022
16,573
17,737
31.12.2023
95,145
31.12.2022
95,727
31.12.2023
31.12.2022
71,814
69,816
31.12.2023
250,890
443
31.12.2022
246,926
420
Write-downs on inventories to their net realisable value amount-
ing to € 189 million (2022: € 112 million) were recognised by
the Automotive segment in the financial year 2023. The reversal
of impairment losses had a positive impact of € 13 million
(2022: € 11 million) on the segment result of the Automotive
segment.
The result of the Financial Services segment was negatively im-
pacted by impairment losses totalling € 616 million
(2022: € 578 million) recognised on leased products. Income
from the reversal of impairment losses on leased products
amounted to € 289 million (2022: € 300 million).
in € million
The Other Entities segment result includes interest and similar
income amounting to € 3,403 million (2022: € 1,543 million)
and interest and similar expenses amounting to € 2,372 million
(2022: € 1,539 million).
Group
Reconciliation
11,239
10,354
184
171
24,896
21,150
8,826
8,433
116
101
9,759
10,016
-5,952
-4,136
-5,038
30,367
26,637
- 4,094
14,565
14,456
Automotive
Motorcycles
Financial Services
Other Entities
to Group figures
The information disclosed for capital expenditure and deprecia-
tion and amortisation relates to non-current property, plant and
equipment, intangible assets and leased products.
230
BMW Group Report 2023
61
50
External revenues
Non-current assets
566
494
1
12
Total liabilities - Financial Services
133,819
131,676
1,334
122
Group profit before tax
17,096
23,509
Non-operating assets - Other
Entities
Information by
region in € million
Germany
2023
2022
2023
2022
22,982
Financial and other assets - Motorcycles
Trade payables - Motorcylces
Financial result of Motorcycles segment
Elimination of inter-segment items
8,283
15,092
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
← = Q
The total of the segment figures can be reconciled to the corre-
sponding Group figures as follows:
in € million
31.12.2023
31.12.2022
-159
Reconciliation of segment assets
Reconciliation of segment result
2023
2022
Total for reportable segments
Financial and other assets - Automotive
Trade payables - Automotive
179,076
63,554
13,906
177,110
71,742
12,763
In the information by region, external sales are based on the lo-
cation of the customer. The information disclosed for non-current
assets relates to property, plant and equipment, intangible as-
sets and leased products. Eliminations disclosed for non-current
assets relate to leased products.
Total for reportable segments
Financial result of Automotive segment
16,102
- 339
in € million
132,277
BMW Financial Services Singapore Pte Ltd., Singapore
100
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
Companies
BMW Manufacturing (Thailand) Co., Ltd., Rayong
BMW Tokyo Corp., Tokyo
BMW Group Report 2023
PT BMW Indonesia, Jakarta
2019-2 ABL, Tokyo¹¹
2019-3 ABL, Tokyo¹¹
2020-1 ABL, Tokyo 11
2021-1 ABL, Tokyo¹¹
2021-2 ABL, Tokyo¹¹
2022-1 ABL, Tokyo¹¹
↑
= Q
Equity in € million
BMW Malaysia Sdn Bhd, Kuala Lumpur
237
100
100
316
100
BMW India Financial Services Private Ltd., Gurgaon
BMW (Thailand) Co., Ltd., Bangkok
BMW Asia Pacific Capital Pte Ltd., Singapore
BMW Asia Pte. Ltd., Singapore
BMW Asia Technology Centre Sdn Bhd, Kuala Lumpur
BMW China Services Ltd., Beijing
BMW Credit (Malaysia) Sdn Bhd, Kuala Lumpur
BMW Holding Malaysia Sdn Bhd, Kuala Lumpur
BMW India Private Ltd., Gurgaon
BMW Lease (Malaysia) Sdn Bhd, Kuala Lumpur
105
8
100
100
100
100
100
100
100
100
Profit/loss in € million
126
Capital investment in %
100
0
0
0
0
0
0
0
0
Oceania
0
BMW Australia Finance Ltd., Mulgrave
2
100
BMW Australia Ltd., Melbourne
161
64
100
BMW Financial Services New Zealand Ltd., Auckland
100
BMW Melbourne Pty. Ltd., Melbourne
182
0
0
Bavarian Sky Korea 2023-A, Seoul¹¹
100
51
0
0
0
0
0
0
2023-1 ABL, Tokyo¹¹
2023-2 ABL, Tokyo¹¹
Bavarian Sky China 2021-3, Beijing
Bavarian Sky China 2022-1, Beijing¹¹
Bavarian Sky China 2022-2, Beijing¹¹
Bavarian Sky China 2023-1, Beijing¹¹
0
0
Bavarian Sky China Leasing 2022-1, Tianjin¹¹
Bavarian Sky China Leasing 2023-1, Tianjin¹¹
Bavarian Sky Korea 2022-1, Seoul¹¹
Bavarian Sky Korea 2022-A, Seoul¹¹
Bavarian Sky Korea 2023-1, Seoul¹¹
Bavarian Sky Korea 2023-2, Seoul¹¹
100
BMW China Automotive Trading Ltd., Beijing
100
21
0
0
0
0
236
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
0
Remuneration Report
Notes to the Group Financial Statements
Companies
BMW Vehicle Lease Trust 2022-1, Wilmington, Delaware¹¹
BMW Vehicle Lease Trust 2023-1, Wilmington, Delaware11
BMW Vehicle Lease Trust 2023-2, Wilmington, Delaware11
BMW Vehicle Owner Trust 2020-A, Wilmington, Delaware¹¹
BMW Vehicle Owner Trust 2022-A, Wilmington, Delaware¹¹
BMW Vehicle Owner Trust 2023-A, Wilmington, Delaware¹¹
BMWCA 2023-A SMBC, Richmond Hill, Ontario¹¹
Africa
← = Q
Equity in € million
Profit/loss in € million
Capital investment in %
0
0
Other Information
0
0
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
0
0
0
748
9
100
BMW Japan Finance Corp., Tokyo
424
52
100
BMW Japan Corp., Tokyo
390
101
100
Herald International Financial Leasing Co., Ltd., Tianjin
345
35
100
BMW Korea Co., Ltd., Seoul
273
114
100
BMW Leasing (Thailand) Co., Ltd., Bangkok
213
BMW Financial Services Korea Co., Ltd., Seoul
100
100
1,019
0
BMW (South Africa) (Pty) Ltd., Pretoria
670
71
100
BMW Financial Services (South Africa) (Pty) Ltd., Midrand
172
14
100
SuperDrive Investments (RF) Ltd., Cape Town¹¹
0
Asia
BMW Brilliance Automotive Ltd., Shenyang
7,882
4,148
75
BMW Automotive Finance (China) Co. Ltd., Beijing
2,596
241
100
BMW China Investment Ltd., Beijing
376
100
BMW New Zealand Ltd., Auckland
BMW Sydney Pty. Ltd., Sydney
100
100
100
100
100
100
70
51
50
100
240
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
BMW AG's associated companies, joint ventures and joint operations at 31 December 2023
Companies
BMW Group Report 2023
100
100
100
Herald Hezhong (Beijing) Automotive Trading Co., Ltd., Beijing
Ling Yue Digital Information Technology Co., Ltd., Beijing
BMW Philippines Corp., Manila
BMW Financial Services Hong Kong Ltd., Hong Kong
BMW ArcherMind Information Technology Co., Ltd., Nanjing
Equity in € million
Profit/loss in € million
Capital investment in %
100
100
100
100
100
100
100
100
100
100
100
100
100
Equity in € million
BMW Technology Office Israel Ltd., Tel Aviv
Profit/loss in € million
Joint ventures - equity accounted
15
973
- 339
31
17
6
50
50
50
- 54
49
Critical TechWorks S.A., Porto
BMW Albatha Finance PSC, Dubai
BMW Albatha Leasing, LLC, Dubai
Bavarian & Co Co., Ltd., Incheon
50
50
40
40
20
20
573
50
- 168
DOMESTIC
YOUR NOW Holding GmbH, Munich³
Associated companies - equity accounted
DOMESTIC
IONITY Holding GmbH & Co. KG, Munich³
FOREIGN
THERE Holding B.V., Rijswijk
IONNA LLC, Torrance
Solid Power, Inc., Wilmington, Delaware
Joint operations - proportionately consolidated entities
FOREIGN
Spotlight Automotive Ltd., Zhangjiagang
Not equity accounted or proportionately consolidated entities
DOMESTIC7
Encory GmbH, Unterschleissheim
The Retail Performance Company GmbH, Munich
IDEALworks GmbH, Munich
PDB - Partnership for Dummy Technology and Biomechanics GbR, Gaimersheim
FOREIGN7
BMW AVTOTOR Holding B.V., Amsterdam
77
Capital investment in %
BMW Parts Manufacturing (Thailand) Co., Ltd., Rayong Province
BMW Middle East Retail Competency Centre DWC-LLC, Dubai
BMW Insurance Services Korea Co. Ltd., Seoul
BMW (GB) Ltd., Farnborough
BMW (UK) Investments Ltd., Bracknell 10
BMW (UK) Pensions Services Ltd., Hams Hall
BMW Car Club Ltd., Farnborough
BMW Drivers Club Ltd., Farnborough
BMW Financial Services Czech Republic s.r.o., Prague
BMW Financial Services Slovakia s.r.o., Bratislava
BMW Group Benefit Trust Ltd., Farnborough
BMW Mobility Development Center s.r.o., Prague
BMW Motorsport Ltd., Farnborough
BMW Poland sp. z o.o., Warsaw
BMW Russland Automotive 000, Kaliningrad
BLMC Ltd., Bracknell 10
BMW Services Ltd., Bracknell¹º
John Cooper Works Ltd., Farnborough
000 BMW Leasing, Moscow
The Americas
217-07 Northern Boulevard Corporation, Wilmington, Delaware
BMW Experience Centre Inc., Richmond Hill, Ontario
BMW i Ventures, Inc., Wilmington, Delaware
BMW i Ventures, LLC, Wilmington, Delaware
Equity in € million
Profit/loss in € million
John Cooper Garages Ltd., Farnborough
Alphabet Insurance Services Polska Sp. z o.o., Warsaw
Europe
FOREIGN7
Bavarian Sky Australia Trust A, Mulgrave¹¹
BMW Australia Trust 2011-2, Mulgrave¹¹
100
0
0
238
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Notes to the Group Financial Statements
BMW AG's non-consolidated companies at 31 December 2023
Companies
DOMESTIC7
BMW Fleet GmbH, Munich'
Automag GmbH, Munich
BMW Car IT GmbH, Munich'
BMW i Ventures GmbH, Munich
Capital investment in %
100
100
100
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
← = Q
Companies
BMW Mobility Services, LLC, Wilmington, Delaware
BMW Operations Corp., Wilmington, Delaware
BMW Shared Services, LLC, Wilmington, Delaware
BMW Technology Corp., Wilmington, Delaware
Designworks/USA, Inc., Newbury Park, California
MINI Business Innovation, LLC, Wilmington, Delaware
MINI Canada Inc., Richmond Hill, Ontario
Africa
BMW Automobile Distributors (Pty) Ltd., Midrand
BPF Midrand Property Holdings (Pty) Ltd., Midrand
Asia
BMW (China) Insurance Brokers Co. Ltd., Beijing
BMW Finance (United Arab Emirates) FZE, Dubai
BMW Hong Kong Services Ltd., Hong Kong
BMW India Foundation, Gurgaon
BMW India Leasing Private Ltd., Gurgaon
BMW Insurance Broker (Thailand) Co., Ltd., Bangkok
BMW Group Report 2023
100
239
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Urban X Accelerator SPV, LLC, Wilmington, Delaware
107
- 245
BMW Austria Leasing GmbH, Salzburg
Rolls-Royce Motor Cars Ltd., Farnborough
BMW Iberica S.A., Madrid
316
- 370
100
296
148
289
BMW France S.A., Montigny-le-Bretonneux
88
265
2
100
241
112
100
239
46
100
100
ALPHABET (GB) Ltd., Farnborough
BMW Finance N.V., The Hague
100
117
100
BMW Motoren GmbH, Steyr
957
90
100
BMW i Ventures SCS SICAV-RAIF, Senningerberg
643
-59
100
BMW Finance S.N.C., Guyancourt
599
43
100
BMW (UK) Manufacturing Ltd., Farnborough
581
104
100
BMW (UK) Ltd., Farnborough
383
144
BMW Russland Trading 000, Moscow
1,054
227
100
159
14
100
134
51
100
BMW Malta Ltd., Floriana
124
8
BMW Finanzdienstleistungen (Schweiz) AG, Dielsdorf
BMW Vertriebs GmbH, Salzburg
100
113
41
BMW Financial Services Scandinavia AB, Sollentuna
112
GG
100
42
100
233
Alphabet Belgium Long Term Rental NV, Aartselaar
100
- 28
167
BMW International Investment B.V., The Hague
207
- 95
100
BMW Italia S.p.A., San Donato Milanese
203
81
100
Alphabet France Fleet Management S.A.S., Saint-Quentin-en-Yvelines
198
68
100
BMW Financial Services Nederland B.V., Breda
194
60
100
BMW Austria Bank GmbH, Salzburg
189
10
100
BMW Manufacturing Hungary Kft., Debrecen⁹
- 13
BMW Financial Services (GB) Ltd., Farnborough
100
635
Bürohaus Petuelring GmbH, Munich
LARGUS Grundstücks-Verwaltungsgesellschaft mbH, Munich
Rolls-Royce Motor Cars GmbH, Munich4,5,6
BAVARIA-LLOYD Reisebüro GmbH, Munich
11,559
100
6,139
1
100
BMW Vermögensverwaltungs GmbH, Munich
2,075
250
32
100
200
14
100
179
100
129
100
BMW M GmbH Gesellschaft für individuelle Automobile, Munich 3,5,6
BMW High Power Charging Beteiligungs GmbH, Munich4,6
BMW Hams Hall Motoren GmbH, Munich 4,5,6
100
231
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Notes to the Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
LIST OF INVESTMENTS AT 31 DECEMBER 2023
47 List of investments at 31 December 2023
The List of Investments of BMW AG pursuant to § 285 and
§ 313 HGB is presented below. Disclosures for equity and earn-
ings and for investments are not made if they are of "minor sig-
nificance" for the results of operations, financial position and net
assets of BMW AG pursuant to § 286 (3) sentence 1 no. 1 HGB
and § 313 (3) sentence 4 HGB. It is also shown in the list which
subsidiaries apply the exemptions available in § 264 (3) and
§ 264 b HGB with regard to the publication of annual financial
statements and the drawing up of a management report and/or
notes to the financial statements (footnotes 5 and 6). The Group
Financial Statements of BMW AG serve as exempting consoli-
dated financial statements for these companies.
Affiliated companies (subsidiaries) of BMW AG at 31 December 2023
Equity in € million
Profit/loss in € million
Capital investment in %
Companies
DOMESTIC¹
BMW INTEC Beteiligungs GmbH, Munich 3,6
BMW Beteiligungs GmbH & Co. KG, Munich
BMW Bank GmbH, Munich³
BMW Finanz Verwaltungs GmbH, Munich
BMW Vertriebszentren Verwaltungs GmbH, Munich
BMW Anlagen Verwaltungs GmbH, Munich³, 6
Parkhaus Oberwiesenfeld GmbH, Munich
Alphabet Fuhrparkmanagement GmbH, Munich
Alphabet International GmbH, Munich4,5,6
Bavaria Wirtschaftsagentur GmbH, Munich 3, 5, 6
BMW Fahrzeugtechnik GmbH, Eisenach 3,5,6
12
100
100
100
BMW International Holding B.V., Rijswijk
BMW Österreich Holding GmbH, Steyr
BMW (Schweiz) AG, Dielsdorf
BMW España Finance S.L., Madrid
29,648
6,990
100
11,458
668
100
4,149
411
100
1,489
105
100
1,468
45
100
BMW (UK) Holdings Ltd., Farnborough
1,459
BMW Holding B.V., The Hague
BMW Group Report 2023
Europe
Capital investment in %
100
100
100
100
100
100
100
100
51
232
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
Companies
← = Q
Equity in € million
Profit/loss in € million
FOREIGN 2,10
To Our Stakeholders Combined Management Report
100
Responsibility Statement and Auditor's Report
Bavarian Sky UK C Ltd., London¹¹
0
0
Bavarian Sky UK D Ltd., London¹¹
The Americas
BMW (US) Holding Corp., Wilmington, Delaware
BMW Manufacturing Co., LLC, Wilmington, Delaware
BMW of North America, LLC, Wilmington, Delaware
2,643
1,877
100
2,415
0
583
2,232
1,228
100
BMW Bank of North America Inc., Salt Lake City, Utah
1,534
207
100
Financial Services Vehicle Trust, Wilmington, Delaware
832
100
Bavarian Sky UK B Ltd., London¹¹
0
Bavarian Sky UK A Ltd., London¹¹
100
100
100
100
100
100
100
0
0
0
Bavarian Sky S.A., Compartment German Auto Leases 6, Luxembourg 11
Bavarian Sky S.A., Compartment German Auto Leases 7, Luxembourg¹¹
Bavarian Sky S.A., Compartment German Auto Leases 8, Luxembourg¹¹
Bavarian Sky S.A., Compartment German Auto Loans 10, Luxembourg¹
Bavarian Sky S.A., Compartment German Auto Loans 11, Luxembourg 11
Bavarian Sky S.A., Compartment German Auto Loans 12, Luxembourg¹
Bavarian Sky UK 4 plc, London¹¹
0
0
0
11
0
0
0
0
Bavarian Sky UK 5 plc, London¹¹
0
- 105
100
BMW Canada Inc., Richmond Hill, Ontario
760
BMW Extended Service Corporation, Wilmington, Delaware
BMW Facility Partners LLC, Wilmington, Delaware
BMW Financeira S.A. Credito, Financiamento e Investimento, São Paulo
BMW Financial Services de Mexico S.A. de C.V. SOFOM, Mexico City
BMW Floorplan Master Owner Trust, Wilmington, Delaware
BMW FS Funding Corporation, Wilmington, Delaware
BMW FS Receivables Corporation, Wilmington, Delaware
BMW FS Securities LLC, Wilmington, Delaware
BMW Insurance Agency, Inc., Wilmington, Delaware
BMW Leasing do Brasil, S.A., São Paulo
BMW Manufacturing Indústria de Motos da Amazônia Ltda., Manaus
BMW Manufacturing LP, Woodcliff Lake, New Jersey
BMW of Manhattan, Inc., Wilmington, Delaware
BMW Receivables 1 Inc., Richmond Hill, Ontario
BMW Receivables 2 Inc., Richmond Hill, Ontario
BMW Receivables Ltd. Partnership, Richmond Hill, Ontario
Rolls-Royce Motor Cars NA, LLC, Wilmington, Delaware
SB Acquisitions, LLC, Wilmington, Delaware
BMW 2021-A Lease Conduit, Wilmington, Delaware¹¹
BMW 2022-A Lease Conduit, Wilmington, Delaware¹¹
BMW 2023-A Lease Conduit, Wilmington, Delaware¹¹
BMW Canada Auto Trust 2021-1, Richmond Hill, Ontario¹¹
BMW Canada Auto Trust 2022-1, Richmond Hill, Ontario¹¹
BMW Canada Auto Trust 2023-1, Richmond Hill, Ontario 11
BMW Vehicle Lease Trust 2021-2, Wilmington, Delaware¹¹
← = Q
Equity in € million
403
Profit/loss in € million
Capital investment in %
Group Financial Statements
309
BMW de Mexico, S.A. de C.V., Mexico City
100
BMW de Argentina S.A., Buenos Aires
BMW Auto Leasing LLC, Wilmington, Delaware
162
100
BMW Financial Services NA, LLC, Wilmington, Delaware
665
558
100
BMW do Brasil Ltda., Araquari
551
197
100
235
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Companies
BMW SLP, S.A. de C.V., Villa de Reyes
BMW US Capital, LLC, Wilmington, Delaware
BMW Acquisitions Ltda., São Paulo
BMW Consolidation Services Co., LLC, Wilmington, Delaware
Capital investment in %
Notes to the Group Financial Statements
Equity in € million
BMW Financial Services Belgium S.A./N.V., Bornem
BMW Financial Services Denmark A/S, Copenhagen
BMW Financial Services Polska Sp. z o.o., Warsaw
BMW Hellas Trade of Cars A.E., Athens
BMW Hungary Kft., Vecsés
BMW Italia Retail S.r.l., Rome
BMW Nederland B.V., The Hague
BMW Norge AS, Fornebu
BMW Northern Europe AB, Stockholm
BMW Portugal Lda., Porto Salvo
BMW Renting (Portugal) Lda., Porto Salvo
← = Q
Equity in € million
110
Profit/loss in € million
Capital investment in %
2
100
110
82
100
102
4
100
100
BMW Financial Services (Ireland) DAC, Dublin
100
BMW España Finance S.L., Madrid
BMW Danmark A/S, Copenhagen
Remuneration Report
Other Information
Profit/loss in € million
Notes to the Group Financial Statements
Companies
Bavaria Reinsurance Malta Ltd., Floriana
BMW Belgium Luxembourg S.A./N.V., Bornem
000 BMW Bank, Moscow
Alphabet España Fleet Management S.A.U., Madrid
Alphabet Fuhrparkmanagement (Schweiz) AG, Dielsdorf
Alphabet Italia S.p.A., Trento
Alphabet Luxembourg S.A., Leudelange
Alphabet Polska Fleet Management Sp. z o.o., Warsaw
BiV Carry ISCS, Senningerberg
BiV Carry II SCS, Senningerberg
BMW (UK) Capital plc, Farnborough
BMW Austria GmbH, Salzburg
BMW Bulgaria EOOD, Sofia
BMW Central Medical Trustees Ltd., Farnborough
BMW China Capital B.V., The Hague
BMW Czech Republic s.r.o., Prague
BMW Distribution S.A.S., Vélizy-Villacoublay
100
BMW Automotive (Ireland) Ltd., Dublin
100
234
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Notes to the Group Financial Statements
Companies
BMW Romania S.R.L., Bucharest
BMW Slovenia, distribucija motornih vozil, d.o.o., Ljubljana
Oy BMW Suomi AB, Helsinki
Park Lane Ltd., Farnborough
Riley Motors Ltd., Farnborough
Swindon Pressings Ltd., Farnborough
Triumph Motor Company Ltd., Farnborough
Bavarian Sky Europe S.A., Compartment Swiss Auto Lease A, Luxembourg11
100
← = Q
Bavarian Sky S.A., Compartment A, Luxembourg¹¹
Bavarian Sky S.A. Luxembourg¹¹
100
100
BMW Slovenská republika s.r.o., Bratislava
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
2/ As part of our audit we obtained a comprehensive under-
standing of the development of receivables from sales financing,
the associated default-related risks as well as the business pro-
cesses for the identification, management, monitoring and
measurement of default risks, among other things by inquiries
and inspection of documents on the internal calculation meth-
ods. Furthermore, we evaluated the appropriateness and effec-
tiveness of the internal control system regarding the determina-
tion of the impairment loss to be recognized. In this context, we
The determination of the valuation allowances by the executive
directors is subject to a significant degree of judgment due to
several value-influencing factors such as the estimation of cre-
ditworthiness, the determination of probabilities of default and
loss ratios and was therefore of particular significance in the
context of our audit.
1/ The BMW Group offers end customers, dealerships and im-
porters various financing models for vehicles. In this context,
current and non-current receivables from sales financing total-
ing EUR 87,355 million are reported in the consolidated state-
ment of financial position as at the balance sheet date (approx-
imately 34.8% of total assets). Impairment losses amounting to
EUR 2,189 million were recognized on these receivables as at
the balance sheet date. In order to determine the amount of the
necessary valuation allowances to be recognized with respect
to receivables from sales financing, the BMW Group, among
others, evaluates the creditworthiness of the dealers, importers
and end customers, as well as any loss ratios, and risk provi-
sioning parameters are derived based on historical default prob-
abilities and loss ratios.
2/ As part of our audit we obtained an understanding of the de-
velopment of operating leases, the underlying residual value
risks as well as the business processes for the identification,
management, monitoring and measurement of residual value
risks, among other things by inquiries and inspection of docu-
ments related to the internal calculation methods. Furthermore,
we evaluated the appropriateness and effectiveness of the in-
ternal control system, particularly regarding the determination of
expected residual values. This included the evaluation of the
propriety of the relevant IT systems as well as the implemented
interfaces therein by our IT-specialists. In addition, we evaluated
the appropriateness of the forecasting methods, the model as-
sumptions as well as the parameters used for the measurement
of the residual values based on the validations carried out by the
BMW Group. For this purpose, we inquired with the BMW
Group's experts responsible for the management and monitor-
ing of residual value risks and inspected the internal analysis on
residual value developments and residual value forecasts as
well as the validation results. We examined the mathematical
correctness of the forecast values using the key calculation
steps.
3/ The Company's disclosures on the applied "Accounting poli-
cies, assumptions, judgments and estimations" are contained in
the notes to the consolidated financial statements under note 6
and on leased products are contained under note 23.
valuation are appropriate and the assumptions and parameters
included in the forecast model for the residual value are appro-
priate as a whole.
Based on our audit procedures, we were able to satisfy our-
selves that the methods and processes for determining the ex-
pected residual values of leased products underlying the
247
Against this background and due to the resulting significant un-
certainties with regard to estimates in the context of measuring
the residual values of the leased products, this matter was of
particular significance in the context of our audit.
expected residual value at the end of the lease term. For the re-
sidual value forecasts the BMW Group uses internally available
data on historical empirical values, current market data and
market estimates as well as forecasts by external market re-
search institutes. The residual value estimates also contain reg-
ulatory changes in the individual markets and expectations re-
garding customer behavior, among others including climate pol-
icy considerations. The estimation of future residual values is
subject to judgment due to the large number of assumptions to
be made by the executive directors and the amount of data in-
cluded in the determination.
1/ The BMW Group leases vehicles to end customers under op-
erating leases (leased products). At the balance sheet date, the
figure reported under the "leased products" line item for operat-
ing leases was EUR 43,118 million (approximately 17.2% of
total assets). Leased products are measured at cost, which is
depreciated on a straight-line basis over the lease term to the
expected residual value (recoverable amount). A key estimated
value for subsequent measurement of leased products is the
2/ Valuation of receivables from sales financing
BMW Group Report 2023 To Our Stakeholders Combined Management Report
3/ Valuation of provisions for statutory and non-statutory
warranty obligations as well as product guarantees
Responsibility Statement and Auditor's Report
Independent Auditor's Report
3/ The Company's disclosures on the applied "Accounting poli-
cies, assumptions, judgments and estimations" are contained in
the notes to the consolidated financial statements under note 6
and on "Other provisions" are contained under note 34.
parameters and assumptions used by the executive directors
are appropriate.
1/ Measurement of leased products
In our view, the method for the valuation of provisions for statu-
tory and non-statutory warranty obligations as well as product
guarantees is overall appropriate. Taking into consideration the
information available, we believe that, overall, the measurement
Other Information
2/ In order to assess the appropriateness of the valuation
method used for the determination of the provisions for statu-
tory and non-statutory warranty obligations as well as product
guarantees including the assumptions and parameters, we pri-
marily obtained an understanding of the process for determining
the assumptions and parameters through discussions with the
responsible employees of the BMW Group. We also evaluated
the appropriateness as well as effectiveness of controls for de-
termining the assumptions and parameters. With the involve-
ment of our IT specialists, we checked the IT systems used re-
garding their compliance. We compared the expenses for claims
and technical actions with actual costs incurred in order to draw
conclusions on the forecast accuracy. Based on a targeted sam-
ple of vehicle models, the mathematical correctness of the valu-
ation model used across the Group was examined. We exam-
ined and evaluated the assumptions used by the BMW Group
concerning the extent to which the past values were representa-
tive of the expected susceptibility of damage, the expected value
of damage per vehicle (comprising parts and labor input) as well
as the expected assertion of claims from statutory and non-stat-
utory warranties.
The determination of provisions is associated with unavoidable
estimation uncertainties and is subject to a high risk of change,
depending on factors such as notification of detected defects as
well as claims made by vehicle owners. Against this background,
this matter was of particular significance during our audit.
vehicle model level. The expected amount of obligations is ex-
trapolated from costs of the past and recognized as a provision
in the corresponding amount, if the criteria of IAS 37 have been
met. For specific or anticipated individual circumstances, for ex-
ample recalls for vehicles sold, additional provisions are recog-
nized provided they have not already been taken into account.
1/ Provisions for statutory and non-statutory warranty obliga-
tions as well as product guarantees are included in the consoli-
dated financial statements of BMW Group as a material amount
in other provisions. The obligations amounted to EUR 9,650
million (approximately 3.8% of total assets) as at 31 December
2023. The BMW Group is responsible for the legally required
warranty and product guarantees in the respective sales market.
In order to estimate the liabilities arising from statutory and non-
statutory warranty obligations as well as product guarantees for
vehicles sold, information on the type and volume of damages
arising and on remedial measures is recorded and analyzed at
3/ The Company's disclosures on the applied "Accounting poli-
cies, assumptions, judgments and estimations" are contained in
the notes to the consolidated financial statements under note 6
and on "receivables from sales financing" are contained under
note 25.
In our view, the assumptions and parameters used in the meas-
urement of receivables from sales financing were appropriate
overall.
also evaluated the relevant IT systems and internal processes.
The evaluation included an assessment by our IT-specialists of
the appropriateness of the systems concerned and associated
interfaces to ensure the completeness of data as well as the au-
dit of automated controls for data processing. As part of our au-
dit we assessed in particular the appropriateness of the risk
classification procedures as well as the risk provisioning param-
eters used. For this purpose, we analyzed in particular the vali-
dations of parameters that are regularly conducted by the Com-
pany. To assess the default risk, we also used targeted sam-
pling of individual cases to examine whether the attributes for
assignment to the respective risk categories were suitably avail-
able and the impairment losses had been calculated using the
parameters defined for these risk categories.
← = Q
Other Information
Remuneration Report
Group Financial Statements
Hereinafter we present the key audit matters:
Basis for the Audit Opinions
2/ Audit approach and findings
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
that our audit has not led to any reservations relating to the legal
compliance of the consolidated financial statements and of the
group management report.
consistent with the consolidated financial statements,
complies with German legal requirements and
appropriately presents the opportunities and risks of future
development. Our audit opinion on the group management
report does not cover the content of those parts of the
group management report listed in the "Other Information"
section of our auditor's report.
the accompanying group management report as a whole
provides an appropriate view of the Group's position. In all
material respects, this group management report is
the accompanying consolidated financial statements
comply, in all material respects, with the IFRSs as adopted
by the EU, and the additional requirements of German
commercial law pursuant to § [Article] 315e Abs.
[paragraph] 1 HGB [Handelsgesetzbuch: German
Commercial Code] and, in compliance with these
requirements, give a true and fair view of the assets,
liabilities, and financial position of the Group as at 31
December 2023, and of its financial performance for the
financial year from 1 January to 31 December 2023, and
In our opinion, on the basis of the knowledge obtained in the
audit,
We have audited the group financial statements of Bayerische
Motoren Werke Aktiengesellschaft, Munich, and its subsidiaries
(the Group), which comprise the balance sheet for the group at
31 December 2023, and the income statement for the group,
the statement of comprehensive income for the group, the state-
ment of changes in equity for the group and the cash flow state-
ment for the group for the financial year from 1 January to
31 December 2023, and notes to the group financial state-
ments, including material accounting policy information. In addi-
tion, we have audited the group management report of Bayer-
ische Motoren Werke Aktiengesellschaft, which is combined with
the Company's management report, for the financial year from
1 January to 31 December 2023. In accordance with the Ger-
man legal requirements, we have not audited the content of
those parts of the group management report listed in the "Other
Information" section of our auditor's report.
We conducted our audit of the consolidated financial statements
and of the group management report in accordance with § 317
HGB and the EU Audit Regulation (No. 537/2014, referred to
subsequently as "EU Audit Regulation") in compliance with Ger-
man Generally Accepted Standards for Financial Statement Au-
dits promulgated by the Institut der Wirtschaftsprüfer [Institute
of Public Auditors in Germany] (IDW). Our responsibilities under
those requirements and principles are further described in the
"Auditor's Responsibilities for the Audit of the Consolidated Fi-
nancial Statements and of the Group Management Report" sec-
tion of our auditor's report. We are independent of the group en-
tities in accordance with the requirements of European law and
German commercial and professional law, and we have fulfilled
our other German professional responsibilities in accordance
with these requirements. In addition, in accordance with Article
10 (2) point (f) of the EU Audit Regulation, we declare that we
have not provided non-audit services prohibited under Arti-
cle 5 (1) of the EU Audit Regulation. We believe that the audit
evidence we have obtained is sufficient and appropriate to
Audit Opinions
To Bayerische Motoren Werke Aktiengesellschaft, Munich
INDEPENDENT AUDITOR'S REPORT
Remuneration Report
The executive directors are responsible for the other infor-
mation. The other information comprises the following non-au-
dited parts of the group management report:
← = Q
Other Information
Report on the audit of the consolidated financial
statements and of the group management report
246
BMW Group Report 2023
To Our Stakeholders
1/ Matter and issue
Our presentation of these key audit matters has been structured
in each case as follows:
3/ Valuation of provisions for statutory and non-statutory
warranty obligations as well as product guarantees
2/ Valuation of receivables from sales financing
1/ Measurement of leased products
In our view, the matters of most significance in our audit were as
follows:
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the consoli-
dated financial statements for the financial year from 1 January
to 31 December 2023. These matters were addressed in the
context of our audit of the consolidated financial statements as
a whole, and in forming our audit opinion thereon; we do not
provide a separate audit opinion on these matters.
Key Audit Matters in the Audit of the Consolidated
Financial Statements
provide a basis for our audit opinions on the consolidated finan-
cial statements and on the group management report.
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Independent Auditor's Report
Group Financial Statements
Combined Management Report
3/ Reference to further information
the section "APPROPRIATENESS AND EFFECTIVENESS
OF THE INTERNAL CONTROL SYSTEM AND RISK
MANAGEMENT SYSTEM" of the group management
Group Financial Statements
the disclosures marked with [[ ]] of the non-financial
statement to comply with §§ 289b to 289e HGB and with
§§ 315b to 315c HGB
Report on the Assurance on the Electronic Rendering of the
Consolidated Financial Statements and the Group Management
Report Prepared for Publication Purposes in Accordance with §
317 Abs. 3a HGB
OTHER LEGAL AND
REGULATORY
REQUIREMENTS
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Independent Auditor's Report
Assurance Opinion
BMW Group Report 2023 To Our Stakeholders Combined Management Report
From the matters communicated with those charged with gov-
ernance, we determine those matters that were of most signifi-
cance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We de-
scribe these matters in our auditor's report unless law or regu-
lation precludes public disclosure about the matter.
We also provide those charged with governance with a state-
ment that we have complied with the relevant independence re-
quirements, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
We communicate with those charged with governance regard-
ing, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant de-
ficiencies in internal control that we identify during our audit.
Perform audit procedures on the prospective information
presented by the executive directors in the group
management report. On the basis of sufficient appropriate
audit evidence we evaluate, in particular, the significant
assumptions used by the executive directors as a basis for
the prospective information and evaluate the proper
derivation of the prospective information from these
assumptions. We do not express a separate audit opinion
on the prospective information and on the assumptions
used as a basis. There is a substantial unavoidable risk that
future events will differ materially from the prospective
information.
Evaluate the consistency of the group management report
with the consolidated financial statements, its conformity
with German law, and the view of the Group's position it
provides.
Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express audit opinions on the
consolidated financial statements and on the group
management report. We are responsible for the direction,
supervision and performance of the group audit. We remain
solely responsible for our audit opinions.
250
Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the
disclosures, and whether the consolidated financial
statements present the underlying transactions and events
in a manner that the consolidated financial statements give
a true and fair view of the assets, liabilities, financial
position and financial performance of the Group in
compliance with IFRSS as adopted by the EU and the
additional requirements of German commercial law
pursuant to § 315e Abs. 1 HGB.
We have performed assurance work in accordance with § 317
Abs. 3a HGB to obtain reasonable assurance as to whether the
rendering of the consolidated financial statements and the
group management report (hereinafter the "ESEF documents")
contained in the electronic file BMW_AG_KA+KLB_ESEF-
2023-12-31.zip and prepared for publication purposes com-
plies in all material respects with the requirements of § 328 Abs.
1 HGB for the electronic reporting format ("ESEF format"). In ac-
cordance with German legal requirements, this assurance work
extends only to the conversion of the information contained in
the consolidated financial statements and the group manage-
ment report into the ESEF format and therefore relates neither
to the information contained within these renderings nor to any
other information contained in the electronic file identified
above.
other information contained in the electronic file identified
above.
Evaluate whether the tagging of the ESEF documents with
Inline XBRL technology (iXBRL) in accordance with the
requirements of Articles 4 and 6 of the Delegated
Regulation (EU) 2019/815, in the version in force at the
date of the consolidated financial statements, enables an
appropriate and complete machine-readable XBRL copy of
the XHTML rendering.
Evaluate whether the ESEF documents provide an XHTML
rendering with content equivalent to the audited
consolidated financial statements and to the audited group
management report.
Responsibility Statement and Auditor's Report
Independent Auditor's Report
Obtain an understanding of internal control relevant to the
assurance work on the ESEF documents in order to design
assurance procedures that are appropriate in the
circumstances, but not for the purpose of expressing an
assurance opinion on the effectiveness of these controls.
Evaluate the technical validity of the ESEF documents, i.e.,
whether the electronic file containing the ESEF documents
meets the requirements of the Delegated Regulation (EU)
2019/815 in the version in force at the date of the
consolidated financial statements on the technical
specification for this electronic file.
Identify and assess the risks of material non-compliance
with the requirements of § 328 Abs. 1 HGB, whether due
to fraud or error, design and perform assurance procedures
responsive to those risks, and obtain assurance evidence
that is sufficient and appropriate to provide a basis for our
assurance opinion.
Our objective is to obtain reasonable assurance about whether
the ESEF documents are free from material non-compliance
with the requirements of § 328 Abs. 1 HGB, whether due to
fraud or error. We exercise professional judgment and maintain
professional skepticism throughout the assurance work. We
also:
In our opinion, the rendering of the consolidated financial state-
ments and the group management report contained in the elec-
tronic file identified above and prepared for publication purposes
complies in all material respects with the requirements of § 328
Abs. 1 HGB for the electronic reporting format. Beyond this as-
surance opinion and our audit opinion on the accompanying
consolidated financial statements and the accompanying group
management report for the financial year from 1 January to 31
December 2023 contained in the "Report on the Audit of the
Consolidated Financial Statements and on the Group Manage-
ment Report" above, we do not express any assurance opinion
on the information contained within these renderings or on the
Group Auditor's Responsibilities for the Assurance Work on the
ESEF Documents
error.
In addition, the executive directors of the Company are respon-
sible for such internal control as they have considered necessary
to enable the preparation of ESEF documents that are free from
material non-compliance with the requirements of § 328 Abs. 1
HGB for the electronic reporting format, whether due to fraud or
The executive directors of the Company are responsible for the
preparation of the ESEF documents including the electronic ren-
dering of the consolidated financial statements and the group
management report in accordance with § 328 Abs. 1 Satz 4 Nr.
[number] 1 HGB and for the tagging of the consolidated finan-
cial statements in accordance with § 328 Abs. 1 Satz 4 Nr. 2
HGB.
Responsibilities of the Executive Directors and the Supervisory
Board for the ESEF Documents
We conducted our assurance work on the rendering of the con-
solidated financial statements and the group management re-
port contained in the electronic file identified above in accord-
ance with § 317 Abs. 3a HGB and the IDW Assurance Standard:
Assurance Work on the Electronic Rendering of Financial State-
ments and Management Reports, Prepared for Publication Pur-
poses in Accordance with § 317 Abs. 3a HGB (IDW ASS 410
(06.2022]) and the International Standard on Assurance En-
gagements 3000 (Revised). Our responsibility in accordance
therewith is further described in the "Group Auditor's Responsi-
bilities for the Assurance Work on the ESEF Documents" sec-
tion. Our audit firm applies the IDW Standard on Quality Man-
agement: Requirements for Quality Management in the Audit
Firm (IDW QMS 1 (09.2022)).
Basis for the Assurance Opinion
The supervisory board is responsible for overseeing the process
for preparing the ESEF documents as part of the financial re-
porting process.
report
-
Other Information
is materially inconsistent with the consolidated financial
statements, with the group management report disclosures
audited in terms of content or with our knowledge obtained
in the audit, or
In connection with our audit, our responsibility is to read the
other information mentioned above and, in so doing, to consider
whether the other information
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Independent Auditor's Report
otherwise appears to be materially misstated.
Responsibilities of the Executive Directors and the
Supervisory Board for the Consolidated Financial
Statements and the Group Management Report
Group Financial Statements
248
Our audit opinions on the consolidated financial statements and
on the group management report do not cover the other infor-
mation, and consequently we do not express an audit opinion or
any other form of assurance conclusion thereon.
all remaining parts of the annual report - excluding cross-
references to external information - with the exception of
the audited consolidated financial statements, the audited
group management report and our auditor's report
the remuneration report pursuant to 162 AktG [Aktien-
gesetz: German Stock Corporation Act], for which the
supervisory board is also responsible
the statement on corporate governance pursuant to § 289f
HGB and § 315d HGB
The other information comprises further
BMW Group Report 2023 To Our Stakeholders Combined Management Report
← = Q
The executive directors are responsible for the preparation of
the consolidated financial statements that comply, in all material
respects, with IFRSS as adopted by the EU and the additional
requirements of German commercial law pursuant to § 315e
Abs. 1 HGB and that the consolidated financial statements, in
compliance with these requirements, give a true and fair view of
the assets, liabilities, financial position, and financial perfor-
mance of the Group. In addition the executive directors are re-
sponsible for such internal control as they have determined nec-
essary to enable the preparation of consolidated financial state-
ments that are free from material misstatement, whether due to
fraud (i.e., fraudulent financial reporting and misappropriation of
assets) or error.
Furthermore, the executive directors are responsible for the
preparation of the group management report that, as a whole,
provides an appropriate view of the Group's position and is, in
all material respects, consistent with the consolidated financial
statements, complies with German legal requirements, and
Remuneration Report
Responsibility Statement and Auditor's Report
Independent Auditor's Report
Group Financial Statements
BMW Group Report 2023 To Our Stakeholders Combined Management Report
249
Conclude on the appropriateness of the executive directors'
use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the Group's ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in the auditor's
report to the related disclosures in the consolidated
financial statements and in the group management report
or, if such disclosures are inadequate, to modify our
respective audit opinions. Our conclusions are based on the
audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the
Group to cease to be able to continue as a going concern.
In preparing the consolidated financial statements, the execu-
tive directors are responsible for assessing the Group's ability to
continue as a going concern. They also have the responsibility
for disclosing, as applicable, matters related to going concern. In
addition, they are responsible for financial reporting based on
the going concern basis of accounting unless there is an inten-
tion to liquidate the Group or to cease operations, or there is no
realistic alternative but to do so.
Evaluate the appropriateness of accounting policies used
by the executive directors and the reasonableness of
estimates made by the executive directors and related
disclosures.
Identify and assess the risks of material misstatement of
the consolidated financial statements and of the group
management report, whether due to fraud or error, design
and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate
to provide a basis for our audit opinions. The risk of not
detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with § 317
HGB and the EU Audit Regulation and in compliance with Ger-
man Generally Accepted Standards for Financial Statement Au-
dits promulgated by the Institut der Wirtschaftsprüfer (IDW) will
always detect a material misstatement. Misstatements can
arise from fraud or error and are considered material if, individ-
ually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of
these consolidated financial statements and this group man-
agement report.
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements and of the Group Management Report
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error,
and whether the group management report as a whole provides
an appropriate view of the Group's position and, in all material
respects, is consistent with the consolidated financial state-
ments and the knowledge obtained in the audit, complies with
the German legal requirements and appropriately presents the
opportunities and risks of future development, as well as to issue
an auditor's report that includes our audit opinions on the con-
solidated financial statements and on the group management
report.
The supervisory board is responsible for overseeing the Group's
financial reporting process for the preparation of the consoli-
dated financial statements and of the group management re-
port.
appropriately presents the opportunities and risks of future de-
velopment. In addition, the executive directors are responsible
for such arrangements and measures (systems) as they have
considered necessary to enable the preparation of a group man-
agement report that is in accordance with the applicable Ger-
man legal requirements, and to be able to provide sufficient ap-
propriate evidence for the assertions in the group management
report.
Obtain an understanding of internal control relevant to the
audit of the consolidated financial statements and of
arrangements and measures (systems) relevant to the
audit of the group management report in order to design
audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an audit opinion on
the effectiveness of these systems.
Group Financial Statements
Remuneration Report
BMW Group Report 2023
2 The amounts shown for foreign affiliated companies correspond to the annual financial statements drawn up in accordance with uniform IFRS rules. Equity and earnings not denominated in euros are
translated into euros using the closing exchange rate at the balance sheet date.
3 Profit and Loss Transfer Agreement with BMW AG.
To Our Stakeholders Combined Management Report
5 Exemption from drawing up a management report applied in accordance with § 264 (3) and § 264b HBG.
6 Exemption from publishing financial statements applied in accordance with § 264 (3) and § 264b HBG.
7 These entities are neither consolidated nor accounted for using the equity method due to their overall immateriality for the Group Financial Statements.
8 The amounts shown for entities accounted for using the equity method and for proportionately consolidated entities correspond to the annual financial statements drawn up in accordance with uniform
IFRS rules. Equity not denominated in euros is translated into euros using the closing exchange rate at the balance sheet date, earnings are translated using the average rate.
9 First-time consolidation.
10 Deconsolidation in financial year 2023: Alphabet Austria Fuhrparkmanagement GmbH, Salzburg (merger), BMW Services Ltd, Bracknell (in liquidation), BMW (UK) Investments Ltd, Bracknell (in
liquidation), BLMC Ltd, Bracknell (in liquidation).
11 Control on basis of economic dependence.
28
18
16
16
10
8
6
5
3
3
242
1 The amounts shown for German affiliated companies correspond to the annual financial statements drawn up in accordance with German accounting rules (HGB).
Capital investment in %
Profit/loss in € million
Equity in € million
241
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Other Information
← = Q
Notes to the Group Financial Statements
BMW AG's participations at 31 December 2023
Companies
BMW Group Report 2023
DOMESTIC7
SGL Carbon SE, Wiesbaden
Hubject GmbH, Berlin
Joblinge gemeinnützige AG Leipzig, Leipzig
Joblinge gemeinnützige AG Berlin, Berlin
Racer Benchmark Group GmbH, Landsberg am Lech
Joblinge gemeinnützige AG München, Munich
Deutsches Forschungszentrum für Künstliche Intelligenz GmbH, Kaiserslautern
GSB Sonderabfall-Entsorgung Bayern GmbH, Baar-Ebenhausen
FOREIGN7
Northvolt AB, Stockholm
IVM Industrie-Verband Motorrad GmbH & Co. Dienstleistungs KG, Essen
To Our Stakeholders Combined Management Report
4 Profit and Loss Transfer Agreement with a subsidiary of BMW AG.
Responsibility Statement and Auditor's Report
AND AUDITOR'S REPORT
244
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report Remuneration Report
Responsibility Statement by the Company's Legal Representatives
Other Information
← = Q
RESPONSIBILITY STATEMENT BY THE COMPANY'S
LEGAL REPRESENTATIVES
Statement pursuant to § 117 No.1 of the German Securities
Trading Act (WPHG) in conjunction with § 297 (2) sentence 4
and § 315 (1) sentence 5 of the German Commercial Code
(HGB)
RESPONSIBILITY STATEMENT
"To the best of our knowledge, and in accordance with the appli-
cable reporting principles, the Group Financial Statements give a
true and fair view of the assets, liabilities, financial position and
results of operations of the Group, and the Group Management
Report includes a fair review of the development and perfor-
mance of the business and position of the Group, together with a
description of the principal opportunities and risks associated
with the expected development of the Group."
Bayerische Motoren Werke
Aktiengesellschaft
The Board of Management
Oliver Zipse
Jochen Goller
Ilka Horstmeier
Walter Mertl
Dr-Ing Milan Nedeljković
Group Financial Statements
Frank Weber
245
Munich, 12 March 2024
04
Dr-Ing Joachim Post
245 Independent Auditor's Report
252 Independent Practitioner's Report
Remuneration Report
← = Q
Notes to the Group Financial Statements
Munich, 12 March 2024
Bayerische Motoren Werke
Aktiengesellschaft
The Board of Management
Oliver Zipse
Jochen Goller
Ilka Horstmeier
Other Information
Dr-Ing Milan Nedeljković
Walter Mertl
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
←三〇
243
Frank Weber
Dr-Ing Joachim Post
BMW Group Report 2023 To Our Stakeholders Combined Management Report Group Financial Statements
244 Responsibility Statement by the Company's Legal Representatives
― € 1.890 million (Chairman of the Board of Management)
- Payment as part of the next payroll run after the Annual General Meeting at which the Financial Statements are presented for the relevant vesting year
-Earnings component of bonus rewards attainment of financial targets and is beneficial for earnings-related aspects of business strategy
-Performance component of bonus motivates the pursuit of non-financial strategic targets and is therefore beneficial for the long-term development of the BMW Group
Strategic relevance
Share-based remuneration
Personal cash investment amount
Calculation
― Requirement for Board of Management members to invest an earmarked cash amount (personal cash investment amount), net of tax and deductions, in shares of BMW common stock immediately after
disbursement
― € 1.28 million (from second period of office or fourth year of mandate = second remuneration level)
― Assessment period of five years in total (one year for determining the personal cash investment amount, four years holding requirement)
- Target amount p. a. (at 100% target achievement):
― € 1.10 million (first period of office = first remuneration level)
― € 2.35 million (Chairman of the Board of Management)
-50% of target amount depends on ROCE achieved in the Automotive segment (RoCE component)
BMW Group Report 2023
-50% of the target amount depends on the achievement of predefined strategic focus targets (strategic focus target component)
― Capped at 180% of target amount
251
― € 1.035 million (from second period of office or fourth year of mandate = second remuneration level)
- Requirement for Board of Management members to hold the acquired shares of common stock for at least four years; this requirement remains in effect for individuals who step down from the Board of
Management (share ownership guideline)
― € 0.855 million (first period of office = first remuneration level)
- Primarily qualitative, non-financial criteria, expressed in terms of a performance factor, aimed at measuring the Board member's contribution to sustainable and long-term performance and corporate
orientation
- Performance factor may not exceed 1.8
Bonus (continued)
Performance component
(at 100% target achievement corresponds to
50% of target amount)
Parameters/measurement base, applicable amounts
Assessment period one year
- Base amount p. a. (50% of target bonus amount):
- € 0.475 million (first period of office = first remuneration level)
― € 0.575 million (from second period of office or fourth year of mandate = second remuneration level)
― € 1.050 million (Chairman of the Board of Management)
-Formula: 50% of target amount x performance factor
- Relevant period is the vesting year
- Additional trend analysis over at least three financial years
― Composition of performance factor:*
-50% cross-divisional targets with ESG criteria
-40% other cross-divisional targets
-10% individual targets
- Criteria for cross-divisional targets with ESG criteria include in particular: Innovation performance (environmental, e. g. reduction of carbon emissions), development of the BMW Group's reputation based on
ESG aspects (e. g. corporate culture, promotion of integrity and compliance), adaptability, attractiveness as an employer, leadership performance
- Criteria for the other cross-divisional targets include in particular: Market position compared to competitors, innovation performance (economic), development of the BMW Group's reputation based on
non-ESG-related aspects (e. g. perception on capital markets, brand strength), customer orientation
― Measurement parameters and target values are determined before the start of the financial year
- Maximum amount of performance component p. a.:
To Our Stakeholders Combined Management Report
The remuneration system for the members of the Supervisory
Board is set out in Article 16 of the Articles of Incorporation and
provides only for fixed remuneration. It was confirmed by the An-
nual General Meeting on 12 May 2021 with a majority of
99.40% of the valid votes cast, and implemented for the 2023
financial year in accordance with the provisions of the Articles of
Responsibility Statement and Auditor's Report
Independent Auditor's Report
Incorporation. In the 2023 financial year, Dr Martin Kimmich was
appointed by the court to replace Mr Manfred Schoch as a mem-
ber of the Supervisory Board on 18 January 2023. Mr Schoch left
the Supervisory Board on 31 December 2022. On 23 January
2023, Dr Kimmich was appointed as the first deputy chair by the
Supervisory Board and as a member of the Personnel and Audit
Committee. As the first deputy chair, he is also a member of the
Presiding Board and the legally required Mediation Committee.
Apart from this, the composition of the Personnel Committee,
which is responsible for the preparation of remuneration deci-
sions in accordance with the Supervisory Board's rules of proce-
dure, did not change in the 2023 financial year. The Supervisory
Board awarded a contract to new external remuneration consult-
ants in the 2023 financial year. The Remuneration Report for the
2022 financial year was confirmed by the Annual General Meet-
ing on 11 May 2023 with a majority of 94.14% of the valid votes
cast. In view of the high level of approval, there was no reason to
rethink the implementation of the current remuneration system
or the manner of reporting. Changes were made to make certain
issues clearer.
The composition of the Board of Management changed during
the 2023 financial year. Mr Pieter Nota left the Board of Man-
agement on 31 October 2023 by mutual agreement as part of a
succession arrangement. Dr Nicolas Peter left the Board of Man-
agement on 11 May 2023. This was also by mutual agreement
as part of a succession arrangement. ▾ Premature termination of
activities and post-contractual non-competition clause Mr Walter Mertl was
appointed as the member of the Board of Management respon-
sible for Finance on 12 May 2023. Mr Jochen Goller was ap-
pointed as the member of the Board of Management responsible
for Customer, Brands, Sales on 1 November 2023. From the
start date of his second period of office on 1 July 2023, Mr Frank
Weber was eligible to receive the target remuneration in the sec-
ond remuneration level, which is available to members of the
Board of Management from their second period of office.
If necessary, and in the interest of the long-term success of
BMW AG, the Supervisory Board may temporarily deviate from
the remuneration system - as provided for in § 87a (2) Sentence
2 AktG. In accordance with G.11 of the German Corporate Gov-
ernance Code dated 28 April 2022 ("GCGC"), the Supervisory
Board has also reserved the right to make adjustments if extraor-
dinary developments occur, such as significant acquisitions and
disposals, or changes in accounting standards or tax regulations
that have a significant impact. After due examination, it did not
make use of these options for the 2023 financial year.
makes up part of the long-term variable remuneration (share-
based remuneration) component was also exceeded. In terms of
the non-financial strategic focus targets for the long-term vari-
able remuneration, the ambitious targets related to the reduction
of fleet carbon emissions in the EU were exceeded, while the
BMW Group's sales targets for all-electric vehicles were not quite
met in full. Share-based remuneration for the financial year 2023
Thanks to its strong overall performance, the Board of Manage-
ment exceeded both the financial and a large part of the non-
financial targets for short-term variable remuneration (bonuses)
for the 2023 financial year. 7 Bonus for the 2023 financial year The fi-
nancial target tied to ROCE in the Automotive segment which
In December 2022, the Supervisory Board set ambitious targets
linked to the variable remuneration of the members of the Board
of Management for the 2023 financial year. Of the total variable
target remuneration available, around 39% was linked to envi-
ronmental, social or governance (ESG) targets. The Supervisory
Board has set ambitious targets to reduce fleet carbon emissions
in the EU and to increase all-electric vehicle sales. These serve
as strategic focus targets that correspond to 50% of the long-
term variable remuneration (share-based remuneration). The
Supervisory Board has thus once again incorporated the strate-
gic importance of accelerating the electrification of the vehicle
fleet into the remuneration for the members of the Board of Man-
agement. The Supervisory Board placed particular emphasis on
environmental sustainability targets, which make up 50% of the
long-term variable remuneration.
II.
The current remuneration system for the members of the Board
of Management came into effect on 1 January 2021. The Annual
General Meeting approved it on 12 May 2021 with a majority of
91.60% of the valid votes cast. The Supervisory Board did not
resolve any changes to the remuneration system or the target
remuneration in the remuneration levels set out for the members
of the Board of Management in the 2023 financial year.
← = Q
II. Outlook for the 2024 Financial Year
Remuneration Report Other Information
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
The BMW Group generated a strong profit in the 2023 financial
year. Group net profit amounted to € 12.2 billion, with € 11.3 bil-
lion attributable to BMW AG shareholders, while the Group return
on sales after tax amounted to 7.8%. Under the leadership of the
Board of Management, the Company continued to drive the
BMW Group's transformation to electromobility forward in the re-
porting year. The BMW Group increased its sales of all-electric
ve-hicles at a significantly greater pace than the market as a
whole and has an all-electric offering in every major segment.
The proportion of total sales attributable to all-electric vehicles
went up to around 15%.
BMW Group Report 2023
OUTLOOK FOR THE
The remuneration system and the target remuneration for the
remuneration levels of the members of the Board of Manage-
ment, as described in this report for the 2023 financial year, will
continue to apply unchanged in the 2024 financial year. In De-
cember 2023, the Supervisory Board set the targets for variable
remuneration for the 2024 financial year on the basis of a pro-
posal by the Personnel Committee. A resolution was passed to
raise the required level of performance for the earnings compo-
nent of the bonus for the Board of Management, which remains
limited to 180% of the target remuneration.
The remuneration structure is geared towards the
sustainable and long-term development of the Company.
Therefore, variable remuneration components are pre-
dominantly granted on the basis of a multi-year
assessment.
The remuneration system which has been in place since the
2021 financial year complies with the provisions of the German
Stock Corporation Act (AktG) and the recommendations and
suggestions of the GCGC. The Supervisory Board has applied the
following principles in designing the remuneration system for the
Board of Management:
Principles of the remuneration system and the contribution of
remuneration to the promotion of the Company's business
strategy and its long-term development
OF THE BOARD OF MANAGEMENT
1.
III. REMUNERATION OF THE MEMBERS
2024 FINANCIAL YEAR
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report
258
There are no plans to change the remuneration system for mem-
bers of the Supervisory Board for the 2024 financial year.
III. Remuneration of the Members of the Board of Management
The total remuneration of the members of the Board of
Management is commensurate with their tasks and
performance as well as the Company's situation.
257
1 For reasons of simplicity, this report partially uses the masculine form in reference to persons. It is
intended to represent all genders.
300
3.
297
297
Articles of incorporation and procedure
1.
2. Principles and elements of remuneration
297
IV. Remuneration of the Members of the Supervisory
11. Maximum remuneration and remuneration vested in the
2023 financial year (vesting year)
10. Remuneration granted and owed to former members of
the Board of Management pursuant to § 162 of the
German Stock Corporation Act (AktG)
Remuneration granted and owed to members of the Board
of Management pursuant to § 162 of the German Stock
Corporation Act (AktG)
Premature termination of activities and post-contractual
non-competition clause
297
Board
² Due to rounding, it is possible that individual figures in this report may not add up exactly to the
totals provided, and that the percentages presented here may not be an exact reflection of the
absolute values to which they relate.
Remuneration granted and owed to members of the
Supervisory Board pursuant to § 162 of the German Stock
Corporation Act (AktG)
Stock Corporation Act (AktG)
VII. Auditor's Report
305
VI. Other Considerations
304
The 2023 financial year was very successful for the BMW Group.
A total of 2,554,183 vehicles were delivered - a new record for
the BMW Group. The BMW brand defended its leading position
in the global premium segment by selling just under 2.3 million
delivered vehicles. The Rolls-Royce brand also achieved record
sales. BMW Motorrad achieved the strongest sales in the Com-
pany's history in the year of its 100th anniversary.
REVIEW OF THE 2023 FINANCIAL YEAR
FROM A REMUNERATION PERSPECTIVE
V. Comparison of Change in Remuneration and Earnings
pursuant to § 162 (1) Sentence 2 No. 2 of the German
I.
Wirtschaftsprüfungsgesell-
GmbH
PricewaterhouseCoopers
In order to facilitate understanding, the basic features of the re-
muneration system applicable to the members of the Board of
Management and the Supervisory Board, as applied in the 2023
financial year, are also set out below. In view of the fact that indi-
vidual members of the Board of Management also received re-
muneration components from the remuneration system in effect
in the 2018 financial year during the 2023 financial year, ele-
ments of these systems are also explained to the extent neces-
sary for comprehension.
The Board of Management and the Supervisory Board have pre-
pared this Remuneration Report in accordance with the require-
ments of § 162 of the German Stock Corporation Act (AktG). The
report shows and explains the remuneration granted and owed
to the individual current and former members of the Board of
Management and the Supervisory Board of Bayerische Motoren
Werke Aktiengesellschaft (BMW AG) in the financial year 2023.1.2
REMUNERATION REPORT
schaft, Frankfurt am Main, Munich branch, has audited the Re-
muneration Report beyond the requirements of § 162 (3) Sen-
tences 1 and 2 AktG. The Auditor's Report is attached to this
report.
294
The remuneration system ensures that both positive and
negative developments are appropriately reflected in the
remuneration ("pay for performance").
The remuneration system observes the principle of
consistency between the remuneration systems in the
Company: the remuneration systems for the Board of
Management, executives and employees of BMW AG are all
designed in a similar way.
- Payment as part of the next payroll run after the Annual General Meeting at which the Financial Statements are presented for the relevant vesting year
Assessment period one year
― Capped at 180% of target amount
― € 2.10 million (Chairman of the Board of Management)
― € 1.15 million (from second period of office or fourth year of mandate = second remuneration level)
― € 0.95 million (first period of office = first remuneration level)
- Target amount p. a. (at 100% target achievement):
- Base amount p. a. (50% of target bonus amount):
(at 100% target achievement corresponds to
50% of target amount]
performance component)
(sum of earnings component and
Bonus
Bonus
- Fixed remuneration components are required for remuneration to be competitive in order to attract and retain qualified members of the Board of Management
The base salary counteracts the temptation to take disproportionately high risks in order to achieve short-term goals, and thus contributes to the long-term development of the Company
Earnings component
Chairman of the Board of Management: € 700,000
― € 0.475 million (first period of office = first remuneration level)
― € 1.050 million (Chairman of the Board of Management)
- Payment after the Annual General Meeting at which the Financial Statements are presented for the relevant vesting year
← = Q
Other Information
Remuneration Report
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023
- € 0.575 million (from second period of office or fourth year of mandate = second remuneration level)
260
- € 1.035 million (from second period of office or fourth year of mandate = second remuneration level)
- € 0.855 million (first period of office = first remuneration level)
- Maximum amount of earnings component p. a.:
-The earnings factor is 1.5 in case of a profit attributable to shareholders of BMW AG amounting to € 6.9 billion and a post-tax return on sales of 7.3%
―The earnings factor is 0 in case of a profit attributable to shareholders of BMW AG below € 3.0 billion or a post-tax return on sales of below 3.0%
― Earnings factor may not exceed 1.8
― Earnings factor is derived from an allocation matrix determined in advance based on the parameters "profit attributable to shareholders of BMW AG" and "Group post-tax return on sales" in the vesting year
―The earnings factor is 1.0 in case of a profit attributable to shareholders of BMW AG amounting to € 5.3 billion and a post-tax return on sales of 5.6%
- Formula: 50% of target amount x performance factor
- € 1.890 million (Chairman of the Board of Management)
The remuneration system takes into account both the
performance of the entire Board of Management and the
achievement of individual targets.
Member of the Board of Management: € 400,000
Benefits based on amounts credited to individual savings accounts for contributions paid and interest earned, various forms of disbursement
III. Remuneration of the Members of the board of Management
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
2.
BMW Group Report 2023
focus targets. The obligation to use the total net amount to
purchase shares of common stock in the Company and to
hold these shares for at least four years is a share ownership
guideline that strengthens the entrepreneurial long-term
orientation of the Board of Management. Implementing the
corporate strategy sustainably by taking appropriate
decisions also creates lasting value for the shareholders,
and thus regularly provides the basis for positive long-term
capital market performance. Due to the substantial
investment and the fixed holding period associated with
these shares, members of the Board of Management
participate in the long-term positive (and negative)
development of the Company, as reflected in the share price
and dividend trends.
The amount of the variable share-based remuneration also
depends on the fulfilment of financial and non-financial
objectives derived from the business strategy, since 50% of
the target personal cash investment amount earmarked for
share purchases is linked to a financial key indicator (ROCE
in the Automotive segment), and 50% is linked to strategic
The variable bonus is divided into two parts, which influence
behaviour in different ways. The earnings-related
component of the bonus rewards recipients for achieving
the Company's financial targets in the vesting year, and
promotes the earnings-related parts of the business
strategy. In contrast, the performance component of the
bonus is based on non-financial performance criteria, which
are also derived from the business strategy. In this respect,
the performance component of the bonus also offers
particular incentives to encourage individuals to pursue the
goals of the business strategy consistently for the long-term
development of the Company. These goals do not have to
be directly reflected in the key financial indicators for a given
vesting year.
The fixed basic remuneration counteracts the temptation to
take disproportionately high risks in order to achieve short-
term goals, and thus contributes to the long-term
development of the Company. It ensures a minimum income
appropriate to the tasks and responsibilities of a member of
the Board of Management.
The BMW Group aims to be the most successful and sustainable
premium provider of individual mobility. The business strategy
focuses on the customer and the provision of sustainable individ-
ual mobility in the premium segment, taking into account high
profitability, in order to secure the Company's independence in
the future. The remuneration system contributes to the imple-
mentation of the business strategy and the sustainable and long-
term development of the Company. It also takes into account the
concerns of the Company's important stakeholders (in particular,
shareholders, customers and employees). The incentive effects
of the various remuneration components have a complementary
effect.
The total remuneration is in line with market practice both in
terms of amount and structure, and takes into account the
size, complexity and economic situation of the Company.
259
Pension contribution p. a.:
Overview of the remuneration system
FIXED REMUNERATION COMPONENTS
Contractual agreement, main points: non-cash benefits from the use of company cars and the BMW chauffeur service, insurance premiums, contributions towards security systems, employee discounts
The Supervisory Board may award payments to compensate for loss of salary from a previous employment relationship and to cover relocation costs in the case of new entrants
Defined contribution system with a guaranteed minimum return
Base salary is paid monthly on a pro rata basis
- € 1.95 million p. a.
Chairman of the Board of Management:
― € 1.05 million p. a. (from second period of office or fourth year of mandate = second remuneration level)
― € 0.90 million p. a. (first period of office = first remuneration level)
The table below shows an overview of the current remuneration system.
COMPONENT
Member of the Board of Management:
Strategic relevance
Retirement benefits
Compensation payments
Fringe benefits
Base salary
Parameters/measurement base, applicable amounts
VARIABLE REMUNERATION COMPONENTS
291
9.
280
In the course of our assurance engagement, we have, amongst
other things, performed the follow-ing assurance procedures and
other activities:
In a limited assurance engagement the procedures performed
are less extensive than in a reason-able assurance engagement,
and accordingly a substantially lower level of assurance is ob-
tained. The selection of the assurance procedures is subject to
the professional judgement of the assur-ance practitioner.
the Sustainability Disclosures in the sections "Dialog with
stakeholders", "Further GRI in-formation" and "SASB-
Index" of the Company's Integrated Group Report have not
been prepared, in all material aspects, in accordance with
the relevant GRI-Criteria.
the Disclosures on Non-financial Reporting denoted with the
symbol [[ ]] of the Com-pany's Combined Non-financial
Statement, which is integrated into the combined man-
agement report contained in the Integrated Group Report,
other than the external sources of documentation or expert
opinions mentioned in the Disclosures on Non-financial Re-
porting denoted with the symbol [[ ]] of the Combined
Non-financial Statement, have not been prepared, in all
material respects, in accordance with §§ 315c in
conjunction with 289c to 289e HGB and the EU Taxonomy
Regulation and the Delegated Acts issued thereunder as
well as the interpretation by the executive directors
disclosed in section "EU-Taxonomy" of the Combined Non-
financial Statement, or
We conducted our assurance engagement in accordance with In-
ternational Standard on Assur-ance Engagements (ISAE) 3000
(Revised): Assurance Engagements other than Audits or Re-
views of Historical Financial Information, issued by the IAASB.
This Standard requires that we plan and perform the assurance
engagement to obtain limited assurance about whether any
matters have come to our attention that cause us to believe that
Our responsibility is to express a conclusion with limited assur-
ance on the Disclosures on Non-financial Reporting denoted with
the symbol [[ ]] of the Combined Non-financial Statement and
the Sustainability Disclosures in the sections "Dialog with stake-
holders", "Further GRI infor-mation" and "SASB-Index" of the In-
tegrated Group Report based on our assurance engagement.
Obtaining an understanding of the structure of the
sustainability organization and of the stakeholder
Responsibility of the Assurance Practitioner
Audit Firm's Independence and Quality Management
We have complied with the German professional provisions re-
garding independence as well as other ethical requirements.
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Independent Practitioner's Report
Group Financial Statements
Our audit firm applies the national legal requirements and pro-
fessional standards – in particular the Professional Code for Ger-
man Public Auditors and German Chartered Auditors
("Berufssatzung für Wirtschaftsprüfer und vereidigte Buch-
prüfer": "BS WP/vBP") as well as the Standard on Quality Man-
agement 1 published by the Institut der Wirtschaftsprüfer (Insti-
tute of Public Auditors in Germany; IDW): Requirements to quality
management for audit firms (IDW Qualitätsmanagementstand-
ard 1: Anforderungen an das Qualitätsmanagement in der
Wirtschaftsprüferpraxis - IDW QMS 1 (09.2022)), which requires
the audit firm to design, imple-ment and operate a system of
quality management that complies with the applicable legal re-
quirements and professional standards.
BMW Group Report 2023 To Our Stakeholders Combined Management Report
engagement
Inquiries of the executive directors and relevant employees
involved in the preparation of the Integrated Group Report
regarding the preparation process, the internal control
system relat-ing to this process and selected disclosures in
the Integrated Group Report
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Independent Practitioner's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
-
254
Evaluation of CO₂ compensation certificates exclusively with
regard to their existence, but not with regard to their impact.
Evaluation of the presentation of the disclosures
Inquiries on the relevance of climate-risks
Evaluation of the process to identify taxonomy-eligible and
taxonomy-aligned economic activi-ties and the
corresponding disclosures in the Combined Non-financial
Statement
Analytical evaluation of selected disclosures in the
Integrated Group Report
Testing of
processes for the collection, control, analysis and
aggregation of selected data from various Group sites on a
sample basis
Identification of the likely risks of material misstatement of
the Integrated Group Report
In determining the disclosures in accordance with Article 8 of the
EU Taxonomy Regulation, the executive directors are required to
interpret undefined legal terms. Due to the immanent risk that
undefined legal terms may be interpreted differently, the legal
conformity of their interpretation and, accordingly, our assurance
engagement thereon are subject to uncertainties.
← = Q
253
The EU Taxonomy Regulation and the Delegated Acts issued
thereunder contain wording and terms that are still subject to
considerable interpretation uncertainties and for which clarifica-
tions have not yet been published in every case. Therefore, the
executive directors have disclosed their interpretation of the EU
Taxonomy Regulation and the Delegated Acts adopted thereun-
der in section "EU-Taxonomy" of the Combined Non-financial
Statement. They are responsible for the defensibility of this inter-
pretation. Due to the immanent risk that indeterminate legal
terms may be interpreted differently, the legal conformity of the
interpretation is subject to uncertainties.
Petra Justenhoven
Wirtschaftsprüferin
(German Public Auditor)
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Munich, 13 March 2024
The German Public Auditor responsible for the engagement is
Michael Popp.
RESPONSIBLE FOR THE ENGAGEMENT
GERMAN PUBLIC AUDITOR
Michael Popp
Wirtschaftsprüfer
(German Public Auditor)
Our auditor's report must always be read together with the au-
dited consolidated financial statements and the audited group
management report as well as the assured ESEF documents.
The consolidated financial statements and the group manage-
ment report converted to the ESEF format - including the ver-
sions to be filed in the company register - are merely electronic
renderings of the audited consolidated financial statements and
the audited group management report and do not take their
place. In particular, the "Report on the Assurance on the Elec-
tronic Rendering of the Consolidated Financial Statements and
the Group Management Report Prepared for Publication Pur-
poses in Accordance with § 317 Abs. 3a HGB" and our assur-
ance opinion contained therein are to be used solely together
with the assured ESEF documents made available in electronic
form.
We declare that the audit opinions expressed in this auditor's
report are consistent with the additional report to the audit com-
mittee pursuant to Article 11 of the EU Audit Regulation (long-
form audit report).
We were elected as group auditor by the annual general meeting
on 11 May 2023. We were engaged by the supervisory board
on 4 July 2023. We have been the group auditor of Bayerische
Motoren Werke Aktiengesellschaft, Munich, without interruption
since the financial year 2019.
Further Information pursuant to Article 10 of the EU Audit
Regulation
← = Q
Other Information
Remuneration Report
REFERENCE TO AN OTHER MATTER -
USE OF THE AUDITOR'S REPORT
1 PricewaterhouseCoopers GmbH has performed a limited assurance engagement on the German version of the,,BMW Group Report 2023" and issued an independent practitioner's report in German language,
which is authoritative. The following text is a translation of the independent practitioner's report.
252
To Our Stakeholders Combined Management Report
and making assumptions and estimates about individual non-fi-
nancial and sustainability disclosures of the Group that are rea-
sonable in the circumstances. Furthermore, the executive direc-
tors are responsible for such internal control as the executive di-
rectors consider necessary to enable the preparation of an Inte-
grated Group Report that is free from material misstatement
whether due to fraud or error.
This responsibility includes the selection and application of ap-
propriate non-financial and sus-tainability reporting methods
The executive directors of the Company are responsible for the
preparation of the Combined Non-financial Statement in accord-
ance with §§ (Articles) 315c in conjunction with 289c to 289e
HGB ("Handelsgesetzbuch": "German Commercial Code") and
Article 8 of REGULATION (EU) 2020/852 OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL of 18. June 2020 on es-
tablishing a framework to facilitate sustainable investment and
amending Regulation (EU) 2019/2088 (here-inafter the "EU
Taxonomy Regulation") and the Delegated Acts adopted there-
under, as well as for making their own interpretation of the word-
ing and terms contained in the EU Taxonomy Regula-tion and
the Delegated Acts adopted thereunder, as set out in section
,,EU-Taxonomy" of the Combined Non-financial Statement and
the Integrated Group Report in accordance with the prin-ciples
stated in the Sustainability Reporting Standards of the Global
Reporting Initiative (hereinaf-ter the "GRI-Criteria") and for the
selection of the disclosures in the Combined Non-financial State-
ment and the Sustainability Disclosures.
Responsibility of the Executive Directors
Not subject to our assurance engagement are the external
sources of documentation or expert opinions mentioned in the
Integrated Group Report.
To Bayerische Motoren Werke Aktiengesellschaft, Munich
We have performed a limited assurance engagement on the dis-
closures in the "BMW Group Re-port 2023" of Bayerische Mo-
toren Werke Aktiengesellschaft, Munich, (hereinafter the
"Compa-ny") for the period from 1 January to 31 December
2023 (hereinafter the "Integrated Group Re-port") denoted with
[[ ]] of the Combined Non-financial Statement, which is inte-
grated into the combined management report (hereinafter the
"Disclosures on Non-financial Reporting") con-tained in the Inte-
grated Group Report, as well as the sustainability disclosures
contained in the sections "Dialog with stakeholders","Further
GRI information" and "SASB-Index" of the Integrat-ed Group Re-
port (hereinafter referred to as "Sustainability Disclosures"). Our
engagement in this context relates solely to the disclosures de-
noted with the symbol [[ ]] and the disclosures in the sections
"Dialog with stakeholders", "Further GRI information" and
"SASB-Index".
BMW Group Report 2023
Independent Practitioner's Report on a Limited Assurance En-
gagement on Disclosures on Non-financial Reporting and Sus-
tainability Disclosures
INDEPENDENT PRACTITIONER'S REPORT
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Independent Practitioner's Report
Group Financial Statements
Independent Practitioner's Report on a Limited Assurance
Engagement on Disclosures on Non-financial Reporting and
Sustainability Discloures¹
Assurance Opinion
Based on the assurance procedures performed and evidence
obtained, nothing has come to our attention that causes us to
believe that
the Disclosures on Non-financial Reporting denoted with the
symbol [[ ]] of the Com-pany's Combined Non-financial
Statement for the period from 1 January to 31 December
2023, which is integrated into the combined management
report contained in the Inte-grated Group Report, have not
been prepared, in all material aspects, in accordance with
§§ 315c in conjunction with 289c to 289e HGB relevant to
these disclosures and the EU Taxonomy Regulation and the
Delegated Acts issued thereunder as well as the interpreta-
tion by the executive directors disclosed in section "EU-
Taxonomy" of the Non-financial Statement, or
ment
III. Remuneration of the Members of the Board of Manage-
Outlook for the 2024 Financial Year
Remuneration Perspective
Review of the 2023 Financial Year from a
258
1. Principles of the remuneration system and the contribution
of remuneration to the promotion of the Company's
258
257
I.
256
REMUNERATION REPORT
← = Q
I. Review of the 2023 Financial Year from a Remuneration Perspective
II.
Other Information
business strategy and its long-term development
2. Overview of the remuneration system
7. Malus and clawback provisions
8.
279
279
6. Retirement benefits
279
259
Share ownership guideline
278
Remuneration for the 2023 financial year
4.
268
3. Determination and review of the remuneration system and
individual remuneration
262
5.
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
255
Annette Fink
Remuneration Report
(German Public Auditor)
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Munich, 13 March 2024
We draw attention to the fact that the assurance engagement
was conducted for the Company's purposes and that the report
is intended solely to inform the Company about the result of the
assurance engagement. Consequently, it may not be suitable for
any other purpose than the aforementioned. Accordingly, the re-
port is not intended to be used by third parties for making (finan-
cial) decisions based on it. Our responsibility is to the Company.
We do not accept any re-sponsibility to third parties. Our assur-
ance opinion is not modified in this respect.
Restriction of Use
We do not express an assurance opinion on the external sources
of documentation or expert opinions mentioned in the Disclo-
sures on Non-financial Reporting denoted with the symbol [[ ]]
of the Company's Combined Non-financial Statement.
the Sustainability Disclosures in the sections "Dialog with
stakeholders", "Further GRI in-formation" and "SASB-
Index" of the Company's Integrated Group Report for the
period from 1 January to 31 December 2023 have not been
prepared, in all material aspects, in accordance with the
relevant GRI-Criteria.
Michael Popp
Wirtschaftsprüfer
Other Information
← = Q
256 Remuneration Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
256
REPORT
REMUNERATION
05
305 VII. Auditor's Report
304 VI. Other Considerations
Act (AktG)
300 V. Comparison of Change in Remuneration and Earnings Pursuant
to § 162 (1) Sentence 2 No. 2 of the German Stock Corporation
297 IV. Remuneration of the Members of the Supervisory Board
258 III. Remuneration of the Members of the Board of Management
257 II. Outlook for the 2024 Financial Year
Perspective
256 I. Review of the 2023 Financial Year from a Remuneration
Group Financial Statements
* See below for the targets set for the 2023 financial year Variable remuneration for the 2023 financial year.
COMPONENT
III. Remuneration of the Members of the board of Management
62
2,430,000
62
2,050,000
61
2,050,000
59
Total target remuneration
1,639,756
100
1,012,500
3,910,825
3,372,692
100
3,452,259
100
1 Service contract comes to an end on 31 May 2023. See Premature termination of activities and post-contractual non-competition clause.
2 For more information about fringe benefits for the 2022 and 2023 financial years, refer to Remuneration granted and owed to members of the Board of Management pursuant to § 162 of the German Stock Corporation Act (AktG).
3 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
267
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Target remuneration for the 2023 (2022) financial year
100
FRANK WEBER
(-)
550,000
14
475,000
14
Variable
remuneration
SHARE-BASED REMUNERATION
Personal cash investment amount³
RoCE component
Strategic focus target component
266,667
16
16
640,000
550,000
16
550,000
16
266,667
16
640,000
16
550,000
16
16
Total variable remuneration
Development
Fixed
remuneration
39
1,334,077
39
BONUS
Earnings component
525,000
14
475,000
14
Performance component
525,000
14
475,000
14
Variable
SHARE-BASED REMUNERATION
remuneration
Personal cash investment amount³
RoCE component
Strategic focus target component
Total variable remuneration
1,404,392
Total fixed remuneration
12
400,000
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
FY 2023
FY 2022
in €
in %
in €
in %
Fixed remuneration (base salary)
since 1 July 2020¹
975,000
900,000
27
Fringe benefits (other remuneration]²
29,392
1
34,077
1
Contribution to the company pension scheme
400,000
11
27
595,000
15
15
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Target remuneration for the 2023 (2022) financial year
NICOLAS PETER
Finance
1 January 2017 to 11 May 20231
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
JOACHIM POST
Purchasing and Supplier Network
since 1 January 2022
← = Q
FY 2023
FY 2022
in €
in %
in €
in %
in €
FY 2023
in %
266
3 For more information about fringe benefits for the 2022 and 2023 financial years, refer to Remuneration granted and owed to members of the Board of Management pursuant to § 162 of the German Stock Corporation Act (AktG).
"Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
Premature termination of activities and post-contractual non-competition clause.
2 Service contract comes to an end on 31 July 2024. See
16
640,000
16
640,000
16
2,430,000
62
2,145,000
61
2,430,000
FY 2022
62
62
3,907,524
100
3,502,324
100
3,932,049
100
3,899,673
100
1 Second remuneration level since 1 October 2022.
2,430,000
in €
in %
Fixed remuneration (base salary)
12
Total fixed remuneration
627,256
38
1,480,825
38
1,322,692
39
1,402,259
41
400,000
BONUS
239,583
15
575,000
15
475,000
14
475,000
14
Performance component
239,583
Earnings component
575,000
12
10
437,500
27
1,050,000
27
900,000
27
900,000
26
Fixed
remuneration
Fringe benefits (other remuneration]²
400,000
23,089
30,825
1
22,692
1
102,259
3
Contribution to the company pension scheme
166,667
10
400,000
1
572,500
16
16
1 Simplified depiction.
2 Earnings factor 2023.
0.135
3.0
Minimum value
3.0
Minimum value
5.3
Target value
Profit attributable to
shareholders of BMW AG in € billion
11.0
Maximum value
270
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
Targets set and extent of achievement - earnings component of the
bonus for the 2023 financial year
1.000
1.680²
1.800
of target amount
50% OF TARGET AMOUNT
PERFORMANCE FACTOR
BONUS
X
+
X
=
Earnings factor is derived from an allocation matrix based on the
parameters "Profit attributable to shareholders of BMW AG" and
"Group post-tax return on sales" in the vesting year
Earnings factor may not exceed 1.8
Earnings component of the bonus: allocation matrix¹
T
The targets set and the extent to which they have been achieved,
as well as the specific amounts associated with the earnings
component of the bonus for the 2023 financial year, are shown
in the following tables. In the 2023 financial year, BMW AG's
share of profit attributable to shareholders was € 11.3 billion,
and the Group post-tax return on sales was 7.8%. Based on the
allocation matrix approved by the Supervisory Board, this pro-
vides an earnings factor of 1.680, which corresponds to a target
achievement level of 168%.
Group return on sales
9.0
Maximum value
7.8
5.6
Target value
- Performance factor is derived from
-50% cross-divisional targets with ESG criteria
40% other cross-divisional targets
-10% individual departmental targets
- Performance factor may not exceed 1.8
Capped at 180%
after tax in %
Performance component of the bonus
The performance component of the bonus rewards the achieve-
ment of certain non-financial targets. Before the beginning of the
financial year, the Supervisory Board sets these targets in the
form of various non-financial performance criteria and associ-
ated metrics. The performance criteria are derived primarily from
the corporate strategy, long-term corporate planning and the
business development planning done for the following year. The
targets are divided into individual targets for the individual mem-
bers of the Board of Management (departmental targets) and
collective targets for the entire Board of Management (interde-
partmental targets). The Supervisory Board has discretion in
weighting the performance criteria. Approximately 10% of the
target amount for the performance bonus is intended to be allo-
cated to the departmental targets. Departmental targets can be
department-specific targets or contributions to shared targets
measured individually for each department. The remainder of the
target amount for the performance bonus (amounting to approx-
imately 90%) should be associated with interdepartmental, non-
financial targets. In this regard, around 50% of the target amount
should be connected to the achievement of non-financial targets
relating to environmental, social and governance (ESG targets).
Targets set and extent of achievement – earnings component of the bonus for the 2023 financial year
79,167
575,000
301,178
575,000
1.680
575,000
239,583
475,000
525,000
Earnings component
1,050,000
Earnings factor
1,764,000
133,000
966,000
505,978
966,000
966,000
402,500
798,000
882,000
3 Member of the Board of Management until 31 October 2023, service contract comes to an end on 31 July 2024. See Premature termination of activities and post-contractual non-competition clause.
"Member of the Board of Management until 11 May 2023, service contract ended 31 May 2023. See Premature termination of activities and post-contractual non-competition clause.
5 Second remuneration level since 1 July 2023.
of the bonus in €
EARNINGS FACTOR
amount in €
1 Member of the Board of Management since 1 November 2023.
2 Member of the Board of Management since 12 May 2023.
Minimum value
3.0
Target value
5.3
Maximum value
11.0
3.0
5.6
9.0
Actual value
11.3
7.8
Extent to which
target achieved
Proportionate target bonus
Earnings
factor
1.680
Performance criteria
Profit attributable to shareholders of BMW AG in € billion
Group return on sales after tax in %
Overview of earnings component of the bonus for the 2023 financial year
Member of the Board of Management
Oliver Zipse
Jochen Goller¹
Ilka Horstmeier
Walter Mertl²
Milan Nedeljković
Pieter Nota³
Nicolas Peter
Joachim Post
Frank Weber5
168%
550,000
PERFORMANCE COMPONENT
EARNINGS COMPONENT
← = Q
4.
Remuneration for the 2023 financial year
In December 2022, the Supervisory Board determined the target
remuneration for the members of the Board of Management for
the 2023 financial year as well as the performance criteria for the
variable remuneration components provided for in the remuner-
ation system. In March 2024, the Supervisory Board set or con-
firmed the amount of the variable remuneration components due
to the members of the Board of Management for the 2023 finan-
cial year after reviewing and assessing the extent to which the
targets had been achieved.
a) Fixed remuneration for the 2023 financial year
Each member of the Board of Management receives a fixed base
salary, which is paid monthly on a pro rata basis. The amount of
the base salary depends on the individual's respective function
on the Board of Management and the duration of their tenure on
the Board of Management or their appointment period/remuner-
ation level, as applicable.
The fringe benefits include, in particular, non-cash benefits from
vehicle use and employee discounts and subsidies for safety
equipment. In addition, the Supervisory Board can approve pay-
ments to newly appointed members of the Board of Management
in order to compensate them for loss of salary from a previous
employment relationship and/or to cover relocation costs. A com-
mitment to cover relocation costs was issued in the 2023 finan-
cial year.
in €
Overview of fixed remuneration for the 2023 financial year
Base salary
Oliver Zipse
Jochen Goller¹
1,950,000
150,000
1,050,000
Fringe benefits
(other remuneration)
26,113
3,331
66,981
570,652
111,981
Total fixed
remuneration
1,976,113
153,331
1,116,981
682,633
Milan Nedeljković
1,050,000
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
595,000
16
550,000
16
2,240,000
3,644,392
61
2,050,000
61
100
3,384,077
27,524
100
1 Second remuneration level since 1 July 2023.
2 For more information about fringe benefits for the 2022 and 2023 financial years, refer to Remuneration granted and owed to members of the Board of Management pursuant to § 162 of the German Stock
Corporation Act (AktG).
3 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
↑
= Q
268
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements
Total target remuneration
1,077,524
Pieter Nota³
1,050,000
50%)
Variable target remuneration
with ESG targets
Approx. 39% in total*
Share-based
remuneration
Strategic
focus target
component
Approx. 26-27%
(of which ESG
targets: 100%)
*Incorporating the collective departmental targets for the performance component of the bonus.
269
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
(of which ESG targets:
Group Financial Statements Responsibility Statement and Auditor's Report
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
(1) Bonus for the 2023 financial year
Overview
The bonus consists of an earnings component and a perfor-
mance component. If 100% of the target is achieved for both the
performance and the earnings component, the share of the
bonus attached to each component is 50% of the individual tar-
get amount of the bonus. The bonus amount is capped at 180%
of the individual target amount. The bonus for the financial year
will be paid as part of the next payroll run after the Annual Gen-
eral Meeting 2024.
Earnings component of the bonus
The earnings component of the bonus rewards the performance
of the business in the 2023 vesting year, as measured by the
financial indicators "Profit attributable to shareholders of
BMW AG" and "Group post-tax return on sales". For this pur-
pose, the Supervisory Board adopted an allocation matrix, from
which an earnings factor is derived based on the values
achieved.
A minimum value, a target value and a maximum value were de-
fined for both key figures before the start of the 2023 vesting
year. If one of the minimum values is not reached, the earnings
factor is zero (corresponding to a target achievement of 0%). If
both target values are reached, the earnings factor is 1.000 (cor-
responding to a target achievement of 100%). If both maximum
values are exceeded, the earnings factor is 1.800 (correspond-
ing to a target achievement of 180%, the highest possible per-
centage). For intermediate values, the earnings factor is derived
from the allocation matrix.
Overview of the composition of the bonus
Remuneration Report
50% OF TARGET AMOUNT
Bonus Performance
Overview of variable target remuneration 2023
52,049
Nicolas Peter
437,500
23,089
Joachim Post
900,000
22,692
1,102,049
460,589
922,692
Bonus
Earnings component
Share-based
remuneration
RoCE component
Approx. 26-27%
Frank Weber5
29,392
1,004,392
Approx. 23-24%
Ilka Horstmeier
Walter Mertl²
1 Member of the Board of Management since 1 November 2023.
2 Member of the Board of Management since 12 May 2023.
3 Member of the Board of Management until 31 October 2023, service contract comes to an end on
31 July 2024. See Premature termination of activities and post-contractual non-competition
clause.
4 Member of the Board of Management until 11 May 2023, service contract ended 31 May 2023.
See Premature termination of activities and post-contractual non-competition clause.
5 Second remuneration level since 1 July 2023.
b) Variable remuneration for the 2023 financial year
The variable remuneration for the 2023 financial year consists of
the bonus and the share-based remuneration. When determining
specific target values, the Supervisory Board takes into account,
in particular, long-term corporate planning and business devel-
opment planning for the following year as submitted to the Su-
pervisory Board for approval. For the strategic relevance of the
individual remuneration components, see also above 7 Overview of
the remuneration system.
975,000
(-)
16
16
0.2
17,249
0.4
26,113
Fringe benefits (other remuneration]1
(-)
(-)
27
150,000
27
1,950,000
27
1,950,000
Fixed remuneration (base salary)
in %
FY 2022
in €
in %
in €
in %
in €
3,331
1
(-)
(-)
1,050,000
15
1,050,000
Earnings component
BONUS
(-)
39
219,998
37
2,667,249
in %
38
Total fixed remuneration
(-)
(-)
12
66,667
10
700,000
10
700,000
Contribution to the company pension scheme
2,676,113
in €
FY 2023
FY 2022
Contributions
Retirement
1-4%
Fringe benefits²
Overview of total target remuneration for members of the
Board of Management¹
The total target remuneration is composed of the fixed remuner-
ation and the variable remuneration. Within the variable target
remuneration, the proportion of share-based remuneration as
long-term variable remuneration exceeds the share of the bonus
as short-term variable remuneration. The share of the individual
remuneration components is within the ranges specified by the
remuneration system.
In accordance with the remuneration system, the Supervisory
Board acting on the proposal of the Personnel Committee
sets specific target remuneration for each individual member of
the Board of Management for the upcoming financial year, as
well as the performance criteria associated with the variable re-
muneration components provided for in the remuneration
system.
-
The Supervisory Board reviews the remuneration system annu-
ally to ensure it is appropriate in terms of structure, target and
maximum remuneration, as well as actual remuneration. The Su-
pervisory Board also takes remuneration studies into account
when assessing the market conformity of the target and maxi-
mum remuneration, as well as when assessing actual remuner-
ation in horizontal terms. Due to the size and structure of the
BMW Group, DAX companies are used as a comparison group
while taking revenues, employee headcounts and market capi-
talisation into consideration. This ensures that the main compet-
itors of BMW AG and other global companies are factored in. Ver-
tically, the Supervisory Board compares the remuneration of
members of the Board of Management with the remuneration of
senior executives and with the average remuneration of employ-
ees employed by BMW AG in Germany in areas inside and out-
side the scope of collective bargaining agreements, including in
terms of how they have changed over a period of several years.
Recommendations from independent external remuneration ex-
perts, as well as suggestions from investor and analyst circles,
may also be included in the deliberations. For the 2023 financial
year, the review has shown that the target, maximum and actual
remuneration are appropriate.
Determination and review of the remuneration system and
individual remuneration
Determining the system and structure of Board of Management
remuneration, and reviewing it regularly, is a task of the full Su-
pervisory Board, as is determining the individual level of remu-
neration of members of the Board of Management. The Person-
nel Committee of the Supervisory Board assumes a preparatory
function.
3.
benefits
7-12%
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report
262
- Agreement entitling the BMW Group to reclaim variable remuneration already paid out in the event of specified serious incidences of non-compliance, incorrect calculation bases or incorrect financial statements
― Amounts may also be clawed back in principle after a member has left the Board
- Agreement to withhold variable remuneration in the event of specified serious compliance violations or (withholding amounts provisionally) in the event of reasonable suspicions of such
― Amounts may also be withheld in principle after a member has left the Board
Clawback
Malus
Malus and clawback rules
III. Remuneration of the Members of the Board of Management
15
ΤΟ
Bonus
27-30%
FY 2023
← = Q
Customer, Brands, Sales
since 1 November 2023
JOCHEN GOLLER
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Fixed
remuneration
Chairman of the Board of Management since 16 August 2019
Member of the Board of Management since 13 May 2015
OLIVER ZIPSE
Base salary
25-30%
Target remuneration for the 2023 (2022) financial year
Group Financial Statements
Combined Management Report
To Our Stakeholders
BMW Group Report 2023
263
Target remuneration for the 2023 financial year
The following tables show the individual target remuneration of
the members of the Board of Management and the relative share
of the respective remuneration component in the total target re-
muneration. The maximum remuneration and remuneration
earned for the 2023 financial year are shown below. 7 Maximum
remuneration vested in the 2023 financial year (vesting year)
2 Excluding a possible payment to new members of the Board of Management to compensate for
salary losses from a previous employment relationship and/or to cover relocation costs.
1 The remuneration structure as defined in the remuneration system for total target remuneration is
depicted.
Share-based
Remuneration
31-36%
Variable
Remuneration
58-66%
Responsibility Statement and Auditor's Report
-The remaining 50% of the personal cash investment amount encourages achievement of strategic focus targets and therefore contributes to business performance in key strategic areas
-Commitment to purchase shares of the Company's common stock and the four-year holding period provide additional motivation to support the Company's long-term development
79,167
(-)
FY 2022
in €
in %
in €
in %
in €
in %
in €
FY 2023
FY 2022
FY 2023
← = Q
since 12 May 2023
Finance
WALTER MERTL
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Human Resources and Real Estate, Labour Director
since 1 November 20191
ILKA HORSTMEIER
Fixed
remuneration
in %
Fixed remuneration (base salary)
1,050,000
27
11
253,623
12
400,000
10
400,000
Contribution to the company pension scheme
(-)
(-)
5
Target remuneration for the 2023 (2022) financial year
111,981
39,578
2
66,981
Fringe benefits (other remuneration]²
(-)
(-)
26
570,652
27
925,000
1
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
1,175,000
Strategic focus target component
(-)
16
91,667
17
1,175,000
16
1,175,000
RoCE component
16
Personal cash investment amount²
Variable
remuneration
Performance component
(-)
(-)
14
79,167
15
1,050,000
15
1,050,000
SHARE-BASED REMUNERATION
14
1,175,000
91,667
264
IIII
1 For more information about fringe benefits for the 2022 and 2023 financial years, refer to Remuneration granted and owed to members of the Board of Management pursuant to § 162 of the German Stock Corporation Act (AktG).
2 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
(-)
(-)
(-)
CCC
100
561,666
100
17
7,117,249
7,126,113
Total target remuneration
61
341,668
63
4,450,000
62
4,450,000
Total variable remuneration
16
100
640,000
-50% of the personal cash investment amount within the target structure depends on the ROCE and is therefore directly linked to a key target for the corporate strategy and reflects BMW AG's aspiration to
generate a significant premium on the cost of capital
― € 1.152 million (from second period of office or fourth year of mandate = second remuneration level)
in €
in %
in €
in %
in €
FY 2023
in %
FY 2022
in €
in %
1,050,000
27
937,500
27
1,050,000
27
1,050,000
27
27,524
1
19,824
1
FY 2022
FY 2023
← = Q
1 January 2018 to 31 October 2023²
IIII
1 Second remuneration level since 1 November 2022.
2 For more information about fringe benefits for the 2022 and 2023 financial years, refer to Remuneration granted and owed to members of the Board of Management pursuant to § 162 of the German Stock Corporation Act (AktG).
3 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
265
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Target remuneration for the 2023 (2022) financial year
Fixed
remuneration
52,049
Fixed remuneration (base salary)
Contribution to the company pension scheme
Total fixed remuneration
BONUS
MILAN NEDELJKOVIĆ
Production
since 1 October 20191
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
PIETER NOTA
Customer, Brands, Sales
Fringe benefits (other remuneration]³
1
19,673
1
575,000
15
500,000
14
575,000
15
575,000
15
Variable
remuneration
SHARE-BASED REMUNERATION
Performance component
Personal cash investment amount"
Strategic focus target component
Total variable remuneration
Total target remuneration
640,000
16
572,500
16
640,000
16
640,000
RoCE component
CCC
15
15
400,000
10
400,000
11
400,000
10
400,000
10
1,477,524
38
575,000
1,357,324
1,502,049
38
1,469,673
38
Earnings component
575,000
15
500,000
14
575,000
39
― € 2.115 million (Chairman of the Board of Management)
(-)
100
Strategic focus target component
(at 100% target achievement corresponds to
50% of target amount)
RoCE component
Share-based remuneration (continued)
COMPONENT
III. Remuneration of the Members of the board of Management
← = Q
Other Information
Remuneration Report
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders
BMW Group Report 2023
261
Total fixed remuneration
1,516,981
38
1,364,578
39
936,256
42
(-)
(at 100% target achievement corresponds to
50% of target amount)
Strategic relevance
Parameters/measurement base, applicable amounts
- Target amount of ROCE component p. a. (50% of target amount for personal cash investment amount):
― € 0.990 million (first period of office = first remuneration level)
- Maximum amount of strategic focus target component p. a.:
-Factor for each strategic focus target may not exceed 1.8
25% of target amount for personal cash investment amount x factor for strategic focus target 1 + 25% of target amount for personal cash investment amount x factor for strategic focus target 2
― Minimum, target and maximum values are defined before the start of the financial year
- Formula in the event of two strategic focus targets with equal weighting p. a.:
- Weighting of the strategic focus targets is decided before the start of the financial year
- At least two strategic focus targets derived from the strategic plan
― € 1.175 million (Chairman of the Board of Management)
- € 0.64 million (from second period of office or fourth year of mandate = second remuneration level)
- € 0.55 million (first period of office = first remuneration level)
BONUS
- Target amount of strategic focus target component p. a. (50% of target amount for personal cash investment amount):
- € 1.152 million (from second period of office or fourth year of mandate = second remuneration level)
― € 0.990 million (first period of office = first remuneration level)
- Maximum amount of ROCE component p. a.:
- ROCE factor may not exceed 1.8
- Minimum, target and maximum values for ROCE are defined before the start of the financial year
- ROCE factor is derived from the RoCE achieved in the Automotive segment for the vesting year
- Formula: 50% of target amount x RoCE factor
― € 1.175 million (Chairman of the Board of Management)
― € 0.64 million (from second period of office or fourth year of mandate = second remuneration level)
― € 0.55 million (first period of office = first remuneration level)
- € 2.115 million (Chairman of the Board of Management)
Earnings component
575,000
15
348,732
16
(-)
640,000
16
565,000
16
348,732
16
(-)
16
2,430,000
3,946,981
2,113,333
61
1,299,820
58
(-)
(-)
100
3,477,911
100
2,236,076
62
(-)
565,000
640,000
491,667
14
301,178
13
(-)
Performance component
575,000
15
491,667
14
16
301,178
(-)
(-)
Variable
SHARE-BASED REMUNERATION
remuneration
Personal cash investment amount³
RoCE component
Strategic focus target component
Total variable remuneration
Total target remuneration
13
475,000
component
Approx. 23-24%
Ilka Horstmeier
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
275
investment amount is determined in a two-step process. In the
first step, the factor for the vesting year achieved for the relevant
strategic focus target is multiplied by the share of the individual
target amount attributable to this target. In the second step, the
values determined for the individual strategic focus targets using
this calculation are added together. If two strategic focus targets
are set, each strategic focus target accounts for 25% of the indi-
vidual target amount, unless the Supervisory Board decides on a
different weighting. If more than two strategic focus targets are
set, the Supervisory Board determines the weighting of each
target.
The Supervisory Board sets at least two strategic focus targets
before the start of the vesting year. It derives these targets from
the corporate strategy and corporate planning. It then sets a min-
imum, target and maximum value for each strategic focus target,
and assigns a factor to each of these values. If the minimum
value is not reached, the factor for that target is 0. If the target
value is reached, the factor for that target is 1.00. If the maximum
value is reached or exceeded, the factor for that target is 1.80.
The strategic focus targets component of the personal cash
Strategic focus targets component of the personal cash investment
amount
determined by multiplying the RoCE factor for the vesting year by
50% of the individual target amount.
"Payment of the personal cash investment amount, acquisition of shares and the start of the four-year holding period occur as part of the next payroll run after the Annual General Meeting at which the
annual financial statements for the vesting year are presented.
3 Exemplary illustration of price development.
2 At least two strategic focus targets and their proportion of the target amount are determined by the Supervisory Board.
of the payment amount]
(amounting to 100%
Acquisition of shares
Total performance period: 5 years
Freely
available
shares
Performance period: 4 years
Yn+1
← = Q
III. Remuneration of the Members of the Board of Management
Targets set and extent of achievement for the ROCE component for
the 2023 financial year
ROCE in the Automotive segment for the 2023 financial year is
defined as segment profit before the financial result, divided by
the average capital employed in the segment. In December
2022, the Supervisory Board determined the following values for
the ROCE component for the vesting year 2023, based on the
long-term corporate planning: minimum value: 12% (target
achievement 50%), target value: 16% (target achievement
100%), maximum value: 21% (target achievement 180%). The
ROCE achieved in the Automotive Segment for the 2023 finan-
cial year is 20.2% and the ROCE factor for calculating the per-
sonal cash investment amount is therefore 1.67.
Targets set and extent of achievement - reduction of fleet carbon emissions (EU)
RoCE in Automotive segment in %
→ Extent to which target achieved: 167%
Maximum value
Target value
21
16
12
Minimum value
0%
50%
FY +5
100%
20.2
Actual value 2023
Extent to which target achieved
200%
180%
T
Targets set and extent of achievement - RoCE component
Sales of all-electric vehicles (battery electric vehicles, BEV);
weighting in relation to individual personal cash investment
target: 25%.
Reduce fleet carbon emissions in the EU according to
WLTP; weighting in relation to individual personal cash
investment target: 25%.
In December 2023, the Supervisory Board set the following stra-
tegic focus targets for the vesting year 2022 in accordance with
the remuneration system:
Targets set and extent of achievement for the strategic
focus targets component for the 2023 financial year
150%
FY +4
FY n+3
FY n+2
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
274
3 Member of the Board of Management until 31 October 2023, service contract comes to an end on 31 July 2024. See Premature termination of activities and post-contractual non-competition clause.
4 Member of the Board of Management until 11 May 2023, service contract ended 31 May 2023. See Premature termination of activities and post-contractual non-competition clause.
5 Second remuneration level since 1 July 2023.
2 Member of the Board of Management since 12 May 2023.
1 Member of the Board of Management since 1 November 2023.
111.9
10
Other Information
Departmental targets
525,000
1.02
92.5
40
271
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
535,500
T
III. Remuneration of the Members of the Board of Management
(2) Share-based remuneration for the 2023 financial year
As part of the share-based remuneration as a variable long-term
component of remuneration, the members of the Board of Man-
agement receive a cash payment earmarked for investment in
BMW shares of common stock (the "personal cash investment
amount"). This amount depends on the achievement of certain
financial and non-financial targets in the past financial year (vest-
ing year). The members of the Board of Management are obliged
to invest their personal cash investment amounts (less taxes and
duties) in BMW shares of common stock immediately after dis-
bursement, and to hold these shares for a period of at least four
years (share ownership guideline). The holding period remains in
effect even if the member leaves the Board of Management.
FY
+
Share performance over 4 years³
Amount paid out
Taxes and deductions
Personal cash
investment amount
(capped at 180%
of the target amount)
Strategic focus target factor
Extent of target achievement
for strategic focus targets²
(value between 0 and 1.80)
50%
Target amount
1 Simplified depiction.
← = Q
Extent of target achievement for
RoCE in the Automotive segment
(value between 0 and 1.80)
50%
Target amount
FYn
Overview of share-based remuneration¹
RoCE component of the personal cash investment amount
Before the beginning of the relevant vesting year, the Supervi-
sory Board sets minimum, target and maximum values for the
RoCE in the Automotive segment in the vesting year on the basis
of corporate planning, and assigns a RoCE factor to each of these
values. If the minimum value is not reached, the RoCE factor is 0.
If the target value is reached, the RoCE factor is 1.00. If the max-
imum value is reached or exceeded, the RoCE factor is 1.80. The
ROCE component of the personal investment cash amount is
Target amount for the personal cash investment amount
The target amounts for the individual members of the Board of
Management for the 2023 financial year are presented in the
table Overview of share-based remuneration for financial year 2023.
RoCE component + strategic focus target component
Personal cash investment amount =
The personal cash investment amount for the 2023 financial
year will be paid as part of the next payroll run after the Annual
General Meeting in 2024. The size of this amount depends on
the target amount, the RoCE achieved in the Automotive seg-
ment and the degree to which certain strategic focus targets
were achieved in the vesting year. The personal cash investment
amount is limited to a maximum of 180% of the target amount
and is calculated as follows:
Personal cash investment amount
RoCE factor
Other Information
200%
| Extent to which target achieved
300,000
25
1.14
114%
102.1
98
103
125
25
Reduction of fleet
CO2 emissions (in g/km)
Sales of all-electric vehicles
(BEV) in units
Strategic focus target
component
1.67
167%
20.2
21
16
12
50
RoCE in the Automotive
segment (in %)
RoCE component
Factor
380,000
465,000
375,716
97%
in €
component
BEV in €
focus target
Proportionate Strategic focus
target amount
target factor
in €
(BEV)
factor component CO₂
(CO2)
in €
Strategic
total
Strategic focus target component (BEV)
Strategic Strategic
focus target focus target
Strategic focus target component (CO2)
Extent to which
target achieved
Proportionate
target amount
in €
RoCE factor
in €
Member of the Board of Management
Proportionate
target amount
RoCE component
focus targets
Strategic
← = Q
Overview of share-based remuneration for financial year 2023
0.97
ROCE
component
in €
Actual value
Target value Maximum value
(in %) Minimum value
T
Targets set and extent of achievement - BEV sales
For sales of all-electric vehicles (BEV), the Supervisory Board set
the following reference values in units for the vesting year 2023:
minimum value: 300,000 units (target achievement 50%), tar-
get value: 380,000 units (target achievement 100%), maximum
value: 465,000 units (target achievement 180%). The actual
value for the 2023 financial year was 375,716 units, resulting in
a target achievement of 97%.
With regard to reducing fleet carbon emissions according to
WLTP, the Supervisory Board set the following values in g/km
CO₂ under WLTP for fleet consumption in Europe as threshold
values relevant to remuneration for the vesting year 2023: Mini-
mum value: 125 g/km CO₂ (target achievement 50%), target
value: 103 g/km CO2 (target achievement 100%), maximum
value: 98 g/km CO₂ (extent to which target achieved: 180%).
The actual value for the 2023 financial year was 102.1 g/km
CO2, resulting in a target achievement of 114%.
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
BMW Group Report 2023 To Our Stakeholders
200%
180%
276
125
Minimum value
→ Extent to which target achieved: 114%
Target value
103
98
Maximum value
0%
50%
100%
Actual value 2023
102.1
150%
CO₂ g/km
180%
Extent to which target achieved
100%
Performance criteria
Weighting
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Targets set and extent of achievement for share-based remuneration for financial year 2023
The following tables provide an overview of the targets set and
extent of achievement for share-based remuneration for the
2023 financial year.
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
150%
277
BEV sales in units
→ Extent to which target achieved: 97%
465,000
Maximum value
380,000
Target value
Minimum value
300,000
375,716
Actual value 2023
0%
50%
← = Q
Total
Personal cash
investment
amount
in €
III. Remuneration of the Members of the Board of Management
Targets set and extent of achievement - performance component of
the bonus for the 2023 financial year
Departmental targets
10
110.0
Interdepartmental targets - ESG
50
108.0
Walter Mertl²
Interdepartmental targets - Other non-financial
40
92.5
1.02
301,178
307,201
Departmental targets
10
111.9
Interdepartmental targets - ESG
50
108.0
Milan Nedeljković
Interdepartmental targets - Other non-financial
586,500
575,000
1.02
92.5
Departmental targets
10
118.8
Interdepartmental targets - ESG
50
108.0
Jochen Goller¹
Interdepartmental targets - Other non-financial
40
92.5
40
1.02
80,750
Departmental targets
10
108.1
Interdepartmental targets - ESG
50
108.0
Ilka Horstmeier
Interdepartmental targets - Other non-financial
40
79,167
92.5
1.02
575,000
Interdepartmental targets - Other non-financial
246,771
Departmental targets
10
116.9
Interdepartmental targets - ESG
50
108.0
Joachim Post
Interdepartmental targets - Other non-financial
239,583
40
1.02
475,000
484,500
Departmental targets
10
110.0
Interdepartmental targets - ESG
50
108.0
Frank Weber5
92.5
1,081,500
1.03
40
586,500
Departmental targets
10
111.3
Interdepartmental targets - ESG
50
108.0
Pieter Nota3
Interdepartmental targets - Other non-financial
40
92.5
92.5
575,000
586,500
Departmental targets
10
111.9
Interdepartmental targets - ESG
50
108.0
Nicolas Peter
Interdepartmental targets - Other non-financial
1.02
← = Q
1,050,000
92.5
Weighting 50%
Entire Board of Management'
Leadership performance (employee satisfaction)
Market position (e. g. sales volume of the BMW Group)
Other interdepartmental
non-financial targets
Innovation performance (economic, e. g. proportion of sales attributable to new BMW vehicles with the ability to perform remote software upgrades)
Customer orientation (product, customer service quality, based on comparative studies and other information)
Reputation (e.g. brand strength)
Weighting 40%
Contribute to meeting growth and profitability targets
Joint
All members
departmental targets
of the Board of Management²
Specific
departmental targets
Oliver Zipse
Ilka Horstmeier
Milan Nedeljković
Pieter Nota (Member of the Board of Management until
31 October 2023)/
Jochen Goller¹
Jochen Goller (Member of the Board of Management
since 1 November 2023)
Nicolas Peter (Member of the Board of Management
Innovation performance (environmental, e. g. proportion of sales attributable to all-electric vehicles (battery electric vehicles, BEV))
Reputation (corporate reputation, preventive activities in ensuring compliance)
Adaptability (investment in training and further education, sustainability)
Employer attractiveness (e. g. placement in rankings)
ESG targets
Interdepartmental
Targets set for the performance component of the bonus for financial year 2023
The targets set by the Supervisory Board for the 2023 vesting
year as part of the performance component of the bonus, the
weighting of the relevant criteria and the individual target
achievement are summarised in the tables below.
The Supervisory Board assessed the performance of the mem-
bers of the Board of Management in terms of the departmental
targets, on the one hand, and the interdepartmental targets, on
the other hand, within a target achievement corridor with a partial
performance factor between 0 (corresponding to a target being
0% achieved) and 1.80 (corresponding to a target being 180%
achieved, the highest possible percentage). The performance
factor for the bonus was determined from the partial perfor-
mance factors, with a weighting of 10% for the departmental tar-
gets and 90% for the interdepartmental targets, in each case in
relation to the target amount of the performance component of
the bonus. With regard to the interdepartmental targets, 50% of
the weighting is for non-financial environmental, social and gov-
ernance (ESG) targets, and 40% is for other non-financial tar-
gets, in each case in relation to the target amount of the perfor-
mance component of the bonus.
The leadership performance of the individual members of the
Board of Management was assessed along with the overall per-
formance of the Board of Management as a whole. With regard
to the departmental targets, the Supervisory Board assessed the
individual performance of each member of the Board of Manage-
ment. With regard to the interdepartmental targets, the Supervi-
sory Board considered the Board of Management as a team and
assessed the performance of all the members of the Board of
Management as a whole. The Supervisory Board's decision-
making process is based on a detailed, documented analysis of
performance as measured against all the agreed criteria, as well
as in-depth discussions at Personnel Committee and full Super-
visory Board level. As a basis for the targets set in the previous
year and the assessment process following the financial year, the
Supervisory Board was guided, in particular, by the quantitative
and qualitative metrics that were defined in the corporate plan-
ning before the beginning of the financial year.
The results of comparative studies and calculations vis-à-vis
competitors were also used to assess individual metrics. In addi-
tion to a review of performance in 2023, the Supervisory Board
carried out a trend review covering several financial years. In do-
ing so, it assessed the effects of decisions, measures and the
overall course set in previous financial years on the 2023 finan-
cial year and also estimated the significance of the performance
in 2023 for the future development of the Company.
The defined quantitative and qualitative metrics include indica-
tors such as vehicle sales, segment shares, the share of sales for
electrified and all-electric vehicles and the share of BMW brand
vehicles with remote software upgrade capability. Other metrics
included assessments of the quality of the customer experience
compared to the competition, the R&D ratio, spending on em-
ployee training and development and diversity targets.
Overview of targets of the performance component of the
bonus for the financial year 20231
10%
Departmental
targets²
40%
Other
interdepartmental
non-financial targets³
50%
until 11 May 2023)/
Interdepartmental
ESG targets³
2 Individual assessment for each member of the Board of Management.
3 Collective assessment of the Board of Management as a team.
272
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
III. Remuneration of the Members of the Board of Management
Based on the target amount of the performance component of the bonus.
Leadership performance in the department and achievement of departmental diversity targets
Preventive activities in ensuring compliance in the department
Increased quality focus
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
III. Remuneration of the Members of the Board of Management
Overview of target achievement for the performance component of the bonus for the 2023 financial year
Weighting
Average degree to which
273
Targets
Interdepartmental targets - ESG
50
target achieved in %
108.0
Performance factor
Proportionate target
bonus amount in €
Performance component
of bonus in €
Oliver Zipse
Interdepartmental targets - Other non-financial
40
in %
1.03
Weighting 10%
Hand over products ready for mass production on time; focus on new vehicle and digital architecture
Continue development of automated driving; develop hydrogen technology
Future MINI portfolio
Coordinate the work of the Board of Management
Represent the Company's interests, present new products
Progress with sustainability strategy and transformation process
Future portfolio of the brands
Ensure the BMW Group is an attractive employer and ensure labour availability
Manage personnel structures, capacities and costs; oversee skills transformation
Real estate portfolio management
Progress in terms of decarbonisation and energy supply strategies for each location
Anticipate market requirements, manage the production network and safeguard the supply chain
Flexible production structure; enhancement of future-oriented production system
Continue development of high-quality standards and ensure compliance with these standards
Progress in terms of decarbonisation and energy supply strategies for each location
1 Collective assessment of the Board of Management as a team. 2 Individual assessment for each member of the Board of Management.
Plan sales and prices, realise potential in our sales markets
Capital market communication; continue development of non-financial reporting and reporting structure
Risk management and Group financing; optimisation of capital structure; investment planning
Walter Mertl (Member of the Board of Management since Performance programme financial targets including untapped potential in digitalisation processes
12 May 2023)
Joachim Post
Frank Weber
Represent the Company in Chinese projects
Anticipate market requirements, manage the production network and safeguard the supply chain
Meet quality requirements and cost targets
Ensure access to technology and continued ability to innovate
Continue development of a CO₂ management system in the supply chain
Develop competitive products
Anticipate market requirements, manage the production network and safeguard the supply chain
Continue development of digital marketing and sales concepts and prepare regional direct sales models
Effective communication and presentation of new products
Oliver Zipse
Performance period: 1 year
Dr Nicolas Peter left the Board of Management on 11 May 2023
by mutual agreement as part of a succession arrangement. He
received fixed remuneration (base salary and other remunera-
tion) of € 0.05 million for the remaining term of his service con-
tract up to 31 May 2023. The bonus and personal investment
cash amount for the period between 12 May and 31 May 2023
came to € 0.08 million and € 0.09 million respectively. A pro rata
pension contribution of € 0.02 million was made for the period
between him leaving the Board of Management and the end of
his service contract. A one-year post-contractual non-competi-
tion clause applies. The waiting allowance contractually owed to
him amounts to € 1.1 million for the period from 1 June 2023 to
31 May 2024 and € 0.6 million for the period from 1 June to 31
December 2023.
(-)
20,682
4,622,577
(-)
2,084,332
Relation value/
base salary 2023 in %4
237%
(-)
199%
(-)
(-)
(-)
(-)
(-)
7,374
(-)
7,472
(-)
21,172
2,133,714
203%
(-)
6,686
(-)
6,686
673,815
13,700
75%
Mr Pieter Nota left the Board of Management on 31 October
2023 by mutual agreement as part of a succession arrange-
ment. His service contract comes to an end on 31 July 2024. His
9.
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
280
In the event of death or invalidity, special rules apply for waiving
the holding period for shares of common stock that were ac-
quired with share-based remuneration components. Where the
There are no specific severance arrangements covering early
termination of a Board member's mandate due to a change of
control or in connection with a takeover offer.
Board of Management service contracts provide for severance
pay to be paid to the Board member in the event of premature
termination by the Company without due cause, the amount of
which is limited to a maximum of two years' remuneration (sev-
erance payment cap). The member will not be compensated for
more than the remaining term of the service contract. If the re-
maining term of the contract is less than two years, the sever-
ance payment is reduced proportionately. The annual remuner-
ation paid generally includes the base salary, the target amount
of the bonus and target amount of the personal cash investment
amount, unless the relevant target amount was not achieved in
the previous year. In this case, the bonus that was actually
granted or the personal cash investment amount that was actu-
ally disbursed will apply.
8. Premature termination of activities and
post-contractual non-competition clause
A one-year post-contractual non-competition clause has been
agreed with the Board members under specified circumstances
against payment of a remuneration amount. Service contracts
provide for the payment of a monthly waiting allowance in the
amount of the applicable monthly base salary for the duration of
the post-contractual non-competition clause. In accordance with
Recommendation G.13 of the GCGC, any severance payment is
offset against the waiting allowance. The same applies to other
income from third parties, except remuneration for Supervisory
Board appointments approved during the term of office. The
Company may unilaterally waive the requirement to comply with
the post-contractual non-competition clause.
The Supervisory Board has not identified any reason to withhold
or reclaim variable remuneration components in the 2023 finan-
cial year.
remuneration will continue to be paid to him on the contractually
agreed due dates until the end of his employment contract; his
remuneration will not be settled or paid early; he will not receive
a termination payment. For the period from 1 November to 31
December 2023, he received fixed remuneration (base salary
and other remuneration) of € 0.2 million, a bonus of € 0.3 million
and a personal cash investment amount of € 0.3 million (all pro
rata). The pension contribution comes to € 0.07 million for the
period from 1 November to 31 December 2023. For the period
from 1 January to 31 July 2024, his base salary comes to € 0.6
million, with a maximum bonus of € 0.7 million and a maximum
personal cash investment amount of € 0.7 million. The pension
contribution for the relevant portion of the 2024 financial year is
€ 0.2 million. A one-year post-contractual non-competition
clause applies. For the period from 1 August 2024 to 31 July
2025, the waiting allowance contractually owed to him amounts
to € 1.1 million.
Malus and clawback provisions
The current remuneration system provides for the possibility of
withholding variable remuneration (malus) and reclaiming vari-
able remuneration already paid out (clawback) under certain
conditions. The rules allow the Supervisory Board to withhold or
reclaim variable remuneration in the event of certain serious
compliance-related violations (compliance malus and/or compli-
ance clawback). These provisions can also be applied where var-
iable remuneration components linked to the achievement of cer-
tain targets have been paid out on the basis of incorrect calcula-
tion bases or incorrect financial statements. Remuneration can
also be withheld or reclaimed after an individual's departure from
the Board of Management.
3 Member of the Board of Management until 31 October 2023, service contract until 31 July 2024,
see Premature termination of activities and post-contractual non-competition clause.
"Member of the Board of Management until 11 May 2023, service contract until 31 May 2023,
see Premature termination of activities and post-contractual non-competition clause.
1 Member of the Board of Management since 1 November 2023.
2 Member of the Board of Management since 12 May 2023.
In addition to the absolute amount of remuneration, the relative
share of the relevant remuneration component in the total remu-
neration granted and owed is also shown. For the sake of com-
pleteness, the individual service cost in accordance with IAS 19
for the Company pension scheme is also shown, although this
service cost is not classified as granted or owed remuneration
within the meaning of § 162 AktG.
Thus, the remuneration granted and owed includes all remuner-
ation components earned through the activities of the members
of the Board of Management in the 2023 financial year. In addi-
tion, it includes remuneration components already earned as a
result of activity in previous financial years, but for which the re-
spective member of the Board of Management's payment enti-
tlement only arose due to the occurrence of conditions in the
2023 financial year.
Bonus for the 2023 financial year (to be paid out in 2024)
Share-based remuneration (personal cash investment
amount) for the 2023 financial year (to be paid out in 2024)
Share-based remuneration component (matching
component) for vesting year 2018, due to the expiry of the
four-year holding period in the 2023 financial year (paid out
in 2023)
Thus, in addition to the fixed remuneration components, the fol-
lowing variable remuneration components are reported as remu-
neration granted for the 2023 financial year within the meaning
of § 162 of the German Stock Corporation Act (AktG):
balance sheet date, and if all conditions for entitlement have
been met.
In addition to actual amounts received, "remuneration granted"
in the reporting year is also assumed to exist if the activity on
which the remuneration component is based has been fully per-
formed by the member of the Board of Management as of the
The tables include all amounts received by the individual mem-
bers of the Board of Management in the reporting period ("remu-
neration granted") and all remuneration legally due but not yet
received ("remuneration owed").
Remuneration granted and owed to members of the
Board of Management pursuant to § 162 of the German Stock
Corporation Act (AktG)
The following tables Remuneration granted and owed show the re-
muneration granted and owed to the members of the Board of
Management in office during the reporting year in accordance
with § 162 AktG. The remuneration shown for the members of
the Board of Management who left during the year also includes
the remuneration granted and owed in the reporting year after
they leave the company.
7.
Remuneration Report
11,383
74,091
(-)
million were incurred. These benefits correspond in their entirety
to allocations to pension provisions in accordance with IAS 19.
Pension entitlements 2023
in €
Oliver Zipse
Jochen Goller¹
Ilka Horstmeier
Walter Mertl²
Service cost in accordance
with IFRS for the
financial year 2023
Cash value of entitlements
to pension benefits
in accordance with IFRS
as at 31 December 2023
5,749,540
1,039,801
2,704,634
807,853
3,174,055
2,336,557
4,038,570
712,729
For members of the Board of Management in office in the 2023
financial year, expenses for post-employment benefits of € 3.2
66,667
254,444
Milan Nedeljković
Pieter Nota³
407,391
407,516
Nicolas Peter'
166,667
Joachim Post
Frank Weber
408,504
407,525
3,238,976
407,533
7,178
42,995
Members of the Board of Management who retire immediately
after their service on the Board, or who are deemed to be in an
equivalent position, are entitled to acquire vehicles and other
BMW Group products and services at conditions that also apply
to BMW pensioners and to lease BMW Group vehicles in accord-
ance with the guidelines applicable to senior heads of depart-
ments. Retired Chairmen of the Board of Management also have
the option of using the BMW car service, subject to availability
and at a charge.
Retirement benefits
18,561
1,870,578
192%
4,117
112,969
11,385,016
1 Includes only shares of BMW common stock acquired using the cash remuneration component of the share-based remuneration programme for members of the Board of Management, for which the four-
year holding period has not yet expired.
2 Payment of the 2022 cash remuneration component (personal cash investment amount) in May 2023 with subsequent acquisition of reported shares of BMW common stock (purchase date: 31 May
2023; purchase price: € 103.42), for which the four-year holding period until 2027 applies.
3 Last trading day of 2023: 29 December 2023. XETRA closing price on 29 December 2023: € 100.78.
"Value of share portfolio as at 31 December 2023 in relation to base salary paid in 2023. For more information about the base salary, please refer to table in Remuneration granted and owed to mem-
bers of the Board of Management pursuant to § 162 of the German Stock Corporation Act (AktG).
The retirement benefits system provides for the Company to
make annual contributions to a savings account for every year
that members of the Board of Management are appointed. After
they are confirmed, pension entitlements become vested when
the employment relationship has existed for one year. Members
of the Board of Management receive a disability pension in the
event of invalidity. Retired members of the Board of Manage-
ment are entitled to retirement benefits after the age of 62 at the
earliest and after leaving the Board. If a member of the Board of
Management dies before becoming entitled to a retirement or in-
validity benefit, a surviving spouse or registered partner is enti-
tled to a survivor's benefit; otherwise, surviving children are enti-
tled to a survivor's benefit depending on their age and level of
education. The amount of the benefits to be paid is determined
on the basis of the amount accrued in each Board member's in-
dividual pension savings account. This figure is in turn based on
the annual contributions and annual profit participation depend-
ing on the form of investment. For the contributions made, there
is a guaranteed minimum interest rate equal to the maximum in-
terest rates specified in the German actuarial reserve regulation
(Deckungsrückstellungsverordnung). The payment is made as a
lump sum or in annual instalments at the discretion of the mem-
ber of the Board of Management. For entitlements arising before
2016, there is an option to receive payment as a lifelong monthly
pension or in a combined form. In the event of death or invalidity,
a minimum benefit in the amount of the potential annual pension
contributions that could have been made up to the age of 60 is
approved. This benefit cannot exceed ten years of contributions.
5 Member of the Board of Management since 1 November 2023.
7 Second remuneration level since 1 July 2023.
279
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
6.
6 Member of the Board of Management since 12 May 2023.
1,174,735
1,845,023
22,870,768
Other Information
← = Q
174,366
169,135
367,912
320,000
1.14
364,800
320,000
0.97
310,400
675,200
198,777
3,201,875
249,792
1,744,000
950,294
1,744,000
364,800
320,000
310,400
675,200 1,744,000
Nicolas Peter
Joachim Post
Frank Weber5
266,667
445,333
133,333
320,000
152,000
174,366
640,000
Walter Mertl²
Milan Nedeljković
Pieter Nota³
1,175,000
91,667
640,000
1,962,250
153,083
1,068,800
587,500
669,750
587,500
582,382
1,068,800
1,068,800
45,833
45,833
569,875
44,458
320,000
364,800
320,000
310,400
1,239,625
96,708
675,200
348,732
640,000
1.67
52,250
III. Remuneration of the Members of the Board of Management
133,333
281,333
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
5. Share ownership guideline
The members of the Board of Management in office as at 31 De-
cember 2023 hold a total of 112,969 shares of BMW common
stock which they are required to hold in accordance with the
terms of the share-based remuneration programmes for the fi-
nancial years 2019-2022. The four-year holding period re-
mains in effect even if the member leaves the Board of
Management.
The share-based remuneration (personal cash investment
amount) for vesting year 2022 was disbursed as part of the next
payroll run after the Annual General Meeting 2023. The afore-
mentioned members of the Board of Management acquired a to-
tal of 42,995 shares of BMW common stock immediately there-
after which must be held until 2027. The share-based remuner-
ation (personal cash investment amount) for vesting year 2023
will be paid as part of the next payroll run after the Annual Gen-
eral Meeting 2024. The shares of BMW common stock will be
acquired immediately thereafter and must be held until 2028.
The value of the shares of common stock in BMW held by the
members of the Board of Management in office as at 31 Decem-
ber 2023 came to between 237% and 75% of the respective
base salary for the 2023 financial year³,4.
BMW Group Report 2023
Pursuant to Article 19 of the Market Abuse Regulation (EU) No.
569/2014 (Managers' Transactions), any purchase or sale of
BMW AG shares and related financial instruments by members
of the Board of Management must be reported, even after the
minimum holding period has expired. No member of the Board
of Management reported a sale of BMW AG shares or related fi-
nancial instruments in the 2023 financial year.
Share portfolio as at
1 January 2023
Oliver Zipse
Jochen Goller5
Ilka Horstmeier
Walter Mertl6
Milan Nedeljković
Joachim Post
Frank Weber'
Total
35,700
(-)
13,308
Additions in the
financial year 2023²
14,285
End of the holding period
in the financial year 2023
4,117
Share portfolio as at Value in € as at
31 December 2023 31 December 20233
45,868
(-)
(-)
(-)
service contract is terminated prematurely and the Company has
an extraordinary right of termination, or if the Board member re-
signs without the Company's agreement, entitlements to match-
ing components as yet unpaid are forfeited. Entitlements to other
variable remuneration components (bonus, personal cash in-
vestment amount) are forfeited as soon as they exceed the target
amounts.
Shares of BMW common stock subject to holding requirements in connection with share-based remuneration for financial
years 2019-20221
129,333
278
Premature termination of activities and post-contractual non-competition clause.
726,667
550,000
918,500
275,000
313,500
275,000
266,750
580,250
1,498,750
595,000
Premature termination of activities and post-contractual non-competition clause.
993,650
339,150
297,500
288,575
627,725
1,621,375
1 Member of the Board of Management since 1 November 2023.
2 Member of the Board of Management since 12 May 2023.
3 Member of the Board of Management until 31 October 2023, service contract until 31 July 2024. See
4 Member of the Board of Management until 11 May 2023, service contract ended 31 May 2023. See
5 Second remuneration level since 1 July 2023.
297,500
Total
Variable
3,296,500
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost
79 or 21
1,145,800
4,312,973
97 or 3
130,087
4,398,549
Total variable remuneration for vesting year 2023 or earlier vesting years
Total
Remuneration for vesting year 2023 or earlier vesting years
4,389,100
76
3,426,587
59 or 21
3,243,300
73 or 3
130,087
80
1,145,800
14
(-)
966,000
586,500
21
13
1,035,000
(-)
19
563,500
10
10
1,145,800
21
(-)
130,0872
4,528,636
407,516
3
(-)
(-)
RoCE component
Strategic focus target component
1,068,800
675,200
(-)
24
902,400
(-)
17
(-)
15
742,400
(-)
100
(-)
100
283
4 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
3 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
1 The number of shares purchased in 2019 with the 2018 cash remuneration component (investment component) for the financial year amounted to 4,117. The number of mathematical matching shares for calculating the equivalent value in cash amounts to 1,372.
2 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
10,865,354
100
10,152,625
712,729
BMW Group Report 2023
100
Total remuneration plus service cost
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost³
78 or 22
2,236,126
7,916,499
98 or 2
135,416
8,158,904
712,729
8,871,633
8,023,488
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
JOCHEN GOLLER
Share-based remuneration component (matching component)
remuneration
SHARE-BASED REMUNERATION
PCP 2020-2022
1,068,800
PERFORMANCE CASH PLAN
Performance component of bonus
Remuneration granted and owed in financial year 2023 (2022)
Earnings component of bonus
Total
Fringe benefits (other remuneration]
Fixed remuneration (base salary)
remuneration
Fixed
since 1 November 2023
Customer, Brands, Sales
BONUS
Personal cash investment amount¹
Remuneration for vesting year 2023 or earlier vesting years
8,185,376
(-)
1,962,250
RoCE component
1
79,326
(-)
2
24
135,416¹
21
2,156,800
10
(-)
1,039,500
13
19
(-)
81
1,656,750
16
76
6,182,791
59 or 22
2,236,126
5,949,250
74 or 2
135,416
(-)
6,047,375
13
(-)
1,363,000
15
(-)
1,239,625
Strategic focus target component
Total variable remuneration for vesting year 2023 or earlier vesting years
Total
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
(-)
16
(-)
96,708
Strategic focus target component
(-)
(-)
(-)
(-)
(-)
153,083
RoCE component
(-)
(-)
(-)
(-)
25
(-)
(-)
463,541
Total remuneration plus service cost
(-)
(-)
100 or 0
(-)
616,872
Remuneration for vesting year 2023 or earlier vesting years
Total variable remuneration for vesting year 2023 or earlier vesting years
(-)
463,541
Total
(-)
(-)
(-)
75 or 0
(-)
75
(-)
I
I
(-)
150,000
total remuneration
in €
in €
as a % of
Earlier vesting years
24
Vesting year 2022
in €
in €
Earlier vesting years
Vesting year 2023
FY 2022
FY 2023
← = Q
as a % of
total remuneration
(-)
(-)
(-)
13
(-)
(-)
(-)
22
80,750
133,000
20
(-)
25
153,331
(-)
(-)
(-)
1
(-)
3,331
5,458,773
407,516
1,069,673
Remuneration granted and owed in financial year 2023 (2022)
1,102,049
I
(-)
(-)
(-)
(-)
(-)
(-)
I
RoCE component
(-)
24
(-)
(-)
(-)
Strategic focus target component
367,912
582,382
(-)
13
(-)
(-)
(-)
111,981
(-)
5
(-)
(-)
(-)
(-)
28
(-)
(-)
505,978
307,201
21
(-)
682,633
(-)
15
(-)
100
(-)
III
(-)
(-)
(-)
(-)
2,446,106
254,444
Total remuneration plus service cost³
(-)
1 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
2 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
3 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
286
BMW Group Report 2023
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
2,700,550
(-)
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost²
(-)
(-)
Total variable remuneration for vesting year 2023 or earlier vesting years
1,763,473
(-)
72 or 0
(-)
(-)
(-)
(-)
1,763,473
72
(-)
Remuneration for vesting year 2023 or earlier vesting years
2,446,106
(-)
100 or 0
Total
23
(-)
570,652
4,413,481
(-)
100 or 0
3,783,461
1,145,800
77 or 23
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost³
Remuneration for vesting year 2023 or earlier vesting years
4,413,481
407,533
4,929,261
407,533
100
Total remuneration plus service cost❝
4,821,014
5,336,794
1 Second remuneration level since 1 November 2022.
2 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
100
3 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
80
75
(-)
16
Strategic focus target component
675,200
(-)
15
Total variable remuneration for vesting year 2023 or earlier vesting years
Total
3,964,683
3,296,500
75 or 0
655,400
2,818,883
(-)
13
1,145,800
57 or 23
3,296,500
(-)
4 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
285
BMW Group Report 2023
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
FY 2023
FY 2022
Vesting year 2023
Earlier vesting years
Remuneration Report
in €
as a % of
total remuneration
Vesting year 2022
Earlier vesting years
as a % of
in €
in €
total remuneration
in €
Personal cash investment amount¹
Share-based remuneration component (matching component)
remuneration
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration granted and owed in financial year 2023 (2022)
WALTER MERTL
Finance
since 12 May 2023
Fixed
remuneration
Fixed remuneration (base salary)
Fringe benefits (other remuneration]
Total
BONUS
Earnings component of bonus
Performance component of bonus
PERFORMANCE CASH PLAN
PCP 2020-2022
Variable
SHARE-BASED REMUNERATION
Remuneration granted and owed in financial year 2023 (2022)
24
MILAN NEDELJKOVIĆ
since 1 October 20191
5,371,840
1 Second remuneration level since 1 October 2022.
2 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
3 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
4 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
287
BMW Group Report 2023
4,781,415
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
PIETER NOTA
Customer, Brands, Sales
(-)
1 January 2018 to 31 October 20231
Fixed
remuneration
Fixed remuneration (base salary)
(-)
Fringe benefits (other remuneration)
Total remuneration plus service cost❝
4,964,449
407,391
58 or 23
3,296,500
75
4,007,125
81
Remuneration for vesting year 2023 or earlier vesting years
4,374,024
100
(-)
3,818,649
1,145,800
77 or 23
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost³
4,374,024
100
407,391
100 or 0
1,145,800
Total
Earnings component of bonus
as a % of
in €
in €
total remuneration
1,050,000
(-)
23
Earlier vesting years
1,050,000
19
52,049
(-)
1
19,673
(-)
0.4
(-)
BONUS
Vesting year 2022
in €
Performance component of bonus
PERFORMANCE CASH PLAN
Variable
PCP 2020-2022
SHARE-BASED REMUNERATION
remuneration
Share-based remuneration component (matching component)
as a % of
total remuneration
Personal cash investment amount³
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
FY 2023
FY 2022
Vesting year 2023
in €
Earlier vesting years
Remuneration Report
13
(-)
664,100
2,861,325
FY 2022
Vesting year 2023
in €
Earlier vesting years
in €
as a % of
total remuneration
1,050,000
(-)
FY 2023
24
Earlier vesting years
as a % of
in €
total remuneration
(-)
19
27,524
Vesting year 2022
in €
937,500
(-)
← = Q
Other Information
Fixed
remuneration
Fixed remuneration (base salary)
Fringe benefits (other remuneration]
Total
BONUS
Earnings component of bonus
III. Remuneration of the Members of the Board of Management
Performance component of bonus
Variable
PCP 2020-2022
SHARE-BASED REMUNERATION
remuneration
Share-based remuneration component (matching component)
Personal cash investment amount²
Remuneration Report
PERFORMANCE CASH PLAN
1
19,824
(-)
(-)
RoCE component
1,068,800
(-)
24
807,225
(-)
(-)
16
675,200
(-)
15
Total variable remuneration for vesting year 2023 or earlier vesting years
Total
3,296,500
(-)
75 or 0
Strategic focus target component
(-)
(-)
(-)
0.4
1,077,524
25
957,324
19
966,000
586,500
22
900,000
13
490,000
(-)
18
10
1,145,800
23
(-)
Production
1,890,000
18
1,081,500
3
24
as a % of
total remuneration
FY 2022
← = Q
465,500
13
855,000
22
484,500
798,000
1,002,259
25
922,692
(-)
102,259
1
(-)
22,692
(-)
in €
in €
900,000
24
(-)
900,000
Earlier vesting years
Vesting year 2022
as a % of
total remuneration
in €
27
(-)
23
12
2,781,250
Total
73 or 0
(-)
2,734,000
75 or 0
(-)
2,781,250
Total variable remuneration for vesting year 2023 or earlier vesting years
17
(-)
638,000
16
(-)
in €
580,250
21
(-)
775,500
25
(-)
918,500
RoCE component
(-)
(-)
(-)
(-)
(-)
(-)
I
Strategic focus target component
75
Earlier vesting years
FY 2023
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost
76 or 24
1,359,926
4,329,875
95 or 5
(-)
(-)
81
4,608,976
(-)
24
(-)
121,105
2,449,026
Remuneration for vesting year 2023 or earlier vesting years
612,500
Waiting allowance
58
1,497,042
Total
57 or 24
1,359,926
3,249,050
54 or 5
121,105
1,375,937
Total variable remuneration for vesting year 2023 or earlier vesting years
13
(-)
742,400
11
2,570,131
166,667
100
5,689,801
407,274
100
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Personal cash investment amount¹
Share-based remuneration component (matching component)
remuneration
SHARE-BASED REMUNERATION
Variable
PCP 2020-2022
PERFORMANCE CASH PLAN
Performance component of bonus
Earnings component of bonus
BONUS
Total
Vesting year 2023
Fringe benefits (other remuneration)
Fixed
remuneration
since 1 January 2022
Purchasing and Supplier Network
JOACHIM POST
Remuneration granted and owed in financial year 2023 (2022)
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023
289
2,736,798
5 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
2 The number of shares purchased in 2019 with the cash remuneration component (investment component) for the 2018 financial year amounted to 3,683. The number of mathematical matching shares for calculating the equivalent value in cash amounts to 1,227.
3 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
4 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
6,097,075
1 Member of the Board of Management until 11 May 2023, service contract ended 31 May 2023. See Premature termination of activities and post-contractual non-competition clause.
Total remuneration plus service cost
Fixed remuneration (base salary)
(-)
2,734,000
Remuneration for vesting year 2023 or earlier vesting years
(-)
627,725
Strategic focus target component
18
(-)
775,500
25
(-)
993,650
RoCE component
(-)
(-)
(-)
(-)
(-)
(-)
14
572,900
11
20
(-)
465,500
13
855,000
22
535,500
882,000
22
934,077
16
638,000
(-)
15
4 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
3 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
2 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
1 Second remuneration level since 1 July 2023.
4,648,502
4,450,792
Total remuneration plus service cost
100
4,240,977
407,525
100
4,043,267
407,525
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost³
86 or 14
572,900
25
3,668,077
(-)
4,043,267
Remuneration for vesting year 2023 or earlier vesting years
78
3,306,900
75
3,038,875
64 or 14
572,900
2,734,000
75 or 0
(-)
3,038,875
Total variable remuneration for vesting year 2023 or earlier vesting years
Total
100 or 0
73
1,004,392
(-)
Earnings component of bonus
BONUS
Total
Fringe benefits (other remuneration)
Fixed remuneration (base salary)
Fixed
remuneration
since 1 July 20201
Development
FRANK WEBER
Remuneration granted and owed in financial year 2023 (2022)
BMW Group Report 2023 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
290
3 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
2 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
1 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
4,144,763
4,112,446
Total remuneration plus service cost³
100
3,736,259
408,504
100
3,703,942
408,504
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost²
100 or 0
(-)
3,736,259
100 or 0
(-)
3,703,942
Performance component of bonus
PERFORMANCE CASH PLAN
PCP 2020-2022
Variable
34,077
1
(-)
29,392
21
(-)
total remuneration
in €
in €
900,000
24
(-)
975,000
as a % of
Earlier vesting years
1
Vesting year 2022
in €
in €
Earlier vesting years
Vesting year 2023
FY 2022
FY 2023
← = Q
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Personal cash investment amount²
Share-based remuneration component (matching component)
remuneration
SHARE-BASED REMUNERATION
as a % of
total remuneration
281,333
Strategic focus target component
16
(-)
(-)
(-)
(-)
RoCE component
281
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Overview of remuneration granted and owed in 2023 financial year with payout profile¹
Share-based remuneration 2018²
Four-year holding period for acquired BMW AG shares
2018
2019
2020
2021
2022
Personal cash investment amount 2023
Bonus 2023
11th May
2023
Basic remuneration and fringe benefits
Contribution to company pension scheme
Payout of matching component 2018
Payment after the Annual
General Meeting 2024,
Acquisition of BMW AG
shares
Four-year holding period for
acquired BMW AG shares
Payment after the Annual
General Meeting 2024
2024
2028
1 Simplified depiction.
(-)
(-)
23
1,145,800
Vesting year 2022
Earlier vesting years
as a % of
1,050,000
(-)
24
in €
925,000
in €
total remuneration
(-)
19
66,981
(-)
2
2 Payment of 2018 cash remuneration component (investment component) in 2019, immediately following the acquisition of shares of BMW common stock subject to holding requirements for
2019-2023.
39,578
1
1,116,981
25
964,578
20
966,000
586,500
22
885,000
13
481,833
(-)
796,650
10
(-)
as a % of
total remuneration
Remuneration Report
III. Remuneration of the Members of the Board of Management
FY 2023
FY 2022
Vesting year 2023
in €
Earlier vesting years
in €
as a % of
total remuneration
Vesting year 2022
Earlier vesting years
as a % of
in €
in €
total remuneration
1,950,000
(-)
24
1,950,000
(-)
19
26,113
(-)
0.3
17,249
(-)
0.2
1,976,113
24
1,967,249
19
1,764,000
← = Q
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
← = Q
a) Variable remuneration for the 2023 financial year
The variable remuneration for the 2023 financial year and the
extent to which targets were achieved are set out above in
7 Variable remuneration for the 2023 financial year.
b) Share-based remuneration component (matching component)
2018
Share-based remuneration components have been included in
the remuneration of members of the BMW AG Board of Manage-
ment since 2011. In the 2023 financial year, the matching com-
ponent of the share-based remuneration for vesting year 2018
was paid out. Under the share-based remuneration programme
for financial year 2018, the members of the Board of Manage-
ment in office in 2018 received an amount equal to 45% of the
gross bonus as additional cash remuneration from the Company
for financial year 2018 (the investment component), which they
were each required to invest in shares of the Company's com-
mon stock after taking taxes and deductions into account. Under
a matching plan, the member of the Board of Management re-
ceives from the Company - at the Company's discretion - either
one additional share of common stock or the equivalent in cash
(share-based remuneration component/matching component)
for every three shares of common stock held after the four-year
holding period. The investment component for financial year
2018 was paid out immediately after the 2019 Annual General
Meeting on 16 May 2019, and the shares of common stock were
acquired on 17 May 2019 at a price of € 65.84. The holding pe-
riod for the shares of common stock acquired in 2019 expired on
16 May 2023. The Company settled the matching component in
cash based on a reference price of € 98.70. A matching compo-
nent will be paid for the last time in 2025.
c) Presentation of remuneration granted and owed
The following tables show the remuneration granted and owed
to the members of the Board of Management in office during the
reporting year.
282
BMW Group Report 2023
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration granted and owed in financial year 2023 (2022)
OLIVER ZIPSE
Other Information
Chairman of the Board of Management since 16 August 2019
Member of the Board of Management since 13 May 2015
remuneration
Fixed remuneration (base salary)
Fringe benefits (other remuneration)
Total
BONUS
Earnings component of bonus
Performance component of bonus
PERFORMANCE CASH PLAN
Variable
PCP 2020-2022
SHARE-BASED REMUNERATION
remuneration
Share-based remuneration component (matching component)
Personal cash investment amount²
Fixed
in €
Earlier vesting years
Vesting year 2023
in €
(-)
1,050,000
17
(-)
437,500
total remuneration
in €
in €
as a % of
Earlier vesting years
Vesting year 2022
as a % of
total remuneration
in €
in €
Earlier vesting years
Vesting year 2023
FY 2022
FY 2023
← = Q
III. Remuneration of the Members of the Board of Management
Other Information
Remuneration Report
Personal cash investment amount³
Share-based remuneration component (matching component)
SHARE-BASED REMUNERATION
PCP 2020-2022
PERFORMANCE CASH PLAN
Performance component of bonus
Earnings component of bonus
18
23,089
(-)
1
(-)
902,400
17
(-)
445,333
RoCE component
1
79,326
(-)
5
121,105²
(-)
23
1,280,600
BONUS
10
10
18
(-)
1,035,000
16
246,771
402,500
19
1,080,825
18
460,589
1
(-)
30,825
569,250
Total
Fringe benefits (other remuneration]
Fixed remuneration (base salary)
2 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
3 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
284
BMW Group Report 2023
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration granted and owed in financial year 2023 (2022)
ILKA HORSTMEIER
Human Resources and Real Estate, Labour Director
since 1 November 20191
Fixed
remuneration
Fixed remuneration (base salary)
Fringe benefits (other remuneration]
Total
1 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
BONUS
Performance component of bonus
PERFORMANCE CASH PLAN
Variable
PCP 2020-2022
SHARE-BASED REMUNERATION
remuneration
Share-based remuneration component (matching component)
Personal cash investment amount²
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
FY 2023
FY 2022
Earnings component of bonus
22
(-)
(-)
remuneration
Variable
remuneration
Fixed
1 January 2017 to 11 May 20231
Finance
NICOLAS PETER
Remuneration granted and owed in financial year 2023 (2022)
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023
288
4,936,152
5 For the purposes of compliance with the maximum specified remuneration limit, only the service cost and the remuneration for the vesting year are to be taken into account. See table Maximum remuneration and remuneration vested in the 2023 financial year (vesting year).
4 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
(-)
2 The number of shares purchased in 2019 with the cash remuneration component (investment component) for the 2018 financial year amounted to 3,954. The number of mathematical matching shares for calculating the equivalent value in cash amounts to 1,318.
3 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
1 Member of the Board of Management until 31 October 2023, service contract until 31 July 2024. See Premature termination of activities and post-contractual non-competition clause.
Total remuneration according to § 162 German Stock Corporation Act (AktG)
Service cost²
Total remuneration plus service cost³
616,872
66,667
683,539
100
(-)
III
(-)
(-)
5,866,289
24
Member since 1 November 2023
JOCHEN GOLLER (b. 1966)
Fraunhofer-Gesellschaft zur Förderung der
angewandten Forschung e. V.", Deputy Chairman
Mandates
Chairman (since 2019)
- Memberships on comparable boards in Germany and abroad.
21
Member since 2019
ILKA HORSTMEIER (b. 1969)
Rolls-Royce Motor Cars Ltd.***, Chairman
(since 1 November 2023)
Mandates
Customer, Brands, Sales
BMW Group Report 2023
People and Real Estate,
To Our Stakeholders
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
You lend us your support and give us the latitude we need to make decisions with a long-
term perspective. Entrepreneur Herbert Quandt laid the foundation for this many years ago.
His family's next generation and all of us who work at the Company are following his legacy.
In his spirit, the Company and its employee representatives work together - negotiating
firmly, but always focused on finding solutions for the future. That, too, is our lived BMW cul-
ture.
All these things make your Company strong and resilient. This is especially true in the cur-
rent conditions, where we face a variety of extremely demanding requirements in individual
regions of the world, with geopolitical uncertainty and entirely new challenges constantly
emerging. We provide a substantial response to all these things.
Combined Management Report
Statement of the Chairman of the Board of Management
Labour Relations Director
WALTER MERTL (b. 1974)
Member since 12 May 2023
Finance
Mandates
Customer, Brands, Sales
Member from 2018 until 31 October 2023
PIETER NOTA (b. 1964)
BOARD OF MANAGEMENT
OUTGOING MEMBERS OF THE
FRANK WEBER (b. 1966)
Member since 2020
Development
Purchasing and Supplier Network
DR-ING JOACHIM POST (b. 1971)
Member since 2022
BMW (South Africa) (Pty) Ltd.***, Chairman
BMW Motoren GmbH***, Chairman
Mandates
Member since 2019
Production
DR-ING MILAN NEDELJKOVIĆ (b. 1969)
BMW Brilliance Automotive Ltd.***, Chairman
(since 12 May 2023)
Mandates
More than 150,000 associates worldwide carry your Company forwards through their hard
work and dedication every day. They all value your commitment and your loyalty to the
BMW Group as shareholders.
Your Company intends to stay on track for success.
Our business model – individual premium mobility in its different forms and in line with re-
gional requirements - continues to offer substantial potential for achieving profitable growth
and gaining market share.
We are taking advantage of these opportunities in our rolling strategic approach and our long-
term corporate planning. What sets us apart is that we make conscious decisions, that are
consistently based on facts, empirical findings and well-founded analysis - not driven by the
current "zeitgeist" or short-term hypes. And, of course, it takes experience and sometimes
also common sense.
Our core BMW brand maintains its leading position in the global premium segment. In
March 2024, BMW was ranked number one in the US by the consumer portal "Consumer
Reports". This independent platform compared test ratings, reliability, customer satisfaction
and safety criteria among 34 automotive manufacturers. Four BMW models even earned
the "Green Choice" environmental seal for being among the vehicles in the United States
with the lowest emissions.
Dynamic growth for our all-electric models.
In addition to significant growth in the luxury class and upper premium segment, the strongest
impetus for growth last year came from our all-electric vehicles. We sold over 375,000 BEVs
- which is about 75% more than the previous year. This means that, by the end of 2023, all-
electric vehicles made up around 15% of our total sales.
This is also reflected in our share of the global BEV market: at 4.1%, it is already significantly
higher than our share of the total global market, which remains stable at 3.3%.
By the end of 2024, we will have more than 15 all-electric models in our line-up across all
brands, from MINI to BMW to Rolls-Royce. All of this speaks for our fresh and highly attractive
product range - across all brands, all segments and all drive technologies.
In 2023, all our new vehicles went into production or were released onto the market, as
planned, including the new BMW 5 Series and the new BMW X2 with the all-electric variants,
the i5 and iX2. MINI also presented two models from the all-new MINI family at the IAA
MOBILITY: the Cooper 3-door and the Countryman.
BMW Motorrad celebrated its centenary in late September of last year, with Federal Chancel-
lor Olaf Scholz attending the anniversary celebrations at the Berlin-Spandau plant. There
were two main highlights: the inauguration of the BMW Motorrad Welt - the counterpart to
our BMW Welt in Munich, as a delivery and visitor centre - and the premiere of the R 1300
GS. Fans all over the world have been eagerly awaiting this leap in the next GS generation.
All I have to say is: pure high-tech on two wheels - earning extremely positive feedback from
the trade press.
Our technological expertise is delivering results.
Our broad, yet centred, approach, with systematic further development of all drive technol-
ogies, reflects BMW's typical self-belief, as well as the effectiveness of our strategy. General
recognition of our strategy keeps on growing since we continue to present measurable suc-
cesses in decarbonisation.
Your Company outperformed the EU CO₂ fleet target by 20%.
As in previous years, we not only met the EU CO₂ fleet target for the use phase in 2023, but
significantly overfulfilled it: the BMW Group's numbers came in at 26.5 grams significantly
below the applicable limit for the reporting year of 128.6 grams of CO2 per kilometre. We
therefore ended up below the CO₂ limit set for BMW by more than 20%.
As you can see, we are continuing the positive trend of recent years, through further electri-
fication of our vehicle portfolio and by using innovative Efficient Dynamics technologies
throughout our entire fleet.
Technology openness in BMW 5 Series and 5 Series Touring.
Following on from the new BMW 5 Series Sedan, which has been available since late 2023,
the new BMW 5 Series Touring is another perfect example of how our comprehensive tech-
nological expertise works in practice.
The Touring, which will be launched this spring, is especially popular in Europe. Here, also,
customers will have four drive concepts to choose from: all-electric, plug-in hybrid or highly
efficient diesel and petrol engines with 48-volt mild-hybrid technology. BMW is where Touring
meets e-drive. No one else in this segment offers a vehicle like the all-electric BMW i5 Tour-
ing, with an electric range of over 500 kilometres.
We delivered a total of 2.55 million vehicles to customers in 2023. As anticipated, we not
only posted solid year-on-year growth, but also achieved a new all-time high at Group level.
Our brands performed very well individually, too, with new all-time highs for BMW, BMW M,
Rolls-Royce and BMW Motorrad. Despite the model changeover due to the extensive realign-
ment of the brand, MINI reported higher sales than the previous year.
Rolls-Royce Motor Cars Ltd.***, Chairman
(until 1 November 2023)
Strong products generate strong demand.
Other Information
Our BMW, MINI, Rolls-Royce and BMW Motorrad brands enjoy an excellent reputation
worldwide. Our products don't just get people from A to B; they touch hearts and spark
emotions. Our customers experience their mobility in a very individual way. To achieve this,
we are making mobility more human, more intelligent and more sustainable.
A glance in the rear-view mirror shows that we are certainly capable of doing this: BMW has
overcome difficult situations many times in the past. This certainty has shaped our self-con-
fidence for 108 years. Your Company has constantly reinvented itself - taking bold leaps in
innovation at exactly the right time.
Timing is key in whether innovations gain traction and the Company stays relevant, but it is
also clear that:
The future is always ahead of us. And we are prepared!
We know where we are headed at all times and we know what we need. Our consistent be-
haviour shapes the image of your Company in the eyes of the public and among our stake-
holders. People expect us to consider things carefully and to come up with practical solu-
tions. We "walk the talk" - people know that we take big leaps, but that we also deliver. All-
electric vehicles are projected to account for half of our global deliveries before 2030. We
are right on track.
Your investment in the BMW Group must be worth it.
Your Company is robust and financially strong. Our Automotive EBIT margin for financial year
2023 was within our upwardly adjusted target range of 9.0 to 10.5%. As you know, we are
still targeting a range of 8 to 10% in the long term. At Group level, our EBT margin for 2023
of 11% exceeded our strategic target of 10%.
Our profitability puts us in a position where we can once again pay you an attractive dividend.
We are making major investments in our future. The same applies to 2023 as well as to the
current financial year. Our R&D spending focus on our products, further electrification and
digitalisation of our line-up and automated driving. At the same time, we are investing in the
NEUE KLASSE mega-project, our modular kits, construction of high-voltage battery produc-
tion facilities in various markets, and the new plant in Debrecen, to name just a few examples.
Your Company is going to profit noticeably from all this in the coming years.
"We make conscious decisions, that are
consistently based on facts."
Member since 2015
22
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Statement of the Chairman of the Board of Management
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
← = Q
23
DR NICOLAS PETER (b. 1962)
Mandates
Member since 1997, elected until the AGM 2024
STEFAN QUANDT (b. 1966)
ZF Friedrichshafen AG*, Chairman
Fresenius Management SE*
Deutsche Post AG
Mandates
Deputy Chairman of the Supervisory Board
Chairman of the Supervisory Board of ZF Friedrichshafen AG
DR-ING HEINRICH HIESINGER (b. 1960)
ZF Friedrichshafen AG* (since 15 March 2023)
-
Mandates
Member since 2021, elected until the AGM 2025
Member of Supervisory Boards
RACHEL EMPEY (b. 1976)
Member since 2017, elected until the AGM 2026
Entrepreneur
Mandates
DELTON Health AG****, Chairman
DELTON Technology SE*****, Chairman
Frankfurter Allgemeine Zeitung GmbH*
AQTON SE****, Chairman
- Memberships on other mandatory supervisory boards.
Group mandate (other).
BMW Group mandate.
Not listed on the stock exchange.
Executive employee of the enterprise.
2 Union representative.
Employee of the enterprise.
Whirlpool Corp., Chairman
Simex Trading AG*
Mandates
Member since 2021, elected until the AGM 2025
Chairman and CEO of Whirlpool Corp.
DR MARC BITZER (b. 1965)
Note: Mr Quandt is the sole shareholder of DELTON Health AG, DELTON Technology SE and AQ-
TON SE, and indirectly holds majority interests in Entrust Corp. and SOLARWATT GmbH.
SOLARWATT GmbH****
Entrust Corp.****
Member since 2021, appointed until the AGM 2024
Chairman of the BMW AG Works Council Landshut
BERNHARD EBNER¹ (b. 1978)
Continental AG, Deputy Chairwoman
Mandates
← = Q
Other Information
Remuneration Report
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Composition of the Board of Management and Supervisory Board
To Our Stakeholders
BMW Group Report 2023
30
- Memberships on comparable boards in Germany and abroad.
- Memberships on other mandatory supervisory boards.
***Group mandate (other).
BMW Group mandate.
Not listed on the stock exchange.
DR ANDREAS LIEPE
General Counsel:
BMW Brilliance Automotive Ltd. ***, Chairman
(until 11 May 2023)
CURRENT MEMBERS OF THE SUPERVISORY BOARD
Member from 2017 until 11 May 2023
Finance
DR-ING DR-ING Eh NORBERT REITHOFER (b. 1956)
Member since 2015, elected until the AGM 2025
Chairman of the Supervisory Board
Mandates
Member since 2014, elected until the AGM 2024
First Chairwoman of IG Metall (since 23 October 2023)
CHRISTIANE BENNER² (b. 1968)
BASF SE, Chairman
Mandates
Member since 2018, elected until the AGM 2027
Deputy Chairman of the Supervisory Board and
Chairman of the Audit Committee
Chairman of the Supervisory Board of BASF SE
DR KURT BOCK (b. 1958)
Member since 2007, elected until the AGM 2024
Deputy Chairman of the Supervisory Board
Chairman of the BMW AG Works Council Dingolfing
STEFAN SCHMID¹ (b. 1965)
Chairman of the General Works Council and Works Council
Munich of BMW AG
(since 23 January 2023)
Member since 18 January 2023, appointed until the AGM 2024
Deputy Chairman of the Supervisory Board
DR MARTIN KIMMICH¹ (b. 1972)
Henkel AG & Co. KGaA (Shareholders' Committee)
Henkel Management AG*
Siemens AG (until 9 February 2023)
Former Chairman of the Board of Management of BMW AG
BMW Group Report 2023
272
Combined Management Report
Statement of the Chairman of the Board of Management
22
27
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Chairman of the Board of Managemen
To Our Stakeholders
← = Q
The Board of Management
From left to right:
Ilka Horstmeier
Member of the Board of Management,
People and Real Estate
Other Information
Oliver Zipse
V.fiume
Yours
Is there any better foundation for continuing on our successful course together?
2023 was another strong team effort.
Personally, and on behalf of the entire Board of Management, I would like to thank all our
associates. Everyone made a valuable contribution. I would also like to thank all our custom-
ers worldwide, our retail organisation and our suppliers.
All of us at BMW are united by a can-do spirit: think ahead - perform - succeed!
Dear Shareholders,
Our business environment will again be dominated by a great many challenges this financial
year, including weak economic development in several markets, the price development in the
automotive sector, high interest rates and the uncertainty created by geopolitical shifts.
That is why it is so decisive that we recognise and systematically exploit our opportunities. It
is important to me that all of us at the BMW Group approach our tasks with self-belief, confi-
dence and the necessary grit. I travel the world a lot, visiting our markets and facilities.
Everywhere I go, I see how valuable and important individual mobility is in many people's
everyday lives.
Courage, pride in performance and resilience.
That is what makes your Company different. We dare to chart our own course, even in turbu-
lent times; we are able to withstand the headwinds, as long as we are convinced that we are
on the right path.
Your Company is a high-performance organisation. That is why we once again have ambi-
tious plans for 2024: on the automotive side, 14 new models will go into production and
BMW Motorrad will release a further 12 new models - not to mention numerous model up-
dates and engine variants. We have never postponed a launch and we will not waver from
this.
All of this shows that we are continually laying the foundation for our future success. That is
continuous progress. In other words: DRIVING THE NEXT ERA.
That is why the following applies to your Company:
Strong today - strong tomorrow.
“Our customers experience their mobility in a
very individual way. We therefore are continually
laying the foundation for our future success.
That is continuous progress.
"I
Joachim Post
Member of the Board of Management,
Purchasing and Supplier Network
THE BOARD OF
MANAGEMENT
Other Information
← = Q
The Board of Management
20
29
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Composition of the Board of Management and Supervisory Board
Remuneration Report
Other Information
← = Q
COMPOSITION OF THE BOARD OF
MANAGEMENT AND SUPERVISORY BOARD
CURRENT MEMBERS OF THE
BOARD OF MANAGEMENT
OLIVER ZIPSE (b. 1964)
Remuneration Report
The vote was unequivocal: 85% support our strategy - our BMW way. Another very clear
majority of 88% said they would recommend our Company as an employer. 93% are proud
to work for the BMW Group.
Responsibility Statement and Auditor's Report
Combined Management Report
From left to right:
Walter Mertl
Member of the Board of Management,
Finance
Oliver Zipse
Chairman of the Board of Management
Jochen Goller
Member of the Board of Management,
Customer, Brands, Sales
From left to right:
Frank Weber
Member of the Board of Management,
Development
Milan Nedeljković
Member of the Board of Management,
Production
28
BMW Group Report 2023
To Our Stakeholders
Group Financial Statements
With regard to employees: in autumn 2023, we once again asked our global team to share
their opinion. For the first time, all 150,000 associates worldwide were able to take part.
84% took advantage of this opportunity.
Remuneration Report
People like working for the BMW Group.
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Statement of the Chairman of the Board of Management
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
For the BMW brand, we are also setting ourselves up for direct sales access to customers in
the future and will be launching NEW RETAIL for BMW in Europe from 2026
onwards.
We aim to digitalise and simplify the car-buying process for customers, with transparent, con-
sistent pricing nationwide. This will create a win-win situation for everyone involved. Our retail
partners and their profitable business model will remain an essential pillar of these new
arrangements.
It
Automated driving: the car as digital companion.
goes without saying that we offer our customers the newest innovations and the latest,
state-of-the-art technology. Over-the-air upgrades ensure that every one of our vehicles is
always digitally up to date. The art lies in mastering this process: we anticipate far in advance
what our customers are going to need and want in five to ten years' time. That is how we
ensure they get the best overall package from us. This is our aspiration.
And that is why we keep setting benchmarks:
The BMW 5 Series Sedan is the first car in Germany to be approved for partially automated
driving at speeds up to 130 km/h on motorways. The BMW Highway Assistant allows the
driver to take their hands off the steering wheel while driving longer distances. We also
added a completely new feature: Active Lane Change Assistant with eye confirmation. This
allows the vehicle to make an automated lane change without a steering intervention: a
glance in the exterior mirror is all that is required.
24
Taking your hands off the steering wheel and even being able to temporarily turn your atten-
tion away from the road - that is Level 3 highly automated driving. From March 2024 on-
wards, our customers will be able to do precisely this in the models of the new BMW 7 Series.
BMW Personal Pilot L3 is the name of this new function, which takes over driving in certain
defined traffic situations and manages speed, distance and lane tracking autonomously.
In January 2024, we sold and delivered our first vehicle, a MINI, through our new sales sys-
tem. We have already switched the MINI brand to a direct sales model in Poland, Italy and
Sweden, with other European markets to follow. In China, we have been successfully using
this approach for MINI since 2023.
With the CE02, BMW Motorrad is already releasing its second all-electric model onto the mar-
ket, as well as the second M motorcycle model, the M 1000 XR, and the R 1300 GS Adven-
ture. That means there will be no fewer than three new top models at BMW Motorrad. They
all illustrate the breadth of the product line-up. Everyone - and that also applies to me as a
motorcycle rider - can find the right bike for their needs at BMW Motorrad.
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
We also haven't forgotten the fans of the BMW M brand: they can look forward to a new
edition of the M5 this year - as both Sedan and Touring variants. Both M variants come with
an impressive partially electrified drivetrain.
Our plug-in hybrid models remain an important element of our drivetrain portfolio. Current
Gen5 battery technology already enables an attractive range. Plug-in hybrids also provide a
boost to e-mobility that should not be underestimated. Many customers discover the ad-
vantages of electric driving for the first time this way.
Early in 2024, we passed the milestone of two million electrified vehicles sold. This includes
both pure electric vehicles and plug-in hybrids.
We are already testing hydrogen drivetrains in everyday situations.
We have been testing the BMW iX5 Hydrogen on the road in selected countries under every-
day conditions since last year. Our pilot fleet's world tour has raised awareness of the role
hydrogen can play in the energy transition – not just for mobility, but industry-wide. We see
hydrogen as a possible alternative drive technology in the mid to long term.
Last year, renowned US publication Time Magazine and online platform Statista compared
750 international companies. Your Company did exceptionally well to make it into the top 10,
and was, in fact, the highest-ranked automotive manufacturer in the global comparison.
Three criteria were decisive for this assessment: revenue growth, sustainability and employee
satisfaction. These three are not opposing factors but belong together.
"We are steering the e-mobility ramp-up smartly
and precisely in line with demand in all regions of
the world."
We aim to continue our profitable growth.
All our brands and drivetrain variants help assure the continued profitable growth of your
Company. We expect to see significant double-digit growth in sales of our BEV models again
in 2024. We continue to steer the e-mobility ramp-up smartly and precisely in line with differ-
entiated demand in all regions of the world.
We presented our latest models to members of the international media in Portugal in Febru-
ary 2024. Shortly afterwards, we invited 1,500 retailers from 30 European countries to Am-
sterdam for a glimpse of the future, including the new BMW 1 Series and the latest edition of
one of our top-selling individual models, the BMW X3.
The new MINI models for 2024 include the next member of the new MINI family, the Aceman,
which will celebrate its world premiere in April 2024. This electric-only crossover in the pre-
mium compact-car segment will also bring a massive leap in digitalisation. MINI has a de-
voted community and creates a unique sense of life and community spirit. The new MINI
family is produced at our Chinese joint venture, Spotlight, in Oxford, UK, and, for the first time,
in Germany, at the Leipzig plant. At Rolls-Royce, Spectre is the first battery-electric model to
become available. Rolls-Royce has long been a standout and unrivalled in the ultra-luxury
class with exclusive models.
NEW RETAIL: direct sales as win-win for everyone involved.
For us, the highest level of premium functionality goes hand in hand with maximum safety
for our customers and all road users. We therefore opened the Future Mobility Development
Centre in Sokolov in the Czech Republic in summer 2023, where we are testing automated
driving and parking functions, up to and including fully automated driving (Level 4). At this
location, we are able to simulate virtually all situations that occur in road traffic and thus en-
sure the maturity of our technical solutions.
Our vehicles performed well under various climate and traffic conditions - and the public re-
sponse has been overwhelmingly positive. This is understandable, since hydrogen fuel cell
drivetrains combine the best of both worlds: the advantages of an emissions-free e-drive,
with the fast refuelling people are used to. We also demonstrated this at the COP28 UN Cli-
mate Change Conference in Dubai. Your Company is supporting the growth of the hydrogen
economy worldwide, as well as locally, including expansion of infrastructure networks for
hydrogen filling stations.
With its spectacular Vision Vehicles, your Company showcases time and again indicates the
direction in which we are taking mobility, in line with the major global topics of the future -
through bold leaps in innovation and responsible action. This is what our NEUE KLASSE
mega-project represents in a unique way.
Mobility is movement - and movement requires energy and functioning supply
chains.
We are talking here about powerful, innovative and sustainably produced battery cells - in
other words, high-voltage batteries. In the models of the NEUE KLASSE, we will be using our
newly developed round lithium-ion battery cells, which have been optimised for the new ar-
chitecture, for the very first time.
Our sixth-generation BMW eDrive technology represents an enormous leap in technology,
compared to the previous generation: we are increasing energy density by more than 20%,
improving charging speed by up to 30% and boosting range by around 30% - at the same
time as lowering costs. We are also reducing CO₂ emissions from cell production by up to
60%.
For both basic research and development of mass-manufacturing processes for high-voltage
batteries, your Company is relying on in-house expertise. We want to understand every as-
pect of the high-voltage battery. To do so, we have created the necessary conditions for this
with the Battery Cell Competence Centre in Munich and the Cell Manufacturing Competence
Centre in Parsdorf, Bavaria, enabling us to span all value creation processes involved in cell
production; this is a crucial step for us.
The Gen6 batteries for our plants in Bavaria will be supplied from our planned new location
in Irlbach-Straßkirchen from 2026 onwards. Before embarking on the building project, we
sought frank and open dialogue with local residents. We were very pleased that they voted
strongly in favour of our site and see this as confirmation of our efforts.
Your Company is building production facilities for BMW high-voltage batteries not just in
Lower Bavaria, but all over the world - always in close proximity to our vehicle plants in
Hungary, the US, Mexico, China and Thailand. Our strategic "local for local" approach also
guarantees short transport distances for high-voltage batteries and secures our supply
against unforeseen events in different regions of the world.
With our "i Supply Chain" strategy, we are ensuring resilient, excellent and digital supply
chains in all areas. Our plants worldwide need supplying with 36 million parts every day - at
the right time, in the best quality and in the right quantity. For the digitalisation of our supply
chains, we are relying on Catena-X, a shared data ecosystem for automotive manufacturers,
suppliers and subcontractors, as well as recycling companies in the future. This digital collab-
oration increases efficiency and transparency - for example, around the carbon footprint and
options for tracing components and raw materials.
26
BMW Group Report 2023
To Our Stakeholders
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
NEUE KLASSE - vision becomes reality.
"The NEUE KLASSE is much more than just a
single car. It is an entirely new generation of
BMW models - all of them developed with an
all-electric heart, fully digitalised and with a
clear focus on sustainability."
After the official start of production, in 2025, at our newest BMW plant in Debrecen, Hun-
gary, the NEUE KLASSE will also come off the production line at our oldest plant in Munich
from 2026, with other locations worldwide to follow. Incidentally, one out of every two
BMWs leaving the Munich production line is already fully electric today. From 2027 on-
wards, our more than 100-year-old main plant will build only electric vehicles.
Combined Management Report
Statement of the Chairman of the Board of Management
I can promise you that both Vision Vehicles will be on the market soon in a very similar form.
In-between these two models, there is plenty of room for everything that will define the BMW
brand in the future.
Last year, there were two major milestones: at the CES in Las Vegas at the start of the year,
we unveiled our BMW i Vision Dee, full of digital innovations. Then, in September, at the IAA
MOBILITY, we presented our BMW VISION Neue Klasse. No other car at the IAA MOBILITY
received as much media coverage and attention as the BMW VISION Neue Klasse.
The Board of Management members already had the chance to drive prototypes of the
NEUE KLASSE. What a fantastic driving experience! The first camouflaged prototypes are
already being tested on the roads and we will be building the first pre-production vehicles
before the end of the year.
We also presented this Vision Vehicle to our associates at an exclusive evening event. The
interest was huge. Up to 700 associates from across Germany were selected by lottery to
attend the event live with a companion. Another 25,000 watched the live stream or the re-
cording of the event. That is a sixth of our global workforce. I see that as genuine interest in
our joint future project, the NEUE KLASSE.
they get the best overall package from us.”
25
BMW Group Report 2023
To Our Stakeholders
"We anticipate far in advance what our
customers want. That is how we ensure
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report Other Information
We are preparing to launch the NEUE KLASSE onto the market at an unprecedented pace
from 2025 onwards, with six models within just 24 months of the start of production. We
showed the scope of the NEUE KLASSE in a very concrete way for the first time at the BMW
Group Annual Conference on 21 March 2024. Its offering ranges from sporty sedan to X
model. The BMW VISION Neue Klasse and our newest Vision Vehicle - the BMW VISION
Neue Klasse X - represent these two bookends.
← = Q
―
Combined Management Report
Statement of the Chairman of the Board of Management
The NEUE KLASSE is so much more than just a single car; it is an entirely new generation of
BMW models all of them developed with an all-electric heart, fully digitalised and with a
clear focus on sustainability. The innovations of the NEUE KLASSE will benefit all future BMW
models.
(-)
(-)
(-)
Retirement benefits
(-)
(-)
Waiting allowance
84
(-)
152,985
(-)
(-)
retirement
benefits
152,985
181,079
100
Waiting
allowance/
Total waiting allowance/retirement benefits
Total remuneration for financial years 2023 or earlier vesting years
Total remuneration according to § 162 German Stock Corporation Act (AktG)
*The number of shares purchased in 2019 with the 2018 cash remuneration component (investment component) amounted to 4,652. The number of mathematical matching shares for calculating the
equivalent value in cash amounts to 1,550.
292
Total variable remuneration
28,094
remuneration
The following tables show the fixed and variable remuneration
granted and owed to the former members of the Board of Man-
agement in the reporting year in accordance with § 162 German
Stock Corporation Act (AktG). In accordance with § 162 (5) AktG,
individual figures are not shown for former members of the Board
of Management who stepped down from the Board of Manage-
ment in 2013 or earlier. The remuneration of the members of
the Board of Management who left in the reporting year is pro-
vided in Remuneration granted and owed to members of the Board of
Management pursuant to § 162 of the German Stock Corporation Act (AktG).
152,985*
BMW Group Report 2023 To Our Stakeholders Combined Management Report
291
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
← = Q
10. Remuneration granted and owed to former members of the
Board of Management pursuant to § 162 of the German Stock
Corporation Act (AktG)
For individual former members of the Board of Management, the
remuneration granted and owed also includes the share-based
remuneration component (matching component) 2018. In this
regard, please refer to the statements on remuneration granted
and owed for the active members of the Board of Management
7 Share-based remuneration component (matching component) 2018.
Remuneration granted and owed in financial year 2023
Fixed
Fringe benefits (other remuneration)
Financial year 2023
in €
28,094
MILAGROS CAIÑA CARREIRO-ANDREE
Member of the Board of Management until 31 October 2019
Earlier
as a % of
vesting years in €
total remuneration
(-)
16
remuneration
Total fringe benefits
28,094
16
Variable
Share-based remuneration component (matching component) 2018
(-)
84
Group Financial Statements Responsibility Statement and Auditor's Report
50
Other Information
408,504
166,667
166,667
407,516
407,516
407,391
407,391
Service cost5
3,703,942
4,612,692
1,836,526
2,283,089
4,398,549
5,476,049
4,374,024
5,451,524
Total fixed and variable remuneration
408,504
2,781,250
Maximum remuneration/Vested remuneration incl. service cost
4,781,415
Other Information
III. Remuneration of the Members of the Board of Management
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
296
6 Maximum remuneration within the meaning of § 87a (1) Sentence 2 No. 1 AktG. The overall cap is lower than the sum of the maximum amounts for the individual components. Any special payments to compensate for salary losses from a previous employment relationship and/or to cover relocation costs in
the case of new appointments are also subject to maximum remuneration.
3 For more information about fringe benefits for the 2023 financial year, refer to Remuneration granted and owed to members of the Board of Management pursuant to § 162 of the German Stock Corporation Act (AktG).
" Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
5 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
2 Service contract ended 31 May 2023. See Premature termination of activities and post-contractual non-competition clause.
1 Service contract comes to an end on 31 July 2024. See Premature termination of activities and post-contractual non-competition clause.
4,112,446
4,925,000
2,003,193
2,291,667
4,806,065
5,500,000
5,500,000
← = Q
3,690,000
1,822,500
1,152,000
RoCE component
(PERSONAL CASH INVESTMENT AMOUNT)"
SHARE-BASED REMUNERATION
Variable
remuneration
484,500
855,000
246,771
431,250
586,500
1,035,000
586,500
1,035,000
798,000
855,000
402,500
431,250
1,068,800
1,375,937
1,152,000
480,000
3,296,500
4,374,000
3,296,500
4,374,000
Total variable remuneration
580,250
990,000
281,333
480,000
675,200
1,152,000
675,200
1,152,000
Strategic focus target component
918,500
990,000
445,333
1,068,800
Maximum remuneration and remuneration vested in the 2023 financial year (vesting year)
FRANK WEBER
Development
IV. Remuneration of the Members of the Supervisory Board
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report
297
actual financial year, includes the payment of the matching compo-
nent of the share-based remuneration for the 2018 vesting year
to the Board of Management members who were already in of-
fice in that financial year. This payment was made in May 2023,
after the expiry of the four-year shareholding period. This com-
ponent is subject to the overall cap set for the vesting year 2018,
which was complied with for the Board of Management mem-
bers in office at that time.
The remuneration granted and owed for the 2023 financial year
pursuant to § 162 AktG, see Remuneration granted and owed for the
The maximum limits for each individual element of the variable
remuneration in the 2023 vesting year and the stipulated maxi-
mum remuneration limits were complied with in all cases.
If these minimum thresholds are not reached, the relevant com-
ponent of the variable remuneration is not paid.
The total fixed maximum remuneration is less than the sum of
the maximum amounts for the individual components.In addition
to the maximum limits for the individual components of overall
remuneration, the Supervisory Board also set minimum thresh-
olds that had to be exceeded in order for a target to be achieved.
Minimum remuneration of Board of Management members is
ensured by the fixed remuneration components, in particular the
basic remuneration.
5 Maximum remuneration within the meaning of § 87a (1) Sentence 2 No. 1 AktG. The overall cap is lower than the sum of the maximum amounts for the indi-
vidual components. Any special payments to compensate for salary losses from a previous employment relationship and/or to cover relocation costs in the
case of new appointments are also subject to maximum remuneration.
4 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
3 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired
with the payout amount.
2 For more information about fringe benefits for the 2023 financial year, refer to Remuneration granted and owed to members of the Board of Management
pursuant to § 162 of the German Stock Corporation Act (AktG).
1 Second remuneration level since 1 July 2023.
← = Q
4,450,792
IV. REMUNERATION OF THE MEMBERS OF
THE SUPERVISORY BOARD
2.
1.00
Amount in € p. a.³
Factor
Deputy Chairman Supervisory Board
Chairman of the Audit Committee²
Chairman of other committee²
Member of the Audit Committee²
Member of other committee²
Member of Supervisory Board
Chairman Supervisory Board
Overview of remuneration of the members of the
Supervisory Board'
The following table shows the remuneration granted and owed
to the members of the Supervisory Board in the 2023 financial
year in accordance with § 162 (1) Sentence 1 German Stock
Corporation Act (AktG). The activity on which the remuneration
for the 2023 financial year is based was fully performed by the
balance sheet date. Therefore, the remuneration for the Super-
visory Board activities is classified as granted for the 2023 finan-
cial year, even if the payment of the Supervisory Board remuner-
ation (including the attendance fee) was made after the end of
the 2023 financial year.
Remuneration granted and owed to members of the
Supervisory Board pursuant to § 162 of the German Stock Cor-
poration Act (AktG)
3.
The remuneration and the attendance fee are only paid after the
end of the respective financial year. Furthermore, the company
reimburses each member of the Supervisory Board for their rea-
sonable expenses. In order to be able to perform his duties, the
Chairman of the Supervisory Board is provided with secretariat
and chauffeur services.
In addition, each member of the Supervisory Board receives an
attendance fee of € 2,000 per meeting for each meeting of the
Supervisory Board (plenary) in which he or she participates. This
also applies to participation by telephone or video link. If they at-
tend more than one meeting on the same day, the meetings are
not remunerated separately. A continuous session on two con-
secutive days is treated as one session.
In the event of changes in the composition of the Supervisory
Board during the year, or if additional remuneration-relevant
functions are performed, remuneration is calculated on a propor-
tionate basis.
Supervisory Board member who has no additional remunera-
tion-relevant functions. The Chair of the Audit Committee re-
ceives two-and-a-quarter times the amount, the Chairs of other
Supervisory Board committees twice the amount, each member
of the Audit Committee twice the amount, and each member of
another committee one-and-a-half times the amount of the re-
muneration paid to a Supervisory Board member, provided the
relevant committee convened on at least three days during the
financial year. If a member of the Supervisory Board exercises
more than one of the functions referred to above, their remuner-
ation is measured only on the basis of the function receiving the
highest amount.
The GCGC recommends that exercising the functions of the chair
and deputy chair of the Supervisory Board should also be con-
sidered when determining the level of remuneration, along with
any committees an individual chairs or sits on (Suggestion G.17).
This is to take account of the extra time commitment associated
with these positions. The Articles of Incorporation of BMW AG
also take account of the requirements for the Audit Committee
and its Chairman. They stipulate that the Chairman of the Super-
visory Board shall receive three times the amount, and each
Deputy Chairman twice the amount, of remuneration paid to a
In accordance with the Articles of Incorporation, each member of
the Supervisory Board of BMW AG who does not exercise any
additional function relevant to remuneration receives fixed remu-
neration of € 200,000 p.a.
The Supervisory Board remuneration is structured as a purely
fixed remuneration in line with suggestion G.18 of the GCGC.
Fixed remuneration strengthens the independence of the Super-
visory Board in advising and monitoring the Board of Manage-
ment. The structure and amount of the fixed remuneration
should ensure that highly qualified individuals can be proposed
to the Annual General Meeting for membership of the Supervi-
sory Board. This promotes the quality of advice and oversight,
which contributes to the Company's sustainable and long-term
development.
Principles and elements of remuneration
1. Articles of incorporation and procedure
The regulation governing remuneration for the Supervisory
Board is set out in § 16 of the Articles of Incorporation, and spec-
ifies both the remuneration system to be used and the precise
framework for calculating the remuneration due to the members
of the Supervisory Board. The regulation was adopted by the An-
nual General Meeting on 14 May 2020 and confirmed on
12 May 2021 with a majority of 99.40% of the valid votes cast.
5,212,500
Maximum remuneration5/Vested remuneration incl. service cost
407,525
1,004,392
1,004,392
29,392
29,392
975,000
975,000
vested
Max.
Remuneration
Earnings component of the bonus
BONUS
Total fixed remuneration
Fringe benefits (other remuneration)²
Fixed remuneration (base salary)
Fixed
remuneration
in €
since 1 July 20201
Performance component of the bonus
945,000
882,000
945,000
407,525
4,043,267
5,036,392
Service cost
Total fixed and variable remuneration
3,038,875
4,032,000
Total variable remuneration
966,000
627,725
Strategic focus target component
993,650
1,071,000
RoCE component
(PERSONAL CASH INVESTMENT AMOUNT) ³
SHARE-BASED REMUNERATION
Variable
remuneration
535,500
1,071,000
200,000
1,035,000
1,035,000
1,962,250
2,115,000
RoCE component
(PERSONAL CASH INVESTMENT AMOUNT)²
remuneration
SHARE-BASED REMUNERATION
Variable
307,201
542,120
586,500
1,035,000
80,750
142,500
1,081,500
1,890,000
505,978
542,120
165,000
966,000
153,083
1,068,800
Total fixed and variable remuneration
463,541
615,000
6,047,375
8,010,000
Total variable remuneration
367,912
627,717
675,200
1,152,000
96,708
165,000
1,239,625
2,115,000
Strategic focus target component
582,382
627,717
1,152,000
9,986,113
1,035,000
142,500
26,113
Fringe benefits (other remuneration)¹
Fixed
vested
Max.
vested
Max.
vested
150,000
150,000
1,950,000
1,950,000
Fixed remuneration (base salary)
Max.
vested
Max.
in €
Remuneration
26,113
133,000
3,331
Total fixed remuneration
1,764,000
1,890,000
Performance component of the bonus
Earnings component of the bonus
BONUS
682,633
682,633
111,981
111,981
570,652
570,652
1,050,000
66,981
1,116,981
1,050,000
66,981
1,116,981
3,331
153,331
153,331
1,976,113
1,976,113
remuneration
8,023,488
768,331
616,872
Total fixed remuneration
remuneration
27,524
Fringe benefits (other remuneration)³
Fixed
1,050,000
1,050,000
Fixed remuneration (base salary)
vested
Max.
Remuneration
since 1 January 2022
1 January 2017 to 11 May 20232
Remuneration
vested
Remuneration Report
vested
Max.
Remuneration
1,077,524
Remuneration
vested
27,524
1,077,524
1,050,000
Performance component of the bonus
Earnings component of the bonus
BONUS
922,692
922,692
460,589
460,589
1,102,049
22,692
22,692
23,089
23,089
52,049
900,000
900,000
437,500
437,500
1,050,000
52,049
1,102,049
Max.
in €
1 January 2018 to 31 October 20231
820,833
254,444
254,444
407,533
2,446,106
3,022,307
4,413,481
1,763,473
2,339,674
3,296,500
4,374,000
5,490,981
407,533
66,667
66,667
712,729
8,736,217
712,729
9,850,000
Maximum remuneration"/Vested remuneration incl. service cost
Service cost³
683,539
5,500,000
4,821,014
3,122,736
JOACHIM POST
Purchasing and Supplier Network
NICOLAS PETER
Finance
Customer, Brands, Sales
PIETER NOTA
MILAN NEDELJKOVIĆ
Production
since 1 October 2019
Maximum remuneration and remuneration vested in the 2023 financial year (vesting year)
III. Remuneration of the Members of the Board of Management
← = Q
966,000
Other Information
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
295
4 Maximum remuneration within the meaning of § 87a (1) Sentence 2 No. 1 AktG. The overall cap is lower than the sum of the maximum amounts for the individual components. Any special payments to compensate for salary losses from a previous employment relationship and/or to cover relocation costs in
the case of new appointments are also subject to maximum remuneration.
1 For more information about fringe benefits for the 2023 financial year, refer to Remuneration granted and owed to members of the Board of Management pursuant to § 162 of the German Stock Corporation Act (AktG).
2 Assessment period five years in total: one year for determining the personal cash investment amount, a four-year holding obligation for the shares acquired with the payout amount.
3 The service cost in accordance with IAS 19 represents the expense for the Company; this amount is not paid out to the Board of Management member.
2,700,550
Remuneration Report
3.00
600,000
2.00
André Mandl¹
(100)
(100,624)
[6]
(6,000)
(94)
(94,624)
100
210,000
5
10,000
95
200,000
Gerhard Kurz
(100)
(210,000)
(5)
200,000
(10,000)
95
5
(96)
(250,000)
100
410,000
2
10,000
98
400,000
Dominique Mohabeer1,2
(100)
(156,333)
(5)
(8,000)
(95)
(148,333)
100
210,000
10,000
(10,000)
(95)
100
(5)
(10,000)
(95)
(200,000)
210,000
5
10,000
95
total remuneration
in €
as a % of
as a % of
total remuneration
in €
total remuneration
in €
200,000
Johann Horn¹
as a % of
(210,000)
(200,000)
100
(100)
200,000
210,000
5
10,000
95
200,000
Jens Köhler¹
(100)
(210,000)
(5)
(10,000)
(95)
(200,000)
100
208,000
4
8,000
96
Susanne Klatten
(4)
(260,000)
(100)
(4,791,344)
100
5,827,545
3
198,000
97
5,629,545
Total acting members of the Supervisory Board
(100)
(208,387)
(5)
(10,000)
(95)
(198,387)
100
210,000
5
(96)
10,000
(184,000)
(4,975,344)
← = Q
The presentation of average employee remuneration is based on
the average remuneration of all employees of BMW AG on a full-
time equivalent basis. In the 2023 financial year, this was
83,383 people. Worldwide, the BMW Group employed 154,950
people at 31 December 2023. In order to calculate the average
employee remuneration presented, the principles applicable to
the calculation of the remuneration granted and owed to the
members of the Board of Management and the Supervisory
Board pursuant to § 162 (1) Sentence 1 AktG were applied
accordingly.
The change in earnings is presented on the basis of BMW AG's
net profit for the year in accordance with the German Commercial
Code (HGB). In addition, the changes in the key indicators "earn-
ings attributable to shareholders of BMW AG" and "Group return
on sales after tax" are reported, as these key indicators are rele-
vant for both the calculation of the variable remuneration of the
members of the Board of Management (earnings component of
the bonus) and the performance-related remuneration of man-
agers and employees.
For the members of the Board of Management and the Supervi-
sory Board, the remuneration granted and owed in the relevant
financial year is presented within the meaning of § 162 (1) Sen-
tence 1 AktG. The remuneration granted and owed to former
members of the Board of Management includes any variable re-
muneration from previous vesting years and any remuneration
from any contracts of employment that remained valid beyond
the end of their mandate, as well as retirement benefit plans
(pension payments, payments from the retirement capital ac-
count), fringe benefits and any waiting allowances paid.
Pursuant to § 162 (1) Sentence 2 No. 2 German Stock Corpora-
tion Act (AktG), the following table shows the change in earnings,
the annual change in the remuneration of the members of the
Board of Management and the Supervisory Board, and the an-
nual change in the average remuneration of the employees on a
full-time equivalent basis over the last five financial years.
COMPARISON OF CHANGE IN REMUNER-
ATION AND EARNINGS PURSUANT TO
§ 162 (1) SENTENCE 2 NO. 2 OF THE
GERMAN STOCK CORPORATION ACT
(AKTG)
V.
V. Comparison of Change in Remuneration and Earnings
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
300
← = Q
1 These employee representatives have declared that they will transfer their remuneration to the Hans Böckler Foundation in accordance with the guidelines of the Confederation of German Trade Unions.
2 Member of the Audit Committee.
(100)
(4)
95
200,000
Sibylle Wankel¹
10,000
95
200,000
Christoph Schmidt
(100)
(210,000)
(5)
(10,000)
(95)
(200,000)
100
210,000
5
10,000
95
200,000
Anke Schäferkordt
5
210,000
100
(200,000)
(100)
(210,000)
(5)
(10,000)
(95)
(200,000)
100
210,000
Total remuneration
5
95
200,000
Vishal Sikka
(100)
(210,000)
(5)
(10,000)
(95)
10,000
Attendance fee
Fixed remuneration
IV. Remuneration of the Members of the Supervisory Board
(400,000)
100
410,000
2
10,000
98
400,000
Stefan Quandt (Deputy Chairman)
(-)
(-)
(-)
100
389,545
3
10,000
97
379,545
(98)
Manfred Schoch (Deputy Chairman) 1.2
(10,000)
(410,000)
98
450,000
Kurt Bock (Deputy Chairman, Chairman of the Audit Committee)
(100)
(410,000)
(2)
(10,000)
(98)
(400,000)
100
410,000
2
10,000
98
400,000
Stefan Schmid (Deputy Chairman)'
(100)
(2)
100
(100)
(610,000)
(2)
Remuneration granted and owed to Supervisory Board members pursuant to § 162 AktG in financial year 2023 (2022)
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
298
2 Provided that the Committee has met on at least three days during the financial year.
3 Plus attendance fee of € 2,000 per plenary session.
1 If a Supervisory Board member performs more than one of the functions referred to above, their
remuneration is measured only on the basis of the function that is remunerated with the highest
amount.
300,000
1.50
400,000
2.00
400,000
2.00
450,000
2.25
400,000
MEMBERS OF THE SUPERVISORY BOARD IN OFFICE AS AT 31 DECEMBER 2023
Remuneration Report
Other Information
IV. Remuneration of the Members of the Supervisory Board
(10,000)
(98)
(600,000)
total remuneration
in €
610,000
2
10,000
98
10,000
as a % of
in €
total remuneration
in €
600,000
Norbert Reithofer (Chairman)
as a % of
Total remuneration
Attendance fee
Fixed remuneration
as a % of
total remuneration
Remuneration
2
100
200,000
(200,000)
Heinrich Hiesinger
(100)
(260,000)
(4)
(10,000)
(96)
(250,000)
100
410,000
2
10,000
98
400,000
Rachel Empey³
(100)
(210,000)
95
(5)
10,000
210,000
Other Information
Remuneration Report
MEMBERS OF THE SUPERVISORY BOARD IN OFFICE AS AT 31 DECEMBER 2023
Remuneration granted and owed to Supervisory Board members pursuant to § 162 AktG in financial year 2023 (2022)
Responsibility Statement and Auditor's Report
Group Financial Statements
To Our Stakeholders Combined Management Report
BMW Group Report 2023
299
← = Q
1 These employee representatives have declared that they will transfer their remuneration to the Hans Böckler Foundation in accordance with the guidelines of the Confederation of German Trade Unions.
2 Member of the Supervisory Board since 18 January 2023, Deputy Chairman since 23 January 2023.
3 Member of the Audit Committee.
(100)
(210,000)
(5)
(10,000)
(95)
100
5
(10,000)
(95)
(200,000)
(5)
(10,000)
(95)
(200,000)
100
210,000
5
10,000
95
200,000
Christiane Benner¹
(100)
(460,000)
(2)
(10,000)
(98)
(450,000)
(210,000)
(100)
Marc Bitzer
200,000
100
210,000
5
10,000
95
200,000
Bernhard Ebner¹
(100)
460,000
(210,000)
(10,000)
(95)
(200,000)
100
210,000
5
10,000
95
(5)
Remuneration
Max.
since 13 May 2015
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
Retirement benefits
Total waiting allowance/retirement benefits
Total remuneration for financial years 2023 or earlier vesting years
330,197
(-)
91
194,878
(-)
90
330,197
91
194,878
90
363,765
216,478
Total remuneration according to § 162 German Stock Corporation Act (AktG)
363,765
100
216,478
100
Financial year 2023
(-)
in €
Share-based remuneration component (matching component) 2018
21,600
← = Q
III. Remuneration of the Members of the Board of Management
Remuneration granted and owed in financial year 2023
NORBERT REITHOFER
IAN ROBERTSON
Chairman of the Board of Management until 13 May 2015
Chairman of the Supervisory Board since 13 May 2015
Financial year 2023
in €
Earlier
vesting years in €
as a % of
total remuneration
Financial year 2023
in €
Fixed
remuneration
Total fringe benefits
Variable
remuneration
Total variable remuneration
Waiting
Waiting allowance
allowance/
retirement
benefits
Fringe benefits (other remuneration)
33,568
9
21,600
Member of the Board of Management until 31 December 2017
Earlier
vesting years in €
(-)
as a % of
total remuneration
10
33,568
9
10
Fixed
Fringe benefits (other remuneration)
26,354
Retirement benefits
Total waiting allowance/retirement benefits
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
Total remuneration for financial years 2023 or earlier vesting years
Total remuneration according to § 162 German Stock Corporation Act (AktG)
26,354
152,985
32,384
32,472
179,339
100
64,856
100
1 The number of shares purchased in 2019 with the 2018 cash remuneration component (investment component) amounted to 4,652. The number of mathematical matching shares for calculating the equivalent value in cash amounts to 1,550.
2 The number of shares purchased in 2019 with the 2018 cash remuneration component (investment component) amounted to 988. The number of mathematical matching shares for calculating the equivalent value in cash amounts to 329.
294
BMW Group Report 2023
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
III. Remuneration of the Members of the Board of Management
allowance/
retirement
benefits
(-)
(-)
(-)
PETER SCHWARZENBAUER
Member of the Board of Management until 31 October 2019
Earlier
as a % of
vesting years in €
total remuneration
(-)
ANDREAS WENDT
Financial year 2023
in €
15
32,384
Remuneration
50
remuneration
Total fringe benefits
26,354
15
32,384
Variable
remuneration
Share-based remuneration component (matching component) 2018
Other Information
(-)
85
(-)
32,4722
50
Total variable remuneration
152,985
85
32,472
50
Waiting
Waiting allowance
(-)
(-)
(-)
152,9851
← = Q
Remuneration Report
Group Financial Statements
Waiting allowance
(-)
(-)
(-)
(-)
(-)
(-)
allowance/
retirement
benefits
Retirement benefits
Total waiting allowance/retirement benefits
Total remuneration for financial years 2023 or earlier vesting years
285,612
(-)
91
278,209
(-)
92
285,612
91
278,209
92
313,878
(-)
302,023
(-)
Total remuneration according to § 162 German Stock Corporation Act (AktG)
313,878
Waiting
100
(-)
(-)
← = Q
III. Remuneration of the Members of the Board of Management
Remuneration granted and owed in financial year 2023
KLAUS DRAEGER
FRIEDRICH EICHINER
Fixed
Fringe benefits (other remuneration)
Financial year 2023
in €
28,266
Member of the Board of Management until 30 September 2016
Earlier
vesting years in €
(-)
as a % of
total remuneration
Financial year 2023
in €
9
23,814
Member of the Board of Management until 31 December 2016
Earlier
vesting years in €
(-)
as a % of
total remuneration
8
remuneration
Total fringe benefits
28,266
9
23,814
8
Variable
remuneration
Share-based remuneration component (matching component) 2018
(-)
(-)
(-)
(-)
Total variable remuneration
(-)
302,023
100
Financial year 2023
(-)
(-)
allowance/
retirement
benefits
Retirement benefits
Total waiting allowance/retirement benefits
185,589
(-)
54
(-)
(-)
(-)
185,589
54
(-)
(-)
Total remuneration for financial years 2023 or earlier vesting years
204,325
142,523
17,642
256,620
Total remuneration according to § 162 German Stock Corporation Act (AktG)
346,848
100
274,262
100
1 The number of shares purchased in 2019 with the 2018 cash remuneration component (investment component) amounted to 4,333. The number of mathematical matching shares for calculating the equivalent value in cash amounts to 1,444.
2 The number of shares purchased in 2019 with the 2018 cash remuneration component (investment component) amounted to 7,801. The number of mathematical matching shares for calculating the equivalent value in cash amounts to 2,600.
293
BMW Group Report 2023 To Our Stakeholders Combined Management Report
(-)
(-)
(-)
94
Fixed
Fringe benefits (other remuneration)
in €
18,736
vesting years in €
KLAUS FRÖHLICH
Member of the Board of Management until 30 June 2020
Earlier
as a % of
total remuneration
HARALD KRÜGER
5
Financial year 2023
in €
17,642
Chairman of the Board of Management until 15 August 2019
Earlier
as a % of
vesting years in €
total remuneration
6
remuneration
Total fringe benefits
18,736
5
Responsibility Statement and Auditor's Report
17,642
Variable
remuneration
Share-based remuneration component (matching component) 2018
(-)
142,5231
41
(-)
256,620²
94
Total variable remuneration
Waiting
Waiting allowance
142,523
(-)
41
256,620
6
11. Maximum remuneration and remuneration vested in the 2023
financial year (vesting year)
Member of the Board of Management until 31 December 2021
Earlier
as a % of
vesting years in €
total remuneration
(-)
OLIVER ZIPSE
Maximum remuneration and remuneration vested in the 2023 financial year (vesting year)
The Supervisory Board has set upper limits on the remuneration
of Members of the Board of Management for the 2023 financial
year (vesting year) in two ways: it has set maximum limits in
terms of the amount paid for all variable remuneration compo-
nents and, additionally, for the total remuneration of the Board of
Management members in each case. Both components of the
bonus as well as the two components of the share-based
Chairman of the Board of Management
since 16 August 2019
Member of the Board of Management
the bonus and the share-based remuneration (personal invest-
ment cash amount) for the vesting year 2023. Any special pay-
ments to compensate for salary losses from a previous employ-
ment relationship and/or to cover relocation costs in the case of
new appointments are also subject to maximum remuneration.
A commitment to cover relocation costs was issued in the 2023
financial year.
JOCHEN GOLLER
Customer, Brands, Sales
since 1 November 2023
ILKA HORSTMEIER
Human Resources and Real Estate,
Labour Director
since 1 November 2019
WALTER MERTL
Finance
since 12 May 2023
The maximum remuneration of the Board of Management mem-
bers for the vesting year 2023 determined in accordance with
§ 87a (1) Sentence 2 No. 1 German Stock Corporation Act
(AktG) includes, as fixed components, the basic remuneration for
2023, other fixed remuneration for 2023, the service cost (in ac-
cordance with IAS 19) for 2023 and, as variable components,
remuneration (personal investment cash amount) are limited to
a maximum of 180% of the respective target amounts.
(-)
48,237
(-)
210,000
335%
210,000
since October 2021
Bernhard Ebner¹
0%
210,000
55%
210,000
(-)
(-)
(-)
Petra Justenhoven
Wirtschaftsprüferin
(German Public Auditor)
0%
220,000
since May 2017
Heinrich Hiesinger
58%
410,000
92%
135,419
260,000
135,419
(-)
(-)
(-)
since May 2021
Rachel Empey"
(-)
(-)
(-)
(-)
Kurt Bock³
since May 2018, Deputy Chairman and Chairman of the
0%
410,000
0%
410,000
0%
410,000
Audit Committee
- 5%
430,000
since 2007, Deputy Chairman
0%
410,000
0%
410,000
0%
410,000
410,000
220,000
367,930
67%
since May 2021
Marc Bitzer
0%
210,000
0%
210,000
0%
210,000
- 5%
210,000
220,000
since May 2014
Christiane Benner¹
0%
460,000
0%
460,000
25%
460,000
210,000
- 5%
210,000
0%
7,760
9,368
8,908
16,730
7,931
Other biogenic fuels
1,501
1,161
1,211
1,095
1,109
1 Energy consumption generated by vehicle production (BMW Group plants including BMW Motorcycle, excluding partner plants and contract manufacturing) and by other BMW Group locations not directly related to production (e.g. research centres, sales centres, office buildings).
2 Upper calorific value
3 CHP losses refer to the losses resulting from converting a fuel source into electricity and heat in a combined heat and power plant (CHP plant). These are listed separately as of the 2022 reporting year. Energy consumption for the automotive production, motorcycle production and non-manufacturing sites was
not adjusted retrospectively for previous years. As a result, the figures for 2022 are not directly comparable with previous years.
310
BMW Group Report 2023
4,123
2,209
2,344
2,316
425,796
498,299
508,318
477,588
398,874
164,957
192,911
To Our Stakeholders Combined Management Report
177,564
107,864
68,560
65,065
67,038
60,331
30,908
1,703
144,266
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
26,600
974,238
0%
210,000
59%
210,000
(-)
132,344
2023
(-)
(-)
since May 2021
Johann Horn¹
0%
- 5%
0%
210,000
(-)
210,000
2022
Further GRI Information
Transport logistics: carriers and CO₂ emissions¹
MATERIAL SUPPLY OF THE PLANTS (INBOUND)²
Transport volume in million tkm
CO₂e emissions in t
DISTRIBUTION OF VEHICLES (OUTBOUND) ³
Transport volume in million tkm
CO₂e emissions in t
← = Q
TOTAL MATERIAL SUPPLY OF THE PLANTS AND DISTRIBUTION OF VEHICLES (INBOUND AND OUTBOUND)
Transport volume in million tkm
CUSTOMER SUPPORT LOGISTICS (AFTERSALES LOGISTICS)
Transport volume in million tkm
CO₂e emissions in t
PERCENTAGE SHARE OF CARRIERS IN TOTAL IN TERMS OF TRANSPORT VOLUME AND CO2 EMISSIONS
Sea in %
Road in %
Rail in %
Air in %
CO₂e emissions in t
410,000
430,000
since 1997, Deputy Chairman
-34%
- 62%
346,848
24%
- 69%
-23%
1%
1%
313,878
302,023
-25%
- 32%
62%
- 18%
2%
2%
until August 2019
until June 2020
- 64%
until December 2016
- 34%
- 70%
- 31%
50%
179,339
- 96%
149%
-54%
216,478
2%
7%
10%
until October 2019
until December 2017
- 1%
363,765
1%
1%
-21%
until May 2015, since May 2015 Chairman of the Supervisory Board
274,262
Andreas Wendt
until September 2016
Ian Robertson
← = Q
V. Comparison of Change in Remuneration and Earnings
Other Information
Remuneration Report
FORMER MEMBERS OF THE BOARD OF MANAGEMENT IN €1
Comparison of changes in earnings and remuneration for employees, the Board of Management and the Supervisory Board
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023
302
5 Service contract ended 31 May 2023. See Premature termination of activities and post-contractual non-competition clause.
1 The reported remuneration for the years 2019 and 2020 has been recalculated pursuant to § 162 of the German Stock Corporation Act (AktG).
2 For the 2019 and 2020 financial years, the advance payments of € 566,667 and € 712,000 from the 2018-2020 and 2019-2021 Performance Cash Plans, which were paid in 2019 and 2020 respectively, were also included in the calculation of remuneration.
3 For the 2019 and 2020 financial years, the advance payments of € 500,000 each from the 2018-2020 and 2019-2021 Performance Cash Plans, which were paid in 2019 and 2020 respectively, were also included in the calculation of remuneration.
4 Service contract comes to an end on 31 July 2024. See Premature termination of activities and post-contractual non-competition clause.
-5%
4,043,267
10%
4,240,977
283%
3,856,458
Change
Peter Schwarzenbauer
Change
Change
Norbert Reithofer
Harald Krüger4,5
Klaus Fröhlich²
Friedrich Eichiner
Klaus Draeger
- 77%
181,079
- 1%
- 68%
-25%
until October 2019
Milagros Caiña Carreiro-Andree²,3
2023 vs 2022 in %
2023
2022 vs 2021 in %
2021 vs 2020 in %
2020 vs 2019 in %
Change
until December 2021
- 1%
120%
since May 2015, Chairman
Norbert Reithofer
IV. REMUNERATION OF THE SUPERVISORY BOARD IN €
Change 2023
vs 2022 in %
2023
Change 2022
vs 2021 in %
2022
Change 2021
vs 2020 in %
2021
23,099
1,229,301
25,511
1,226,423
31,263
1,516,823
52,111
2,200,661
54,362
2,746,124
2,447
2,267
Martin Kimmich 1,2
174,017
since January 2023, Deputy Chairman
610,000
Stefan Schmid¹
Stefan Quandt
(-)
389,545
(-)
(-)
(-)
(-)
(-)
(-)
0%
610,000
0%
610,000
0%
610,000
- 5%
640,000
(-)
183,417
tkm
g CO₂e
2020
2019
Comparison of changes in earnings and remuneration for employees, the Board of Management and the Supervisory Board
← = Q
V. Comparison of Change in Remuneration and Earnings
Other Information
Remuneration Report
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023
303
6 For the 2019 and 2020 financial years, the advance payments of € 600,000 and € 500,000 from the 2018-2020 and 2019-2021 Performance Cash Plans, respectively, which were paid in 2019 and 2020 respectively, were also included in the calculation of remuneration.
4 For the 2019 and 2020 financial years, the advance payments of € 900,000 each from the 2018-2020 and 2019-2021 Performance Cash Plans, which were paid in 2019 and 2020 respectively, were also included in the calculation of remuneration.
5 Mr Krüger's employment contract ended on 30 April 2020.
2 For the 2019 and 2020 financial years, the advance payments of € 600,000 each from the 2018-2020 and 2019-2021 Performance Cash Plans, which were paid in 2019 and 2020 respectively, were also included in the calculation of remuneration.
3 Ms Caiña Carreiro-Andree's contract of employment ended on 30 June 2020.
1 The reported remuneration for the years 2019 and 2020 has been recalculated pursuant to § 162 of the German Stock Corporation Act (AktG).
- 97%
64,856
- 54%
Change 2020
vs 2019 in %
3 These figures refer to the distribution of manufactured vehicles (BMW Group, contract manufacturing and partial volumes for partner plants) to markets worldwide. Glossary.
2 Figures relate to spare parts deliveries to vehicle production facilities (BMW Group and partner plants, excluding contract manufacturing). Further information can be found in the Glossary. In some cases, figures have been extrapolated for individual months.
1 From 2022, application of the international GLEC Framework directive in the version applicable during the yearly tranche, along with CleanCargo and DIN EN 16258/ISO 14083 still being in force. The methodology used to calculate carbon emissions changed in the reporting year 2023. Each vehicle is
assigned an average value based on the CO₂e assessment of individual transport movements. The values in the time series were adapted using the new methodology. The emission factors were also adjusted retrospectively (values prior to change in methodology and adjustment of transport logistics (inbound
and outbound) emission factors, excluding aftersales logistics: 2022: 2,100,161 t CO₂e). For more information about calculating the CO₂e emissions, please refer to the Glossary.
tkm
g CO₂e
77.1
43.4
76.7
41.7
14.4
31.7
3,170,701
14.2
7.3
5.5
7.5
5.2
1.2
19.4
1.6
22.2
30.9
23,516
28,455
3,253,638
3,517,068
(-)
(-)
(-)
(-)
since April 2022
André Mandl¹
109%
210,000
(-)
100,624
(-)
(-)
(-)
(-)
(-)
since July 2022
Gerhard Kurz
(-)
0%
156,333
210,000
(-)
134,344
(-)
since May 2020
Anke Schäferkordt
58%
410,000
24%
260,000
0%
210,000
-5%
210,000
220,000
since June 2012
Dominique Mohabeer¹4
34%
(-)
210,000
210,000
210,000
Remuneration Report
Other Information
←三〇
307 Further GRI Information
307 Production, Purchasing and Supplier Network
314 Employees and Society
318 SASB Index
321 TCFD Index
325 NFS Index
326 Consumption and Carbon Disclosures
328 BMW Group Ten-year Comparison
330 Glossary and Explanation of Key Figures*
337 Financial Calendar
338 Contacts
*Part of the Combined Management Report
06
OTHER
INFORMATION
Responsibility Statement and Auditor's Report
143%
Group Financial Statements
BMW Group Report 2023
(-)
86,258
(-)
(-)
(-)
since August 2021
Jens Köhler¹
- 1%
208,000
0%
210,000
0%
210,000
- 5%
210,000
220,000
306
To Our Stakeholders Combined Management Report
56%
210,000
0%
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
305
← = Q
Board of Management
Chairman of the
Oliver Zipse
For the Board of Management
Norbert Reithofer
Chairman of the
Supervisory Board
Dr-Ing Dr-Ing Eh
For the Supervisory Board
Bayerische Motoren Werke Aktiengesellschaft
The Company maintains a financial loss liability insurance policy
for the members of the Board of Management and the
Supervisory Board. The insurance provides cover for legal
liability claims and protects the private assets of members of
BMW AG's Board of Management and Supervisory Board if a
claim is made against them for financial loss in the course of
exercising their function as a corporate entity. A deductible is
provided for members of the Board of Management that
complies with the requirements of the German Stock Corporation
Act (AktG).
BMW Group companies did not grant any loans to members of
the Board of Management or the Supervisory Board in the 2023
financial year, nor did they enter into any contingent liabilities in
their favour. In the year under review, members of the Board of
Management and the Supervisory Board concluded contracts
with BMW Group companies for the purchase of vehicles, other
services (maintenance and repair work) and cash deposits at
arm's length conditions.
VI. OTHER CONSIDERATIONS
VI. Other Considerations
Remuneration Report
VII. Auditor's Report
Other Information
Other Information
VII. AUDITOR'S REPORT
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Munich, March 14, 2024
We issue this auditor's report on the basis of the engagement
agreed with Bayerische Motoren Werke Aktiengesellschaft. The
audit has been performed only for purposes of the company and
the auditor's report is solely intended to inform the company as
to the results of the audit. Our responsibility for the audit and for
our auditor's report is only towards the company in accordance
with this engagement. The auditor's report is not intended for
any third parties to base any (financial) decisions thereon. We do
not assume any responsibility, duty of care or liability towards
third parties; no third parties are included in the scope of protec-
tion of the underlying engagement. § 334 BGB [Bürgerliches
Gesetzbuch: German Civil Code], according to which objections
arising from a contract may also be raised against third parties,
is not waived.
Restriction on use
The audit of the content of the remuneration report described in
this auditor's report includes the formal audit of the remuneration
report required by § 162 Abs. [paragraph] 3 AktG, including the
issuance of a report on this audit. As we express an unqualified
audit opinion on the content of the remuneration report, this audit
opinion includes that the information required by § 162 Abs. 1
and 2 AktG has been disclosed in all material respects in the re-
muneration report.
Reference to an Other Matter - Formal Audit of the
Remuneration Report according to § 162 AktG
In our opinion, based on the findings of our audit, the remunera-
tion report for the financial year from January 1, 2023 to Decem-
ber 31 2023, including the related disclosures, complies in all
material respects with the accounting provisions of § 162 AktG.
Audit Opinion
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
In making those risk assessments, the auditor considers internal
control relevant to the preparation of the remuneration report in-
cluding the related disclosures. The objective of this is to plan
and perform audit procedures that are appropriate in the circum-
stances, but not for the purpose of expressing an opinion on the
effectiveness of the company's internal control. An audit also in-
cludes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by
the executive directors and the supervisory board, as well as
evaluating the overall presentation of remuneration report in-
cluding the related disclosures.
An audit involves performing procedures to obtain audit evidence
about the amounts including the related disclosures stated in the
remuneration report. The procedures selected depend on the au-
ditor's judgment. This includes the assessment of the risks of
material misstatement of the remuneration report including the
related disclosures, whether due to fraud or error.
Our responsibility is to express an opinion on this remuneration
report, including the related disclosures, based on our audit. We
conducted our audit in accordance with German generally ac-
cepted standards for the audit of financial statements promul-
gated by the Institut der Wirtschaftsprüfer (Institute of Public Au-
ditors in Germany) (IDW). Those standards require that we com-
ply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the remuneration
report, including the related disclosures, is free from material
misstatement.
Auditor's Responsibilities
The executive directors and the supervisory board of Bayerische
Motoren Werke Aktiengesellschaft are responsible for the prep-
aration of the remuneration report, including the related disclo-
sures, that complies with the requirements of § 162 AktG. The
executive directors and the supervisory board are also responsi-
ble for such internal control as they determine is necessary to
enable the preparation of a remuneration report, including the re-
lated disclosures, that is free from material misstatement,
whether due to fraud or error.
Responsibilities of the Executive Directors and the
Supervisory Board
We have audited the remuneration report of Bayerische Motoren
Werke Aktiengesellschaft, München, for the financial year from
January 1, 2023 to December 31, 2023 including the related
disclosures, which was prepared to comply with § [Article] 162
AktG [Aktiengesetz: German Stock Corporation Act].
To Bayerische Motoren Werke Aktiengesellschaft, München
← = Q
Remuneration Report
Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report Group Financial Statements
since January 2022
Sibylle Wankel¹
since May 2019
Vishal Sikka
0%
210,000
55%
210,000
(-)
135,419
(-)
(-)
(-)
since May 2021
Christoph Schmidt
0%
210,000
139,532
(-)
208,000
49%
210,000
BMW Group Report 2023
304
4 Member of the Audit Committee since 1 October 2022.
3 Dr Bock was elected Chairman of the Audit Committee in May 2020.
1 These employee representatives have declared that they will transfer their remuneration to the Hans Böckler Foundation in accordance with the guidelines of the Confederation of German Trade Unions.
2 Member since 18 January 2023, Deputy Chairman since 23 January 2023.
1%
210,000
(-)
307 BMW Group Report 2023 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
208,387
(-)
(-)
(-)
0%
210,000
0%
210,000
1%
(-)
Michael Popp
Wirtschaftsprüfer
(German Public Auditor)
FURTHER GRI INFORMATION
BMW Group Carbon footprint
in MWh
TOTAL ENERGY CONSUMPTION
Total energy consumption
TOTAL ENERGY CONSUMPTION BY AREA
Vehicle production
Motorcycle production
Non-manufacturing areas
CHP losses³
Further GRI Information
← = Q
2019
2020
2021
2022
2023
6,348,009
6,040,824
Energy consumption¹²
6,476,955
Other Information
Group Financial Statements Responsibility Statement and Auditor's Report
133,875,567
130,210
1,316,438
2,200,661
66,170
145,284
33,029,416
92,947,849
174,017
1,394,603
2,746,124
115,469
166,273
34,267,874
94,774,779
183,417
1,621,631
1 Carbon emissions in the supply chain, including in transport logistics, as well as in upstream fuel production (well-to-tank) are referred to as CO₂e.
2 The methodology used to calculate carbon emissions changed in the reporting year 2023. Each vehicle is assigned an average value based on the CO₂e assessment of individual transport movements. The values in the time series were adjusted to reflect the new methodology. The emission factors were also
adjusted retrospectively (values prior to change in methodology and adjustment of transport logistics emission factors, excluding aftersales logistics: 2019: 1,454,534 t CO₂e, 2020: 1,225,688 t CO₂e, 2021: 1,748,700 t CO₂e, 2022: 2,100,161 t CO₂e) Glossary.
3 Includes business trips by plane, rail and rental car. As a result of the extensive travel restrictions in place during the pandemic, 2019 is used as a base year for more conclusive comparisons in terms of business travel.
4 Emissions from company cars (Scope 1) are also included on a pro-rata basis under employee commuting and use phase (both Scope 3). A distinction in the systems is currently not possible.
5 2019 is not directly comparable to the other years because an improved data basis was available from 2020 onwards. In some cases, figures have been extrapolated based on data collected at major national and international BMW Group locations. The sites in Farnborough, UK, and Woodcliff Lake, USA,
were included in the calculation for the first time in the reporting year 2023.
6 The methodology used to calculate carbon emissions changed in the 2023 reporting year. Previously, the CO₂e values were calculated on the basis of a small set of TÜV-validated life cycle assessments performed for European vehicles. Enhancements to the IT system have made it possible to perform a
differentiated calculation for all vehicles taking into account different energy mixes and carbon emission factors for different production regions (see Glossary). The values in the time series were adapted using this new methodology (values based on prior methodology: 2019: 18,505,921 t CO₂e, 2020:
16,234,959 t CO₂e, 2021: 18,534,765 t CO₂e, 2022: 19,758,702 t CO₂e). The values for 2019 through 2021 as well as 2023 shown in the table according to the new methodology were subjected to a reasonable assurance audit. The carbon-reducing measures are taken into account from 2022 onwards.
The implementation of measures for 2022 was subjected to a limited assurance audit.
7 Energy consumption values (lower calorific value)] in the "Purchased goods and services" category and the "Disposal" category are estimated using the methodology specified in footnote (9): 113,179 GWh in the "Purchased goods and services" category and 908 GWh in the "Disposal" category.
8 The absolute emissions in the use phase are based on the Carbon emissions of the new vehicle fleet worldwide, including upstream emissions (Scope 3 downstream, well-to-wheel). The total value in t CO2 is the result of multiplying the average value with all BMW Group vehicles sold in the reporting period
and an assumed average mileage of 200,000 km (as per VDA 900-100).
9 CO₂e calculated based on life cycle assessments as per ISO 14040/44 of representative vehicles from the product lines using the "LCA for Experts" tool provided by Sphera (including climate-impacting gases CO2, CH4, N2O, SF6, NF3). For definition, see Glossary.
309
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Remuneration Report
129,958,000
6,295,990
5,226,227
Natural gas
of which CHP losses
Biogas (landfill gas)
of which CHP losses
Solar (photovoltaics)
Other fossil fuels
2,653,855
367,040
33,688
2,320,314
2,453,215
2,542,434
2,711,392
274,484
33,322
284,763
31,882
307,163
354,015
3,117,505
3,206,948
Community cooling
6,380,652
Community heating
TOTAL ENERGY CONSUMPTION BY SOURCE
4,946,865
5,329,550
4,750,321
4,954,639
120,583
114,072
125,450
101,574
105,614
1,001,199
979,887
1,021,955
906,175
890,617
- 1%
537,919
429,782
Electricity
136,757,602
2,203,818
29,765
139,999
33,131,882
99,805,490
131,255,722
1,939,191
25,217
166,586
29,094,346
98,782,354
97,171
1,150,857
2,178,437
129,646
146,298
31,486,873
110,899,066
115,863
1,269,018
134,699,641
678,403
678,967
699,713
694,057
713,933
586,638
604,620
631,304
614,117
595,257
85,667
72,554
66,442
76,491
113,431
6,098
130,743,357
1,793
137,592,164
147,257,699
int CO₂
Total emissions¹
SCOPE 1: DIRECT GREENHOUSE GAS EMISSIONS
Total emissions
BMW Group locations 2,3,4
Company vehicles 5,6,7
Company-owned planes
SCOPE 2: INDIRECT GREENHOUSE GAS EMISSIONS
Remuneration Report
Other Information
← = Q
Further GRI Information
2019
2020
2021
2022
2023
132,064,779
1,967
3,449
5,245
← = Q
BMW Group Carbon footprint
in t CO₂/CO₂e¹
SCOPE 3: INDIRECT GREENHOUSE GAS EMISSIONS
Total emissions
Logistics - material supply of the plants and distribution of vehicles²
Business trips³
Employees' commuter traffic4,5
Purchased Goods and Services6,7
Use phase 4,8
Logistics - aftersales logistics
Disposal 1.7.9
2019
2020
2021
2022
2023
146,225,201
Further GRI Information
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Total emissions
Electricity/heat purchased by BMW Group locations²,4,9
354,095
354,095
130,090
130,090
134,849
134,849
91,300
91,300
110,141
110,141
PRODUCTION, PURCHASING AND SUPPLIER NETWORK
1 The CO2 emissions listed account for approximately 90% of the BMW Group's total Scope 1 to Scope 3 emissions. The methodology used to calculate CO2 emissions changed in the reporting year 2023 for the items "Purchased Goods and services" and "Logistics - material supply of the plants and
distribution of vehicles". The prior-year figures have been adjusted retrospectively.
3 This amount includes 15,881 t CO₂ from the direct use of biomass.
4 Calculation of Scope 1 and Scope 2 emissions, using the operational control approach in accordance with the GHG Protocol. Leased space without the direct influence of the BMW Group on energy supply is therefore not included.
5 Includes the emissions of company cars and function-related vehicles of the BMW Group plants, as well as the 12 major markets. Emissions are preferably calculated on the basis of tank refills. This is the case for the plants and/or markets in Australia, Austria, Brazil, France, Germany, Hungary, India, Italy
(only Alphabet Italia S.p.A. and BMW Bank GmbH, Milan), Japan, Mexico, South Africa, South Korea (only BMW Financial Services Korea Co., Ltd., Seoul), Thailand and the UK. In the remaining cases, they are determined based on kilometres driven. For the USA, the data are partly extrapolated for 2023
because the information was not yet available for the entire period at the time the data was collected. For BMW Italia S.p.A. and BMW Italia Retail S.r.l., values for the reporting period are calculated based on average kilometres per day. For system-related reasons, the refuelling of company vehicles includes
both business and private trips, except refuelling paid for by employees themselves.
6 Emissions from company cars (Scope 1) are also included on a pro-rata basis under employee commuting and use phase (both Scope 3). A distinction in the systems is currently not possible.
7 The increase in this metric is the result of the scope being increased as compared to the previous year. Reporting was only submitted for Germany and the international test sites up to and including 2022. During the 2023 reporting year, all BMW Group plants and the 12 major markets were integrated into the
figure. A calculation based on the Scope from 2022 results in a comparative value for 2023 of 80,869 t CO2 (+5.7% compared to previous year). No retrospective adjustment was made. As a result, the figures for 2023 are not directly comparable with previous years.
8 As a result of the extensive travel restrictions in place during the pandemic, 2019 is used as a base year for more meaningful comparisons in terms of civil aviation.
9 Scope 2 emissions calculated using the market-based method in accordance with the GHG Protocol Scope 2 guidance; mainly based on the emissions factors for electricity, district heating and fuels reported by the VDA (each in the latest version dated 12/2023) and occasionally using local emissions factors;
alternative calculation using the location-based method: 1,195,818 t CO2.
308
BMW Group Report 2023
To Our Stakeholders Combined Management Report
2 Carbon emissions (excluding climate-impacting gases other than carbon dioxide) generated by vehicle production (BMW Group plants and BMW Motorcycle, excluding partner plants and contract manufacturing) and by other BMW Group locations not directly related to production (e.g. research centres, sales
centres, office buildings).
3,703,942
since May 1997
3,736,259
45%
11,290
-37%
Group return on sales after tax (in %)
4.8
3.9
- 19%
11.2
187%
13.0
16%
7.8
-40%
3,923,856
(-)
5,338,865
(-)
II. AVERAGE REMUNERATION OF EMPLOYEES IN €
Chairman since 16 August 2019
Oliver Zipse²
since May 2015,
III. REMUNERATION OF THE BOARD OF MANAGEMENT IN €¹
0%
102,047
17,941
3%
14%
99,169
-3%
86,715
89,353
Average remuneration of employees of BMW AG in €
102,394
Jochen Goller
Susanne Klatten
(-)
Remuneration Report
Other Information
V. Comparison of Change in Remuneration and Earnings
← = Q
Comparison of changes in earnings and remuneration for employees, the Board of Management and the Supervisory Board
2019
2020
Change 2020
vs 2019 in %
2021
Change 2021
vs 2020 in %
2022
Change 2022
vs 2021 in %
2023
Change 2023
vs 2022 in %
I. CHANGES IN EARNINGS
Net income of BMW AG according to the German Commercial Code (HGB) (in € million)
Profit attributable to shareholders of BMW AG (in € million)
2,107
301
228%
12,382
- 23%
3,775
4,915
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
- 31%
29%
6,311
188%
4,910
- 19%
1,702
4,366
since November 2023
BMW Group Report 2023
8,752,558
2,570,131
18%
5,689,801
55%
- 17%
4,528,636
13%
5,458,773
75%
4,820,525
4,824,746
(-)
(-)
(-)
1,006,759
(-)
(-)
(-)
17%
4%
2,757,590
3,117,471
36%
(-)
4,017,337
283%
95%
24%
4,374,024
- 55%
- 12%
2,651,143
Nicolas Peter 3,5
Joachim Post
Frank Weber
January 2017 until 11 May 2023
since January 2022
since July 2020
2,660,349
January 2018 until 31 October 2023
(-)
4,964,449
537,696
(-)
10,152,625
(-)
(-)
16%
(-)
Ilka Horstmeier
Walter Mertl
Milan Nedeljković
Pieter Nota3,4
2,058,305
since May 2023
384,435
2,043,706
432%
3,949,908
since November 2019
4,929,261
since October 2019
(-)
93%
2,446,106
(-)
(-)
(-)
64%
(-)
(-)
(-)
(-)
-10%
-20%
25%
(-)
8,158,904
616,872
4,413,481
China (Dadong, Tiexi incl. Lydia plants)
82
82
83
UK (Plants Hams Hall, Oxford, Swindon, Goodwood, Transport and
Logistics Centre (Bognor Regis))
85
100
100
100
100
84
100
63
100
100
100
100
Austria (Steyr plant)²
100
100
100
100
100
South Africa (Rosslyn plant, Sales, IT, Financial Services)
59
Germany (BMW AG)²
70
100
2023
5 Of this figure, 42.5% clock-controlled production employees of the BMW Group.
2021
70
0
149.55
155.06
126.0²
120.73
118.94
2019
2020
2021
2022
2023
1 The term "employee" has been redefined with effect from the reporting year 2020 (for definition,
see Glossary).
2022
² Of this figure, 38.2% clock-controlled production employees of the BMW Group.
4 Of this figure, 38.0% clock-controlled production employees of the BMW Group.
6 Of this figure, 41.9% clock-controlled production employees of the BMW Group.
315
BMW Group Report 2023
To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Further GRI Information
Share of employees represented by a trade union or falling under collective bargaining agreements¹
in %
2019
2020
3 Of this figure, 37.9% clock-controlled production employees of the BMW Group.
70
of which Share of women
fixed-term
in %
100
16
126
3,857
Austria
4,833
4,170
3,736
4,747
5,474
18
65
6,743
UK
85.4
85.9
84.3
87.2
70.8
12,736
6.6
6.0
4.8
5.1
Brazil
0.8
0.74
0.6
0.8
0.9
23
436
2,867
USA
South Africa
5604
464
653
764
35
2
3,703
Mexico
5.7
657
45,673
43,707
41,180
Vollzeit Select model
in % of total number of employees
Mobile work³
in % of total number of employees
Part-time employment²
Total
2023
2022
2021
in % of total number of employees
2020
Number of employees
Number of employees per country with production site(s)*
Alternative ways of working at BMW AG¹
2 Excluding senior management and representatives. GRI Index: 2-30
Status: 31.12.2023.
100
100
100
100
2019
USA (Spartanburg plant, no collective bargaining agreements in place)
Mexico (San Luis Potosí plant)²
Sabbaticals
Parental leave
43,309
36,208
15
12,623
28,076
China
8.2
7.8
7.7
in % of total number of employees
7.0
18
844
87,304
Germany
6,949
6,388
5,951
5,568
5,440
6.6
25
3,711
30
2021
2020
2019
0
*The efficiency indicator is calculated on the basis of solvent emissions (VOCs) generated by auto-
mobile production (BMW Group plants, excluding partner plants and contract manufacturing) di-
vided by the number of vehicles produced in automobile production (BMW Group plants and part-
ner plants, excluding contract manufacturing).
2023
2022
2022
2021
2019
0
0.52
0.61
0.70
0.81
0.85
2020
in kg
2023
313
2 A new version of the questionnaire containing additional requirements was introduced. As a result, some suppliers had to redo their questionnaires. Some suppliers had to implement additional preventive
31
22
55
70
2023
2022
*Efficiency ratio calculated on the basis of waste for disposal in automobile production (BMW
Group plants, excluding partner plants and contract manufacturing] divided by the total number of
vehicles produced in automobile (BMW Group plants and partner plants, excluding contract man-
ufacturing).
Proportion of suppliers of production-related material with agreed preventive measures at the time of awarding
Basis: industry-specific sustainability questionnaire.
in %
Sustainability assessment of relevant supplier locations 1,2
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
Proportion of suppliers of production-related material with implemented preventive measures at the time of awarding
measures.
VOC Solvent emissions per vehicle produced*
2.74
780,911
2023
2022
2021
2020
2019
in kg
775,459
Waste for disposal per vehicle produced*
in t
Waste¹
← = Q
Further GRI Information
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Total waste
2.12
Materials for recycling²
768,292
2.90
!!!!
1 Waste generated by automotive production (BMW Group plants, excluding partner plants and contract manufacturing).
2 Includes both recycling and thermal recovery.
3.33
5,326
6,113
6,650
771,162
7,168
Waste for disposal
4.09
922,554
812,274
927,880
818,387
829,498
822,848
9,749
Employees in
Germany
Notifications of potential violations in the supply chain
of which number of notifications that were clarified during the reporting year*
3,489
Employees with fixed-term contracts²
100
92
97
103
110
2,892
8,413
8,466
8,473
8,684
3,996
861
3,418
3,474
8,616
3,503
2,503
14,536
60
abroad
90
Employees
120
150
Number of employees in thousands
15,039
Employees in Germany and abroad¹
1 The term "employee" has been redefined with effect from the reporting year 2020 (for definition, see Glossary).
7,973
7,315
6,846
6,433
6,318
Employees in part-time employment³
2 Around 24% of these are women employed at BMW AG. For system-related reasons, this data is only collected for BMW AG.
3 Permanent and fixed-term employees.
Number of notifications of potential violations of our sustainability principles received through our reporting channels
142,441
106,928
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report
314
← = Q
Further GRI Information
Further GRI Information
6
4
11
8
2023
2022
of which number of justified notifications that were clarified during the reporting year
All notifications are processed until they are fully resolved, including across several financial years. Five notifications received in 2023 were still at the internal processing stage at the end of the financial
year and had not yet been fully resolved. Similarly, four notifications from 2022 were still being processed in 2023 that had not been fully resolved by the end of the 2022 financial year. Three of these
notifications were resolved in 2023 and were proven unjustified. The remaining notification will continue to be processed during the next financial year.
137,056
EMPLOYEES AND SOCIETY
BMW Group
108,676
113,719
154,950
149,475
118,909
120,726
126,016
Employees at end of year¹
2023
2021
2020
2019
Other
Financial Services
Motorcycles
Automotive
2022
2
2020
in % of total number of employees
Percentage of vehicle models rated by
NCAP programmes with an overall 5-star
safety rating, by region
Product safety
7 Key performance indicators
TR-AU-000.B
Number
Quantitative
Number of vehicles sold
Activity metric
7 Production network
TR-AU-000.A
Number
Quantitative
Number of vehicles manufactured
Notes
Code
Quantitative
Percentage (%)
TR-AU-250a.1
Number of safety-related defect
complaints, percentage investigated
Share of employees represented by a
trade union or falling under collective
agreements
Labour practices
Product safety
7 Quality management in the BMW Group
TR-AU-250a.3
Number
Quantitative
Unit
Number of vehicles recalled
100%* of safety-relevant complaints were reviewed.
- 67% - Korean New Car Assessment Programme (KNCAP)
In its reporting on NCAP programmes, the BMW Group focuses on
markets in the EU (including the UK), China, the USA and South
Korea. More information about NCAP can be found in the chapter
Product Quality and Safety.
- 100% - China New Car Assessment Programme (C-NCAP)
-40% - U.S. National Highway Traffic Safety Administration's
(NHTSA) New Car Assessment Programme (NCAP)
- 88% - European New Car Assessment Programme
(Euro NCAP)
TR-AU-250a.2
Number, Percentage
(%)
Quantitative
* The survey period runs from November of the previous year through to November of the
reporting year, as to allow for a processing time after the receipt of complaints.
Category
Accounting metric
[[Topic
65.2
60.0
57.8
57.1
Thailand
Handling of pieces 12.8
Assembling/
disassembling 14.5
67.4
84.5
82.2
78.8
73.7
China
86.0
88.2
85.1
85.1
Quantitative
Mexico
62.9
SASB INDEX
SASB-Index
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
48.4
Combined Management Report
BMW Group Report 2023
318
case.
* "Local" refers to managers with local contracts. People deployed to work at the location who do not have a local employment contract are not included. These are reflected in the difference to 100 in each
74.2
72.7
67.8
To Our Stakeholders
Percentage (%)
TR-AU-310a.1
7 Further GRI Information
Total amount of waste from
manufacturing, percentage recycled
Materials efficiency and recycling
TR-AU-440a.1
Discussion and analysis n/a
Code
Unit
Category
Quantitative
Description of the management of risks
associated with the use of critical
materials
Raw material sourcing
[[Topic
SASB-Index
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Accounting Metric
To Our Stakeholders Combined Management Report
Notes
More information about this can be found online.
All BMW Group vehicles sold since 2008 meet the currently
applicable worldwide requirements for the recycling of end-of-life
vehicles, components and materials. Vehicles (except for
motorcycles) are already currently required to be 85% recyclable
or 95% recyclable including thermal utilisation (based on vehicle
weight).
]]
7 Closing material loops
At the Recycling and Dismantling Centre in Munich, 4,386
vehicles (including motorcycles) were taken back and recycled
during the reporting year. This corresponds to a total scrapping
weight for vehicles (including motorcycles) of 6,105 t. In relation
to the entire vehicle (excluding motorcycles), at least 85% of
materials are recycled and, including thermal utilisation, at least
95% as stipulated by legal requirements (European End-of-Life
Vehicles Directive ELV 2000/53/EC).
91.4% of the total amount of waste (927,880 t) was recycled
and 8.1% was thermally utilised.
7 Further GRI Information
tons (t)
sales-weighted metric
7 Raw materials security and strategy
TR-AU-440b.3
Average recyclability of vehicles sold Quantitative
TR-AU-440b.2
Metric tons (t),
Percentage (%)
Weight of end-of-life material recovered, Quantitative
percentage recycled
7 Waste
TR-AU-440b.1
Metric tons (t),
Percentage (%)
Percentage (%) by
84.9
BMW Group Report 2023
In line with its corporate strategy, the BMW Group is pursuing a
clear course of decarbonisation. Against a backdrop of increasing
electrification, it is particularly important to consider carbon
emissions over the entire life cycle of a vehicle. In this context, the
BMW Group has set itself decarbonisation targets by 2030 (base
year 2019) during the usephase, in the upstream supply chain
and in production. These have been registered with the SBTi and
validated (Reducing carbon emissions across the entire value
chain). The BMW Group is also taking measures to mitigate and
adapt to climate change. It is therefore imperative to identify
climate-related risks and opportunities and to take appropriate
account of them in determining the strategic direction to be
followed, managing the business and organising a Group-wide
risk management system. For further information, see ▾ Climate-
related Risks and Opportunities. The BMW Group is also working
consistently to reduce vehicle pollutants such as nitrogen oxides
(NOx), carbon monoxide (CO) and particulate matter (PM)
(Pollutants).
Number, days idle
Code
Unit
Category
Quantitative
(1) Number of work stoppages
Labour practices
Accounting Metric
TR-AU-310a.2
[[Topic
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
319
SASB-Index
320
and
(2) total days idle
(2) The BMW Group portfolio includes BEVs (1) and PHEVs (2).
Under the BMW Group definition, see Glossary Electrified
Vehicles, 48 V vehicles are not counted as hybrid vehicles.
(3) Plug-in hybrid electric vehicles (PHEV): 190,159
(1) Emissions-free vehicles (BEV): 375,716
7 As in previous years, statutory carbon emissions limits during the use
phase are met again
(2) The BMW Group provides the total number of days idle
resulting from work stoppages as per the definition in (1). The
total number of days idle can be calculated from the total number
of employees involved with each work stoppage and the number
of days the work stoppage lasted. The number of days idle for
2023 was zero. Strike action is usually taken to reinforce pay rise
demands.
(1) The BMW Group provides the number of work stoppages
(strikes and lockouts) affecting more than 1,000 employees and
that lasted one full shift or longer. The number of work stoppages
for 2023 was zero.
Notes
opportunities
Fuel economy and use-phase emissions
TR-AU-410a.3
Fuel economy and use-phase emissions
TR-AU-410a.2
Number
Quantitative
Number of (1) zero-emission vehicles
(ZEV), (2) hybrid vehicles and (3) plug-in
hybrid vehicles sold
Sales-weighted average passenger fleet Quantitative
fuel economy, by region
Mpg, L/km, gCO2/km, TR-AU-410a.1
km/L
Discussion of strategy for managing fleet Discussion and analysis n/a
fuel economy and emissions risks and
22
78.2
Ancillary activities 12.6
21.6
23.1
23.7
16.0
Average number of hours of training and further education
per employee of the BMW Group*
20.7
14.1
10.8
Tariff
68.9
43.1
27.0
"Meister" (master craftsmen)
26.0
38.2
lill
0
2019
2020
3,191
3,720
4,535
2,794
Total
2023
2022
26.4
2021
2019
Number
Total number of employees leaving BMW AG, by reason for leaving¹
* Training for BMW Group employees at consolidated and non-consolidated subsidiaries world-
wide. Data is collated on the basis of direct input by participants and, to a small extent, by extrap-
olation. Data also includes e-learning formats. GRI Index: 404-1
2023
2022
2021
To Our Stakeholders Combined Management Report
30.7
Non-tariff employees
2023
2 Of which 4,118 were female (60%). For systemic reasons, this number is only calculated for BMW AG.
1 The term "employee" has been redefined with effect from the reporting year 2020 (for definition, see > Glossary).
9
3
572
India
4.6
Hungary
29
691
Thailand
3,938
4,183
5.1
4,211
5.4
4,158
5.2
4,082
4.9
157
3,107
915
18
2022
2021
Employee category
Number of hours
employee category
Average training hours at the BMW AG Academy, by
Further GRI Information
38
Other Information
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
316
*Status: 31 December 2023.
"As a result of changes in the way information is recorded, data for 2022 have been retrospectively adjusted (Values before adjustment: 493 employees in sabbaticals; 0,6% of total number of employ-
ees).
3 Only workers in administrative positions who engaged in mobile work.
Remuneration Report
Part-time retirement, retirement, death
1,700
1,884
89.2
88.3
89.1
87.4
South Africa
Austria
USA
88.5
Processing 6.2
88.8
89.5
89.8
87.5
Others 7.2
99.5
99.7
90.2
99.8
Transport 10.2
78.7
75.6
80.0
78.4
68.4
82.1
India
Walking 28.2
82.3
Cleaning 2.4
Testing 2.1
88.4
85.4
85.9
82.7
78.7
77.7
79.1
85.8
Brazil
99.7
UK
91
70
33
50
65
Dismissed by employer
911
1 Figures refer to employees with permanent contracts.
1,011
2,6012
1,029
contract by employee)
Voluntarily left Company (termination or suspension of employment
2,105
2,110
1,938
1,749²
99.7
2 Increase mainly due to a set of personnel measures.
= Q
Germany
2023
2022
2021
2020
2019
in %
↑
Principal hazard spots
= Q
↑
Further GRI Information
Other Information
Remuneration Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
317
Share of local employees in management positions at major Company locations*
BMW Group Report 2023
Driving 3.8
← = Q
2.12
2.05
1.91
1.90
1.78
Elastomers (e.g. tyres,
seals) 3.6
0
Non-ferrous metals 21.0
2019
2021
2022
2023
1 Calculated using unit-adjusted averages for the BMW 1 Series, 2 Series, 3 Series, 4 Series, 5 Se-
ries, 6 Series, 7 Series, 8 Series, the X1, X2, X3, X4, X5, X6, X7 of Rolls-Royce, MINI and M-
GmbH, as well as the BEV vehicles i3 long, 14, 15, 17, ix, iX1, ix2, iX3, MINI E, Rolls-Royce Spectre
and PHEV versions.
2 The number of vehicles produced (BMW Group plants, partner plants and contract manufactur-
ing] increased year-on-year to around 2.66 million vehicles (2022: around 2.38 million). Based
on an average vehicle weight of BMW Group vehicles of around 2.0 tonnes, the total weight of in-
put materials is around 4.9 million tonnes. To calculate the individual material flows, the total
weight is multiplied by the average distribution of the materials in BMW Group vehicles.
Efficiency indicator calculated from the potable water consumption measured for automobile pro-
duction (BMW Group plants, excluding partner plants and contract manufacturing) divided by the
number of vehicles produced in automobile production (BMW Group plants and partner plants,
excluding contract manufacturing).
² Potable water consumption refers to water purchased from external water suppliers. If a BMW
Group location does not purchase water from an external supplier, the primary source of supply is
counted as potable water. This applies to the BMW Group plants in San Luis Potosí, Mexico, and
Araquari, Brazil, where groundwater is the main source.
2020
3 Value of the base year 2016 to the target reduction of -25% by 2030: 2.00.
Textiles 1.1
12.5
312
311
BMW Group Report 2023
To Our Stakeholders Combined Management Report Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Steel and iron 48.4
Potable water consumption per vehicle produced 1,2,3
in %
in m³
Others (including glass and
operating materials) 11.1
M.O.N. (mod. Organ.
Natural mat.) 0.3
Duromers 2.0
Average distribution of materials in BMW Group vehicles¹²
Water consumption*
Thermoplastic resins
Water consumption
15.7
15.9
of which surface water in %
0.0
0.0
0.0
0.0
14.6
of which rainwater in %
0.1
0.3
0.3
0.2
*Water used by automotive production (BMW Group plants, excluding partner plants and contract manufacturing).
in m³
Further GRI Information
0.0
13.6
0.1
83.8
of which groundwater in %
12.6
2019
2020
2021
2023
5,417,428
4,722,310
2022
4,924,477
84.0
85.1
86.3
of which potable water in %
5,049,144
4,840,161
87.4
Fuel consumption
BMW M3 CS
BMW i4 eDrive35
BMW i4 eDrive40
Model
CO2 emissions
in g/km
(combined/weighted
combined) max/min
in l/100km
(combined/weighted
combined) max/min
combined)
BMW
apply for the assessment of taxes and other vehicle-related du-
ties which are also based on CO2 emissions. Further information
about the official fuel consumption and official specific carbon
emissions of new vehicles can be found in the "Manual on fuel
consumption, carbon emissions and electricity consumption of
new vehicles". www.dat.de/co2
Figures according to WLTP
in kWh/100 km
(combined/weighted
combined) max/min
Electricity power
consumption
CO₂ emissions
in g/km
(combined/weighted
combined) max/min
Fuel consumption
in l/100km
(combined/weighted
combined) max/min
As of February 2024
may
For vehicles that were newly type-approved on or after 1 January
2021, official figures are only based on WLTP. In the vehicles,
different figures than those published here
BMW i4 M50
The figures for fuel consumption, CO₂ emissions and power con-
sumption are calculated based on the measurement methods
stipulated in the current version of Regulation (EU) 715 / 2007.
The information is based on a vehicle with basic equipment in
Germany. Ranges take into account differences in wheel and tyre
size selected as well as optional equipment and can change
based on configuration. The figures have been calculated based
on the new WLTP test cycle and adapted to NEDC for compari-
son purposes.
Electric range
(combined/weighted
BMW i5 eDrive40
445-506
10.4-10.1
Disclosures regarding fuel consumption, carbon emissions and electricity consumption
21.7 -19.9
17-13
0.8 -0.6
1.0-0.8
BMW 530e xDrive
BMW 530e
20.8 18.3
BMW i5 M60 xDrive Touring
457-516
20.5-18.2
BMW i5 eDrive40 Touring
BMW i5 M60 xDrive
19.3-16.5
497-582
18.9-15.9
415-520
22.5-18.0
492-590
19.116.1
406-483
18.7 -15.8
234-229
483-560
CONSUMPTION AND
CARBON DISCLOSURES
-
← = Q
-
-
7 Risks and Opportunities
7 Production and Supplier Network
7 Products
Performance Indicators and Performance Management
Environmental Analysis
The BMW Group Strategy
About This Report
-
93-103
7 Risks and Opportunities
* Environmental Analysis
- Performance Indicators and Performance Management
Cornerstones of the Strategy
The BMW Group Strategy
-
Social matters
Employee matters
Environmental matters
Connection to figures in financial statements
-
Consumption and Carbon Disclosures
Climate-related Risks and Opportunities
Cornerstones of the Strategy
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
326
* Regulation (EU) 2020/852 of the European Council and of the European Parliament on the Es-
tablishment of a Framework to Facilitate Sustainable Investment, and amending Regulation (EU)
2019/2088, Commission Delegated Regulation (EU) 2021/2139, Commission Delegated Regu-
lation (EU) 2021/2178, Commission Delegated Regulation (EU) 2023/2485 and Commission
Delegated Regulation (EU) 2023/2486.
↑
NFS-Index
7 EU Taxonomy
7 Compliance and Human Rights
7 Purchasing and Supplier Network
7 Compliance and Human Rights
Disclosures regarding revenues that are taxonomy-eligible and taxonomy-aligned, capital
expenditure (CapEx) and operational expenditure (OpEx)
Mandatory disclosure pursuant to Section 8 of the EU Taxonomy Regulation*
Combating corruption and bribery
Respect for human rights
7 Purchasing and Supplier Network
* Environmental Analysis
7 Employees and Society
Performance Indicators and Performance Management
The BMW Group Strategy
23-19
in kWh/100 km
(combined/weighted
combined) max/min
83-90
BMW iX2 xDrive30
BMW iX1 xDrive30
BMW iX1 xDrive20
Model
184-179
167-157
7.4-6.9
8.1-7.9
78-84
32.2-31.5
37-30
1.7-1.3
76-82
33.5-32.5
45-35
2.0-1.6
76-83
33.6-32.5
43-35
1.9 1.5
453-461
18.9 - 18.5
BMW iX3
417-449
BMW XM
BMW XM 50e
17.2
387-402
14.7 -14.1
203-232
17.6-15.4
293-305
14.3 -13.8
in l/100km
(combined/weighted
combined) max/min
Fuel consumption
Rolls-Royce Ghost
Rolls-Royce Cullinan
ROLLS-ROYCE
MINI Countryman SE ALL4
MINI Countryman E
MINI Cooper SE Cabrio
MINI Cooper SE (from model year 2024)
MINI Cooper SE (until model year 2023)
MINI Cooper E
MINI
BMW Z4 Roadster M40i
BMW Z4 Roadster sDrive20i
BMW XM Label Red
17.7-16.3
417-439
18.1 - 16.9
587 633
490-559
403-435
24.7-21.9
21.3 -19.5
BMW iX M60
BMW iX xDrive50
21.4 -19.4
BMW iX xDrive40
23.7-20.8
589-624
19.6 - 18.5
575-611
20.3 - 19.1
BMW i7 M70 xDrive
BMW i7 xDrive 60
BMW i7 xDrive50
94-110
27.0-22.9
26-18
1.1-0.8
BMW X5 xDrive 50e
501 - 564
Figures according to NEDC
Electricity power
consumption
in kWh/100 km
(combined/weighted
combined) max/min
327
in kWh/100 km
(combined/weighted
combined) max/min
consumption
Figures according to NEDC
Electricity power
CO₂ emissions
in g/km
(combined/weighted
combined) max/min
in l/100km
(combined/weighted
combined) max/min
combined)
430-474
17.2 - 15.4
Electric range
(combined/weighted
Fuel consumption
Figures according to WLTP
23.2 - 21.6
Risks
Electricity power
CO₂ emissions
in g/km
(combined/weighted
combined) max/min
← = Q
As of February 2024
Consumption and Carbon Disclosures
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report Group Financial Statements
BMW Group Report 2023
consumption
Integration of top management
Reducing carbon emissions across the entire value chain
7 Organisation and Business Model
Climate-related opportunities
-
Physical climate risks
-
Transitory climate risks
-
Climate scenarios
-
Climate-related Risks and Opportunities
-
7 Risks and Opportunities
Climate-related Risks and Opportunities
-> Material Short-term Risks and Opportunities
- Risk and Opportunity Management
7 Risks and Opportunities
- Carbon emissions in the supply chain
Purchasing and Supplier Network
-
7 Production and Supplier Network
- Thinking holistically about electric mobility
- Electromobility
CDP Questionnaire 2023
-> Further reduction in pollutant emissions
C2.1, C2.1a, C2.1b, C2.2a, C2.3, C2.3a, C2.4,
C2.4a
C2.3, C2.3a, C2.4, C2.4a, C3.1, C3.3, C3.4, C3.5,
C3.5a
-
-
-Climate scenarios
Climate-related Risks and Opportunities
Climate-related risks
- Risk measurement
-> Organisation of Risk Management
-> Risk and Opportunity Management
Risks and Opportunities
BMW Group Report 2023
A. Describe the Company's processes for identifying
and assessing climate-related risks.
Recommended TCFD Disclosures
Disclose how the Company identifies, assesses, and manages climate-related risks.
[[Risk Management
TCFD-Index
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report Group Financial Statements
BMW Group Report 2023
323
C2.1b, C2.3, C2.3a, C2.4, C2.4a, C3.1, C3.3, C3.4,
C3.5, C3.5a
-
- Making conventional drivetrains more efficient and lowering their emissions
-
Risks and Opportunities
- Environmental Analysis
The BMW Group Strategy
BMW Group Report 2023
C. Describe the resilience of the Company's strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario.
B. Describe the impact of climate-related risks and
opportunities on the Company's businesses, strategy,
and financial planning.
A. Describe the climate-related risks and
opportunities.
Disclose the actual and potential impacts of climate-related risks and opportunities on the Company's businesses, strategy, and financial planning where such information is material.
Recommended TCFD Disclosures
[[Strategy
↑
TCFD-Index
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
322
C1.2
C1.1a, C1.1b
CDP Questionnaire 2023
TCFD-Index
- Risk and Opportunity Management
Reducing carbon emissions across the entire value chain
-
-> Non-financial risks as reported in the non-financial statement (NFS)
Carbon Emissions
-
-
Drivetrain technologies of the future
- Innovation, Digitalisation and Customer Orientation
Products
- Cornerstones of the Strategy
-> Environmental Analysis
The BMW Group Strategy
Climate-related opportunities
-
- Physical climate risks
-> Transitory climate risks
- Climate scenarios
Climate-related Risks and Opportunities
-> Risks and opportunities relating to purchasing
Strategic and sector-specific risks and opportunities
Material Short-term Risks and Opportunities
-
-
-
Climate-related risks
Transitory climate risks
-
Physical climate risks
Cornerstones of the Strategy
The BMW Group Strategy
-
-
- Circular Economy, Resource Efficiency and Renewable Energy
7 Production and Supplier Network
- Carbon Emissions
7 Products
Further GRI Information (Table BMW Group Carbon Footprint)
- Performance Indicators and Performance Management
The BMW Group Strategy
201
Carbon Emissions
-
-
7 Products
7 Dashboard
Further GRI Information (Table BMW Group Carbon Footprint)
C. Describe the targets used by the Company to
manage climate-related risks and opportunities.
B. Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions.
↑
- Position - What does the BMW Group stand for?
CDP Questionnaire 2023
C4.1b, C4.2, C4.2a, C4.2b, C4.2c
Performance Indicators and Performance Management
Products
BMW Group Report 2023
Business model
Mandatory disclosure pursuant to § 289 c - e HGB
NFS INDEX
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
325
C4.1, C4.1b, C4.2, C4.2a, C4.2b, C4.2c
C6.1, C6.2, C6.3, C6.4, C6.4a, C6.5, C6.10, C7.1,
C7.2, C7.3, C7.3a, C-TO7.4, C7.5, C7.6, C7.6a, C-
T07.8, C7.9, C7.9a, C7.9b
7 EU Taxonomy
-> Financial market player with sustainability credentials
Dialogue with Stakeholders
-
7 To Our Stakeholders
Reducing carbon emissions across the entire value chain
Carbon Emissions
-
-
-> Managing sustainability
Performance Indicators and Performance Management
-> Managing Sustainability
-
7 The BMW Group Strategy
Organisation of Risk Management
the Company's overall risk management.
and managing climate-related risks are integrated into
C. Describe how processes for identifying, assessing,
Risk measurement
-
-
Risk and Opportunity Management
-
Risks and Opportunities
B. Describe the Company's processes for managing
climate-related risks.
-
C2.1, C2.2, C2.2a
-> Position - What does the BMW Group stand for?
Cornerstones of the Strategy
- Managing sustainability
Performance Indicators and Performance Management
The BMW Group Strategy
C2.1, C2.2, C2.2a
CDP Questionnaire 2023
-
The BMW Group Strategy
- Performance Indicators and Performance Management
-
-> Managing and sustainability
A. Disclose the metrics used by the Company to assess
climate-related risks and opportunities.
BMW Group Report 2023
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
Recommended TCFD Disclosures
[[Metrics and Targets
TCFD-Index
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report Group Financial Statements
BMW Group Report 2023
The BMW Group Strategy
324
↑
C2.2
Climate-related Risks and Opportunities
- Risk measurement
-> Organisation of Risk Management
-
-> Risk and Opportunity Management
Risks and Opportunities
- Position - What does the BMW Group stand for?
Cornerstones of the Strategy
]]
17.4-15.7
Motorcycles
18.5-16.8
70,966
€ million
24.2
24.8
25.1
27.7
27.7
26.3
28.4
32.7
37.0
37.0
%
37,437
42,764
47,363
54,107
57,829
59,907
61,520
75,132
71,217
91,288
77,929
85,502
216,658
229,527
246,926
250,890
€ million
59,078
65,591
67,989
71,765
71,411
82,625
71,963
76,466
84,421
87,001
€ million
58,288
63,819
73,183
69,634
79,698
83,175
228,034
92,923
5.7
7,791
8,836
€ million
Capital expenditure (excluding capitalised development costs)
56,844
61,831
66,864
73,542
84,736
90,630
81,807
86,173
92,204
94,972
€ million
97,959
110,343
121,671
121,964
124,202
137,404
5,012
€ million
3,922
5,029
4.2
4.0
4.8
5.2
5.4
4.0
4.5
5.5
5.7
%
Balance sheet total
Current provisions and liabilities
Non-current provisions and liabilities
Equity ratio
Equity
costs)
Capital expenditure ratio (excluding capitalised development
4,601
3,826
3,731
4,688
5,650
208,938
195,506
188,535
Other Information
Glossary and Explanation of Key Figures
Remuneration Report
Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report Group Financial Statements
BMW Group Report 2023
330
3 Proposal by management. The dividend total may change before the date of the Annual General Meeting due to the share buyback and a resulting change in the number of shares entitled to receive a dividend.
2 Since the reporting year 2020, a new definition for workforce size has been applied ( Glossary). To enable better comparability, the value for 2019 was adjusted accordingly (2019 before adjustment: 133,778 employees). For the timeframe including and prior to 2018, the share of the employees that are no
longer reflected in reporting is about 7.5-8.0%.
1 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, note 6 to the Group Financial Statements). In addition, prior year figures were adjusted due to changes in the presentation of selected items that are of minor
importance overall.
2.90/2.92
1,904
3.20/3.22
2,102
3.50/3.52
2,300
4,00/4.02
2,630
3.50/3.52
2,303
2.50/2.52
1,646
← = Q
1,253
1.90 / 1.92
GLOSSARY AND EXPLANATION OF KEY FIGURES*
Apprentices
CO₂e is a unit of measurement used to standardise the climate
impact of various greenhouse gas (GHG) emissions, such as me-
thane or nitrous oxide. This is necessary because the individual
gases do not all contribute equally to the greenhouse effect. In
addition, the expert committee at the United Nations (Intergov-
ernmental Panel on Climate Change, IPCC) has defined "global
warming potential" (GWP). This is an index used to express
warming impact compared with CO₂ so that all GHGs are aggre-
gated. For example, over a period of 100 years, methane has 28
times the impact of CO2, while for nitrous oxide the impact is 265
times higher.
Carbon dioxide equivalents/CO₂e
Investments in property, plant and equipment (excluding right-
of-use assets in accordance with IFRS 16) and other intangible
assets (excluding capitalised development costs) as a percent-
age of Group turnover.
Capital expenditure ratio (excluding right-of-use assets and
capitalised development costs)
Investments in property, plant and equipment and other intangi-
ble assets (excluding capitalised development costs) as a per-
centage of Group turnover.
Capital expenditure ratio (excluding capitalised
development costs)
Capitalised development costs as a percentage of research and
development expenditure.
Capitalisation rate
C
The sum of the balance sheet line items "Leased products" and
"Receivables from sales financing" (current and non-current), as
reported in the balance sheet for the Financial Services segment.
Business volume in balance sheet terms
A securitised debt instrument in which the issuer certifies its ob-
ligation to repay the nominal amount at the end of a fixed term
and to pay a fixed or variable rate of interest.
Bond
It is also important to us that projects in the Global South create
a social benefit in line with the Sustainable Development Goals
(SDGs). These include, for example, initiatives that create health
benefits such as avoiding open fires in enclosed spaces.
BVCM involves, for example, purchasing certificates on the vol-
untary carbon market. Criteria such as additionality, perma-
nence, and certification by independent institutions following in-
ternational standards (Gold Standard) contribute to the quality of
the certificates employed, thereby bolstering the efficacy of our
commitment beyond our internal value chain.
Beyond Value Chain Mitigation (BVCM) refers to all investments
and measures that a company takes in addition to its Science
Based Targets (SBTS) to reduce emissions outside its value
chain. This includes activities that avoid or reduce greenhouse
gas emissions as well as those that remove greenhouse gases
from the atmosphere and store them. BVCM is strongly recom-
mended by the Science Based Targets initiative (SBTI) to vali-
dated companies in addition to CO₂ reduction in their own value
chain. The BMW Group is committed to this reduction hierarchy
and already actively manages both direct and indirect carbon
emissions from its plants in line with the 1.5°C pathway set by
the Science Based Targets initiative (SBTI), which involves im-
plementing significant measures in our value chain, plus addi-
tionally engaging in BVCM to address emissions outside our own
value chain. We voluntarily back these initiatives without them
counting towards the BMW Group's CO₂ reduction targets.
Beyond Value Chain Mitigation (BVCM)
B
A form of corporate financing involving the sale of receivables to
a financing company.
Asset-backed financing transactions
The number of all people on multi-year vocational training
courses at a BMW Group company (includes all of the consoli-
dated and non-consolidated companies in which the BMW
Group holds more than 50 % of the shares), with these training
courses consisting of practical and theory sections.
A
3,827
5.80/5.82
8.50/8.52
5,481
4,459
2,713
7,688
6,122
7,880
9,039
10,979
12,036
2,567
13,537
3,395
16,009
6,354
11,071
6,942
€ million
Free cash flow Automotive segment
16,870
17,327
€ million
Cash and cash equivalents at balance sheet date
CASH FLOW STATEMENT
154,803
172,174
5,792
5,404
3,481
PERSONNEL
3,802³
6,00/6,023
€
€ million
Dividend per share of common stock/preferred stock
Dividend total
92,337
97,136
116,324
122,244
124,729
99,575
134,851
129,932
100,760
126,016
98,901
120,726
99,647
118,909
103,569
149,475
94,952
96,778
Е
154,950
DIVIDEND
Personnel cost per employee²
Workforce at year-end²
134,682
101,178
143,354
154,722
155,918
5,981,928
133,093
5,859,890
139,530
5,513,129
135,689
5,312,689
137,910
€ million
Business volume (based on balance sheet carrying amounts)
contracts
Contract portfolio
FINANCIAL SERVICES
2,165,566
133,615
2,279,503
151,004
2,359,756
145,555
2,505,741
185,682
2,541,534
162,687
2,564,025
187,116
2,255,637
168,104
2,461,269
187,500
2,382,305
215,932
2,661,922
221,988
units
units
5,973,682
142,834
Motorcycles
5,708,032
133,147
5,114,906
123,394
13.7
19.8
17.2
19.1
%
80,401
92,175
94,163
98,282
96,855
104,210
98,990
111,239
142,610
155,498
€ million
Gross profit margin
Revenues
INCOME STATEMENT
4,359,572
96,390
4,718,970
111,191
5,380,785
124,719
Automobiles
PRODUCTION VOLUME
2,117,965
123,495
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
BMW Group Report 2023
328
500-530
23.6-22.2
Rolls-Royce Spectre
369-357
16.3 15.8
Rolls-Royce Wraith
381-367
16.9-16.2
Rolls-Royce Dawn
359-347
15.8 -15.2
377-368
16.5-16.1
399-432
BMW Group Ten-Year Comparison
BMW GROUP TEN-YEAR COMPARISON
DELIVERIES
2023
2,259,733
136,963
2,349,962
145,032
2,465,021
164,153
2,486,149
165,566
2,537,504
175,162
2,325,179
169,272
2,521,514
194,261
2,399,632
202,895
2,554,183
209,066
units
17.3
units
Automobiles
2014
2015
2016
2017
2018¹
2019
2020
2021
2022
Organisation of Risk Management
423-462
19.0
19.9
6,910
8,675
7,064
5,022
3,857
12,463
18,582
12,165
€ million
Net profit for the year
33.2
30.7
28.5
18.7
26.3
30.1
26.1
22.4
21.0
28.8
%
6,396
Effective tax rate
5,817
BMW Group Report 2023
€ million
Current assets
Non-current assets
BALANCE SHEET
2014
2015
2016
2017
2018¹
2019
2020
2021
2022
2023
← = Q
Other Information
BMW Group Ten-Year Comparison
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
To Our Stakeholders
329
2,890
2,828
2,755
7,118
5,222
16,060
23,509
17,096
€ million
Earnings before tax
9,118
9,593
9,386
9,899
8,933
7,411
4,830
13,400
13,999
18,482
€ million
Earnings before financial result
21.2
19.7
9,627
10,675
9,665
9,224
2,000
2,530
2,140
1,365
3,597
4,927
4,931
€ million
Income taxes
10.8
20.3
10.0
10.9
9.9
6.8
5.3
14.4
16.5
11.0
%
Return on sales (earnings before tax/revenues)
8,707
10.3
-
*Part of the Combined Management Report.
-
B. Describe Management's role in assessing and
managing climate-related risks and opportunities.
A. Describe the Board's oversight of climate-related
risks and opportunities.
Recommended TCFD Disclosures
Disclose the Company's governance around climate-related risks and opportunities.
[[Governance
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Combined Management Report Group Financial Statements
To Our Stakeholders
BMW Group Report 2023
321
Carbon emissions in the supply chain, including in transport lo-
gistics, as well as in upstream fuel production (well-to-tank) are
referred to as CO₂e. Climate-impacting gases under Scope 1 and
2 are not recognised for reasons of materiality.
Risk and Opportunity Management
BMW Group Report 2023
The BMW Group Strategy
TCFD INDEX
-
Risks and Opportunities
- Cornerstones of the Strategy
-
-
Performance Indicators and Performance Management
Cornerstones of the Strategy
- Carbon Emissions
7 Products
The BMW Group Strategy
Organisation of Risk Management
-
- Risk and Opportunity Management
Risks and Opportunities
- Managing sustainability
Performance Indicators and Performance Management
- Position - What does the BMW Group stand for?
7 Appropriateness and Effectiveness of the Internal Control System and Risk Management System
EU Taxonomy - operating expenditure (OpEx)
Operating expenditure only comprises non-capitalised develop-
ment costs, maintenance and refurbishment costs for buildings,
repairs to property, plant and equipment, relevant IT costs in the
Financial Services segment, non-capitalised expenses relating
to short-term lease contracts, expenditure for low value assets,
and purely variable remuneration. The KPI figure calculated for
taxonomy-purposes is not used by the BMW Group for financial
reporting purposes.
included, as these economic activities are not classified as tax-
onomy-eligible.
EU Taxonomy - capital expenditure (CapEx)
Capital expenditure is calculated on the basis of IAS 16.73(e)(i)
and (iii) for property, plant and equipment, IAS 38.118(e)(i) for
intangible assets and IFRS 16.53(h) for leases. In accordance
with the definition of capital expenditure provided in Annex I of
the Commission Delegated Regulation (EU) 2021/2178 and
taking into account the adjustments made by Delegated Regula-
tion (EU) 2023/2486, the KPI figure used for taxonomy pur-
poses comprises additions to intangible assets, in particular cap-
italised development costs, additions to property, plant and
equipment as well as right-of-use assets in accordance with
IFRS 16, and leased-out products. Capital expenditure relating
to the sale of parts to external third parties or the delivery of parts
to cooperation partners are not taken into account.
EU Taxonomy - revenues
Revenues are calculated in accordance with Article 2(5) of Di-
rective 2013/34/EU. Revenues comprise the income and earn-
ings reported in accordance with IAS 1.82(a). Revenues relating
to the sale of parts and components (e. g. after-sales business
excluding the provision of repair services) and the supply of pro-
duction components to third parties, insurance premiums, and
interest income on deposit-taking and credit business were not
F
Gross profit margin
A hedge against exposures to fluctuations in the fair values of
balance sheet items.
Free cash flow (Automotive segment)
Free cash flow is derived from cash flows from operating and in-
vesting activities. The cash flows from investing activities from
the purchase and sale of marketable securities and investment
funds is not included. Cash flows from the purchase and sale of
shares and the dividend payout from investments accounted for
using the equity method are included in the cash flows from in-
vesting activities.
G
Goodwill
Acquired goodwill is considered an intangible asset. It corre-
sponds to the difference between the purchase price and the net
assets of the acquired business as measured at fair value.
Equity capital as a percentage of the balance sheet total.
Fair value hedge
Equity ratio
Other Information
Glossary and Explanation of Key Figures
The number of people with temporary or permanent employ-
ment contracts who have opted for retirement via partial
Gross profit as a percentage of Group turnover.
← = Q
EBIT
Earnings Before Interest and Taxes. This is comprised of reve-
nues less cost of sales, selling and administrative expenses and
the net amount of other operating income and expenses.
EBIT margin
Profit/loss before financial result as a percentage of revenues.
EBT
retirement working arrangements and who are in the non-active
phase of this model (the second part, following the active phase
in this model).
EBIT plus financial result.
The effective tax rate is calculated by dividing the income tax ex-
pense by the Group profit before tax.
Electrified vehicles
The BMW Group uses the terms battery electric vehicle (BEV) to
denote fully electric vehicles and plug-in hybrid vehicle (PHEV) to
denote vehicles that can be charged and also driven on a fully
electric basis.
Employees BMW Group
Since 2020, all people with active temporary or permanent em-
ployment contracts (as of 31 December in the year in question)
with the BMW Group (includes all of the consolidated and non-
consolidated companies in which the BMW Group holds more
than 50% of the shares) have been considered "employees of
the BMW Group". This excludes apprentices, interns, temporary
staff (students on work experience), temporary employees,
dormant/inactive employment contracts due to maternity leave,
sabbaticals, parental leave, long-term illness (as defined in the
country in question), those in inactive early retirement phase, and
employees accompanying their partner abroad.
Until 2019, temporary staff, postgraduate students, interns, ap-
prentices, and people on extended sick leave or on sabbatical
were also included in this definition.
Employees in the non-work phase of partial retirement
working arrangements
Effective tax rate
Interns
N
335
The number of employees of the BMW Group participating in fur-
ther education worldwide (includes all consolidated subsidiaries
of the BMW Group). Data is collated on the basis of direct input
by participants and, to a small extent, by extrapolation. It com-
prises the overall number of participants on training and qualifi-
cation courses, including e-learning courses.
0
Outlook
Unless specific ranges are specified, the BMW Group uses the
following terminology and ranges as a basis when forecasting
key performance indicators:
At previous year's level [-0.9 %/+ 0.9%]
Slight increase
Slight decrease
Solid increase
Moderate decrease
Significant increase
Significant decrease
Number of training participants
P
[+ 1.0 %/+ 4.9%]
[-1.0%/- 4.9%]
[+5.0 %/+ 9.9%]
[-5.0 %/-9.9%]
≥ + 10.0 %
≤ -10.0 %
The number of employees (see definition of "Employees"), dis-
tinguishing between employees who have contractually stipu-
lated weekly working hours as prescribed by law, in a collective
wage agreement or by the company in question (full time) and
employees with a contractually stipulated reduction in their num-
ber of weekly working hours, which are thus less than the respec-
tive number of full-time working hours (part time).
Payout ratio
Ratio of unappropriated profit of BMW AG in accordance with
HGB to profit attributable to shareholders of BMW AG, based on
the BMW Group's net profit for the year under IFRS. Until the
2021 financial year, the payout ratio corresponded to the ratio of
unappropriated profit belonging to BMW AG in accordance with
HGB to the net profit for the year of the BMW Group in accord-
ance with IFRS.
People on extended sick leave
Part time, full time
The number of people completing voluntary or mandatory work
experience programmes at a BMW Group company (includes all
of the consolidated and non-consolidated companies in which
the BMW Group holds more than 50 % of the shares) while stud-
ying for a degree.
Reduction of Scope 1, 2 and 3 emissions (in line with the sci-
ence-based principles [SBTi]) to a residual level that corre-
sponds with achieving net zero emissions at global or sectoral
level in recognised 1.5°C scenarios or sectoral pathways (corre-
sponding to a maximum of 10% of the emissions of the chosen
base year). In addition, all remaining emissions are to be neutral-
ised by the net zero target date and beyond.
Remuneration Report
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Glossary and Explanation of Key Figures
Net Zero
← = Q
Liquidity
Cash and cash equivalents as well as marketable securities and
investment funds.
M
Management positions
Management positions are positions at functional levels I to IV
below the Board of Management level.
Maternity protection, parental leave
The number of people with active employment contracts who are
absent from work, as permitted by law, before and after the birth
of a child (maternity protection) or due to parenthood, as pro-
vided for by law in the country in question (parental leave).
L
Responsibility Statement and Auditor's Report
Cash flow hedges
To Our Stakeholders Combined Management Report
The CO₂e emissions of supply chains vary across different re-
gions of the world. For this reason, we allocate the production
sites of the vehicles to one of three regions: Europe, Asia or the
USA. We then calculate the emissions for the entire vehicle sup-
ply chain using the Sphera datasets that are valid for that region.
The particularly emission-intensive components, battery cells
and catalytic converter coating are specifically calculated based
on their actual production region, regardless of the vehicle's
manufacturing location.
Given the significant impact of battery cell production on the ve-
hicles' total CO₂e emissions, a detailed calculation model is used
332
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
The methodology outlined above depends on the established
"LCA for Experts" database (previously known as "GaBi") from
Sphera to ascertain CO₂e factors for energy, raw materials and
manufacturing processes. In this process, the current datasets
are consistently used, starting with the 2023 reporting year. Ret-
rospectively from 2019 until the release of the current datasets
at the end of February 2023, data from 2019 are used to calcu-
late CO₂e emissions.
Other Information
Glossary and Explanation of Key Figures
to assess the cells. In addition to the actual assembly sites of the
battery cells, the material compositions and related production
processes, it also accounts for the unique characteristics of the
cell chemistry (anode and cathode) as well as the emissions as-
sociated with supplier-specific energy consumption.
This approach gives each vehicle built during the period under
review its specific CO₂e value for supply chain emissions. The to-
tal fleet value of CO₂e supply chain emissions is calculated by
adding up the CO₂e contributions of all vehicles produced in the
reporting year.
Share of the reported value attributable to the supply chain
The reduction in CO₂e emissions compared to the BMW Group's
baseline is the result of emission-reducing measures in the sup-
ply chain that were contractually agreed with suppliers and veri-
fiably implemented during the reporting year (e.g. electricity from
renewable sources, use of recycled materials). Agreements with
suppliers of aluminium and precious metals as well as high-volt-
age storage cells resulted in particularly high reduction contribu-
tions.
The CO₂e value for these components and materials before the
implementation of measures is initially determined using the
"LCA for Experts" database on the basis of the type and quantity
of material. The emission-reducing measures are then deducted.
The calculation of the effect is also carried out using industry av-
erage values from "LCA for Experts" for green electricity and sec-
ondary raw materials.
The total emission-reducing measures for all components and
raw materials in the vehicles produced in the reporting year that
are evaluated in this manner is subtracted from the baseline
value. This results in the share of supply chain CO₂e emissions in
the reporting value of the overall indicator. The methodology for
calculating the supply chain CO₂e emissions outlined above
marks a key improvement over the previous approach. This im-
provement allows for the inclusion of agreed-upon emission-re-
ducing measures at the level of individual components and raw
materials, among other factors. Until 2022, each vehicle in the
fleet was allocated the supply chain CO₂e value of the most sim-
ilar vehicle from a small selection of vehicles that already had
TÜV-validated life cycle assessments available. The reporting
metric is then obtained by adding the transport logistics CO₂e
emissions, the calculation of which is described in the following
section.
← = Q
An external service provider commissioned by BMW conducts
the verification of measures at affected suppliers and their sub-
contractors at the impacted manufacturing sites. A defined
method is used to ensure that the contractually agreed emis-
sions-reducing measures are implemented clearly and without
duplication in the reporting year. There are some limitations re-
garding the clear and non-repetitive allocation of material flows
with secondary raw materials. Due to the lack of regulatory man-
dates, there is currently neither a requirement for the recording
and documentation of material flows for secondary materials
across the supply chain (for example on delivery notes), nor is
there a government-operated/regulatory registry similar to that
of green energy certificates that facilitates the distinct allocation
of secondary materials to specific customers without duplication.
Therefore, the secondary material quota is confirmed using sys-
tem extracts from the relevant suppliers' Enterprise Resource
Planning (ERP) systems, along with details and evidence of sec-
ondary material procurement through mass balances. Further-
more, written confirmation is obtained from suppliers and n-tier
suppliers (via declarations of conformity) to clearly attribute sec-
ondary materials to BMW products, preventing any possibility of
double-counting with other customers.
For example, in the baseline calculation for 2023, there is a 520i
listed as a bill of materials vehicle, but no 520i Touring. To en-
sure that the latter is accurately represented, the calculated CO₂e
emissions for components like the drivetrain, wheels, seats and
so on remain unchanged, while the body values are multiplied by
a scaling factor when calculating the Touring model.
For the vast majority of vehicle models produced that are not in-
cluded in the representative vehicles, there is no individual CO₂e
calculation available on a bill of materials basis. A modular scal-
ing calculation method has been developed to include these in
the overall result:
331
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Glossary and Explanation of Key Figures
← = Q
Carbon emissions: Scope 1 to Scope 3
The carbon emissions generated by a company are reported in
various categories. The Greenhouse Gas Protocol, a partnership
between the World Resources Institute (WRI) and the World Busi-
ness Council for Sustainable Development (WBCSD), distin-
guishes between Scope 1, Scope 2 and Scope 3 emissions,
based on their various sources. Whereas direct emissions (Scope
1) are generated within a company through the combustion of
fossil fuels, Scope 2 refers to the indirect emissions caused by
the consumption of electricity and heat from externally generated
sources of energy. Additional indirect (Scope 3) emissions are
generated in the upstream and downstream stages of the value
chain, for instance in the supply chain (upstream) and in the sub-
sequent use of products and services (downstream).
The bill of materials of the representative vehicles is divided into
sections (modules) according to functional criteria, and these are
assessed in terms of their total CO₂e emissions. Previously un-
assessed vehicle derivatives can now be custom-built using
these basic components, with different building blocks selected
based on the specific technical features of the target vehicles, in-
cluding engine type, all-wheel drive or body style. Components
that do not fit are scaled from existing ones. The scaling tech-
niques are based on empirical data derived from similar analyses
as well as on expert evaluations. This encompasses the scaling
of detailed bodywork calculations ranging from sedans to touring
models with identical engine specifications.
Carbon emissions from BMW Group locations per vehicle
produced (Scope 1 and 2)
CO₂e emissions from the supply chain including transport
logistics per vehicle produced (Scope 3 upstream)
A methodology tailored specifically for BMW was created to as-
sess the supply chain and logistics emissions in terms of their
CO₂e equivalents. Due to the absence of supplier-specific CO₂e
values throughout the entire supply chain, a model incorporating
industry averages and, when accessible, supplier-specific data is
used. This method draws upon components of ISO 14040/44
and follows common practice in preparing life cycle analyses
(LCA). However, it should be noted that this approach may not
be directly comparable with methods or values employed by
other companies. Due to a lack of data availability, various esti-
mates, assumptions and average values are used to determine
the key indicator. The aim is to improve the quality of the model
for calculating key metrics in future years. This will be achieved
by boosting transparency in supply chains and expanding the de-
tail of the model, all while maintaining consistency in calculations
over time.
The indicator quantifies greenhouse gas emissions (CO₂e) pro-
duced during production (GHG Protocol Scope 3 upstream cate-
gory 1), including the transportation of purchased goods and ser-
vices for production ("inbound"), as well as the global vehicle dis-
tribution of BMW Group automobiles ("outbound") (collectively
GHG Protocol Scope 3 upstream category 4). Contrary to the def-
inition of the scopes of the GHG Protocol, the following are not
included: motorcycles, racing vehicles and aftersales products,
including their transport logistics, as well as purchased IT cloud
services and engineering or development services.
Baseline calculation of supply chain emissions
The initial calculation of the supply chain CO₂e emissions for a
representative selection of vehicles is based on their bill of mate-
rials. This selection reflects the range of vehicle classes (from
premium compact to luxury) and types of drive (petrol, diesel,
PHEV and BEV) produced during the period under review.
For the representative vehicles, the CO₂e emissions of all in-
stalled components are calculated on the basis of their material
composition and related processing steps. Up to around 60,000
individual entries are evaluated in each case. The CO₂e value of
the relevant vehicle is calculated by adding these contributions
together.
This key indicator is calculated from the direct and indirect car-
bon emissions of BMW Group locations relating to the number of
vehicles produced during the year under report. The carbon
emissions result from energy consumption in the BMW Group
plants as well as non-manufacturing sites. Electricity from on-
site renewable generation, Power Purchase Agreements for
green electricity and Energy Attribute Certificates (e.g. guaran-
tees of origin) are all taken into account. The conversion is based
on emission factors for electricity, district heating and fuels from
the German Association of the Automotive Industry (VDA) in the
most current valid version and occasionally local emission fac-
tors. This key indicator is the basis for measuring the strategic
target by 2030 with regard to Scope 1 and 2 emissions. The re-
porting indicator is t CO₂ per vehicle produced.
Group Financial Statements
Transport logistics' share of the reporting value
In inbound logistics (production supply), all transport flows of in-
dividual component parts for automobile manufacturing (BMW,
MINI and Rolls Royce) are considered. This includes
Hedges against exposures to the variability in forecasted cash
flows, particularly in connection with exchange rate fluctuations.
Commercial paper
Deep-discounted bonds with a term of less than one year.
Consolidation
The process of consolidating separate financial statements of
Group entities into Group Financial Statements, depicting the fi-
nancial position, net assets and results of operations of the
Group as a single economic entity.
Credit default swap (CDS)
Financial swap agreements, under which creditors of securities
(usually bonds) pay premiums to the seller of the CDS to hedge
against the risk that the issuer of the bond will default. As with
credit default insurance agreements, the party receiving the pre-
miums gives a commitment to compensate the bond creditor in
the event of default.
The number of people with active employment contracts who are
absent from work on grounds of illness for an extended period of
time (as defined in the country in question - in Germany, this
means an absence of more than 42 calendar days with a given
illness).
D
A new or used vehicle will be recorded as a delivery once handed
over to the end user. End users also include leaseholders under
lease contracts with BMW Financial Services and - in the US and
Canada – dealerships when they designate a vehicle as a service
loaner or demonstrator vehicle. In the case of used vehicles, end
users may include dealerships and other third parties when they
purchase a vehicle at auction or directly from the BMW Group.
Vehicles designated for the end user which suffer a total loss in
transit are also recorded as deliveries. Deliveries may be made
by BMW AG, one of its international subsidiaries, a BMW Group
retail outlet, or independent dealerships. The vast majority of de-
liveries and hence the reporting to BMW Group of deliveries -
are made by independent dealerships. In the US and Canada,
the period start and end dates for the reporting of deliveries de-
viate immaterially from the beginning and, respectively, end of
calendar years or calendar quarters and instead follow industry-
standard reporting calendars. In the German-language version
of the BMW Group Report, the terms "Auslieferungen" (deliver-
ies) and “Absatz" (sales) are used interchangeably.
E
-
Earnings per share (EPS)
Basic earnings per share are calculated by dividing the earnings
attributable to the shareholders of BMW AG for ordinary and
preference shares by the average number of shares in each cat-
egory. Earnings per share of preferred stock are computed on the
basis of the number of preferred stock shares entitled to receive
a dividend in each of the relevant financial years.
334
BMW Group Report 2023
Deliveries
This indicator takes into account transport logistics emissions in
the reporting year. Firstly, inbound and outbound transport flows
are documented using IT-enabled billing and movement data to
calculate the CO₂e emissions in tonnes and the transport volume
in tonne-kilometres.
Similar to "value at risk" (see definition below).
permitted credit factors (e.g. supercredits and eco-innovations)
and standardised according to the WLTP (European) driving cy-
cle. These core markets account for more than 80% of the BMW
Group's sales. The calculated figures are increased by 10% to
account for possible discrepancies between cycle values and real
emissions, as required by the Science Based Targets initiative.
This indicator also includes the upstream emissions of the en-
ergy sources (fossil fuels and electricity used for charging), in line
with the well-to-wheel approach. This covers the entire impact
chain behind vehicle motion, i.e. from the generation and supply
of power to its conversion into drivetrain energy. This approach
also includes the environmental impacts associated with the pro-
duction of fuel and electricity. For example, to calculate the vol-
ume of emissions resulting from upstream electricity (drivetrain
energy supply), the BMW Group uses the energy report pub-
lished by the International Energy Agency (IEA; reference basis:
previous year) as a basis in order to assess the emissions asso-
ciated with the electricity mix in its core markets. The perfor-
mance indicator for reporting purposes is g CO₂ per kilometre
driven.
transportation from the Tier 1 supplier's shipping location to the
receipt of goods at individual production plants worldwide, in-
cluding partner plants and excluding contract manufacturing
sites. In outbound logistics (vehicle distribution), all transport
flows of new vehicles transported from the production sites
through compounds and national distributors to individual deal-
erships worldwide are considered. Exceptions include partial vol-
umes from partner plants.
CO₂e emissions are calculated for the gross weight (component
weight including packaging and shipping material) as well as the
specific vehicle weight and the distance travelled in kilometres.
This calculation is based on the respective CO₂e emission factor,
which varies depending on the technology and mode of transport
(road, sea, rail or air). The CO₂e emission factors used are de-
rived from contemporary standards such as the GLEC Frame-
work V3.0 and ISO 14083, supplemented by supplier-specific
values whenever possible.
In a second step, an average, derivative-specific inbound CO₂e
value is assigned to each vehicle produced from the CO₂e as-
sessed transport flows, based on plant location and type of drive,
and an outbound CO₂e value is assigned based on the factory-
market relationship. If inbound and/or outbound CO₂e values for
individual derivatives are missing in the recorded transport
streams (step 1), these are supplemented on the basis of exist-
ing derivatives with similar transport routes. Consequently, each
manufactured vehicle is allocated an inbound and outbound
CO₂e factor based on the production site and intended market.
The share of CO₂e emissions attributed to transport logistics
within the "supply chain and logistics emissions" metric is deter-
mined by aggregating the inbound and outbound CO₂e emis-
sions of all vehicles manufactured in the reporting year.
This ap-
proach applies to the CO₂e contributions from transport logistics
in the base year and in 2022.
CO₂e emissions for the years 2019 to 2021 were calculated in
previous corporate reports using a variety of emissions factors.
Between 2019 and 2022, the recording or assessment of CO₂e
from transport movements was consistently improved. Among
other things, a new IT system was introduced in 2022 to expand
333
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Cash flow at risk
Group Financial Statements Responsibility Statement and Auditor's Report
Other Information
Glossary and Explanation of Key Figures
← = Q
the recording of transport flows and their CO₂e assessment. In
line with the range of factors and data sources used for emis-
sions from 2022 onward, a retrospective assessment of
transport logistics emissions is carried out for the years 2019 to
2021, following the same methodology as from 2022 onward.
This involves using factory- or market-specific inbound and out-
bound CO₂e emissions data from 2022 for the vehicles produced
in each corresponding year. Vehicle variants from 2019 to 2021
that are no longer produced in 2022 will be supplemented on the
basis of existing derivatives with similar transport routes.
Carbon emissions of the new vehicle fleet in the EU (Scope 3
downstream, tank-to-wheel)
The average carbon emissions of a manufacturer's fleet (use
phase) are calculated on the basis of the weighted average of
carbon emissions across all vehicles newly registered during the
reporting period. This is based on the volume of new registra-
tions by a manufacturer in the EU, including Norway and Iceland,
in the calendar year and the individual vehicle-specific carbon
emissions determined in accordance with the WLTP type test
procedure. The BMW Group's fleet carbon emissions figure, as
measured internally, includes a legally permitted allowance for
eco-innovations with minor significance. The performance indi-
cator for reporting purposes is g CO₂ per kilometre driven.
Carbon emissions of the new vehicle fleet worldwide
including upstream emissions (Scope 3 downstream, well-
to-wheel)
This indicator documents the progress made by the BMW Group
in its strategic objective of reducing carbon emissions during the
use phase including upstream emissions (drivetrain energy sup-
ply) by an average rate of at least 50% per kilometre driven by
2030 (base year 2019). For the purpose of this calculation, vol-
ume-weighted average fleet carbon emissions are calculated for
the core markets EU (27 EU countries including Norway and Ice-
land plus UK) (driving cycle: Worldwide Harmonized Light Vehi-
cles Test Procedure; basis: vehicle registrations), USA (driving
cycle: United States Combined; basis: production volume) and
China (driving cycle: Worldwide Harmonized Test Cycle, subject
to China-specific framework conditions for testing; basis: import
or local production volumes) before deduction of legally
Remuneration Report
Post-tax return on sales
BMW Group Report 2023 To Our Stakeholders Combined Management Report
www.BMWGROUP.COM
Glossary and Explanation of Key Figures
← = Q
337
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Contractually stipulated weekly hours of work.
← = Q
FINANCIAL CALENDAR
2024
21 March 2024
BMW Group Annual Conference
8 May 2024
Quarterly Statement to 31 March 2024
15 May 2024
Annual General Meeting
1 August 2024
Half-Year Report to 30 June 2024
Financial Calendar
6 November 2024
Working hours/working times
The well-to-tank method takes into account the carbon emis-
sions from the supply chain as well as the upstream fuel supply
from the oil well or the energy generation source. As such, this
approach considers the impact chain that arises until the energy
is supplied to the vehicle, but does not include the vehicle itself.
To Our Stakeholders Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
liabilities that generally do not incur interest. The deductible cap-
ital consisted of capital shares that are available to the opera-
tional business, largely without interest.
Return on equity (ROE)
RoE in the Financial Services segment is calculated as segment
profit before taxes, divided by the average amount of equity cap-
ital at the end of the last five quarters - attributable to the Fi-
nancial Services segment.
S
Sabbatical
The number of people with active employment contracts who are
absent from work for at least one month and for not more than
six months due to an employee-funded leave of absence ("sab-
batical").
By contrast, the tank-to-wheel method takes into account the im-
pact chain of energy received (fuel, electricity) until it is converted
into kinetic energy by the vehicle. As such, this approach consid-
ers the impact chain that arises during the use of the vehicle.
Spending on employee training and development
Investment in training comprises all costs incurred in the report-
ing year for vocational training within the consolidated subsidiar-
ies of the BMW Group, including personnel costs for trainers and
apprentices as well as other costs and investments related to vo-
cational training. The investments in further training are calcu-
lated for all consolidated subsidiaries of the BMW Group. The in-
vestments in further training are calculated for all consolidated
subsidiaries of the BMW Group. This includes preparation and
implementation costs, opportunity costs and investments made
in order to provide such further education. These costs also in-
clude notional depreciation, measured on the basis of inventory
lists.
Temporary employees
People who the BMW Group (includes all consolidated and non-
consolidated companies in which the BMW Group holds more
than 50% of the shares) has hired from a temporary employ-
ment agency to work on a temporary basis.
Temporary staff/working students
The number of people employed on an hourly basis as tempo-
rary staff at a BMW Group company (includes all of the consoli-
dated and non-consolidated companies in which the BMW
Group holds more than 50 % of the shares) while studying for a
degree.
V
Value at risk
A measure of the potential maximum loss in value of an item dur-
ing a set time period, based on a specified probability.
W
Well-to-wheel
The well-to-wheel method takes into account the entire impact
chain behind vehicle motion - from the generation and supply of
drivetrain power to its conversion into energy. This approach also
includes the environmental impacts associated with the produc-
tion of fuel and electricity. For example, the BMW Group uses the
current energy report from the International Energy Agency (IEA;
reference basis: previous year) as the basis for calculating emis-
sions from electrified vehicles (provision of electrical energy). As
a result, this approach can be divided into the following two com-
ponents:
T
Quarterly Statement to 30 September 2024
2025
20 March 2025
Fax
+49 89 382-2 44 18
Email
presse@bmwgroup.com
Investor Relations information is available directly at:
7 www.bmwgroup.com/ir
Bayerische Motoren Werke
Aktiengesellschaft
80788 Munich
Germany
Telephone +49 89 382-0
INVESTOR RELATIONS
Telephone +49 89 382-2 53 87
7 www.bmwgroup.com
Fax
+49 89 382-1 46 61
ir@bmwgroup.com
Information about the various BMW Group brands is available at:
7 www.bmw.com
7 www.mini.com
7 www.rolls-roycemotorcars.com
7 www.bmw-motorrad.com
BMW VISION
Neue Klasse
Group net profit as a percentage of Group revenues.
Email
+49 89 382-2 41 18
Further information about the BMW Group is available online at:
PUBLISHED BY
BMW Group Report 2024
20 March 2025
BMW Group Annual Conference
7 May 2025
Quarterly Statement to 31 March 2025
14 May 2025
Annual General Meeting
31 July 2025
Half-Year Report to 30 June 2025
5 November 2025
Quarterly Statement to 30 September 2025
338
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
CONTACTS
BUSINESS AND FINANCE PRESS
THE BMW GROUP ON THE INTERNET
Contacts
BMW Group Report 2023
336
Telephone +49 89 382-2 45 44
ROCE in the Automotive and Motorcycles segments is measured
on the basis of relevant segment profit before financial result and
the average amount of capital employed - at the end of the last
five quarters - in the segment concerned. Capital employed cor-
responds to the sum of intangible assets, property, plant and
equipment and net working capital, the latter comprising inven-
tories and trade receivables less trade payables.
Return on capital employed (ROCE)
The engineering, IT and process expertise required for the (pre-)
development of hardware and software for all BMW Group prod-
ucts and services is combined at the Group's international re-
search and development locations.
Research and development locations
Research and development expenditure ratio
Research and development expenditure as a percentage of
Group turnover.
The sum of research and non-capitalised development costs and
investments in capitalised development costs not including the
associated scheduled amortisation.
Research and development expenditure
R
Group profit/loss before tax as a percentage of Group revenues.
Pre-tax return on sales
Up to the financial year 2021, capital employed corresponds to
the sum of all current and non-current operational assets, less
5.80
8.50
6.00²
Common stock
Dividend
58.85
47.54
32.50
51.60
1.90
67.85
KEY DATA PER SHARE IN €
2.50
1.92
6.02²
8.52
5.82
57.60
2.50
Earnings per share of common stock³
17.67
27.31
18.77
5.73
7.47
Earnings per share of preferred stock"
Preferred stock
82.00
Low
55.05
95.89
76.68
77.75
85.80
69.13
68.34
37.66
58.70
89.95
105.00
80.15
Number of issued shares in 1,000
58,920
60,844
59,404
57,689
56,867
Shares bought back as of reporting date in 1,000
943
1,449
Stock exchange price in €¹
Year-end closing price
High
17.69
79.55
73.30
55.20
85.20
27.33
10.96
5.75
38
Organisation and Business Model
90
Products
38
Segments
90
Innovation, Digitalisation and Customer Orientation
39
Locations
95
Product Quality and Safety
42
The BMW Group Strategy
97
Carbon Emissions
42
Environmental Analysis
43
Cornerstones of the Strategy
47
Performance Indicators and Performance Management
52
Financial Performance
52
General and Sector-specific Environment
55 Overall Assessment by Management of the Financial Year
EU Taxonomy
78
Overview of the BMW Group
38
7.49
Free cash flow Automotive segments
99.32
17.14
9.61
5.15
3.90
Equity 5,6
141.42
134.85
113.60
93.26
90.92
18.79
1 Xetra closing prices.
3 Weighted average number of shares for the year.
4 Stock weighted according to dividend entitlements.
5 The key figure is calculated without the repurchased shares.
6 From the 2022 financial year, the equity of BMW AG shareholders will be used for the calculation.
52
37
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
←=Q
2 Proposed by management.
112.90
100.78
72.23
To Our Stakeholders
BMW Group Report 2023
35
7 GRI Index: 2-29
→ Civil society and NGOs
One-to-one meetings / dialogues, answering
queries
→ Local stakeholders
conferences
Neighbourhood talks, plant visits, press
→ Media
drives, trade shows
Dialogue as part of press tours, press releases,
informational events on new products, test
→ Science
events with students
Visits to universities, lectures, discussions, dialogue
in dialogue
BMW Group
→ Networks and associations
and working groups, memberships in initiatives
and associations
Participation of Company experts in committees
→ Business partners
Dialogue with market and importer dealership
organisations
→ Suppliers
presentations, supplier risk assessment
joint events, training sessions,
Dialogue as part of branch initiatives,
→ Capital market
Combined Management Report Group Financial Statements
BMW Group and Capital Markets
with investors and analysts
Responsibility Statement and Auditor's Report
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
BMW Group and Capital Markets
To Our Stakeholders
BMW Group Report 2023
36
² S&P scale for long-term ratings: AAA to D. S&P scale for short-term ratings: A-1 to D.
1 Moody's scale for long-term ratings: Aaa to C. Moody's scale for short-term ratings: P-1 (Prime-
1) to NP (Not Prime).
Company rating
Long-term debt
Short-term debt
The credit ratings reflect BMW's continued strong operating per-
formance. The credit rating is also backed up by the Company's
solid capital structure, balanced financial policy and solid liquidity
position. Moreover, the increasing proportion of Group sales of
all-electric vehicles is seen as a positive factor. With this profile,
the rating agencies view BMW AG as well prepared to master the
numerous challenges arising in conjunction with the transfor-
mation of the automotive industry and in terms of future macro-
economic developments (including volatile prices, supply bottle-
necks, geopolitical upheavals, inflation and rising interest rates).
BMW AG continues to have one of the best credit ratings of any
automobile manufacturer. In 2023, the rating agencies Moody's
and Standard & Poor's (S&P) both confirmed BMW AG's high in-
vestment-grade credit ratings within a challenging market envi-
ronment. Moody's long-term rating remains at "A2 with stable
outlook", while the short-term rating is unchanged at "P-1".
S&P's long-term rating remains at "A with stable outlook", with a
short-term rating of "A-1".
The BMW Group again achieved a good ranking in prestigious
sustainability ratings in 2023, confirming its strong position in
this respect. The BMW Group has an AA rating from MSCI ESG,
a score of 24.8 from Sustainalytics, and a C+ rating and Prime
status from ISS ESG.
GOOD PLACEMENT IN
SUSTAINABILITY RATINGS
stable
stable
A-1
P-1
A
A2
& Poor's²
Moody's¹
Standard
Outlook
These above-average credit ratings are testimony to BMW AG's
excellent creditworthiness. Accordingly, BMW AG enjoys good
access to international capital markets and benefits from attrac-
tive refinancing conditions.
RATINGS REMAIN AT HIGH
LEVEL
BMW GROUP AND CAPITAL MARKETS
← = Q
Remuneration Report
73.14
Dialogue, conferences and technology workshops
employee survey, internal media
Remuneration Report
Other Information
← = Q
DIVIDENDS ONCE AGAIN AT
A HIGH LEVEL
The Board of Management and the Supervisory Board will pro-
pose to the Annual General Meeting that the unappropriated
profit of BMW AG amounting to € 3,802 million (2022:
€ 5,481 million) be used to pay a dividend of € 6.00 for each
share of common stock entitled to receive a dividend (2022:
€ 8.50) and a dividend of € 6.02 for each share of preferred
stock entitled to receive a dividend (2022: € 8.52) and to transfer
the remaining amount to other revenue reserves. The payout ra-
tio (unappropriated profit of BMW AG in accordance with HGB in
relation to the Group net profit attributable to shareholders of
BMW AG in accordance with IFRS) for 2023 therefore stands at
33.7% (2022: 30.6%).
BMW AG Stock
COMMON STOCK
Number of issued shares in 1,000
Shares bought back as of reporting date in 1,000
Stock exchange price in €¹
Year-end closing price
High
Low
PREFERRED STOCK
2023
2022
2021
2020
2019
579,796
601,995
601,995
601,995
601,995
4,218
15,312
83.38
88.49
Other Information
→ Employees
← = Q
The volume of non-liquid pension plan assets invested in our var-
ious impact funds continues to grow according to schedule, with
several new subscriptions exercised in the form of fund-based
investments. The investments made to date in this area relate
not only to climate protection, but also to other Sustainable De-
velopment Goals (SDGs) set out by the UN. Investments that
have a beneficial effect on the climate are at the forefront of the
impact funds.
Dialogue with employees and managers,
→ Political decicion makers
topics for the Company
66
provided to political decision makers on relevant
Point of contact for questions on policy, information
→ Customers
social media, trade fairs, mass media
Surveys (including a corporate reputation study),
Stakeholder groups and forms of dialogue
← = Q
Other Information
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
To Our Stakeholders
Dialogue with Stakeholders
BMW Group Report 2023
34
*BMW Operations Pension Scheme.
The BMW Group continuously communicates with a large num-
ber of different stakeholder groups at all locations and in all mar-
kets. Appropriate forms and methods of engagement are se-
lected, depending on the situation.
Approach taken to engage stakeholders
The Board of Management keeps up to date with stakeholder
feedback and positions through a variety of channels, for exam-
ple in regular Board meetings, in direct dialogue with stakeholder
groups (such as investors or political decision makers) and
through briefings conducted by BMW Group departments, espe-
cially prior to attending major events such as OECD conferences
or the Group's Annual General Meetings. The Chairman of the
Supervisory Board also maintains regular contact with stake-
holders. The members of the Supervisory Board attend the An-
nual General Meeting, and many of them also interact with stake-
holders as part of their other activities and mandates.
The Board of Management's collaboration with
stakeholders to identify and manage impacts
Moreover, plans are in place for the coming year to expand the
scope of recording the carbon emissions associated with those
investments, with the primary aim of reliably assessing and
transparently documenting the compatibility of our investments
with the climate goals enshrined in the Paris Agreement. To the
extent possible, our aim is to take account of non-liquid invest-
ments in the Group's reporting on sustainability, or at least for all
such investments to be reviewed from a sustainability perspec-
tive.
The BMW Group will continue to interact closely and construc-
tively with its stakeholders and develop existing dialogue oppor-
tunities in 2024, and will continue to maintain active dialogue
with capital market players such as investors, financial analysts
and rating agencies. As in previous years, our activities will in-
clude direct dialogue as well as participation in in-person and vir-
tual ESG conferences.
Outlook
Financial market player with sustainability credentials
Regular, in-depth communication with capital market players has
always been given a high priority within the BMW Group. The
BMW Group kept investors, analysts and rating agencies up to
date again in 2023 with its regular quarterly and annual report-
ing. The BMW Group has stepped up its communication with in-
vestors who consider sustainability criteria in their investment
decisions in the past few years and now meets this group's in-
formation needs with in-person and virtual ESG conferences, in
addition to individual and group meetings. The Group's commu-
nication focused on the further development of the business
model, digitalisation and other technology trends in the automo-
tive industry, sustainability in the supply chain and the ramp-up
of electromobility. In 2023, the Group also focused on measuring
the carbon footprint of its pension plan assets in the UK and Ger-
many, and validating the data available for this purpose. The
7 TCFD Report was created for the UK BOPS* Plan, reiterating the
target to achieve carbon neutrality for the scheme's asset port-
folio by 2050.
56
Basalt-Actien-Gesellschaft*
57 Financial Position
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
JOHANN HORN² (b. 1958)
Member since 2021, appointed until the AGM 2024
Union Secretary
Mandates
Siemens Healthcare GmbH*
ANDRÉ MANDL¹ (b. 1984)
Member since 2022, appointed until the AGM 2024
Chairman of the BMW AG Works Council Regensburg/
Wackersdorf
DR VISHAL SIKKA (b. 1967)
Member since 2019, elected until the AGM 2024
CEO and Founder, Vianai Systems, Inc.*
Mandates
GSK plc.
Oracle Corp.
DR HC SUSANNE KLATTEN (b. 1962)
Member since 1997, elected until the AGM 2024
Entrepreneur
Mandates
ALTANA AG****, Deputy Chairwoman
SGL Carbon SE, Chairwoman (until 9 May 2023)
SprinD GmbH*
UnternehmerTUM GmbH*, Chairwoman
DR DOMINIQUE MOHABEER¹ (b. 1963)
Member Since 2012, elected until the ACM 2024
ANKE SCHÄFERKORDT (b. 1962)
Member since 2020, elected until the AGM 2025
Member of Supervisory Boards
Combined Management Report
Composition of the Board of Management and Supervisory Board
Mandates
To Our Stakeholders
31
ANO
17
Countries with research
and development locations
Π
◉
ㅁ
Production outside Europe
BMW Group plant Araquari, Brazil
BMW Group plant Chennai, India
BMW Group plant Manaus, Brazil
BMW Group plant Rayong, Thailand
BMW Group plant Rosslyn, South Africa
BMW Group plant San Luis Potosí, Mexico
BMW Group plant Spartanburg, USA
BMW Brilliance Automotive, China (3 plants)
Spotlight Automotive, China (Joint operation)
Partner plants outside Europe
Partner plant, Chongqing, China
Partner plant, Chu Lai, Vietnam
Partner plant, Hosur, India
Partner plant, Jakarta, Indonesia
Partner plant, Cairo, Egypt
Partner plant, Kulim, Malaysia
Research and Development outside Europe
↑
= Q
BMW Group Designworks, Newbury Park, USA
BMW Group Technology Office USA, Mountain View, USA
BMW Group Engineering and Emission Test Center, Oxnard, USA
BMW Group Design, Technology and ConnectedDrive Lab,
Shanghai, China
BMW Group Development China, Beijing, China
BMW Group Development and Technology Office, Tokyo, Japan
BMW Group Development USA, Woodcliff Lake, USA
BMW Group IT Technology Office, Greenville, USA
19
BMW Group IT Technology Office, Nanjing, China
BMW Group IT Technology Office, Singapore
BMW Group IT DevOps Hub, Chennai, India
BMW Group IT DevOps Hub, Rosslyn, South Africa
BMW do Brasil Entwicklung, Araquari, Brazil
BMW Group Technology Office Tel Aviv, Tel Aviv, Israel
BMW Group R&D Center Seoul, Seoul, South Korea
BMW Group Prototype Testing, Rosslyn, South Africa
BMW Brilliance Automotive, Shenyang, China
BMW Group Report 2023
Production and assembly plants
Serviceplan Group Management SE*
Wayfair Inc.
SIBYLLE WANKEL² (b. 1964)
The Paris Climate Agreement and climate neutrality goal of
the BMW Group
-
The BMW Group's interaction with stakeholders includes topics
brought to its attention from outside the Group as well as those
in which it proactively engages in dialogue. This combination re-
sults in a comprehensive spectrum of topics:
Key topics in 2023
The BMW Group operates within a highly interconnected, com-
plex world. Its business activities impact the environment in
which it operates, and can have both a direct and an indirect
bearing on the interests of a wide variety of stakeholders. Con-
versely, societal trends and developments can influence many
aspects of the Group's business activities. Against this backdrop,
the BMW Group maintains a continuous dialogue with its stake-
holders worldwide. GRI Index: 2-29
Stakeholder engagement
DIALOGUE WITH STAKEHOLDERS
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
To Our Stakeholders
Dialogue with Stakeholders
BMW Group Report 2023
32
32
- Memberships on comparable boards in Germany and abroad.
- Memberships on other mandatory supervisory boards.
Group mandate (other).
BMW Group mandate.
Not listed on the stock exchange.
Executive employee of the enterprise.
2 Union representative.
Employee of the enterprise.
Member since 2022, appointed until the AGM 2024
Head of Corporate Quality at BMW AG
GERHARD KURZ³ (b. 1963)
Thyssen Vermögensverwaltung GmbH*
Emissions limits with a focus on technological diversity in
terms of drivetrain technologies and vehicle concepts
-
Hydrogen as a potential energy storage for electric
drivetrain systems
Active crisis management regarding the geopolitical
situation and energy supply
Member since 2022, appointed until the AGM 2024
Managing Director and First Representative
of IG Metall's Munich Office
Mandates
KraussMaffei Group GmbH*, Deputy Chairwoman
MAN Truck & Bus SE*
Note: Dr hc Klatten indirectly holds all shares in ALTANA AG and a significant non-controlling inter-
est in SGL Carbon SE; she is the sole shareholder of UnternehmerTUM GmbH. The mandates at
SprinD GmbH and UnternehmerTUM GmbH are primarily an expression of her corporate citizenship.
JENS KÖHLER1 (b. 1964)
Member since 2021, appointed until the AGM 2024
Chairman of the BMW AG Works Council Leipzig
PROF DR DR HC CHRISTOPH M. SCHMIDT (b. 1962)
Member since 2021, elected until the AGM 2025
President of RWI - Leibniz-Institute of Economic Research
Essen, University Professor
Group Financial Statements Responsibility Statement and Auditor's Report
Combined Management Report
To Our Stakeholders
Dialogue with Stakeholders
BMW Group Report 2023
33
A comprehensive overview of the BMW Group's key political po-
sitions and activities can be found at 7 Advocacy, a new section of
the website made available in May 2023 which goes beyond and
replaces the previous Climate Commitment Report.
The BMW Group's involvement in associations ranges from
board memberships in association bodies to active participation
in working groups as well as simple observer status. Our goal is
to coordinate our approach with the respective associations on
positions regarding relevant strategic issues. If the BMW Group
identifies discrepancies between association and Company po-
sitions, the Company works with the association concerned with
the aim of bringing the positions closer together. The BMW
Group sees its role as sharing its corporate opinions as part of
the associations' policy-forming process. In this way, we are able
to participate in discussions on key strategic issues such as cli-
mate protection, human rights, the circular economy, decarboni-
sation with a view to achieving the Paris climate targets, and
transparent supply chain management.
In certain cases, however, participation may also be based on
statutory requirements.
The BMW Group maintains an active, open and transparent dia-
logue with decision makers and representatives of politics, trade
unions, associations and non-governmental organisations
(NGOs), with a view to playing a constructive and transparent
role in helping to shape the general political framework to the ex-
tent that it concerns the Group's business activities. The
BMW Group is a member of numerous associations in various
countries. As a rule, membership and commitment are voluntary.
Participation in public policy development and work in
associations
The BMW Group XChange encompasses the well-established
forms of events organised by the Group, such as the BMW Group
Dialogues and the rad°hub, providing the appropriate platforms
to encourage dialogue with a variety of target groups. The for-
mats selected usually take place several times a year. The results
of these stakeholder dialogues are documented and incorpo-
rated in the Group's strategic considerations. GRI Index: 2-12
BMW Group Xchange
Establishment of a new site in Germany to assemble high-
voltage batteries
Increased transparency in the sustainability indicators
provided in product information
Social responsibility for employees
Sustainable financing, EU taxonomy and sustainability
reporting standards, greenwashing
standards and respect for human rights, especially
regarding the procurement of raw materials for
electromobility applications
Compliance with statutory due diligence obligations in
supply chains, particularly environmental and social
Supply of critical raw materials
Circular design and use of secondary materials (particularly
in relation to battery recycling)
Comparison of Forecasts with Actual Outcomes
32
41
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
OVERVIEW OF THE BMW GROUP
ORGANISATION AND
BUSINESS MODEL
SEGMENTS
The BMW Group develops and manufactures innovative pre-
mium automobiles and motorcycles. Its BMW, MINI, Rolls-Royce
and BMW Motorrad brands are among the best-known in the
world. The BMW Group occupies leading market positions in
both the premium segment and the financial services sector.
Electric, digital and circular - for the BMW Group, these are the
keys to individual mobility with a clear focus on sustainability.
The BMW Group is leading the way in shaping tomorrow's mo-
bility with its brands' innovative products. The Vision Vehicle
7 BMW VISION Neue Klasse marks the first time that all three areas -
electromobility, digitalisation and circularity - have been brought
together and provides a look ahead at the completely new model
generation of the NEUE KLASSE.
Bayerische Motoren Werke Aktiengesellschaft (BMW AG), based
in Munich, Germany, is the parent company of the BMW Group.
The BMW Group comprises BMW AG itself and all subsidiaries
over which BMW AG has either direct or indirect control List of
Investments. The BMW Group is subdivided into the 7 Automotive,
Motorcycles and Financial Services segments and the Other Entities
segment. Presentation of segments BMW AG assumes central re-
sponsibility for the management of the Automotive, Motorcycles
and Financial Services operating segments.
At 31 December 2023, the BMW Group employed a workforce
of 154,950 people worldwide.
Automotive segment
With its automobile brands BMW, MINI and Rolls-Royce, the
BMW Group caters to a wide range of customer requirements.
The essence of the BMW brand lies in the seamless interplay be-
tween components, which provide the distinctive driving dynam-
ics synonymous with the brand. An extensive and attractive
product range with a variety of drivetrains - from purely electric
drives (BEV¹) and modern plug-in hybrids (PHEV²) to highly effi-
cient combustion engines - reflects BMW's technology-oriented
approach. The product range includes automobiles ranging from
the premium compact class to the luxury class. The range of ve-
hicles in the various classes is rounded out by the innovative
high-performance automobiles in BMW M's high-performance
class.
C4420
B.CH264SE
14 496E
3
HY73 EZC
1 Battery Electric Vehicle Electrified Vehicles.
2 Plug-in Hybrid Electric Vehicle Electrified Vehicles.
37 Consumption and Carbon Disclosures.
39
BMW Group Report 2023
Mandates
Combined Management Report
Overview of the BMW Group
Group Financial Statements
Combined Management Report
Overview of the BMW Group
Responsibility Statement and Auditor's Report
To Our Stakeholders
38
100 Electromobility
104 Production and Supplier Network
104 Production Network
107 Circular Economy, Resource Efficiency and Renewable Energy
111 Purchasing and Supplier Network
115 Employees and Society
115 Employer Attractiveness and Employee Development
118 Health and Performance
120 Diversity, Equal Opportunity and Inclusion
66
Course of Business and Segments
74
Comments on the Financial Statements of BMW AG
122 Corporate Citizenship
123 Outlook
126 Appropriateness and Effectiveness of the Internal Control System
and Risk Management System
127 Risks and Opportunities
127 Risk and Opportunity Management
130 Material Short-term Risks and Opportunities
137 Climate-related Risks and Opportunities
141 Summary and Outlook
142 Compliance and Human Rights
146 Internal Control System
147 Disclosures Relevant for Takeovers and Explanatory Comments
02
COMBINED
MANAGEMENT REPORT
BMW Group Report 2023
Sales subsidiaries and Financial
Services locations worldwide
Remuneration Report
← = Q
■
Financial Services
8
South Africa
15 Malaysia
1
Headquarters
9
Russia
16 Singapore*
2
Canada
10 India
3
USA
11 China
4
Mexico
12 South Korea
17 Indonesia*
18 Australia
19 New Zealand
5
United Arab Emirates
13 Japan
6
Brazil
* Sales locations only.
Other Information
14 Thailand
7
The MINI brand stands for maximum driving pleasure in the pre-
mium compact segment. The all-electric MINI Cooper SE* re-
mained the brand's best-selling model in the year under report.
When it unveiled the "New MINI Family" in the autumn of 2023,
the brand heralded the start of a new all-electric future focused
on the digital experience, innovative technologies and the unmis-
takable driving pleasure that comes from driving a MINI. In spring
2024, the MINI Aceman will celebrate its world premiere as the
first all-electric crossover model.
The Rolls-Royce brand is steeped in tradition and offers automo-
biles in the ultra-luxury class, with a focus on exclusive service
and meeting bespoke customer specifications. The luxury brand
is en route to the all-electric age after launching its first BEV
model, the Rolls-Royce Spectre*, at the end of 2023.
The global sales network of the BMW Group's automobile busi-
ness currently comprises more than 3,500 BMW, 1,600 MINI
and 147 Rolls-Royce dealerships. Automotive segment
Motorcycles segment
The BMW Group is also pursuing a consistent electrification
strategy in the premium motorcycles segment. In its centenary
year, the BMW Motorrad brand set a new milestone in the pre-
mium segment with the all-electric eParkourer CE 02 from the
Urban Mobility segment. BMW Motorrad offers a range of vehi-
cles in the Sport, Tour, Roadster, Heritage and Adventure cate-
gories. Currently, BMW motorcycles are sold by more than 1,200
dealerships and importers in over 90 countries worldwide.
7 Motorcycles segment
Financial Services segment
The BMW Group is a leading provider of financial services in the
automotive sector. It offers these services in more than 50 coun-
tries worldwide via subsidiaries and cooperation arrangements
with local financial service providers and importers. The Financial
Services segment's main line of business comprises credit fi-
nancing and the leasing of BMW Group brand automobiles and
motorcycles to retail customers.
Operating under the brand name Alphabet, the BMW Group is a
partner in the international multi-brand fleet business. Its ser-
vices consist mostly of vehicle fleet financing for large customers
and comprehensive management services for corporate car
fleets, including support of customers' sustainable and environ-
mentally friendly fleet management. Financial Services segment
R
LOCATIONS
Global overview
The BMW Group operates on a
worldwide
basis. The
BMW Group's largest automobile and motorcycle markets are lo-
cated in Europe, particularly in Germany and the United Kingdom
(UK), as well as in the USA and China.
* Consumption and Carbon Disclosures.
40
40
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Overview of the BMW Group
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
LOCATIONS WORLDWIDE
.
Sales subsidiaries and
Argentina*
To Our Stakeholders
17.2
19 Slovakia
The BMW Group's strategy is oriented to its corporate purpose:
"The BMW Group exists to move body, heart and mind."
It is the driving force, the guiding principle and the orientation for
our employees, and our commitment to our active role in society.
Its long-term focus guides us purposefully through the extensive
transformation of the entire automotive industry and beyond.
Transitioning to the specific details of the BMW Group strategy,
the BMW Group Impact broadens the Company's long-term stra-
tegic vision and underscores its ambition to contribute to broader
societal development. "We make individual mobility more hu-
man, intelligent and responsible - creating an inspiring future for
all of us."
With this in mind, the BMW Group's corporate strategy
(BMW Group strategy) defines the strategic framework and lays
the foundation for the Company to maintain a consistent and
market-oriented focus on profitability, growth and sustainability,
even in an increasingly dynamic environment. The BMW Group
strategy outlines targets in four areas: position, direction, strate-
gic approach and collaboration.
*Standard industry definition according to the Society of Automotive Engineers (SAE): Five levels
of automated driving.
BMW Group Strategy
44
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
The BMW Group Strategy
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Position
Direction
Strategic approach
Do
CORNERSTONES OF THE
STRATEGY
In urban areas within the European Union, infrastructure bottle-
necks and selective reallocation of road space are likely to result
in increased traffic congestion and reduced accessibility. Simul-
taneously, there is an increasing trend towards policies that dis-
courage car use in city centres. The planned deployment of smart
city technologies would, however, primarily affect cities in China.
Politics and regulations are narrowing the scope for action across
the entire automotive value creation model. There is an increas-
ing variety of legislation in all regions of the world.
Politics
Individual mobility remains a fundamental human need, though
vehicle ownership continues to depend to a large extent on in-
come, household size and location. The coronavirus pandemic
has not had any significant or lasting effects on mobility behav-
iour in general. On-demand mobility (ODM) services, especially
in urban areas, remain a supplementary option. Fuelled by the
43
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
The BMW Group Strategy
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Do Do
industrialisation of digital technologies, innovative usage con-
cepts for stationary and moving vehicles are gaining importance.
For a technology-based company like the BMW Group, general
developments in this area are of particular importance. This area
is undergoing constant change, with the market environment
evolving dynamically and new collaborative models emerging.
New solutions, particularly in artificial intelligence, are emerging
and are finding applications across all aspects of life. Modern ve-
hicles are already one of the most complex digital items owned
by consumers. Vehicle requirements are also increasingly influ-
enced by the digital ecosystems that customers interact with
every day. Automobiles should be a reliable source of support in
everyday life, fit seamlessly into a person's living environment
and create a holistic overall experience. Software updates with
further functional developments are expected and generally be-
coming standard. Innovation, Digitalisation and Customer Orientation
Alongside digitalisation, development of automated/autono-
mous driving remains a key expectation for the future of mobility.
Initial offerings of Level 4* features are expected to launch in the
market before 2030, although widespread adoption is expected
to occur only after 2030. Products
The acceleration of electromobility worldwide continues to be an
important prerequisite on the path to climate neutrality, although
the pace of adoption is expected to vary regionally. In the long
term, there will be a parallel range of electric vehicles and com-
bustion engine vehicles available worldwide. However, the num-
ber of all-electric models in the automotive industry as a whole is
expected to continue to increase. Addressing remaining uncer-
tainties, including regulations, the swift and widespread develop-
ment of charging infrastructure and the availability of raw mate-
rials will be essential for the future expansion of this sector. It is
necessary to increase the pace at which capacities are expanded
in order to meet the ever-increasing demand for climate-neutral
and green energy across industries. The share of regenerative
energies in the energy mix is on the rise, increasing the volatility
of the entire energy supply and making it increasingly difficult to
maintain the stability of networks. Due to these factors and the
limited capacities of distribution networks, every effort needs to
Environment
As governments around the world work to transpose the goals of
the Paris Climate Agreement's carbon reduction targets into na-
tional laws, an ambitious orientation towards climate policy will
serve as an important basis for successful action for businesses.
It is equally vital to prepare for the consequences of current and
anticipated changes brought about by climate change, which
create a tangible urgency to take action. The role of hydrogen as
an energy source is set to undergo a fundamental shift, propelled
by the global imperative for decarbonisation.
Business
Business and the environment are closely linked and influence
each other. Thus, alongside carbon emissions, resource effi-
ciency will also gain in importance. The demand for secondary
materials and recycling is also rising, for instance, due to quota
requirements. Simultaneously, this development is giving rise to
cross-industry initiatives and opportunities for new business
models. Circular Economy, Resource Efficiency and Renewable Energy
Competition among various political systems is a dominating
force in international politics, influencing changes in international
trade flows using instruments like sanctions, tariffs and subsi-
dies. The need to secure supply chains is intensifying due to the
dual challenges of climate change and geopolitical risks.
Technology
Collaboration
Position -
What does the BMW Group stand for?
-
What drives the BMW Group?
The BMW Group offers exciting products for current and future
generations and secures its independence as a company by
maintaining a high level of profitability. The BMW Group is shap-
ing the future of sustainable mobility with its passion and strong
capacity for innovation. Thanks to its exciting products, the BMW
Group is able to achieve maximum customer satisfaction and
brand strength, and thus grow its market share.
Economic performance is a very important aspect of our corpo-
rate management system and is anchored in our objective of har-
nessing growth potential and securing our profitability targets.
This is supported by our ambitious financial standards, which are
linked to the strategic key figures EBIT margin in the Automotive
segment (between 8 and 10%), ROCE in the Automotive seg-
ment of at least 18% and an EBT margin in the Group of more
than 10%. Performance Indicators and Performance Management
The quality and reliability of all of our products and services are
the critical drivers for customer satisfaction, enthusiasm and the
economic success of the BMW Group. We are therefore commit-
ted to a comprehensive approach to quality, centred on deliver-
ing the best possible customer experience. The "Mission Quality"
initiative was launched across the Company in 2023. As a key
area of focus for the Company, the initiative promotes the
strengthening of quality awareness and focuses on the individual
contributions of all employees.
Digitalisation is consistently extended beyond the vehicle
Innovation, Digitalisation and Customer Orientation, encompassing both
corporate and customer processes, as well as along the automo-
tive value chain, enhancing the resilience and business agility of
the BMW Group. There are corresponding initiatives in all
areas of the Company. Our "Digital Process & Impact" initiative
is an example of commitment to significantly accelerating the
digitalisation of our internal processes and operations across the
Company, harnessing digital potential in every area through the
use of digitalised process management. The dedicated process
and digitalisation functions ensure the consistent implementa-
tion and corresponding development of expertise across all de-
partments. Concurrently, March 2023 marked the launch of DIG-
ITAL BOOST, one of the most comprehensive training pro-
gramme in the BMW Group's history. This virtual training pro-
gramme, designed for employees in indirect roles across all lev-
els of the organisation, delivers insights and opportunities in dig-
italisation on both national and international fronts. The aim is
for all employees to acquire the same basic knowledge of digital-
isation, enabling them to identify potential within their own areas
of responsibility and harness it for the benefit of the BMW Group.
אם
D'O
Direction
Strategic approach -
The BMW Group is focused on its customers worldwide and on
meeting their different requirements. It does so by understanding
the needs of its current and future customers and exceeding their
expectations. It combines ground-breaking technologies, emo-
tional products and individual customer care to create a unique
overall experience. The fields of action electrification, digitalisa-
tion and circularity are of particular importance.
We recognised the importance of electromobility early on and
have been working resolutely to accelerate the adoption of all-
electric and connected mobility. By the close of 2023, the
BMW Group had introduced at least one all-electric model across
all its brands and segments. In 2023, the extended-wheelbase
version of the iX1 for the Chinese market, the BMW i5* sedan and
the Rolls-Royce Spectre* were launched on the market. In 2023,
deliveries of all-electric automobiles increased by more than
74.1%, reaching 375,716 automobiles, up from 215,752 auto-
mobiles in 2022. Electromobility
In 2024, the market will welcome several new additions, includ-
ing the BMW iX2*, the extended-wheelbase version of the BMW
15 sedan tailored for the Chinese market, the BMW i5 Touring*,
the MINI Cooper SE*, the MINI Countryman SE* and the all-elec-
tric MINI Aceman, the brand's first crossover model. 7 Automotive
segment The BMW Group expects its attractive product range to
drive another significant increase in the number of all-electric ve-
hicles delivered in 2024. With intelligent vehicle architectures
and flexible production facilities, the company is well-prepared
for the continued expansion of electromobility. Society's ac-
ceptance of electromobility will depend on trends in customer de-
mand, regional regulations and the development of a suitable
framework, with a particular focus on infrastructure expansion.
The BMW Group is currently planning for all-electric vehicles to
account for more than 50% of all vehicles by 2030. The Rolls-
Royce brand is set to become all-electric by 2030, and the MINI
brand will follow suit by the early 2030s. Electromobility
The launch of the BMW CE 04 electric scooter has successfully
established BMW Motorrad's position in the electromobility land-
scape. Building on this success, the eParkourer - the BMW CE
02 - is set to advance the electrification strategy for urban mo-
bility in April 2024. Motorcyles segment
In addition to delivering product substance, we also offer custom-
ers a 360° approach with an appropriate charging ecosystem.
Customers can charge their vehicles at home, at work and in pub-
lic places, and can also use our BMW Charging and MINI Charg-
ing stations and we are actively involved in expanding the charg-
ing infrastructure. Electromobility
Consumption and carbon emissions data
46
Where is the BMW Group heading?
Society
Sustainability aspects (ESG criteria) are built into individual mar-
ket strategies across our global organisation. Best practices in
the fields of environmental protection, social sustainability, cor-
porate citizenship and governance are also shared within an in-
ternational sustainability network.
Other Information
With its inspiring and innovative products, the BMW Group is
committed to first-class individual mobility and contributes to
sustainable development. It aims to find the right balance be-
tween business, the environment and society. The key areas of
focus within the strategy are electrification, digitalisation and
sustainability or circularity. This enables us to seamlessly merge
enjoyment and responsibility, without compromising, and to
achieve our growth and profitability objectives.
The BMW Group is committed to the Paris Climate Agreement.
To achieve this, the BMW Group promotes the reduction of car-
bon emissions throughout the whole life cycle of its products as
well as the principles of the circular economy with a verifiable
track record of continuous improvement – from the supply chain
to production, the use phase and the recycling of its products. For
this reason, the BMW Group has laid out measurable, science-
based targets to be reached by 2030; these are firmly estab-
lished across the company (base year 2019). Carbon emissions
are to be reduced as follows:
1.
2.
3.
An average of 80% carbon reduction at our own plants
and locations (Scope 1 and 2) per vehicle produced
(Carbon emissions generated at BMW Group locations)
Carbon reduction during the vehicle's use phase (Scope 3
downstream) by an average of at least 50% per kilometre
driven. Increased efficiency in our electrified models and
the new generation of combustion engine technology will
make this possible. An additional driving force for this is the
dynamic growth in demand for our electrified vehicles
7 Electromobility, 7 Automotive segment
An average of at least 20%* carbon reduction in the supply
chain (Scope 3 upstream) per vehicle produced Carbon
emissions in the supply chain
← = Q
We have joined the Science-Based Targets initiative (SBTI) for
this purpose. This will enable us to guarantee transparency and
comparability in the validation and measurement of our targets
and, at the same time, ensure they are in line with the latest sci-
entific findings and regulatory requirements. These are de-
scribed in more detail in the chapter 7 Carbon Emissions.
The BMW Group is actively working on numerous projects and
initiatives to improve the framework conditions for electromobil-
ity, including the expansion of charging infrastructure on a broad
basis. The ambitious goals of the Paris Climate Agreement are
designed to tackle climate change in the transport sector, requir-
ing a combination of modern drive technologies that are closely
aligned with customer needs and different mobility requirements
around the world. In addition to all-electric models, plug-in hy-
brids and modern combustion engine technology also make an
important contribution to the reduction of global carbon emis-
sions. The BMW Group is also forging ahead with its work with
hydrogen. Products
* For the sake of simplicity, this figure has been rounded. The target validated under SBTi is 22%.
45
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
The BMW Group Strategy
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
* Performance management parameters such as Carbon Emissions over
the entire product life cycle are important Performance indicators
during the development phase of our vehicle projects. The Board
of Management receives and discusses a status report on sus-
tainability every quarter and derives appropriate measures as re-
quired.
BMW Group Report 2023 To Our Stakeholders
Alongside the current development directions, certain trends are
gaining momentum, notably within digital technologies and the
political landscape. The most significant trends set to have a
long-term effect on the BMW Group's business model are clas-
sified according to their impact on society, technology, business,
environment and politics.
ENVIRONMENTAL ANALYSIS
2
Norway
10 France
11 Switzerland
18 Austria
3
Denmark
12 Italy
20 Hungary*
4
Sweden
13 Slovenia*
21 Romania*
5
Finland*
14 Spain
22 Bulgaria*
Germany
1
17 Poland
Belgium/Luxembourg
17.9
41
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Overview of the BMW Group
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
6
LOCATIONS IN EUROPE
Sales subsidiaries and
8
Ireland
16 Czech Republic
* Sales locations only.
■
Financial Services
9
.
The Netherlands
15 Portugal
23 Greece
42
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
The BMW Group Strategy
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
THE BMW GROUP STRATEGY
= Q
42 Environmental Analysis
Cornerstones of the Strategy
47
Performance Indicators and Performance
Management
THE BMW GROUP STRATEGY
For the BMW Group, the ongoing development of our corporate
strategy is a continuous process that begins with environmental
analysis. Trends with significant implications for the automotive
industry are analysed and evaluated and the underlying prem-
ises are scrutinised. Taking into account these influencing fac-
tors, characterised by their in parts rapid rate of change, we con-
tinually refine our corporate strategy and adjust our strategic ob-
jectives accordingly.
The corporate strategy and strategic targets of the BMW Group
form the starting point for the departments to define concrete ap-
proaches and implementation measures. This process is based
on strategic fields of action and key success factors.
The strategy process allows plans to be drawn up for different
scenarios to account for increasingly volatile and challenging en-
vironmental conditions, thereby ensuring flexibility and respon-
siveness for the BMW Group. The BMW Group's strategy is
based on fundamental values such as the integrity of our
actions. Compliance and Human Rights
The strategy is integrated into annually revised, longer-range
corporate planning using a closed loop-based planning and
management system. Its implementation is monitored by a tar-
get system that is comprised of the aspects of finance, custom-
ers, processes, learning and development. Performance Indicators
and Performance Management
43
A company's success depends to a large extent on its ability to
recognise changes in its environment early on, plan for different
scenarios, effectively manage risks and take advantage of op-
portunities that may arise from such changes. Risks and
Opportunities To this end, we continuously monitor the business
environment in our key regions, using available data to analyse
the trends and developments that could affect our business in
the future. In 2023, we undertook an extensive update and re-
view of our environmental analysis, significantly broadening the
scope of subject areas considered. Regular 7 Dialogue with
Stakeholders within the scope of the established BMW Group
XChange formats completes the picture from the analysis of ex-
ternal and environmental factors.
↑
BMW Group Diesel Competence Center, Steyr, Austria
Critical TechWorks S.A., Porto/Lisbon, Portugal
7
UK
15
Production in Europe
BMW Group plant Berlin
BMW Group plant Dingolfing
BMW Group plant Eisenach
BMW Group plant Landshut
BMW Group plant Leipzig
BMW Group plant Munich
BMW Group plant Regensburg
BMW Group plant Wackersdorf
BMW Group plant Steyr, Austria
BMW Group plant Hams Hall, UK
BMW Group plant Oxford, UK
BMW Group plant Swindon, UK
Rolls-Royce Manufacturing Plant, Goodwood, UK
◉
BMW France, S. A. S., Miramas, France
Rolls-Royce Motor Cars Ltd., Goodwood, UK
BMW Group Vehicle Testing, Arjeplog, Sweden
BMW Group Vehicle Testing, Granada, Spain
BMW Group Vehicle Testing, Sokolov, Czech Republic
Partner plants in Europe
Partner plant, Born, the Netherlands (contract manufacturing)
Partner plant, Graz, Austria (contract manufacturing)
Research and Development in Europe
BMW Group Research and Innovation Centre (FIZ), Munich,
Germany
BMW Car IT, Munich, Germany
BMW Group Autonomous Driving Campus, Unterschleißheim,
Germany
BMW Group Designworks, Munich, Germany
BMW Group Lightweight Construction and Technology Center,
Landshut, Germany
10
Combined Management Report
The BMW Group Strategy
be continued to ensure that electromobility is a long-term suc-
cess. Electromobility
Remuneration Report
2023
12,981
2022
10,635
2023
64,412
2022
2023
2022
58,728
20.2
18.1
50
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
The BMW Group Strategy
Group Financial Statements Responsibility Statement and Auditor's Report
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Other Information
Automotive
Return on capital employed (Automotive segment)
in %
Return on capital employed
Remuneration Report
Other Information
← = Q
Managing operational performance at segment level
At segment level, operational performance is managed using an
aggregated approach based on returns on capital. Depending on
the business model, the segments are measured on the basis of
return on total capital or return on equity.
Return on capital employed (ROCE) is used for the Automotive
and Motorcycles segments and return on equity (ROE) for the Fi-
nancial Services segment. These indicators combine a wide
range of relevant economic information, such as profitability (re-
turn on sales) and capital efficiency (capital turnover) to measure
segment performance and the development of enterprise value.
Automotive segment
The most comprehensive key performance indicator used for the
Automotive segment is RoCE, which provides information on the
profitability of capital employed and business operations. Value
driver analyses are used to interpret the causes of a change in
ROCE and derive suitable measures to influence its development.
The capital employed items taken into account reflect the focus
of operational segment management. Capital employed is
↑
calculated as the sum of intangible assets, property, plant and
equipment and net working capital, the latter comprising inven-
tories and trade receivables less trade payables. The amount of
capital employed increased in light of the full consolidation of
BMW Brilliance in the BMW Group Financial Statements as at
11 February 2022. The increase arose primarily due to the take-
over of property, plant and equipment and intangible assets, as
well as the capitalisation of reacquired rights in conjunction with
the purchase price allocation. The ROCE will be impacted tempo-
rarily by the higher capital base as well as the related amortisa-
tion expense expected to be recorded.
Due to the special significance of ROCE for the BMW Group, the
Automotive segment is also managed on the basis of a number
of additional key performance indicators that have a significant
impact on ROCE and hence on segment performance. These
value drivers include deliveries and the operating return on sales
(EBIT margin: segment profit before financial result as a percent-
age of segment revenues) as a key figure for profitability in the
segment.
Furthermore, the Automotive segment manages its compliance
with fleet carbon emissions requirements in regulated markets.
This also includes the share of all-electric automobiles in deliver-
ies reported since the 2023 financial year. The proportion of
electrified automobiles, including PHEV models, was reported as
a performance indicator until 2022. Performance indicators As
compliance with regulatory requirements is a significant factor in
the BMW Group's success, business decisions relating to vehicle
projects also take targets for fleet carbon emissions into
account. Managing sustainability
RoCE Automotive
or Motorcycles
Profit before
Financial result
Average
capital employed
Profit before financial result
in € million
Average capital employed
in € million
The strategic target for RoCE is 18%.
= Q
Return on capital employed (Motorcycles segment)
Profit before financial result
1,031
22.1
24.9
Group Financial Statements Responsibility Statement and Auditor's Report
Profit before tax
in € million
Average equity
capital in € million
Return on equity
1,171
in %
2022
2,962
3,205
2023
17,176
2022
2023
2022
17,891
2023
Responsibility Statement and Auditor's Report
2022
2022
in € million
Average capital employed
in € million
Return on capital employed
in %
Motorcycles segment
The Motorcycles segment is largely managed according to the
same logic applied to the Automotive segment. The principal key
performance indicator is the return on capital employed (ROCE).
The strategic RoCE target set for the Motorcycles segment is
18%.
The main value drivers are the deliveries and the operating return
on sales (EBIT margin: segment profit before financial result as
a percentage of segment revenues) as the key performance in-
dicator for segment profitability.
Financial Services segment
2023
The performance of the Financial Services segment is measured
on the basis of the return on equity (ROE), a key performance in-
dicator commonly used in the banking sector. Within the BMW
Group, RoE is defined as segment profit/loss before tax, divided
by the average amount of equity capital in the Financial Services
segment. The target is a return on equity of at least 14%.
Financial Services
RoE Financial Services =
Profit before
tax
Average
equity capital
2023
259
2022
257
2023
Motorcycles
Group Financial Statements
Return on equity (Financial Services segment)
To Our Stakeholders
Combined Management Report
The BMW Group Strategy
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
context, the BMW Group is making considerable investments to
also drive this continuous transformation in all aspects of sus-
tainability (ESG criteria). Production and Supplier Network,
7 Employees and Society
Beginning in 2025, we will take the next step in our transfor-
mation process with the NEUE KLASSE, which is expected to set
standards in electrification, digitalisation and circularity. The con-
cept vehicle, unveiled at the IAA Mobility 2023 International Mo-
tor Show in Munich, offered a glimpse into the future of the NEUE
KLASSE. The NEUE KLASSE is distinguished by its new cluster
architecture (NCAR), which is entirely focused on BEVS (battery
electric vehicles). The sixth-generation BMW e-drive technology
will significantly improve driving pleasure and efficiency. In the
interior, the next generation of BMW iDrive delivers a completely
fresh digital user experience, seamlessly blending real and virtual
worlds. Key components include BMW Panoramic Vision, a rev-
olutionary new head-up technology, the new BMW 3D Head-up
Display for presenting 3D animated and highly accurate driving
information, the multifunctional steering wheel for personalised
control of display content and the central display with intuitive
touch functionality. Another aim of the NEUE KLASSE is to
achieve a new level of sustainability across the entire vehicle life
cycle. To accomplish this, the BMW Group is increasingly inte-
grating secondary materials and implementing resource-efficient
production methods. Circular Economy, Resource Efficiency and
Renewable Energies
Production of vehicles for the NEUE KLASSE will get underway
in 2025 at the newly constructed BMW Group plant in Debrecen
and then be expanded to other locations. Production Network
To Our Stakeholders
PERFORMANCE INDICATORS
MANAGEMENT
The BMW Group's strategic targets are derived from the findings
of the Environmental analysis in an ongoing strategic process and
subsequently translated into a system for measuring perfor-
mance ▾ Cornerstones of the strategy. The resulting target system is
therefore a key instrument for anchoring strategy throughout the
Company. For corporate management purposes, the strategic
targets are backed by effective performance indicators.
Long-range corporate planning for the Company as a whole and
its segments is geared towards the structure of the BMW Group
target system. In this way, the targets set out in the planning are
regularly compared with the BMW Group's strategic goals.
Once approved by the Board of Management and the Supervi-
sory Board, the target amounts decided upon within the strategic
target system become the basis of planning for the current re-
porting year and for the target agreements with BMW Group
managers. Remuneration Report. The following summarises the
key performance indicators defined in DRS 20, which also form
the basis for performance management in the BMW Group.
Group
-
Profit before tax (EBT)
Number of employees at the end of the year
Share of women in management positions (in %)
Automotive segment
AND PERFORMANCE
Profit before financial result as a percentage of segment
revenues (EBIT margin; in %)
BMW Group Report 2023
The BMW Group invests in the development of employee skills,
with the view that continuous training guarantees jobs world-
wide. Employees and Society The restructuring of our Munich head-
quarters is an example of this commitment. The complete re-
structuring of an entire plant, including combustion engine vehi-
cle production, to 100% electromobility, will be implemented by
2027 while production is ongoing. The BMW Group is already
designing and producing electrified drive components for its ex-
isting electric vehicles at German facilities in Munich, Dingolfing,
Leipzig and Regensburg, as well as in China at the Shenyang lo-
cation. For the next generation of high-voltage batteries, new as-
sembly sites will be established in Debrecen (Hungary), San Luis
Potosí (Mexico), Woodruff near Spartanburg (USA) and in Ger-
many at the planned new facility in Irlbach-Straßkirchen, accom-
panied by the development of corresponding expertise. In this
Other Information
Combined Management Report
The BMW Group Strategy
← = Q
The BMW Group is making customer experience the focus of all
its marketing and sales activities. In an increasingly digital envi-
ronment with changing customer needs, the Company relies on
a future-oriented sales structure with a focus on the digitalisation
of the customer interface and direct customer access. The aim is
to offer the industry's best premium customer experience. In this
context, the My BMW App and MINI App play a significant role
with over 12 million users (as at December 2023). More than
three million customers (as at December 2023) access the apps
every day. Using their smartphones, they interact with their BMW
or MINI vehicles, the BMW Group itself and the BMW and MINI
dealerships, and also receive personalised offers. The relation-
ship with the customer thus becomes even closer.
The BMW Group is decisively and consistently driving forward
with its online sale of vehicles. Customers are free to choose
whether they would like to order their vehicle from agents or
online. They also have the option to seamlessly transition be-
tween both worlds.
A central aspect of the revamped sales structure is the transition
to direct sales. After the pilot market in South Africa, MINI was
the first Group brand to implement the new sales model in China
in March 2023, followed by Europe in January 2024 with Italy,
Poland and Sweden. The remaining European countries will
transition over the course of 2024 and 2025 and the BMW brand
will follow suit in Europe in 2026. Going forward, our existing
trading partners will continue in their roles as active commercial
intermediaries between the BMW Group and
customers.
our
The trading partners will be closely involved in the implementa-
tion. The new sales structure offers an attractive and sustainable
business model for these partners, and they will continue to be
the face for customers in the future, where they can focus on
providing the best advice and support. At the same time, we aim
to achieve consistent prices across each sales channel.
47
By enabling smooth transitions between physical and digital
channels and launching direct sales, the BMW Group is improv-
ing direct customer connections - an essential step for providing
the best customer experience Automotive segment. In the Finan-
cial Services segment, we are also continually expanding our ser-
vices to include digital and modular services. The aim is for our
products to be accessible to all customer groups across all chan-
nels within our strategic orientation in the Financial Services seg-
ment. Financial Services segment. This ensures that our customers
receive personalised offers designed to meet their specific
needs.
8
DO DO
Collaboration -
How does the BMW Group achieve this?
The BMW Group constantly strives for the best results, support-
ing its employees with the discovery and development of their
potential so they are able to remain productive. We support and
challenge strong teams with complementary strengths who work
together to achieve the best solutions in a complex environment.
We see diversity as an important element of our competitiveness.
7 Employees and Society The diversity metric defines the share of
women in management positions as a key performance indicator
and a strategic target variable. The aim is to increase the share
of women in management positions at the BMW Group to 22%
by 2025. Performance Indicators and Performance Management
BMW Group employees not only work closely together within the
Company, but also with external partners. The stable relation-
ships that have grown in our partner networks over time are
based on the same values as those at the BMW Group. They al-
low us to maximise our effectiveness and work together to lead
the Company to success. Experiences from the crisis years have
further strengthened these relationships, as exemplified by our
supply chains. Purchasing and Supplier Network
Together with our cooperation partners, we realise potential by
accessing more expertise and improving our profitability and
technology footprint. In addition to the collaboration with Qual-
comm in the advancement of assisted and automated driving,
the development partnership between the BMW Group and Solid
Power, for instance, presents advantages for both companies.
Examples include our Cell Manufacturing Competence Centre
(CMCC) in Parsdorf near Munich, where our expertise in design-
ing and manufacturing solid-state cells is continuously expanded
through a dedicated prototype line, bringing significant value to
our partnership with Solid Power. We continuously expand our
collaborations to unlock additional potential for value creation in
the Group. Innovation, Digitalisation and Customer Orientation
Do
Return on capital employed (RoCE; in %)
Deliveries (in units)
Circularity is a key focus for the BMW Group in the drive towards
more resource-efficient mobility. The concept revolves around
recycling materials to the fullest extent, ensuring that resources
are utilised sustainably and retain their value over time. This ap-
proach opens up a range of opportunities across the entire value
chain. Reusing valuable resources reduces our reliance on pri-
mary raw materials and their fluctuating prices. Furthermore, the
use of high-quality secondary materials significantly reduces the
carbon footprint of our vehicles. Circular Economy, Resource Efficiency
and Renewable Energy. We aim to progress gradually towards a cir-
cular economy, from designing for circularity through to increas-
ing the use of secondary materials for parts and components and
ultimately advancing to the recycling of end-of-life vehicles.
Carbon emissions of the EU new vehicle fleet (in g/km)
Carbon emissions per vehicle produced (in tonnes)
Return on
sales
Capital
turnover
The BMW Group's performance management system is based
on a multilayered structure. Operational performance is man-
aged primarily at segment level. In order to influence long-term
corporate performance, additional performance indicators are
taken into account within the management system at Group
level. In this context, the value added serves as one of several
indicators to measure the contribution made to enterprise value
during the financial year.
This aspiration to add value is measured at both Group and seg-
ment level by means of the key performance indicators. The link
between value added and the relevant value drivers is presented
in a simplified form below.
Profit
Capital
employed
Weighted
average cost
Cost of capital
of capital
Revenues
Managing sustainability
The BMW Group has set itself the target of decarbonising its
vehicle fleet by at least 40% over the entire life cycle by 2030,
based on the reference year 2019. In this context, specific tar-
gets have been set for the scopes of the vehicle's use phase,
production and supply chain (7 Position, ▾ Carbon Emissions). This
entails setting specific carbon targets for each vehicle project,
managing them through digital processes and tracking their at-
tainment.
An integrated approach to target management ensures that the
BMW Group's vehicle projects make a positive contribution to-
wards achieving the sustainability targets that have been set.
Furthermore, the BMW Group will consistently increase its use
of secondary raw materials. The Group intends to already have
made significant progress by 2025 with the introduction of the
first X model of the NEUE KLASSE. Non-financial performance
indicators such as carbon emissions and, in future, secondary
raw materials quotas are therefore key performance indicators
for all new vehicle projects. It is also ensured that financial as-
pects are taken into consideration and the most effective
measures are prioritised for implementation in all areas. The
overall result is a cohesive management model across all as-
pects of the business. GRI Index: 2-13
49
Share of all-electric automobiles in deliveries
(in %)
BMW Group Report 2023
49
Expense
(ROCE oder
RoE)
The BMW Group's long-term corporate strategy is determined
by the Board of Management. Responsibility for implementing
the Group's sustainability goals also lies with the full Board. Sig-
nificant decisions are therefore evaluated from the point of view
of sustainability. This ensures that sustainability issues are sys-
tematically integrated in decision-making processes and to
compensation at top management levels. As part of the proce-
dures for managing sustainability on an integrated basis at cor-
porate level, a Group target system has been created, which ap-
plies to specific departments.
Return on
capital
Value added
Profit before financial result as a percentage of segment
revenues (EBIT margin; in %)
Financial Services segment
Return on equity (RoE; in %)
48
BMW Group Report 2023
To Our Stakeholders
Motorcycles segment
Combined Management Report
The BMW Group Strategy
46
Remuneration Report
BMW Group - Value drivers
Group Financial Statements Responsibility Statement and Auditor's Report
The BMW Group's performance management system follows a
value-based approach that focuses on profitability, consistent
Company growth, value enhancement for capital providers, sus-
tainability, climate change mitigation and job security. Capital is
considered to be employed profitably when the amount of profit
generated on a sustained basis exceeds the cost of equity and
debt capital. This strategy also secures the desired degree of cor-
porate autonomy in the long term.
Performance management
← = Q
Return on capital employed (RoCE; in %)
Deliveries (in units)
Other Information
9,510
-1,386
32.0
23,509
17,096
18,482
100.0
100.0
Group
47
- 182
2.0
2.0
Other regions
13,999
20.8
- 10,616
9.0
Europe
37.7
- 27.3
36.1
- 118,042
-6.6
Asia
36.4
38.3
24,568
Americas
23.9
23.6
-11,025
- 3.9
- 4,927
- 4,129
12,165
-532
- 1,360
- 6,194
- 3,179
-9,373
Change
2,893
- 828
14,782
2022
2023
- 404
2022
-772
861
17,675
6,942
11,071
11.0
18,582
- 34.5
17.67
27.31
- 35.3
17.69
27.33
- 35.3
Change
2023
2022
in % points
19.1
17.2
1.9
-0.1
2023
BMW Group Report 2023
Change in %
in %
8.1 (+0.0% points)
in %
22.1 (-2.8% points)
in units
209,066 (+3.3%)
Slight increase
0.28 (-12.5%)
Significant reduction
in %
1 EU-27 countries including Norway and Iceland; with effect from 2021, values are calculated on a converted basis in line with WLTP (Worldwide Harmonised Light Vehicles Test Procedure).
2 This is a preliminary internal calculation with a potential variation of +/- 0.5 g CO2/km, as official registration figures from the authorities are not available for all EU states. Figures officially published by
the EU Commission are not expected to be available until November of the following year.
3 Including an allowance for eco-innovations (amounts of minor significance).
"Efficiency ratio calculated on the basis of Scope 1 and Scope 2 carbon emissions (i.e. a market-based method in accordance with GHG Protocol Scope 2 guidance; mainly based on the emissions factors
for electricity, district heating and fuels reported by the VDA (each in the latest version dated 12/2023) and occasionally using local emissions factors; excluding climate-changing gases other than carbon
dioxide generated during vehicle production (BMW Group manufacturing sites including Motorrad, but excluding partner plants and contract manufacturers), as well as BMW Group non-manufacturing
sites (e.g. research centres, sales centres, office buildings) divided by the number of vehicles produced (BMW Group manufacturing sites and partner plants, excluding contract manufacturers).
57
To Our Stakeholders
Combined Management Report
Financial Performance
17.2 (-0.7% points)
102.1 (-2.8%)
Slight reduction
14.7% (+63.3%)
Significant increase
Solid increase
94
MOTORCYCLES SEGMENT
EBIT margin
Return on capital employed (ROCE)
Deliveries
FINANCIAL SERVICES SEGMENT
Return on equity (ROE)
Significant increase
Slight reduction
Slight reduction
Between 8 and 10
Between 21 and 26
Slight increase
Between 14 and 17
Q2: 16 to 19
in %
in g/km
in t
2,554,183 (+6.4%)
Group Financial Statements
in %
Responsibility Statement and Auditor's Report
Other Information
- 125,809
29,689
- 4,931
in %
Gross profit margin¹
Pre-tax return on sales²
Post-tax return on sales³
155,498
Effective tax rate"
2 Group profit before tax as a percentage of Group revenues.
3 Group net profit as a percentage of Group revenues.
4 Income taxes as a percentage of Group profit before tax.
Group revenues by region were as follows:
BMW Group revenues by region
2022
142,610
1 Gross profit as a percentage of Group revenues.
2023
Earnings per share of preferred stock in €
Earnings per share of common stock in €
← = Q
FINANCIAL POSITION
EARNINGS PERFORMANCE OF THE BMW GROUP
BMW Group Condensed Income Statement
in € million
Revenues
Cost of sales
Gross profit
Selling and administrative expenses
Other operating income and expenses
Profit before financial result
Financial result
Profit before tax
Income taxes
Net profit
Remuneration Report
-678
457
+ 11.7
- 17,984
Warranty expenditure
0.2
2,775
2,780
5.4
2,265
3,782
2,387
13.8
6,624
7,538
Research and development expenses
68.1
2,114
thereof amortisation of capitalised development costs
Expenses for service contracts, telematics and roadside assistance
3,209
17.9
Other cost of sales
59
* 7 Consumption and Carbon Disclosures
Additionally, the other financial result was adversely impacted by
the fair value measurement of interest rate hedging transactions,
reflecting falling interest rates in the USA, the UK and the euro-
zone during the twelve-month period under report. In the previ-
ous year, the increase in interest rates resulted in favourable
measurement effects on interest rate hedging transactions.
The financial result deteriorated significantly to a net negative
amount of € 1,386 million (2022: net positive amount of
€ 9,510 million). In the previous year, other financial result ben-
efitted primarily from the gain of approximately € 7.7 billion aris-
ing on the remeasurement of the shares already held by the
BMW Group prior to the business combination with BMW Bril-
liance.
Due to the various factors affecting gross profit, as described
above, profit before financial result climbed to € 18,482 million
(2022: € 13,999 million; +32.0%). The impact of the previous
year's first-time full consolidation of BMW Brilliance and lower
intersegment eliminations related to leasing business had a par-
ticularly positive effect on the year-on-year change in gross
profit.
The net amount of other operating income and expenses deteri-
orated year on year. In 2022, other operating income was in-
creased by income arising on the reversal of provisions.
Depreciation and amortisation on property, plant and equipment
and intangible assets recorded in cost of sales as well as in sell-
ing and administrative expenses totalled € 8,974 million (2022:
€ 8,566 million).
Selling and administrative expenses went up slightly by 3.9%
year on year. The rise was due to higher administrative ex-
penses, primarily influenced by higher costs for IT projects, nota-
bly in connection with the planned switch to direct sales in Eu-
rope. The ratio of selling and administrative expenses to reve-
nues fell to 7.1% (2022: 7.4%).
6.6
118,042
125,809
Cost of sales
20.7
1,157
1,396
3,554
59
thereof interest expense relating to financial services business
27,517
← = Q
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
To Our Stakeholders Combined Management Report
Financial Performance
BMW Group Report 2023
Solid increase in Group revenues
58
21.0
28.8
- 5.2
13.0
7.8
CO₂ emissions BMW Group locations per vehicle
produced
7.8
When comparing figures with the previous financial year, it
should be noted that BMW Brilliance Automotive Ltd. (BMW Bril-
liance) has been fully consolidated as a subsidiary since 11 Feb-
ruary 2022, whereas up to that date, it had been accounted for
using the equity method. Consequently, BMW Brilliance is in-
cluded for the whole of 2023, but only for a proportionate period
of the previous year.
Group revenues totalled € 155,498 million in the reporting year
(2022: € 142,610 million), representing a solid increase over
the previous year (+9.0%). The main reason for revenue growth
was the higher number of vehicles delivered. Furthermore, fa-
vourable product mix effects and the aforementioned full consol-
idation of BMW Brilliance contributed to the year-on-year in-
crease in revenues. Additionally, higher interest rates and in-
come from dealership financing further increased revenues in
2023, mainly reflecting the impact of higher inventory levels held
by dealerships in light of improved vehicle availability, model
changes and a higher average financing volume per vehicle.
Reduced intersegment eliminations associated with leasing
business had a positive impact on revenues.
27,764
7.5
76,760
82,549
Change
in %
2022
2023
Due to revenue growth, the research and development expendi-
ture ratio remained at the same level as one year earlier.
Group research and development expenses increased signifi-
cantly by 13.8% year on year. Research and development ex-
penditure related primarily to the digitalisation and electrification
of the vehicle fleet across all model series, as well as the devel-
opment of automated driving functions. Further expenditure was
incurred for the development of new models, such as the all-elec-
tric BMW i5*, the X3 and X5 and the Rolls-Royce Spectre and
NEUE KLASSE models.
The year-on-year increase in cost of sales reflected sales volume
growth as well as higher expenses for materials and warranty
obligations. Similarly, cost of sales recorded by BMW Brilliance
also contributed to an increase compared to 2022. Cost of sales
in the previous financial year were also additionally negatively
impacted by the first-time full consolidation of BMW Brilliance.
Rising interest rates increased interest expenses for the Finan-
cial Services segment.
These favourable factors were offset by unfavourable exchange
rate effects from the Chinese renminbi and the US dollar which
held down Group revenues.
Cost of sales relating to financial services business
Manufacturing costs
in € million
BMW Group cost of sales
0.9
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
The cash outflow from investing activities was higher than one
year earlier. In 2022, the first-time full consolidation of BMW Bril-
liance resulted in a positive impact of € 3,587 million to cash out-
flow from investing activities, resulting from cash acquired on the
business combination and the purchase price paid. Moreover, in-
creased investments in property, plant and equipment, particu-
larly for introducing new vehicle models, digitalising the fleet as
well as pressing ahead with automated driving and the NEUE
KLASSE, resulted in a higher net cash outflow than one year ear-
lier.
A further factor for the decrease in cash inflow from operating
activities was the higher level of inventories held with a view to
servicing markets and fulfilling customer demand. A lower in-
crease in receivables and higher payables had a positive impact
on the cash inflow from operating activities.
The lower net cash inflow from operating activities was primarily
due to changes in leased products and receivables from sales
financing, particularly credit financing for dealerships. The year-
on-year increase in credit financing for dealerships was driven by
improved vehicle availability, model changes and a higher aver-
age financing volume per vehicle.
Cash flows from operating activities are determined indirectly,
starting with Group/segment profit before tax. By contrast, cash
flows from investing and financing activities are based on actual
payments and receipts.
The consolidated cash flow statements for the Group and the
Automotive and Financial Services segments show the sources
and applications of cash flows for the 2023 and 2022 reporting
years, classified according to operating, investing and financing
activities. Cash and cash equivalents in the cash flow statements
correspond to the amounts disclosed in the balance sheet.
FINANCIAL POSITION OF THE
BMW GROUP
In contrast, the net cash inflow arising on the sale of marketable
securities had a positive impact on cash flows from investing
activities.
← = Q
Remuneration Report
Responsibility Statement and Auditor's Report
Group Financial Statements
Combined Management Report
Financial Performance
To Our Stakeholders
BMW Group Report 2023
Other Information
The decrease in the net cash outflow from financing activities
was mainly the result of higher borrowings and lower repay-
ments.
Higher dividend payments to shareholders of BMW AG (2023:
€ 5,430 million; 2022: € 3,827 million) increased the net cash
outflow from financing activities.
BMW Group cash flows
- 6,859
-4,776
-4,772
- 9,548
- 5,981
Change
2022
23,523
2023
17,542
Adjustment for net investment in marketable securities and investment funds
Free cash flow Automotive segment
Cash inflow (+)/ outflow (-) from operating activities
Cash inflow (+) / outflow (-) from investing activities
in € million
Free cash flow Automotive segment
Free cash flow for the Automotive segment was as follows:
Cash inflow (+) / outflow (-) from operating activities
Cash inflow (+)/ outflow (-) from investing activities
Cash inflow (+) / outflow (-) from financing activities
Effects of exchange rate and changes in composition of segment
Change in cash and cash equivalents
in € million
60
The second share buyback programme will be concluded by 31
December 2025, at the latest.
The second tranche of the second share buyback programme
will be carried out with a volume of up to € 410 million for com-
mon stock and up to € 90 million for preferred stock in the period
from 2 January 2024 to 28 June 2024, at the latest.
On 3 May 2023, on the basis of the authorisation granted by the
Annual General Meeting on 11 May 2022, the Management
Board resolved to initiate a second share buyback programme,
which duly began on 3 July 2023. The programme, with a vol-
ume of up to € 2 billion (total purchase price excluding incidental
acquisition costs) pertains to common and preferred stock, the
latter of which is limited to a maximum volume of € 350 million.
The first tranche of the second share buyback programme was
successfully completed on 1 December 2023. As part of this first
tranche, a total of 4,218,363 shares of common stock and
942,892 shares of preferred stock were acquired between 3 July
2023 and 1 December 2023. A total purchase price (excluding
incidental acquisition costs) of around € 500 million was paid for
the shares repurchased as part of this tranche.
² Capitalised development costs as a percentage of research and development expenditure.
1 Research and development expenditure as a percentage of Group revenues.
Capitalisation rate²
Research and development expenditure ratio¹
in %
BMW Group performance indicators relating to research and development expenses
Research and development expenses
Amortisation
Capitalised development costs
Research and development expenditure
in € million
BMW Group research and development expenses
← = Q
Other Information
Remuneration Report
Similarly, the net interest result deteriorated year on year. In the
previous year, interest and similar expenses included income
arising on the change in interest rates in connection with the
measurement of provisions. By contrast, falling interest rates in
2023 had a negative impact.
11,125
Accordingly, Group profit before tax amounting to € 17,096 mil-
lion - as forecast - was significantly lower than one year earlier
(2022: € 23,509 million).
The effective tax rate was 28.8% (2022: 21.0%). In the previous
financial year, the primary factor reducing the effective tax rate
was the tax-neutral gain resulting from the remeasurement of
the shares held prior to the business combination with BMW Bril-
liance.
At the Annual General Meeting of BMW AG held on 11 May
2022, the shareholders authorised the Board of Management to
acquire treasury shares via the stock exchange, up to a maxi-
mum of 10% of the share capital in place at the date of the res-
olution and to redeem those shares without any further action
required by the Annual General Meeting. The buyback authori-
sation remains valid until 10 May 2027. In July 2022, on the ba-
sis of this authorisation, BMW AG resolved an initial share buy-
back programme, with a volume of up to € 2.0 billion (total pur-
chase price excluding incidental acquisition costs), comprising up
to € 1.85 billion for shares of common stock and up to € 0.15
billion for shares of preferred stock. The programme was
launched on 1 July 2022 and ended on 30 June 2023. BMW AG
repurchased a total of 22,199,529 shares of common stock for
€ 1,850 million and 1,923,871 shares of preferred stock for
€ 150 million. On 18 July 2023, the Board of Management re-
solved to redeem all of the shares repurchased in conjunction
with the initial buyback programme. The process of redeeming
the shares was completed during the third quarter 2023.
Share buyback programme continued - share redemption
completed
- 5.7
39.3
33.6
5.0
5.0
2022
2023
Change
in % points
7,178
- 2,819
2,265
6,624
2022
7,755
-2,604
2,387
7,538
2023
In the reporting year, the size of the workforce was slightly higher
at 154,950 employees, which was in line with expectations
(2022: 149,475 employees; +3.7%).
At € 4,931 million (2022: € 4,927 million; +0.1%), income tax
expense in the reporting year was at a similar level to the previ-
ous year.
CO2 emissions EU new vehicle fleet 1,2,3
Prices for battery-related raw materials also fell again. For the
majority of 2023, cobalt was once again below the long-term av-
erage, while lithium prices fell by up to 80% over the course of
the year.
in units
120
110
100
90
80
2019
130
Source: ECB via Macrobond
2021
2022
2023
2024
US dollar
British pound
2020
Japanese yen
Index: December 2018 = 100
The currencies of major emerging markets mostly depreciated
against the euro. While the Indian rupee depreciated by approxi-
mately 8% on average, the South African rand declined by 16%.
On the other hand, the Brazilian real remained largely stable
against the euro, depreciating by less than 1% on average. Con-
versely, the Russian rouble depreciated markedly by 25% due to
the normalisation of energy prices and increasingly stringent
sanctions.
In the USA, the economy proved very resilient in the face of rising
interest rates and grew by 2.5% in the reporting period. A sus-
tained low level of unemployment in combination with rising
wages helped boost consumption. In China, the growth rate in
2023 stood at 5.2%, slightly higher than the target set by the
government. The momentum resulted in particular from catch-
up effects following the end of coronavirus lockdowns.
The Japanese economy recovered well during the reporting pe-
riod with a growth rate of 1.8%, benefiting from stronger export
demand on the back of the depreciated currency.
Higher benchmark interest rates in many markets and a
strong euro
At the beginning of 2023, inflation remained relatively high in a
number of countries. Only in the second half of the year did the
inflation rate gradually begin to decline. Therefore, many central
banks continued to pursue their restrictive monetary policies and
raise benchmark interest rates.
53
BMW Group Report 2023
Exchange rates compared to the euro
To Our Stakeholders Combined Management Report
Financial Performance
Remuneration Report
Other Information
← = Q
During the year, the US dollar fluctuated between 1.05 and 1.13
US dollars to the euro, culminating in an average annual ex-
change rate of 1.08 US dollars to the euro. In 2023, the British
pound was slightly weaker compared to the previous year, fluc-
tuating between 0.89 and 0.85 pounds to the euro, with an av-
erage annual exchange rate of 0.87 pounds to the euro.
In China, inflation was low during 2023, enabling the country's
central bank to pursue a newly evolving monetary policy, which
contributed to a depreciation of the Chinese renminbi. For the
year as a whole, the average exchange rate for the Chinese cur-
rency was 7.66 renminbi to the euro.
The Japanese currency fluctuated between 138 and 164 yen to
the euro during 2023. Based on an average exchange rate of
152 yen, the Japanese currency fell in value against the euro
compared to the previous year.
Group Financial Statements Responsibility Statement and Auditor's Report
Chinese renminbi
Korean won
54
Index: December 2018 = 100
70
60
50
40
30
Development of raw material prices
20
0
2019
2020
2021
2022
2023
10
80
90
100
54
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Decrease in energy and raw materials prices over course of
year
Energy and raw materials prices decreased again in 2023.
Throughout the year, the prices of aluminium and steel declined,
ending the year at approximately the same level as at the begin-
ning of 2021. Precious and non-ferrous metals exhibited a simi-
lar trend, with prices lower on average in 2023 compared to the
previous year. This development was partly due to the significant
price declines in metals such as rhodium (approximately -60%)
and palladium (approximately -40%).
- 5.5
Energy prices also fell over the course of the year, as Germany in
particular adapted to the changed availability of natural gas. By
the end of 2023, natural gas prices in Europe had returned to the
levels seen in autumn 2021, significantly lower than the levels
before the start of the conflict in Ukraine.
Oil price trend
Price per barrel Brent and WTI in US dollar
120
110
In the eurozone, growth in 2023 was 0.5% due to high inflation
rates and the resulting fall in demand. In Germany, GDP con-
tracted by 0.3% as a result of rising prices, declining export de-
mand and the low level of investments in light of higher interest
rates. In France (+0.9%), Italy (+0.7%) and Spain (+2.5%), eco-
nomic growth was more robust. The UK experienced a significant
slowdown in growth to 0.1%.
The global economy performed better in 2023 than expected at
the beginning of the year. According to calculations of the Inter-
national Monetary Fund (IMF), global gross domestic product
(GDP) grew by 3.1% in 2023. While the US and China recorded
stronger growth than in the previous year, economic growth in
Europe weakened.
GENERAL AND SECTOR-
SPECIFIC ENVIRONMENT
Comments on the Financial Statements of
BMW AG
Cost of capital
Value added
Group
=
Value added Group
Earnings amount
Cost of capital (equity + debt capital)
=
2023
2022
23,730
2023
11,615
2022
11,194
2023
5,642
2022
12,536
17,257
Earnings amount -
BMW Group
in € million
51
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
The BMW Group Strategy
Strategic management at Group level
Strategic management and the measurement of its financial im-
pact are coordinated primarily at Group level in conjunction with
the long-term corporate plan. Group profit/loss before tax pro-
vides a comprehensive measure of the Group's overall corporate
performance after consolidation effects and enables a transpar-
ent comparison over time. Other key performance indicators at
Group level are the size of the workforce at the year-end as well
as the share of women in management positions. By 2025, the
BMW Group aims to increase the share of women in manage-
ment positions to 22%. Strategy Process
The information provided by these key performance indicators at
Group level is complemented by the two financial performance
indicators of pre-tax return on sales and value added. Value
added, as a highly aggregated performance indicator, also pro-
vides an insight into capital efficiency and the (opportunity) cost
of capital required to generate Group profit. A positive value
added means that a return on investment above the cost of cap-
ital has been achieved.
Capital employed comprises the amount of Group equity and
pension provisions as well as the financial liabilities of the Auto-
motive and Motorcycles segments employed on average at the
end of each of the last five quarters.
The earnings amount corresponds to Group profit/loss before
tax, adjusted for interest expense incurred in conjunction with the
pension provisions and on the financial liabilities of the Automo-
tive and Motorcycles segments (profit/loss before interest ex-
pense and tax). The cost of capital is the minimum rate of return
expected by capital providers in return for the capital employed.
Since capital employed comprises an equity capital (e.g. share
capital) and a debt capital element (e.g. bonds), the overall cost
of capital is determined on the basis of the weighted average
rates for equity and debt capital, measured using standard mar-
ket procedures. The pre-tax average weighted cost of capital for
the BMW Group in 2023 was 12%, unchanged from the previ-
ous year.
Value added Group
Earnings amount -
(cost of capital rate x capital employed)
2024
In order to determine the internal rate of return, risk-adjusted cost
of capital rates are based on the average of actual rates in recent
years. In light of the long-term nature of product and investment
decisions, the following internal rates of return are used in con-
junction with segment management:
Automotive
Remuneration Report
Other Information
← = Q
FINANCIAL PERFORMANCE
52
General and Sector-specific Environment
Group Financial Statements Responsibility Statement and Auditor's Report
55 Overall Assessment by Management of the
Financial Year
FINANCIAL PERFORMANCE
Outcomes
57 Financial Position
66
74
Course of Business and Segments
56 Comparison of Forecasts with Actual
Combined Management Report
Financial Performance
To Our Stakeholders
BMW Group Report 2023
Motorcycles
Financial Services
2023
2022
12.0
12.0
12.0
12.0
13.4
13.4
Value-based management for project decisions
Operational business in the Automotive and Motorcycles seg-
ments is largely shaped by the life-cycle-dependent character of
investment projects that have a substantial influence on future
performance. Project-related decisions are therefore a crucial el-
ement of financial management in the BMW Group. Project deci-
sions are based on calculations derived from the expected cash
flows of each individual project. Calculations are made for the
complete term of a project, incorporating future years in which
the project is expected to generate cash flows.
Project decisions are taken on the basis of net present value and
the internal rate of return calculated for the project. The net pre-
sent value indicates the extent to which the project will be able to
generate future net cash inflows over and above the cost of cap-
ital. A project with a positive net present value enhances future
value added and therefore results in an increase in enterprise
value. The project's internal rate of return measures the average
return on the capital employed in the project. For all project deci-
sions, the project criteria and long-term impact on periodic re-
sults are measured and incorporated in the long-term Group
plan. This approach enables an analysis of the impact of project
decisions on periodic earnings and rates of return for each year
during the term of the project.
Board of Management remuneration
Performance criteria for the variable remuneration paid to mem-
bers of the Board of Management are based on the key strategic
targets and performance indicators. More information can be
found in the Remuneration Report.
52
in %
Share of all-electric cars in deliveries
WTI
Source: Weltbank via Macrobond
2023 was characterised by a volatile business environment
overshadowed by escalating geopolitical tensions. In many mar-
kets, higher inflation rates, accompanied by increased interest
rates, also weighed on consumer sentiment. Despite these fac-
tors, the BMW Group can look back on an overall positive course
of business in the financial
2023.
year
Deliveries of premium segment automobiles, motorcycles and
scooters were all at record-high levels. In particular, sales of all-
electric premium vehicles provided significant impetus for
growth.
BMW AG's solid financial condition is reflected in the results of
operations, financial position and net assets reported for the fi-
nancial year 2023. Performance was in line with management
expectations and the targets set for 2023. This assessment also
takes into account events after the end of the reporting period.
thereof Brazil
+ 50.4
Asia
- 11.4
OVERALL ASSESSMENT BY
MANAGEMENT OF THE
FINANCIAL YEAR
thereof China
Total
56
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
- 22.9
Other Information
+ 0.4
+ 20.9
Japan
+14.4
thereof Germany
South Korea
+ 3.8
thereof France
+ 12.6
+ 8.3
Total
thereof Spain
Americas
thereof USA
Change compared to
previous year in %
+ 18.6
+ 14.3
+ 13.4
+ 21.7
thereof Italy
← = Q
COMPARISON OF FORECASTS
WITH ACTUAL OUTCOMES
BMW Group: Comparison of the forecast for 2023 with actual outcomes in 2023
in %
20.8 (+3.0%)
Slight increase
AUTOMOTIVE SEGMENT
EBIT margin
Return on capital employed (ROCE)
Deliveries
Between 8 and 10
Between 15 and 20
Slight increase
Q2: 9 to 10.5
9.8 (+1.2% points)
Q2: 18 to 22
in %
20.2 (+2.1% points)
Slight increase
Q2: solid increase
in %
154,950 (+3.7%)
17,069 (-27.3%)
Significant decrease
in € million
Forecast for 2023 in 2022
Group Report
Forecast revision during
the year
Actual outcome
in 2023
The 2023 reporting year saw improved availability of vehicles,
high levels of orders on hand, and volume growth. Compared to
expectations at the beginning of the year, the BMW Group's per-
formance was bolstered by the easing of the supply situation as
well as by favourable pricing conditions in both new and pre-
owned vehicle markets, despite higher cost pressures.
Carbon emissions per vehicle produced decreased more than ex-
pected at BMW Group sites. This was due to reduced gas and
heating oil usage on the one hand and a simultaneous increase
in production volume on the other.
The following table summarises the development of the
BMW Group's key performance indicators as a whole as well as
those of the Automotive, Motorcycles and Financial Services
segments in the financial year 2023 compared to the forecasts
made in the BMW Group Report 2022.
Detailed information on the BMW Group's key performance indi-
cators is provided below in conjunction with the analysis of the
Group's results of operations, financial position and net assets.
The development of the most significant performance indicators
is described in the respective chapters on the Automotive, Mo-
torcycles, and Financial Services segments. An explanation of
the development of other non-financial performance indicators is
provided in the chapters on Products as well as Employees and
Society.
GROUP
Profit before tax
Workforce at year-end
Share of women in management positions
in the BMW Group
Significant decrease
Slight increase
Slight increase
Europe
Brent
+ 5.6
+ 12.1
2019
2020
2021
2022
2023
2024
0
2019
2021
2022
2023
2024
2019
2020
2020
50
0
100
1250
350
1000
250
200
300
250
750
150
200
500
100
150
250
50
2021
China
2022
2024
Europe
thereof Germany
thereof France
Change compared to
previous year in %
+14.1
International motorcycle markets (250 cc plus) mostly
showing significant increases
International motorcycle markets in the 250 cc plus class devel-
oped positively in 2023 (+11.7%). Overall, European markets
recorded growth of 18.6%. Among the major motorcycle mar-
kets, Italy (+21.7%), Spain (+20.9%) and France (+13.4%)
contributed significantly to this trend. Germany also recorded a
sharp year-on-year increase of 14.3%. The US market remained
stable, growing by 0.4%. In China, the downward trend in the
motorcycle market continued (-22.9%), influenced by the linger-
ing effects of the pandemic. In Brazil, however, motorcycle regis-
trations were significantly higher than one year earlier, with an
increase of 50.4%. Registration figures for international motor-
cycle markets developed as follows in the 2023 reporting year:
+ 7.3
+ 16.1
International automobile markets
thereof Italy
thereof Spain
+ 20.8
International motorcycle markets
thereof UK
+ 17.9
USA
+ 19.1
2023
International automobile markets achieve solid growth
Against the backdrop of economic developments described
above, international automobile markets also performed well
during the 2023 reporting year. Worldwide, the number of new
registrations rose by 8.3% to 77.1 million units.
Other Information
Lithium hydroxide
Rhodium
Platinum
Palladium
Cobalt
Steel
← = Q
Aluminium
Nickel
Sources: CRU, LME, Fastmarkets, Bloomberg
55
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Copper
16.5
326
PHEV
BMW Group Report 2023 To Our Stakeholders
826.3
793.5
847.9
778.4
724.7
3,3
Other markets
56.1
48.6
thereof China¹
52.8
52.2
UK
USA
6,2
375,716
15,6
Total¹
2,554.2
2,399.6
45.4
2,521.5
South Korea
986.5
China
32,3
Italy
482.0
441.5
451.7
379.7
472.9
3,1
thereof USA
930.8
397.3
368.0
307.9
375.7
France
3,4
Asia¹
1,073.1
1,031.0
1,067.9
363.5
233.8
2,325.2
Germany
2023
2022
Change in %
Share of BMW
deliveries 2023 in %
225,827
205,971
9.6
10.0
BMW 3 Series/BMW 4 Series
BMW 1 Series/BMW 2 Series
BMW 5 Series/BMW 6 Series
BMW Z4
BMW X1/X2
BMW X3/X4
558,462
478,932
16.6
24.8
273,877
315,590
BMW 7 Series/BMW 8 Series
2,537.5
in units
The 2024 model year looks highly promising. Following the suc-
cess of the BMW M3 CS', another special model in the high-per-
formance class, the BMW M4 CS, is on the verge of being
launched. Further updates to the BMW M3, BMW M4 and BMW
M2 have already been announced and will be introduced during
the year. Alongside the new BMW M5, the lineup of BMW M in
the luxury segment has been complemented by the new BMW i5
M60 xDrive Touring¹.
Deliveries including BMW Brilliance Automotive Ltd., also for the period prior to that entity's full consolidation in the Group Financial Statements of the BMW Group (1 January to 10 February 2022:
96,133 units, 2021: 651,236 units, 2020: 602,247 units, 2019: 538,612 units).
10,7
2 Including BMW Brilliance Automotive Ltd., also for the period before full consolidation in the BMW Group Financial Statements.
37 Consumption and Carbon Disclosures.
3
99
68
BMW Group Report 2023
To Our Stakeholders
Deliveries of BMW vehicles by model series²
Combined Management Report
Financial Performance
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
New BMW brand products
The focus of product innovations in 2023 was predominantly
aimed at the business class. The new BMW X5 and BMW X6
flagship models were launched in the spring. The new BMW 5
Series Sedan followed in autumn. At market launch, all drivetrain
variants were available for this model, including the first all-elec-
tric BMW i51, the two PHEV models BMW 530e¹ and BMW 550e
xDrive, as well as models powered by conventional combustion
engines. The globally popular Business Sedan, which received
an overwhelmingly positive response from the international trade
press shortly after its launch, will be available on the Chinese
market from early 2024. In October 2023, the BMW X2 also cel-
ebrated its world premiere with its first all-electric BMW iX21
model. The market launch will start in spring 2024.
BMW M sets new record
BMW M is also on course for growth. With a significant increase
of 14.2% to a total of 202,431 units, sales of high-performance
automobiles surpassed the 200,000-mark for the first time
(2022: 177,258 units). The positive development is also a result
of the electrification of the BMW M model range: the highest-vol-
ume model was once again the Sports Coupé BMW i4 M50¹.
The focus on the electrification of drive systems was also evident
in market launches in 2023. Right at the beginning of the year,
the BMW XM was launched worldwide as BMW M's first high-
performance class PHEV. The BMW i7 M70 xDrive¹ and BMW i5
M60 xDrive models expanded the BMW M portfolio of all-elec-
tric high-performance vehicles.
Group Financial Statements
- 13.2
163.2
157.3
The BMW Group can look back on a positive course of business
in the financial year 2023. Customers worldwide responded pos-
itively to the appealing and contemporary product portfolios of
the BMW, MINI and Rolls-Royce brands. The BMW Group offers
a diverse range of drive systems, encompassing all-electric mod-
els (BEV), state-of-the-art plug-in hybrids (PHEV) and highly ef-
ficient combustion engines, to meet a wide range of customer re-
quirements. The ramp-up of electric mobility was also a signifi-
cant driver of growth in 2023.
In total, during the reporting year, the BMW Group delivered
2,554,183 automobiles across the BMW, MINI and Rolls-Royce
brands, setting a new record high. In line with expectations, a
solid year-on-year increase in deliveries was therefore achieved
in the reporting year (2022: 2,399,6322 units; +6.4%).
The BMW brand set a new record with deliveries totalling
2,252,793 units (2022: 2,100,6892 units; +7.2%). MINI deliv-
ered 295,358 units, similar to one year earlier (2022: 292,922
units; +0.8%). Rolls-Royce, the renowned luxury marque, deliv-
ered 6,032 units to customers, achieving a new all-time high
(2022: 6,021 units; +0.2%).
The success of the BMW i44 and BMW iX14 models had a major
impact on sales growth. The BMW iX34 and the BMW iX4 also
continued to enjoy great popularity. Furthermore, electrification
made its debut in its top model series in the form of the BMW 174
Luxury Sedan. The new BMW 154 Business Sedan was also
added to the range of all-electric automobiles. This means that
the BMW Group now has an all-electric model in each of its core
segments.
BMW Group deliveries of electrified models
in units
Change
2023
BEV
BMW Group finishes reporting year with new sales volume
record
190,159
173,878
MINI
16,281
Total³
565,875
218,040
200,945
17,095
433,792
- 12.8
- 13.5
- 4.8
BMW
30.4
AUTOMOTIVE SEGMENT
COURSE OF BUSINESS AND
SEGMENTS
Non-controlling interests
875
2.5
641
1.6
Net value added
35,615
100.0
39,654
M.EV 544E
100.0
* Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).
66
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
- 10.2
164.3
Electric mobility maintains momentum
The BMW Group's sales growth in the reporting year was signif-
icantly influenced by the systematic electrification of its product
range. This was borne out by continued strong growth in deliver-
ies of all-electric vehicles. Market demand for all-electric vehicles
from the BMW, MINI and Rolls-Royce brands resulted in deliver-
ies rising to 375,716 units (2022: 215,752³ units; +74.1%).
Overall, the BMW Group delivered more than half a million elec-
trified vehicles (BEV and PHEV) to customers for the first time
with a total of 565,875 units (2022: 433,792³ units; +30.4%).
2023
2022
2021
2020
2019
943.0
878.5
949.1
913.6
in % of sales
1,081.6
272.6
254.3
266.8
285.0
330.5
25,4
thereof UK
Americas
159.2
Other
MIA115E
BMW Group - largest automobile markets in 2023
Europe
1See 7 Glossary for definition of deliveries. Retail vehicle deliveries during a given reporting period
do not correlate directly to the revenues that BMW Group recognizes in respect of such reporting
period.
² Deliveries include BMW Brilliance Automotive Ltd., also for the period prior to that entity's full con-
solidation in the BMW Group Financial Statements (1 January to 10 February 2022: 96,133
units).
3 Including BMW Brilliance Automotive Ltd., also for the period before full consolidation in the
BMW Group Financial Statements.
47 Consumption and Carbon Disclosures.
67
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
thereof Germany
Other Information
Solid growth in Europe and America, new record high in
Asia
A look at the international markets also confirms the successful
development of sales during the reporting year. All key regions
contributed to growth. Vehicle sales in Europe totalled 942,958
units (2022: 878,515 units; +7.3%). Solid growth was also rec-
orded in Germany, where deliveries totalled 272,589 units
(2022: 254,292 units; +7.2%). In the UK, sales rose to 159,202
units (2022: 157,329 units; +1.2%). Significant growth was rec-
orded in France, with sales up to 86,606 units (2022: 75,805
units; +14.2%), while Italy also saw strong growth with 78,763
units delivered (2022: 67,025 units; +17.5%).
In the Americas, the BMW Group recorded solid growth, with
sales up to 482,048 units (2022: 441,471 units; +9.2%). The
positive trend also continued in the USA, with deliveries up by
9.3% to 397,325 units (2022: 363,541 units).
Sales markets in Asia recovered slightly from the downturns that
had arisen in the previous year due to general pandemic-related
restrictions. In the reporting year, deliveries in this region totalled
1,073,115 units (2022: 1,030,9871 units; +4.1%). The sales
situation in China also improved, with deliveries up slightly by
4.1% to 826,257 units (2022: 793,520¹ units).
BMW retains top spot in global premium segment
The core BMW brand set a new sales record in 2023 with
2,252,793 units (2022: 2,100,6891 units; +7.2%) delivered.
This performance confirms the brand's top position in the global
premium segment. The key driver of growth was sales of all-elec-
tric models, which nearly doubled in 2023 to 330,197 units
(2022: 172,0082 units; +92.0%). Models from the X family, es-
pecially the BMW X1, continued to enjoy great popularity. Almost
every fifth vehicle (19%) of this highly successful model was sold
in the all-electric BMW iX13 version.
M.ED1871E
BMW Group deliveries of vehicles by region and market
in 1,000 units
← = Q
- 39.9
12.2
48,708
Rolls-Royce total
6,032
6,021
0.2
PUS659E
M.JA 1737E
7 Consumption and Carbon Disclosures.
70
70
100.0
BMW Group Report 2023
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Automotive segment earnings performance in line with
expectations
As in the analysis of the Group's earnings performance, it should
be noted that BMW Brilliance has been fully consolidated since
11 February 2022, and therefore for only part of the financial
year 2022. In 2023, it has been included for the full year.
At € 132,277 million (2022: € 123,602 million; +7.0%, cur-
rency-adjusted: +11.3%), the Automotive segment recorded a
solid year-on-year increase in revenues on the back of higher ve-
hicle sales. In the previous year, vehicle sales fell due to produc-
tion cutbacks caused by the limited availability of semiconductors
and wiring harnesses as well as pandemic-related lockdowns in
China. Furthermore, the increased volume of high-revenue mod-
els sold, such as the BMW 7 Series and the BMW X5, as well as
growth in spare parts and accessories business, also contributed
to the year-on-year increase in revenues. The full consolidation
of BMW Brilliance also increased revenues. Unfavourable cur-
rency translation effects, primarily from the Chinese renminbi and
the US dollar, held down the increase in revenues.
The segment's cost of sales amounted to € 109,920 million and
was therefore moderately higher than the previous year (2022:
€ 104,324 million; +5.4%). Similar to revenue, higher vehicle
sales and full consolidation of BMW Brilliance also had an impact
in this regard. The segment's cost of sales was also negatively
impacted by increased expenses for warranties. A higher propor-
tion of electrified, especially all-electric, vehicles also contributed
to increased costs.
To Our Stakeholders
In the previous year, the impact of the full consolidation of
BMW Brilliance, including approximately € 1.8 billion in depreci-
ation from purchase price allocation and the elimination of ap-
proximately € 1.3 billion in intra-group profits, had a negative ef-
fect on the cost of sales. Depreciation from the purchase price
allocation amounted to approximately € 1.4 billion in 2023.
0.8
295,358
31.6
10.9
Wraith/Dawn
168
328
- 48.8
24,207
27,870
- 13.1
292,922
8.2
3,523
3,260
8.1
83,403
76,700
8.7
28.2
Spectre
326
Cullinan
24,423
The increased research and development expenditure is primar-
ily related to the cross-series digitalisation and electrification of
the vehicle fleet, as well as the development of automated driving
functions. Furthermore, the expenditure resulted from the
Selling and administrative expenses rose to € 9,195 million in
the reporting period (2022: € 8,801 million; +4.5%). A signifi-
cant reason for the increase is higher costs for IT projects.
17.4
8.1
1 Gross profit as a percentage of segment revenues.
17.3
0.1
8.1
2 Profit before financial result as a percentage of segment revenues.
Rolls-Royce
3.3
1.2
43,744
MINI
92.0
172,008
330,197
BMW
74.1
in %
2022
215,752
61
45,193
development of new models, such as the BMW 5 Series and
NEUE KLASSE models, for example.
8.6
1.3
The net amount of other operating income and expenses de-
creased year-on-year. Among other factors, other operating in-
come in the previous year included higher reversals of provisions.
At € 12,981 million, profit before financial result in the 2023 fi-
nancial year was significantly higher than in the same period of
the previous year (2022: € 10,635 million; +22.1%). The full
consolidation of BMW Brilliance had a dampening impact in
2022 in the year-on-year comparison.
The EBIT margin for the segment was at 9.8% for the reporting
year (2022: 8.6%; +1.2 percentage points). As forecasted in the
quarterly report for 30 September 2023, the EBIT margin was
within the range of 9.0 to 10.5%.
The financial result of the Automotive segment was a net nega-
tive amount of € 339 million and therefore significantly down on
the previous year's corresponding figure (2022: net positive
BMW Group margins by segment
in %
AUTOMOTIVE
Gross profit margin¹
EBIT margin²
MOTORCYCLES
9.8
Gross profit margin¹
amount of € 8,283 million). The main reason for the year-on-
year deterioration was the gain of € 7.7 billion recognised in
2022 in other financial result arising on the remeasurement of
the segment's previous at-equity interest in BMW Brilliance.
In the year under report, the interest result was primarily im-
pacted by higher expenses arising from the unwinding of interest
on discounted provisions, while interest income from bank de-
posits had an offsetting effect. In the previous year, interest in-
come arising from the change in interest rates in connection with
the unwinding of interest on discounted provisions was reported
within interest and similar expenses.
At € 12,642 million, profit before tax for the financial year 2023
was significantly down on the previous year (2022:
€ 18,918 million), whereby the decrease was primarily due to
the gain of € 7.7 billion recognised in other financial result in
2022 arising on the remeasurement of the segment's previous
at-equity interest in BMW Brilliance.
The Automotive segment's return on capital employed (ROCE)
for 2023 finished at 20.2%, and was therefore within the pre-
dicted target range of 18 to 22% (2022: 18.1%; +2.1 percent-
age points). The improvement was primarily due to the higher
profit before financial result.
2023
2022
Change
in % points
16.9
15.6
EBIT margin²
59,763
32,141
2,015
BMW iX
BMW XM
BMW i3/18
BMW total
50,989
39,130
30.3
2.3
6,749
2.7
0.3
22,280
- 96.6
2,252,793
2,100,689
7.2
100.0
thereof BEV
330,197
172,008
755
92.0
5.5
61,117
22.7
2.7
10,957
12,029
- 8.9
0.5
318,051
242,189
31.3
57,905
14.1
400,898
1.2
18.0
BMW X5/X6
280,684
277,057
1.3
12.5
BMW X7
405,562
- 25.1
14.7
173,878
MINI Convertible
MINI Clubman
MINI Countryman
MINI total
2023
2022
Change in %
Share of MINI
deliveries 2023 in %
in units
Phantom
MINI Hatch (3- and 5-door)
2023
2022
418
Change in %
20.8
155,607
163,929
- 5.1
52.7
Ghost
1,510
505
thereof PHEV
in units
With this performance, Rolls-Royce achieved a new record high
in terms of deliveries of ultra-luxury class automobiles. Once
again, the most sought-after model was the Luxury Offroader
Rolls-Royce Cullinan. The Bespoke programme, which allows for
custom-made Rolls-Royce models tailored to individual cus-
tomer preferences, also enjoyed great success worldwide. To-
wards the end of 2023, the first all-electric Rolls-Royce Spectre*
made its market debut. The luxurious Supercoupé marks a mile-
stone in the history of the prestigious marque and already has a
backlog of orders stretching through to 2025.
200,945
- 13.5
7.7
M.YH2739E
17 Consumption and Carbon Disclosures.
2 Deliveries including BMW Brilliance Automotive Ltd, also for the period prior to that entity's
full consolidation in the BMW Group Financial Statements (1 January to 10 February 2022:
96,133 units).
69
BMW Group Report 2023
To Our Stakeholders
Deliveries of Rolls-Royce automobiles by model variant
Combined Management Report
Financial Performance
Remuneration Report
Other Information
← = Q
MINI electrifies driving pleasure
In 2023, the MINI brand delivered a total of 295,358 units to
customers (2022: 292,922 units; +0.8%), similar to the previ-
ous year's level. Electrification also had a highly perceptible im-
pact in the premium compact segment, with the MINI Cooper SE*
once again finishing the year as the brand's best-selling model.
The MINI Cooper SE Convertible* was also launched during the
reporting year, providing electrified driving pleasure in combina-
tion with an open-air experience. The limited edition of 999 ve-
hicles was quickly sold out. Overall, electrified MINI models (BEV
and PHEV models) accounted for 20.8% of the brand's deliver-
ies (2022: 20.8%; +0.0%).
Deliveries of MINI vehicles by model variant
All-electric vehicles accounted for 15.3% of deliveries (2022:
14.9%; +2.7%). The new MINI family will be launched in the
course of 2024. In addition to the completely new MINI Cooper
E*, an all-electric version of the MINI Countryman* is also availa-
ble for the first time. The new MINI Aceman, the brand's first
crossover model, will make its debut as a purely electrically pow-
ered model in spring 2024.
Record high for Rolls-Royce
The
year 2023 was an extremely successful one for Rolls-Royce.
The luxury brand delivered a total of 6,032 units to customers in
the reporting year (2022: 6,021 units; +0.2%).
Group Financial Statements Responsibility Statement and Auditor's Report
31.4
The share of all-electric vehicles in deliveries increased to 14.7%
in 2023 (2022: 9.0%; +63.3%). The significant increase also
had a positive effect on the development of fleet carbon emis-
sions. Carbon Emissions
21.0
21,776
- 8.1
- 5.7
8.0
Property, plant and equipment
35,266
32,126
9.8
12.2
20,022
14.1
43,118
42,820
0.7
1.8
17.2
Investments accounted for using the equity method
443
420
5.5
Leased products
5.4
Intangible assets
change in %
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Financial Performance
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
NET ASSETS POSITION OF THE BMW GROUP
BMW Group Condensed Balance Sheet at 31 December
← = Q
ASSETS
Proportion of
balance sheet total
in % 2023
Intangible assets decreased moderately compared to 31 De-
cember 2022 on a currency-adjusted basis. The main reason for
the decrease was the amortisation recognised on reacquired
rights and dealership relationships from the acquisition of
BMW Brilliance.
Adjusted for currency effects, property, plant and equipment was
up by 12.2% year on year. This increase was driven in particular
by additions to land, buildings and production facilities of the
newly fully consolidated entity, BMW Manufacturing Hungary Kft.
Higher investments in the sixth generation of electric drives, as
well as for new vehicle projects such as the new BMW 5 Series,
also had an impact. The capital expenditure ratio stood at 5.7%
(2022: 5.5%) whereas the capital expenditure ratio excluding
right-of-use assets increased to 4.9% (2022: 4.3%).
Leased products were slightly up on a currency-adjusted basis.
The increase was driven by the higher level of new leasing busi-
ness and a higher average financing volume. In contrast, the
managed contract portfolio decreased to 1,712,330 contracts
(2022: 1,807,904 contracts; -5.3%).
Receivables from sales financing increased slightly compared to
31. Dezember 2022 on a currency-adjusted basis. An increase
in dealership financing, especially in the USA and Germany, had
an impact at 31 December 2023. The year-on-year increase in
dealership financing was due to better availability of vehicles, the
introduction of new models such as the BMW 7 Series and the
BMW i52, and a higher average financing volume per vehicle. The
increase was offset by a decrease in customer financing, partic-
ularly in China. The decrease in China was due to strong com-
petition from local banks.
in € million
2023
2022
Change
in %
Currency-adjusted
The Group's balance sheet total is slightly higher than one year
earlier. Currency effects from the Chinese renminbi and the US
dollar had a dampening effect on the balance sheet total.1
63
0.2
1,197
10,632
- 14.1
- 12.7
3.6
Inventories
23,719
20,005
18.6
21.8
9,133
9.5
4,162
4,127
0.8
4.5
1.7
Cash and cash equivalents
17,327
16,870
2.7
Trade receivables
Other investments
Other assets
31.2
1,351
- 11.4
- 9.4
0.5
Receivables from sales financing
87,355
85,708
1.9
4.3
1.4
34.8
5,518
8,237
- 33.0
-32.2
2.2
12,461
3,630
2,854
27.2
Financial assets
The credit line was not being utilised at 31 December 2023. Fur-
ther information with respect to financial liabilities is provided in
7 note 36 to the Group Financial Statements.
The BMW Group also has access to a syndicated credit line,
which was renewed in June 2023. The syndicated credit line
amounting to € 8 billion has a term without exercising extension
options until June 2028 and is provided by a consortium of 43
international banks.
As at 31 December 2023, liquidity on hand amounted to € 19.5
billion, slightly below the previous year's level (2022: € 20.3 bil-
lion).
The change in the net cash outflow from financing activities was
attributable to lower cash outflows relating to intragroup refi-
nancing on the one hand and the decreased repayment of exter-
nal financial liabilities on the other.
2023
2022
Change
13,590
13,109
481
1,782
3,031
The lower cash inflow from operating activities of the Financial
Services segment was primarily due to changes in leased prod-
ucts and receivables from sales financing, particularly credit fi-
nancing for dealerships. The year-on-year increase in credit fi-
nancing for dealerships was driven by improved vehicle availa-
bility, model changes, and a higher average financing volume per
vehicle.
- 1,249
11,197
- 6,791
19,778
27,337
- 7,559
-2,775
- 2,734
17,003
24,603
4,406
-41
-7,600
Cash inflow (+) / outflow (-) from operating activities
Cash inflow (+) / outflow (-) from investing activities
Cash inflow (+) / outflow (-) from financing activities
Effects of exchange rate and changes in composition of segment
Change in cash and cash equivalents
Cash flows Financial Services segment
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
The Automotive segment generated a free cash flow in 2023 to-
talling € 6,942 million.
The main factor for the year-on-year decrease was the net cash
outflow from investing activities, which, in 2022, had included a
positive impact of € 5,011 million in connection with the full con-
solidation of BMW Brilliance. Excluding that impact, the seg-
ment's free cash flow would have amounted to € 6,060 million
in 2022.
Automotive segment cash inflow from operating activities im-
proved year on year, with the change in trade receivables and
trade payables contributing to the increase. In contrast, the build-
up of inventories to service the markets had a negative impact.
Liabilities for bonus payments to dealerships went up, partly due
to the higher sales volume, and had a positive impact on the cash
flow. In addition, the net cash inflow from operating activities rose
due to lower income tax payments.
Net financial assets of the Automotive segment decreased year
on year due to dividend payments and the share buyback pro-
gramme.
in € million
In the Automotive segment, net financial assets comprised the
following:
in € million
Cash and cash equivalents
Marketable securities and investment funds
Intercompany net financial assets
Financial assets
Less: external financial liabilities*
Net financial assets Automotive segment
* Excluding derivative financial instruments.
Cash and cash equivalents held by the Financial Services seg-
ment changed as follows:
Net financial assets Automotive segment
2023
488
2022
Change
2. Autonomy through the diversification of refinancing instru-
ments and investors
3. A focus on value through the optimisation of financing costs
Financing measures undertaken at corporate level ensure ac-
cess to liquidity for the Group's operating subsidiaries at stand-
ard market conditions and consistent credit terms. Funds are ac-
quired in line with a target liability structure, comprising a bal-
anced mix of financing instruments. The use of longer-term in-
struments to refinance the Group's Financial Services business
and the maintenance of a sufficiently high liquidity reserve serves
to rule out any imminent liquidity risk for the portfolio. This con-
servative financial approach also has a favourable effect on the
Group's rating. Further information is provided in the section
Liquidity Risks within the chapter Risks and Opportunities.
Focused capital market management, good ratings and the high
level of acceptance enjoyed by the BMW Group on those markets
enabled it to refinance itself on the world's debt capital markets
at favourable conditions during the 12-month period under re-
port. In addition to bonds, the BMW Group also issued commer-
cial paper.
Furthermore, retail customer and dealership financing receiv-
ables, rights and obligations from leasing contracts, as well as
collateral interests in the financed vehicles, were transferred to
structured entities that securitise them and place them as collat-
eralised securities on the capital market as part of the Group's
asset-backed securities financing arrangements (ABS financ-
ing).
Specific banking instruments, such as the customer deposits
used by the Group's own banks in Germany and the USA, were
also deployed for financing purposes. In addition, loans were
taken from international banks.
During the reporting period, the BMW Group issued bonds total-
ling approximately € 9.2 billion. The Group refinanced itself by
means of 144A transactions with a total volume of 3 billion US
dollars on the US capital market and by means of so-called
Panda bonds with a volume of 3 billion Chinese renminbi on the
Chinese capital market. Furthermore, the BMW Group issued,
among others, two euro benchmark bonds totalling € 3.0 billion,
as well as a pound sterling benchmark bond of 0.4 billion British
pounds and a Canadian bond of 0.5 billion Canadian dollars on
the international capital markets. ABS transactions with a total
financing volume equivalent to € 16.0 billion were executed in
2023, including both new and rolled-over ABS transactions.
During the reporting period, ABS financing transactions were
carried out in the following markets: Australia, China, Germany,
Japan, Canada, Switzerland, South Korea, the USA and the UK.
The following table provides an overview of amounts utilised at
31 December 2023 in connection with the BMW Group's money
and capital market programmes:
Programmes
1. The ability to act through permanent access to strategically
important capital markets
in € billion
Commercial paper
* Measured at the year-end exchange rate.
Programme
volume
Amount
utilised*
50.0
22.9
13.0
3.3
The BMW Group continued to deploy robust liquidity-related
measures throughout 2023 to ensure its ability to act flexibly and
independently at all times.
Euro medium-term notes
A broad range of instruments on international money and capital
markets is used to finance worldwide operations. The funds
raised are used almost exclusively to refinance the BMW Group's
Financial Services business. The overall objective of Group fi-
nancing is to ensure the solvency of the BMW Group at all times,
focusing on three areas:
FINANCING ACTIVITIES
← = Q
9,145
- 8,657
6
- 50
56
-750
- 9,042
8,292
- 184
6
- 190
- 440
59
- 499
62
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
6.7
6.9
Deferred and current tax
250,890
1,377
0.9
- 24.1
155,316
Total assets
153,770
100.0
1.0
82,527
0.7
53.1
52.1
2.9
22,609
14.6
19,479
12.7
16.1
105,136
67.7
80,181
99,660
1,045
9,783
Net value added by the BMW Group declined in 2023 due to
lower earnings compared to the previous year.
BMW Group value added statement
WORK PERFORMED
Revenues
Financial income
Other income
Total output
Cost of materials*
Other expenses
Bought-in costs
2023
in € million
2023
in %
2022
6.4
2022
in %
Change
in %
155,498
100.1
142,610
92.7
9.0
-1,227
-0.8
in € million
The value added statement shows the value of work performed
by the BMW Group during the financial year, less the value of
work bought in. Depreciation and amortisation, cost of materials,
and other expenses are treated as bought-in costs in the net
value added calculation. The allocation statement applies value
added to each of the participants involved in the value added pro-
cess. The bulk of the net value added benefits the employees.
The remaining portion in the Group is retained to finance future
operations. The gross value added amount treats depreciation
and amortisation as a component of value added which, in the
allocation statement, would be treated as internal financing.
64.9
Gross value added
Providers of finance
Government/public sector
Shareholders
3,665
10.3
2,274
5.7
61.2
5,064
5.7
14.2
12.3
4.1
3,802
10.7
5,480
13.8
- 30.6
Group
7,488
4,866
5.5
35.1
41.3
50,180
32.3
54,110
35.2
-7.3
Depreciation and amortisation of total tangible, intangible and investment
assets
14,565
9.4
14,456
13,932
9.4
Net value added
35,615
22.9
39,654
25.8
- 10.2
ALLOCATION
Employees
14,721
0.8
VALUE ADDED STATEMENT
100.0
Other Information
4,198
3,989
5.2
6.2
1.7
Financial liabilities
95,010
94,196
0.9
Deferred and current tax
2.8
Trade payables
15,547
14,120
10.1
12.3
Other liabilities
25,748
27,233
-5.5
37.9
-2.7
6.8
8.1
246,926
1.6
3.9
100.0
EQUITY AND LIABILITIES
Equity
92,923
91,288
1.8
10.1
4.3
Pension provisions
427
339
26.0
26.0
← = Q
Other provisions
17,037
15,761
37.0
6.2
10.3
0.2
250,890
Automotive segment
Financial Services segment
* Equity in each case as a percentage of corresponding balance sheet total.
31.12.2023
31.12.2022
Change
in % points
37.0
37.0
43.1
Group
45.7
11.9
- 0.9
65
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Total equity and liabilities
- 2.6
in %
11.0
Currency-adjusted financial liabilities went up, primarily due to in-
creased volume of ABS financing and higher liabilities from cus-
tomer deposits. These increases took place against the backdrop
of rising financing requirements in light of the growth of Financial
Services business.
246,926
BMW Group equity ratio*
1.6
3.9
100.0
1 The adjustment for exchange rate factors is calculated by applying the relevant current exchange rates to the prior-year figures.
64
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Financial Performance
27 Consumption and carbon emissions data.
Remuneration Report
Other Information
← = Q
The managed contract portfolio with retail customers and deal-
erships fell by 2.8% to 3,600,359 contracts.
The increase in inventories was mainly due to the build-up of fin-
ished goods to service the markets and as a result of model
changes.
Group equity climbed to € 92,923 million, driven primarily by the
Group net profit amounting to € 12,165 million (2022: € 18,582
million).
Equity attributable to shareholders of BMW AG rose to
€ 89,596 million mainly due to the net profit for the year attribut-
able to shareholders of BMW AG amounting to € 11,290 million.
The dividend payout amounting to € 5,430 million reduced
Group equity and, to an equal extent, equity attributable to
BMW AG shareholders. The continued share buy-back pro-
gramme also reduced equity attributable to shareholders of the
BMW Group.
Other provisions increased significantly on a currency-adjusted
basis, largely due to higher provisions for statutory and non-stat-
utory warranty obligations, as well as product guarantees.
Group Financial Statements Responsibility Statement and Auditor's Report
Pension obligations stood at € 427 million, surpassing the pre-
vious year's figure of € 339 million. The increase in the provision
for pensions resulted mainly from the application of lower dis-
count rates.
2019
0
In parallel to the presentation of the model update of the S 1000
XR in October, the M variant - the M 1000 XR - was announced
as a new model and will provide new impetus in the sports seg-
ment. The R nineT family received a refreshed look with the world
debuts of the new R 12 nineT and R 12 boxer models towards
the end of the year.
As model updates, the F 800 GS, F 900 GS and GS Adventure
revive the BMW Motorrad 2-cylinder family in the Adventure
segment.
For BMW Motorrad, the 2023 reporting year was dominated by
the centenary celebrations. Four new models and four model up-
dates were presented for market launches in 2024. BMW Motor-
rad presented the new BMW CE 02 at the BMW Motorrad Days
in July 2023. One year after the launch of the BMW CE 04,
BMW Motorrad announced a further electric vehicle for urban
centres and is systematically pursuing its electric mobility strat-
egy. The BMW CE 02 eParkourer opens up a new vehicle seg-
ment in urban mobility.
7.7
USA
8.1
Italien
Frankreich
2020
10.4
China
7.6
2021
← = Q
2023
*For a definition of deliveries see Glossary. Retail vehicle deliveries during a given reporting pe-
riod do not correlate directly to the revenues that BMW Group recognizes in respect of such re-
porting period.
72
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Motorcycles segment earnings performance within target
forecast
The EBIT margin of the Motorcycles segment came in at 8.1%
(2022: 8.1%) and therefore within the forecast target range of 8
to 10%.
At € 258 million, profit before tax in the financial year 2023 was
down slightly (2022: € 269 million; - 4.1%), whereby sales vol-
ume growth and positive pricing effects were offset by unfavour-
able product mix effects and higher material costs. In a year-on-
year comparison, net interest expense of € 1 million in 2023 had
a negative impact on the financial result (2022: net interest in-
come of € 12 million). In the previous year, interest income aris-
ing from the change in interest rates in connection with the un-
winding of interest on discounted provisions was reported within
interest and similar expenses. In contrast, decreasing interest
rates had a negative impact in 2023.
Deutschland
11.6
The return on capital employed (ROCE) in the Motorcycles seg-
ment for the reporting year came in at 22.1%, and was therefore
within the expected target range of 21 to 26% (2022: 24.9%; -
2.8 percentage points). The primary factor for the year-on-year
change was the rise in net working capital, driven by a number of
factors, including the model update in 2023 and a moderate in-
crease in inventory levels.
2022
New products unveiled by BMW Motorrad
← = Q
Spanien
6.1
FINANCIAL SERVICES SEGMENT
71
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
MOTORCYCLES SEGMENT
BMW Motorrad achieves record sales in centenary year
In 2023, BMW Motorrad celebrated its 100th anniversary and
achieved a new record, with a total of 209,066 motorcycles and
scooters* delivered to customers (2022: 202,895 units). This
represents a slight increase of 3.0%, in line expectations for the
financial year.
Sales growth in all key regions
All major regions worldwide contributed to the successful sales
result in 2023. In Europe, deliveries increased slightly to
116,011 units (2022: 110,788 units; +4.7%). Germany re-
mained at the previous year's level with 24,176 units (2022:
24,129 units; +0.2%). France achieved a slight increase with
21,668 units (2022: 21,223 units; +2.1%). Slight growth was
also recorded in Italy with 16,179 units (2022: 15,668 units;
+3.3%). Deliveries in Spain totalled 12,716 units (2022:
12,506 units; +1.7%).
In the Americas, deliveries totalled 46,184 units, maintaining the
previous year's level (2022: 45,775 units; +0.9%). Solid growth
was recorded in Brazil with 14,106 units delivered to customers
(2022: 13,051 units; +8.1%). The USA saw a total of 17,017
C
units sold, slightly down on the high number achieved in the pre-
vious year (2022: 17,690 units; -3.8%). Sales in China in-
creased slightly to 15,832 units (2022: 15,404 units; +2.8%).
In 2023, BMW Motorrad celebrated its centenary and took the
opportunity not only to renew but also expand its product portfo-
lio in the premium segment. The BMW R 1300 GS was intro-
duced as the highlight and start of the renewal of the legendary
GS Boxer family and has been available to customers since No-
vember 2023.
In the first half of the year, three model updates were introduced
in the Sport and Super Sport segment with the R 1250 RS, the S
1000 RR and their high-performance M variant - the M 1000
RR. The R 1250 R was updated within the Roadster lineup. The
M 1000 R, the first M Roadster, took to the roads as a completely
new model. The centenary celebrations were complemented in
the Heritage segment by two exclusive edition models: the BMW
R 18 100 Years and the BMW R nineT 100 Years. Another high-
light of the year was the opening of BMW Motorrad Welt in Berlin
as the "Home of the Brand". Fans and other interested parties
can enjoy a world of experience centred around the BMW Motor-
rad brand.
Deliveries of BMW motorcycles
in 1,000 units
209.1
202.9
194.3
175.2
169.3
BMW Group - largest motorcycle markets 2023
in % of sales
Sonstige
41.8
Brasilien
6.7
Market launches in the reporting year
Financial Services segment earnings down on previous year
Profit before tax reported by the Financial Services segment for
the financial year 2023 amounted to € 2,962 million (2022:
€ 3,205 million; -7.6%) and was therefore moderately down on
the previous year. Key reasons for the decrease were higher re-
financing costs due to rising interest rates and a decrease in the
contract portfolio. Remarketing revenues from lease returns re-
mained at a high level, but were nevertheless below the previous
year's figure. This also had a negative impact on earnings com-
pared to the previous year. On the other hand, a lower expense
for credit risk provisioning had a positive effect on earnings. In
the previous year, the level of expense recognised in connection
with credit risk provisioning was heavily influenced by geopolitical
uncertainties and a weaker macroeconomic outlook.
Remuneration Report
New business with retail customers in line with last year's
level
15,560
14,004
Nominal amount of own shares
- 5
-17
Investments
12,077
12,093
Capital reserves
2,450
2,426
Tangible, intangible and investment assets
29,460
27,541
Revenue reserves
11,046
11,665
Inventories
8,505
7,523
Unappropriated profit available for distribution
Property, plant and equipment
663
639
EQUITY AND LIABILITIES
Subscribed capital
BMW Group Report 2023
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
After deducting the expense for taxes, the Company reported a
net profit of € 4,366 million, compared to € 6,311 million in the
previous year.
Subject to the shareholders' approval of the appropriation of re-
sults at the Annual General Meeting, the unappropriated profit
available for distribution amounts to € 3,802 million (2022:
€ 5,481 million). This translates to a payout ratio of 33.7% cal-
culated based on the BMW AG shareholders' portion of the
Financial and net assets position
BMW Group's consolidated net profit in accordance with IFRS.
The payout ratio thus remains within the forecasted corridor of
30% to 40%, as in 2022 (30.6%).
3,802
The payout ratio takes into account the number of shares entitled
to dividends at 31 December 2023 and may change prior to the
Annual General Meeting due to the ongoing share buyback
programme.
in € million
ASSETS
Intangible assets
2023
2022
in € million
2023
2022
1,823
1,444
BMW AG Balance Sheet at 31 December
76
5,481
1,349
13,768
14,557
Current assets
38,222
44,586
Liabilities to banks
35
1
Prepaid expenses
142
116
Trade payables
7,552
6,786
Liabilities to subsidiaries
Other liabilities
22,648
25,703
1,364
902
Liabilities
Provisions
6,207
6,145
Cash and cash equivalents
1,161
Equity
17,932
20,218
Receivables from subsidiaries
16,398
24,510
Registered profit-sharing certificates
24
25
Trade receivables
Other receivables and other assets
2,281
Pension provisions
2,231
2,871
Marketable securities
2,705
2,904
Other provisions
11,537
11,686
3,120
* Consumption and Carbon Disclosures
Taxes on income resulted primarily from the current tax calcu-
lation for the financial year.
The financial result improved by € 2,842 million compared to
the previous year. The previous year mainly included higher ex-
penses from the the fair value measurement of plan assets off-
set against pension obligations.
BMW AG develops, manufactures and sells automobiles and
motorcycles as well as spare parts and accessories manufac-
tured in-house, by foreign subsidiaries and by external suppliers,
and performs services related to these products. Sales activities
are carried out primarily through branches, subsidiaries, inde-
pendent dealerships and importers. Automobile deliveries in-
creased by 235,621 to 2,620,920 units in the financial year
2023. This figure includes 692,267 units relating to series sets
supplied to BMW Brilliance Automotive Ltd., Shenyang, an in-
crease of 50,473 units compared with the previous year.
As of 31 December 2023, BMW AG had 85,168 employees,
plus 5,733 apprentices, interns and thesis students (31 Decem-
ber 2022 81,683 employees, plus 5,500 apprentices, interns
and thesis students).
The
year 2023 was characterised by a volatile business environ-
ment marked by increasing (geo-)political tensions. In addition,
in many markets higher inflation rates accompanied by increased
interest rates had a negative impact on the consumer climate.
Despite these factors, BMW AG overall looks back on a positive
business performance in the reporting year.
BMW AG's solid financial condition is reflected in the results of
operations, financial position and net assets reported for the fi-
nancial year 2023. Business developed in line with management
expectations. This assessment also takes into account events
after the end of the reporting period.
75
75
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
Results of operations
BMW AG Income Statement
in € million
Revenues
Cost of sales
2022
98,807
Business environment and review of operations
The general and sector-specific environment of BMW AG is es-
sentially the same as that of the BMW Group and is described in
the Financial Performance section of the Combined Management
Report.
Differences in accounting treatments based on HGB (used for
the Company Financial Statements) and IFRS (used for the
Group Financial Statements) are mainly to be found in connec-
tion with the capitalisation of intangible assets, the creation of
valuation units, the recognition and measurement of financial in-
struments and provisions as well as the recognition of deferred
tax assets. Differences also arise in the presentation of assets
and liabilities and of items in the income statement.
The key financial performance indicator for BMW AG is the divi-
dend payout ratio. This is defined as the unappropriated profit of
BMW AG in accordance with HGB in relation to the Group net
profit attributable to shareholders of BMW AG in accordance with
IFRS. The key non-financial performance indicators are essen-
tially identical and concurrent with those of the BMW Group.
These are described in detail in the ▾ Financial Performance section
of the Combined Management Report.
Bayerische Motoren Werke Aktiengesellschaft (BMW AG), based
in Munich, Germany, is the parent company of the BMW Group.
The comments on the BMW Group and Automotive segment
provided in earlier sections apply to BMW AG, unless presented
differently in the following section. The Financial Statements of
BMW AG are drawn up in accordance with the provisions of the
German Commercial Code (HGB) and the relevant supplemen-
tary requirements contained in the German Stock Corporation
Act (AktG).
The credit loss ratio for the entire credit portfolio remained at a
low level in 2023, finishing at 0.18% for the year (2022: 0.13%).
In balance sheet terms, business volume increased slightly to
stand at € 137,910 million (2022: € 135,689 million; +1.6%).
Stable earnings performance by Financial Services segment
Return on equity for the Financial Services segment remained at
a similar level to the previous year, finishing at 17.2% for the fi-
nancial year 2023 (2022: 17.9%; -0.7 percentage points). Re-
turn on equity for 2023 was therefore within the revised target
range of between 16 and 19%.
Asia/Pacific/
Middle East/Africa
10.3
China
12.0
Europe
35.5
10"
EU Bank'
18.1
America
- 81,653
24.1
2 Previous year's value adjusted due to a change in brands for contracts with third-party branded
vehicles.
74
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
Financial Performance
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
COMMENTS ON THE
FINANCIAL STATEMENTS OF
BMW AG
1EU Bank comprises BMW Bank GmbH with its branches in Italy, Spain and Portugal.
17,154
2,529
2023
Other operating expenses
Result on investments
Financial result
Income taxes
Profit after income tax
Other taxes
Net profit
Transfer to revenue reserves
Profit from the reduction of the share capital
Transfer to capital reserves according to § 237 V AktG
Unappropriated profit available for distribution
5,481
Revenues increased by € 9,067 million compared to the previ-
ous year. Price and product mix effects, along with increased
sales volume, had a positive impact on revenue growth. Ex-
change rate factors also had a positive effect on revenues. Geo-
graphically, the increase in revenues was mainly attributable to
Europe and Asia. Revenues totalled € 107,874 million (2022:
€ 98,807 million), of which Group internal revenues accounted
for € 83,231 million (2022: € 77,843 million) or 77.2% (2022:
78.8%).
- 1,067
6,330
- 19
6,311
Production costs went up by € 9,212 million to € 90,865 million,
mostly due to higher costs for materials and logistics.
Gross profit decreased by € 145 million to € 17,009 million.
Overall, selling expenses increased slightly, while general admin-
istrative costs increased substantially.
A large proportion of research and development expenses was
related to new vehicle models, including the all-electric
BMW i5* and Rolls Royce Spectre* models and the electrified
BMW 5 Series, BMW X3 and BMW X5 models, as well as the
development of digital products, automated driving and the
NEUE KLASSE. In line with the ramp-up of vehicles and the ex-
penses for platforms related to the transformation towards
electromobility, research and development costs increased by
2.1% compared to the previous year.
Other operating income was reduced to € 1,872 million (2022:
€ 2,529 million). The change was mainly due to lower reversals
of other provisions and lower income from financial transac-
tions.
Other operating expenses decreased to € 2,067 million (2022:
€ 2,889 million) and, as in the previous year, mainly included
expenses from financial transactions and additions to other
provisions.
Income from profit and loss transfer agreements with Group
companies, reported in the line item Result on investments, de-
creased significantly. This was essentially due to the decrease
in the profit of BMW INTEC Beteiliungs GmbH, Munich, which,
among other things, received lower distributions.
-84
31,599
3,802
24
Gross profit
107,874
-90,865
17,009
Selling expenses
- 4,123
- 4,058
Administrative expenses
Research and development expenses
- 3,824
-6,924
- 3,624
- 6,782
-24
Other operating income
-2,067
- 2,889
3,592
8,520
-2,926
- 1,594
4,384
- 18
4,366
-564
- 830
1,872
33,392
To Our Stakeholders
4,501
VI
V
Pollution prevention
and control
Climate change mitigation
х
||
Climate change
adaptation
о
III
Sustainable use
and protection of water
and marine resources
IV
Transition to a
circular economy
The Other Entities segment recorded a loss before tax
of € 100 million (2022: profit before tax of € 995 million). The
main reason for the deterioration was the level of fair value
measurement losses recognised on interest rate hedging trans-
actions in the line item "Other financial result" as a result of falling
interest rates in the USA, the UK and the eurozone during the
reporting year. In the previous year, sharply rising interest rates
led to fair value measurement gains on interest rate hedging
transactions reported by the Other Entities segment.
ELIMINATIONS
OTHER ENTITIES SEGMENT /
At 31 December 2023, the total business volume of dealership
financing stood at € 18,941 million, up sharply compared to the
end of the previous financial year (2022: € 15,209 million;
+24.5%). The increase was mainly due to improved vehicle
availability, model changes and a higher average financing vol-
ume per vehicle.
Dealership financing up on previous year
Under the brand name Alphabet, the Financial Services segment
primarily offers credit financing and leasing contracts, as well as
related services, mainly to commercial customers as part of its
fleet management business. Out of the total portfolio of credit fi-
nancing and leasing contracts with retail customers, this line of
business accounted for 720,094 contracts at the end of the re-
porting period (31 December 2022: 714,630 contracts²;
+0.8%).
Fleet business at previous year's level
At 31 December 2023, a total of 4,952,318 credit financing and
leasing contracts were in place with retail customers (31 Decem-
ber 2022: 5,210,246 contracts; -5.0%), with a declining trend
arising in all regions (EU Bank¹ -6.0%; Europe -2.8%; Americas
-2.8%; Asia/Pacific/Middle East/Africa -1.2%; China -15.5%).
Protection and restoration
of biodiversity
and ecosystems
It must also be ensured that the organisation carrying out the
economic activities has established minimum safeguards.]]
2. They do not cause any significant harm to other environ-
mental objectives based on the specific requirements for
each relevant economic activity ("Do no significant harm"
or "DNSH").
1. They make a substantial contribution to the fulfilment of
the environmental objective based on the specific carbon
emissions for the respective vehicles ("Substantial contri-
bution").
- the supply of components for production to third parties
The acquisition, financing, lease and operation of automobiles and motorcycles,
excluding banking and insurance services performed by our non-automotive
Financial Services segment
Sale of second-hand automobiles that have been used for their intended purpose
before by a customer
II „Climate change adaptation"
Contribution to
EnvironmentalObjective II is
subsumed under Environmental
Objective I
I,,Climate change mitigation"
Taxonomy alignment
Contribution to Environmental
Objective II is subsumed under
Environmental Objective I
IV,,Transition to a circular economy"
in 1,000 units
Taxonomy eligibility
80
80
BMW Group Report 2023 To Our Stakeholders
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
EU Taxonomy
Remuneration Report
Other Information
← = Q
[[The BMW Group examined the relevance of economic activity [[Environmental objectives of EU Taxonomy
CCM 3.18 "Manufacture of automotive and mobility compo-
nents" following the publication of the new Delegated Regulation
2023/2485. This economic activity may become increasingly
important in the next few years as the electrification of the vehicle
portfolio increases, but is not included in the reporting of the cur-
rent year.
In order to determine the Taxonomy alignment of economic ac-
tivities CCM 3.3 and CCM 6.5 in the reporting year, they must be
reviewed against the technical screening criteria relevant to
them:
*The additional economic activities specified in Delegated Regulation (EU) 2022/1214 of 9 March
2022 (in particular with regard to nuclear energy and gaseous fossil fuels) are not relevant to the
BMW Group. Accordingly, specific reporting tables for these activities are not included.
Retail customer contract portfolio in the Financial Services
segment in 2023
2023
2022
29.7
28.4
29.9
Leasing
Financing
IIII
16.1
16.2
20.8
21.4
24.8
22.3
41.0
50.5
49.8
52.2
in %
New BMW Group vehicles leased or financed by the
Financial Services segment*
The share of new BMW Group vehicles either leased or financed
by the Financial Services segment stood at 38.2%* in 2023
(2022: 41.0%; -2.8 percentage points).
Deferred income
New lease business grew by 8.5% increase in 2023, whereas
credit financing business contracted by 4.1%. Leasing ac-
counted for 33.6% of total new business, credit financing for
66.4%.
Credit financing and leasing business with retail customers re-
mained at the same level in 2013, with a total of 1,542,514 new
contracts concluded (2022: 1,545,490 contracts; -0.2%). Out of
the new contracts concluded in 2023, 325,320 contracts (2022:
321,535 contracts; +1.2%) related to credit financing and leas-
ing of pre-owned BMW Group vehicles.
38.2
CE 5.4
22.1
2019
2021
2020
2019
0
4,952
5,210
5,577
5,592
5,486
in 1,000 units
0
Retail customer contract portfolio in the Financial Services
segment in 2023
Other Information
Remuneration Report
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders Combined Management Report
Financial Performance
73
*The calculation only includes automobile markets in which the Financial Services segment is rep-
resented by a consolidated entity.
2023
2022
2021
2020
← = Q
Sale of second-hand goods
The total volume new credit financing and leasing contracts with
retail customers rose by 3.4% to € 57,333 million (2022:
€ 55,449 million), mainly due to a higher average financing vol-
ume per vehicle as a result of an improved product mix in the
Automotive segment.
Transport by motorbikes,
passenger cars and light
commercial vehicles
Risks and opportunities
BMW AG's performance is essentially dependent on the same
set of risks and opportunities that affect the BMW Group and
which are described in detail in the Risks and Opportunities chapter
of the Combined Management Report. As a general rule, BMW
AG participates in the risks entered into by Group companies in
proportion to the respective shareholding percentage. At the
same time, the result on investments has a significant impact on
the earnings of BMW AG.
BMW AG is integrated in the Group-wide risk management sys-
tem and internal control system of the BMW Group. Further in-
formation is provided in the Internal Control System chapter of the
Combined Management Report.
Outlook
For the financial year 2024, BMW AG expects an unchanged div-
idend payout ratio (unappropriated profit of BMW AG in accord-
ance with HGB in relation to the Group net profit attributable to
shareholders of BMW AG in accordance with IFRS), and there-
fore within the targeted range of between 30 and 40% (2023:
33.7%).
Due to its significance in the Group and its close ties with Group
companies, expectations for BMW AG with respect to its non-fi-
nancial performance indicators correspond largely to the BMW
Group's outlook. This is described in detail in the 7 Outlook chapter
of the Combined Management Report.
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesell-
schaft, Frankfurt am Main, Munich branch, has issued an unqual-
ified audit opinion on the Company Financial Statements of BMW
AG, of which the balance sheet and the income statement are
presented here. For the purposes of their inclusion in Company
Register, the Company Financial Statements of BMW AG for the
financial year 2023 will be submitted electronically to the body
that maintains the Company Register, and may be obtained via
the Company Register website. The financial statements are also
available on the BMW Group website at www.bmwgroup.com/ir.
78
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
EU Taxonomy
Group Financial Statements Responsibility Statement and Auditor's Report
Other Information
← = Q
At the level of profit before tax, eliminations increased to a posi-
tive amount of € 1,334 million (2022: € 122 million). In compar-
ison to the previous year, lower eliminations in 2023 for leasing
and credit financing business had a positive impact on the result
reported.
EU TAXONOMY
[[As part of the implementation of the European Green Deal and
the Action Plan "Financing Sustainable Growth", the EU Taxon-
omy is a cornerstone of the EU's aspiration to become climate-
neutral by 2050. It aims to channel capital flows towards envi-
ronmentally sustainable economic activities.
The EU Taxonomy is a classification system that defines eco-
nomic activities as environmentally sustainable based on fulfil-
ment of predetermined technical screening criteria.
Essentially, an economic activity can only be classified as sus-
tainable if it substantially contributes to one of the following six
environmental objectives:
I.
Climate change mitigation
Deferred income went up by € 450 million to € 4,501 million and
included primarily amounts for services still to be performed re-
lating to service and maintenance contracts.
The decrease in liabilities to subsidiaries to € 22,648 million
(2022: € 25,703 million) was mainly due to the decline in finan-
cial liabilities.
Other provisions decreased from € 11,686 million to € 11,537
million mainly due to a decline in provisions for taxes and provi-
sions for liability risks. Conversely, the provision for statutory and
non-statutory warranty and product guarantee obligations in-
creased.
After offsetting pension plan assets against pension obligations,
provisions for pensions decreased from € 2,871 million to
€ 2,231 million.
CCM 6.5, CCA 6.5
4,051
67,824
72,243
Total equity and liabilities
67,824
72,243
77
BMW Group Report 2023
To Our Stakeholders Combined Management Report
Financial Performance
II. Climate change adaptation
Group Financial Statements Responsibility Statement and Auditor's Report
Other Information
← = Q
Capital expenditure on intangible assets and property, plant and
equipment in the year under report totalled € 4,571 million
(2022: € 4,498 million). Depreciation and amortisation
amounted to € 2,607 million (2022: € 2,452 million).
Investment assets remained in line with last year's level and to-
talled € 12,077 million (2022: € 12,093 million). Inventories in-
creased to € 8,505 million (2022: € 7,523 million), primarily due
to higher levels of finished goods and goods for resale.
Receivables from subsidiaries declined to € 16,398 million
(2022: € 24,510 million). Specifically, there was a decrease in
financial receivables from BMW INTEC Beteiliungs GmbH, Mu-
nich.
The increase in other receivables and other assets to € 3,120
million (2022: € 2,281 million) was due in particular to an in-
crease in other assets.
Liquidity within the BMW Group is ensured by means of a liquidity
concept applied uniformly across the Group. This involves con-
centrating a significant part of the Group's liquidity at the level of
BMW AG. An important instrument in this context is the cash pool
based at BMW AG.
Cash and cash equivalents decreased slightly by € 62 million to
€ 6,145 million due to outflows from investing and financing
activities. This was offset by the surplus from operating activities.
Equity fell by € 2,286 million to € 17,932 million, mainly due to
lower unappropriated profit and lower retained earnings as a re-
sult of the share buyback programmes. The equity ratio changed
from 28.0% to 26.4%.
In order to secure pension obligations, cash funds totalling € 430
million were transferred to BMW Trust e. V., Munich, in conjunc-
tion with a Contractual Trust Arrangement (CTA), to be invested
in plan assets. Plan assets are offset against the related guaran-
teed obligations.
Remuneration Report
III. Sustainable use and protection of water and marine re-
sources
Total assets
V. Pollution prevention and control
Do no
significant
harm (DNSH)
Minimum
safeguards
Economic
activity is
taxonomy-aligned
Economic activities
are described in one of the Delegated
Acts
Substantial contribution
to at least
one of the environmental
objectives
Economic activity does
not cause significant
harm to other environmental
objectives
Company establishes
Economic activities
Code(s)
Description
The production of automobiles and motorcycles, excluding
Environmental objectives
Reporting 2023
Comments
Manufacture of low carbon
technologies for transport
CCM 3.3, CCA 3.3
- the sale of parts and components, such as after-sales business excluding the
provision of repair services,
I,,Climate change mitigation"
II,,Climate change adaptation"
Taxonomy alignment
IV. Transition to a circular economy
Substantial
contribution
Taxonomy
eligibility
minimum safeguard
procedures for human
rights, bribery and
corruption, taxation and
fair competition
[[ Overview of economic activities
VI. Protection and restoration of biodiversity and ecosystems
[[Explanatory comments on reporting procedures
In the previous year, the BMW Group reported on the Taxonomy-
eligible and Taxonomy-aligned proportion of its revenues, capital
expenditure and operating expenditure for Environmental Objec-
tives I and II. From reporting year 2023 on, the BMW Group is
also required to report on the proportion of Taxonomy-eligible
revenues, capital expenditure and operating expenditure for
Environmental Objectives III to VI for the first time, following the
new Delegated Regulation 2023/2486. New activities for Envi-
ronmental Objectives I and II are set out by Delegated Regulation
2023/2485. The BMW Group will be required to report on Tax-
onomy alignment for all environmental objectives from reporting
year 2024 onwards.
Our holistic understanding of sustainability
The BMW Group supports the overarching goal of the EU Tax-
onomy to promote the private financing of environmentally sus-
tainable economic activities in order to make Europe the world's
first climate-neutral continent by 2050. As a company aspiring
to achieve Net zero across its entire value chain² by no later than
2050, the BMW Group had already set ambitious, science-
based targets for all three scopes in 2020, which it aims to
achieve by 2030 (base year 2019). These goals were validated
by the Science Based Targets initiative (SBTi). Each year, the
BMW Group informs about the actual level of progress. The BMW
Group Strategy
In the coming years, as a result of the significant increase in elec-
tric mobility, the majority of carbon emissions will no longer be
generated primarily in the use phase, but in the upstream value
chain. Without the planned set of measures to reduce carbon
emissions generated within the BMW Group supply chain, these
emissions (Scope 3 upstream) would already exceed actual car-
bon emissions in the use phase prior to 2030 (Scope 3 down-
stream) The BMW Group Strategy, Production and Supplier Network,
7 Carbon Emissions. Accordingly, the BMW Group is taking a holistic
approach to achieving its sustainability-related targets and is
committed to considering 7 Carbon Emissions over the entire life cy-
cle. Among other things, the BMW Group's measures include a
further reduction in energy demand, increased use of renewable
energy (Scope 1 and 2), the use of new, efficiency-increasing
technologies (Scope 3 downstream), the use of green electricity
as a criterion when awarding contracts to suppliers and a contin-
uously increasing secondary raw material quota (Scope 3 up-
stream). However, for the economic activities that are relevant to
the BMW Group, the EU Taxonomy focuses exclusively on reduc-
ing carbon emissions during the use phase that are attributable
to low-emissions (until 2025) and emissions-free drivetrains. In-
direct carbon emissions, for instance those produced when gen-
erating charging current or during the energy-intensive produc-
tion of high-voltage batteries, are not taken into account in the
context of these economic activities. Moreover, the EU Taxon-
omy only reflects the impact of decarbonisation measures on in-
house production to the extent that they serve to manufacture
Taxonomy-aligned products or to the extent that they are explic-
itly included in the description of an activity. For example, in-
creasing the energy efficiency of paint shop processes also re-
duces carbon emissions in in-house production when an internal
combustion engine vehicle is painted. The BMW Group's sus-
tainability efforts in this regard is not or only partially taken into
account as part of currently defined economic activities in the EU
Taxonomy. Carbon Emissions ]]
1The definition of the three performance indicators and their differentiation from IFRS can be found
in the Glossary.
2 In this context the entire value chain is to be understood as Scope 1 and 2 as well as the Scope 3
categories applicable to the BMW Group (categories 1, 4 and 11) in accordance with the Green-
house Gas Protocol.
19
This contribution is based on fulfilment of specific predetermined
requirements. Moreover, no other environmental objective may
be significantly harmed during performance of the activity and
the company involved must observe minimum safeguards,
among them compliance with human rights.
BMW Group Report 2023
79
]]
← = Q
Other Information
[[Explanatory comments on reporting procedures
For the reporting year 2023, we are continuing to report on Tax-
onomy eligibility and Taxonomy alignment in relation to Environ-
mental Objective I "Climate change mitigation" and Environmen-
tal Objective II "Climate change adaptation". We will also be re-
porting on Taxonomy eligibility in relation to Environmental Ob-
jective IV "Transition to a circular economy" for the first time.
There are, at present, no economic activities relevant to the
BMW Group relating to Environmental Objective III “Sustainable
use and protection of water and marine resources", Environmen-
tal Objective V "Pollution prevention and control" or Environmen-
tal Objective VI "Protection and restoration of biodiversity and
ecosystems". Taxonomy eligibility is an initial indicator of the
maximum environmental sustainability potential of economic ac-
tivities as defined by the EU Taxonomy. Taxonomy alignment,
on the other hand, serves as an indicator of an organisation's
transformation towards environmentally sustainable economic
activities.
Responsibility Statement and Auditor's Report
Combined Management Report Group Financial Statements
EU Taxonomy
To Our Stakeholders
An economic activity is considered as Taxonomy-eligible if it is
described in the Delegated Acts relating to one of the six envi-
ronmental objectives, regardless of whether that economic activ-
ity meets the technical screening criteria stipulated in those Del-
egated Acts. Following an analysis, the BMW Group's business
activities can be summarised under the following economic
activities*:]]
Remuneration Report
Biodiversity
CCM 3.3; CCA 3.3
Category transitional activity
Category enabling activity
OpEx
aligned (A.1) or eligible (A.2)
Proportion of Taxonomy
Minimum safeguards
Circular economy
in % Y;N;N/EL Y;N; N/EL Y;N; N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N Y;N Y;N Y;N Y;N Y;N Y;N
Water
Climate change adaption
Climate change mitigation
DNSH criteria
Biodiversity
Circular economy
Pollution
2022
("Does not significantly harm")
2,051
Pollution
30.9
N/EL
N
N/EL
N/EL
N/EL
N
Y
0.2
11
CCM 6.5; CCA 6.5
E
28.5
Y
Y
Y
Y
Y
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
Substantial contribution criteria
Group Financial Statements Responsibility Statement and Auditor's Report
Climate change adaption
89
99
Total
E T
in %
]]
99.9
|
78.7
25.0
53.7
100.0
30,449
0.2
76
2 Taxonomy-aligned share of capital expenditure per economic activity is 60.4% for CCM 3.3 and 5.4% for CCM 6.5, Voluntary additional information on the Taxonomy-aligned share per economic activity.
1 With reference to ANNEX II of Delegated Regulation (EU) of 27 June 2023 (EU 2023/2486).
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
99.8
30,374
73.7
Y
[[Operating expenditure
Financial year 2023
BMW Group Report 2023
To Our Stakeholders
Climate change mitigation
Proportion of OpEx²
2023
in € million
OpEx
Code(s)'
OpEx of Taxonomy-non-eligible activities
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
A. OpEx of Taxonomy-eligible activities (A.1+A.2)
A.2 Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
Water
Of which transitional
Transport by motorbikes, passenger cars and light commercial vehicles
OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of low carbon technologies for transport
A. TAXONOMY-ELIGIBLE ACTIVITIES
Economic activities
EU Taxonomy
← = Q
Other Information
22,448
Remuneration Report
Combined Management Report
Of which enabling
Y
N/EL
Y
༄།ཞ༐ རྗ།༅།
100.0
100.0
6,634
0.0
0
2 Taxonomy-aligned share of operatig expenditure per economic activity is 32.2% for CCM 3.3 and 4.2% for CCM 6.5, Voluntary additional information on the Taxonomy-aligned share per economic activity.
1 With reference to ANNEX II of Delegated Regulation (EU) of 27 June 2023 (EU 2023/2486).
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
100.0
6,634
68.9
4,572
OpEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
N/EL
N/EL
N/EL
N/EL
EL
EL
3.8
]]
250
in % E T
90
CapEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
With the BMW VISION Neue Klasse, the BMW Group is demon-
strating what the next generation of core BMW brand vehicles
will look like. The Vision Vehicle, which was unveiled to the public
for the first time at the International Motor Show IAA Mobility
2023 in Munich, features a clear design language that is reduced
to the essentials with spacious surfaces and a small number of
striking lines. This approach focuses on signature features like
the BMW kidney grille and the Hofmeister kink in the side win-
dows. The design radiates more of the essence of BMW than
ever.]]
BMW VISION Neue Klasse
Remaining consistently one step ahead while keeping a firm eye
on the future is a core aspect of our philosophy as a company
and an expression of our firm commitment to innovation. The
BMW Group works tirelessly to provide our customers with for-
ward-thinking solutions today to simplify their daily lives. The
new BMW 5 series, for example, achieves a new level of digital
connectivity with its completely novel assistance systems. The
BMW VISION Neue Klasse offers a first glimpse at our next prod-
uct generation.
[[When developing innovations, the BMW Group attaches great
importance to rigorous customer orientation and the use of digi-
tal solutions. Innovations help to optimise processes, improve
products and introduce new technologies.
DIGITALISATION AND
CUSTOMER ORIENTATION
INNOVATION,
PRODUCTS
100 Electromobility
Carbon Emissions
97
95 Product Quality and Safety
Innovation, Digitalisation and Customer
Orientation
90
PRODUCTS
← = Q
Other Information
Remuneration Report
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
Products
To Our Stakeholders
BMW Group Report 2023
90
CCM 6.5; CCA 6.5
Transport by motorbikes, passenger cars and light commercial vehicles
N/EL
0%
0%
0%
0%
30.9%
30.9
2,051
28.6
YYYYYYY
0%
0%
0%
0%
0%
31.1 31.1%
2,062
T
0.1
Y
Y
Y
0%
Y
Y
Y
N/EL
N/EL
EL
EL
65.1
4,322
CCM 3.3; CCA 3.3
Manufacture of low carbon technologies for transport
T
0.0
Y
Y
Y
Y
0%
0.0
0
28.5 E
Y
Y
Y
Y
Y
N/EL
0%
N/EL
85
BMW Group Report 2023
To Our Stakeholders
Combined Management Report Group Financial Statements Responsibility Statement and Auditor's Report
EU Taxonomy
[[Contextual KPI information related to Taxonomy-aligned economic activities
in € million
Revenues
Sales of products, related goods and revenue of service contracts
Revenues related to financial services
Total
Capital expenditure
Economic activity CCM 3.3
Property, plant and equipment¹
"Prior-year figures adjusted due to change in calculation basis.
Development costs
Total
Economic activity CCM 6.5
Property, plant and equipment¹
Development costs
Leased products
Total
Total
Operating expenditure
Economic activity CCM 3.3
Development costs not capitalised²
Right-of-use assets (lessee) - not capitalised
Maintenance/repair expenses
Total
Economic activity CCM 6.5
Leased products
Development costs - not capitalised²
3 Only includes the operating expenditure defined in the EU Taxonomy.
1 Taxonomy-aligned share calculated with denominator as third-party revenue from Taxonomy-
eligible values of the respective economic activity.
6,908
60.4
43.24
18,942
1,018
5.4
3.74
76
n/a
n/a
n/a
30,449
7,926
26.0
2 Taxonomy-aligned share calculated with denominator as the Taxonomy-eligible value of the re-
spective economic activity. See Note [20] to the Group Financial Statements for details on the
BMW Group's capital expenditure.
21.2
by activity
6,373
Taxonomy-aligned
Proportion
2,051
32.2
Proportion
29.6
261
11
4.2
6,634
2,062
31.1
2.5
28.61]
of which
Proportion
Right-of-use assets (lessee) - not capitalised
Total
3
11
6
2,062
1,661
← = Q
[[Revenues for economy activity CCM 3.3 include small amounts
from Taxonomy-aligned activities related to the BMW Group's
Company car programme. These Company cars are generally
transferred to the BMW Group's external sales programme
within 12 months after a short period of in-house use.]]
1 Including intangible assets and right-of-use assets from lessee relationships.
2 Including Spotlight Automotive Ltd.
86
98
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
EU Taxonomy
Group Financial Statements Responsibility Statement and Auditor's Report
2
Remuneration Report
← = Q
[[CapEx plan for Environmental Objective I "Climate change
mitigation"
A CapEx plan is required to be drawn up for capital expenditure
and operating expenditure that expand Taxonomy-aligned eco-
nomic activities or allow Taxonomy-eligible economic activities
to become Taxonomy-aligned. This plan has been approved by
the Board of Management of BMW AG and covers a seven-year
period (2023-2029). The CapEx plan covers capital expenditure
and operating expenditure for the reporting year and planned
capital expenditure and operating expenditure (only non-capital-
ised development costs) for 2023-2029 for economic activities
CCM 3.3 and CCM 6.5. The selected future period corresponds
to the detailed long-term corporate planning of the BMW Group
and contains various investment measures with different imple-
mentation times (e.g. electrification of the vehicle fleet, model re-
visions, structural investments in production sites). The CapEx
plan earmarks € 68,473 million for economic activity CCM 3.3
and € 24,847 million for economic activity CCM 6.5. The in-
crease in Taxonomy-aligned capital expenditure and operating
expenditure as compared to the previous year's plan can largely
be attributed to the anticipated faster electrification of the vehicle
portfolio in the Automotive and Motorcycles segments and, with
a time delay, in the financing and leasing lines of business, and
generally higher capital expenditure and operating expenditure
associated with electrification until the end of the decade.]]
[[CapEx plan for expansion of or transformation into Taxonomy-aligned economic activities
in € million
Economic activities
Manufacture of low carbon technologies for transport
Transport by motorbikes, passenger cars and light commercial vehicles
Total
2023
2022
Code(s)
2023-2029
Other Information
Maintenance/repair expenses
3
1,655
Total
Remuneration Report Other Information
2023
2022
23,340
350
15,264
441
23,690
15,705
5,391
3,554
1,516
1,042
6,908
9
4,596
1
1,018
503
1,018
504
7,926
5,100
1,843
1,485
17
14
191
156
2,051
1
Proportion
Taxonomy-aligned
by activity
11,431
← = Q
Pollution prevention and
control
The requirements to do no significant harm to Environmental
Objective V differ considerably for economic activity CCM 3.3 and
economic activity CCM 6.5.
With regard to economic activity CCM 3.3, the BMW Group has
established corresponding processes which aim to monitor and
ensure legal compliance with any prohibitions and limits relating
to the use of chemical substances at vehicle level. All substances
used by the BMW Group are in compliance with national and Eu-
ropean laws. Substitutes are sought for hazardous substances
that are categorised as being of very high concern in accordance
with Article 57 and 59 of the REACH Regulation, if they are used
directly or in a proportion exceeding 0.1% weight by weight in a
mixture in the production processes of the BMW Group and are
consequently contained in the products of the BMW Group, while
taking factors such as economic and technical requirements into
account. If the use of these hazardous substances cannot be
avoided, the BMW Group uses them under controlled conditions
in accordance with hazardous material regulations.
On the other hand, it is not possible to meet all criteria to do no
significant harm to Environmental Objective V in the case of eco-
nomic activity CCM 6.5. Current PHEV models with air pollutant
emissions under 50 g CO2/km WLTP offered by the BMW Group
and other manufacturers may make a substantial contribution as
defined by the EU Taxonomy. However, manufacturer specifica-
tions for air pollutant emissions in real driving conditions (real
driving emissions, RDE) can only be reduced for selected models
to 80% of the limit as required by the EU Taxonomy with refer-
ence to table 2 in the annex to the Clean Vehicles Directive, due
to potentially extreme driving situations. The vast majority of
PHEV in the vehicle portfolio for economic activity CCM 6.5 must
therefore be considered not Taxonomy-aligned, even if they
meet these values in everyday driving situations.
For the remaining PHEV and BEV models in the BMW Group's
vehicle portfolio, further deductions have to be made for individ-
ual models in the context of economic activity CCM 6.5 in light of
the requirements for rolling resistance coefficients for tyres and
in particular the external rolling noise of tyres. Owing to the lim-
ited availability of data, the eligibility of the models concerned is
calculated in a simplified manner based on the tyres approved
for these models, weighted by their purchase volumes and take
rates.
The DNSH requirements for Environmental Objective V are ful-
filled for economic activity CCM 3.3; however, not all are fulfilled
for economic activity CCM 6.5, owing to the RDE and tyre label
requirements described.
Minimum safeguards
Additionally, companies that carry out economic activities as de-
fined by the EU Taxonomy are required to establish minimum
safeguards. These require the implementation of processes to
ensure compliance with due diligence obligations both within an
organisation and in stages of the upstream and downstream
value chain that have been outsourced. Specifically, this refers to
compliance with human rights and topics like bribery, corruption,
taxation and fair competition. In its Policy statement on respect for
human rights and corresponding environmental standards, the BMW Group
has, among other things, committed to compliance with the fol-
lowing standards for minimum safeguards as defined in Arti-
cle 18 of the Taxonomy Regulation: Organization for Economic
Cooperation and Development (OECD) Guidelines for Multina-
tional Enterprises, the UN Guiding Principles on Business and
Human Rights and the Ten Principles of the UN Global Compact,
which we signed back in 2001. 7 Purchasing and Supplier Network,
7 Compliance and Human Rights
The minimum safeguard requirements are met.
EU Taxonomy performance indicators
Please refer to the remarks in the glossary for the definition and
calculation of the Taxonomy-specific performance indicators rev-
enues, capital expenditure and operating expenditure and their
differentiation from IFRS. Glossary
Remuneration Report Other Information
The proportion of total revenues, capital expenditure and oper-
ating expenditure relating to eligible and non-eligible economic
activities are shown in each case as an aggregate percentage for
In the case of capital expenditure and operating expenditure, all
Taxonomy-eligible expenditure is allocated to the two economic
activities CCM 3.3 and CCM 6.5. There is no separable Taxon-
omy-eligible capital expenditure and operating expenditure for
economic activity CE 5.4.
In most cases, values from financial data were allocated directly
to the economic activities for all three performance indicators,
based for example on the drivetrain or the vehicle model. In the
remaining cases, an allocation mechanism was used for each
economic activity and each performance indicator. For Taxon-
omy-eligible and Taxonomy-aligned capital expenditure for eco-
nomic activity CCM 3.3, the allocator is based on long-term Tax-
onomy-aligned revenues generated from the Automotive and
Motorcycles segment:
Allocator for economic activity CCM 3.3: Proportion (BEV +
PHEV [<50 g CO₂]) x Automotive segment revenues
(2024-2029)*
The allocator is based on detailed long-term corporate planning
for the next six years, as approved each year by the Board of
Management and Supervisory Board. It is used for capital
expenditure on property, plant and equipment (including right-of-
use assets from lessee relationships), intangible assets and
expenditure on research and development for economic activity
CCM 3.3. For operating expenditure, the allocator is only applied
to non-capitalised development costs.]]
*PHEV volumes are only taken into account in the allocator until reporting year 2025 inclusive.
83
83
BMW Group Report 2023 To Our Stakeholders
Combined Management Report
EU Taxonomy
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
[[For other operating expenditure (non-capitalised right-of-use
assets (lessee), maintenance/repair expenses) relating to
economic activity CCM 3.3, the allocator is based on the
Taxonomy-aligned revenues generated from the Automotive
and Motorcycles segment in the reporting period.
the BMW Group. All Taxonomy-eligible revenues, capital ex-
penditure and operating expenditure for economic activities CCM
3.3 and CCM 6.5 are disclosed under Environmental Objective I
"Climate change mitigation", given that there are no identifiable
values for Environmental Objective II "Climate change adapta-
tion" that can be separated from Environmental Objective I "Cli-
mate change mitigation". This approach avoids double counting
of revenues, capital expenditure and operating expenditure when
determining the KPI in the numerator across multiple economic
activities.
For Taxonomy-eligible
Group Financial Statements Responsibility Statement and Auditor's Report
BMW Group Report 2023 To Our Stakeholders
81
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
EU Taxonomy
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
← = Q
[[Substantial contribution
The BMW Group has reviewed its contribution to the environ-
mental objectives "Climate change mitigation" and "Climate
change adaptation" for the reporting year. Economic activity
CCM 3.3 and economic activity CCM 6.5 both make a substantial
contribution to Environmental Objective I "Climate change miti-
gation" due to the manufacture as well as financing and leasing
of low-emission (PHEV < 50 g CO2/km WLTP by 2025) and
zero-emission vehicles (BEV and motorcycles with 0 g CO2/km).
Economic activity CCM 3.3 and economic activity CCM 6.5 as un-
dertaken by the BMW Group are also described under Environ-
mental Objective II "Climate change adaptation". There are,
however, no identifiable values that can be separated from Envi-
ronmental Objective I "Climate change mitigation".¹
In order to identify the specific carbon emissions of PHEV that
are not determined in line with Regulation (EU) 2019/631
(among others, USA and China), assumptions were made based
on the worst-case value for that vehicle model, even though
these emissions may have been lower in reality.
Do no significant harm
Compliance with the DNSH criteria was reviewed in the reporting
year for the five additional environmental objectives, based in
each case on the specific requirements for economic activity CCM
3.3 "Manufacture of low carbon technologies for transport" and
economic activity CCM 6.5 "Transport by motorbikes, passenger
cars and light commercial vehicles".
The vehicle portfolio for economic activity CCM 6.5 includes
BMW Group vehicles and vehicles from other manufacturers. As
no data are available regarding the relevant attributes of these
third-party products, it is currently not possible to make a com-
prehensive assessment in relation to the DNSH criteria. For this
reason, these vehicles are currently not reported as Taxonomy-
aligned.
Combined Management Report
EU Taxonomy
I
A robust climate risk and vulnerability assessment is required for
both economic activity CCM 3.3 and economic activity CCM 6.5
to determine that they do not cause significant harm to Environ-
mental Objective II. To satisfy this requirement, the physical cli-
mate risks at all key BMW Group production sites are considered
and an assessment of any damage that may occur as a result of
climate change is being carried out based on long-term climate
projection scenarios² up to 2035 and 2050. Moreover, we con-
sider potential natural hazards at all of our direct supplier loca-
tions in order to adequately take supply risks into account when
selecting and evaluating suppliers. Adaptive solutions to mitigate
risks are drawn up and implemented as appropriate based on
the results of this risk analysis and in consultation with site rep-
resentatives. For further information, see Climate-related Risks and
Opportunities.
The DNSH requirements for Environmental Objective II are ful-
filled for economic activities CCM 3.3 and CCM 6.5.
до
Sustainable use and protection of
water and marine resources and
protection and restoration of
biodiversity and ecosystems
In order to establish that no significant harm is caused to Envi-
ronmental Objectives III and VI, it is necessary to perform a com-
prehensive risk analysis that looks at the preservation and pro-
tection of environmental, water and marine resources for eco-
nomic activity CCM 3.3 (in both cases, not relevant for economic
activity CCM 6.5).
In this context, the BMW Group carries out environmental impact
assessments in accordance with Directive 2011/92/EU during
the construction of new and expansion of existing sites within the
EU that also take account of water and biodiversity. At locations
outside the EU, the BMW Group carries out an environmental im-
pact assessment based on EU requirements. Moreover, a certi-
fied environmental management system pursuant to ISO 14001
has been implemented at all BMW Group production sites and all
local statutory requirements are met. Resource Management at all
locations
The DNSH requirements for Environmental Objectives III and VI
are fulfilled for economic activity CCM 3.3.
Transition to a circular economy
The requirements for both economic activities of the BMW Group
to do no significant harm to Environmental Objective IV differ for
each stage of the value chain. We fulfil these requirements during
the manufacturing process for BMW Group vehicles (economic
activity CCM 3.3) by, for example, using secondary raw materials
in our products, designing products to facilitate their recycling,
managing waste at our production sites in a way that prioritises
recycling over disposal, and systematically registering sub-
stances of concern along the entire supply chain. With regard to
the use phase and recycling of BMW Group vehicles (economic
activity CCM 6.5), we have set up appropriate processes to com-
ply with recycling requirements and established measures for
managing waste during maintenance and at the end of the life
cycle. All these criteria also form part of our comprehensive ap-
proach to the Transition to a circular economy.
The DNSH requirements for Environmental Objective IV are ful-
filled for economic activities CCM 3.3 and CCM 6.5.1]
1 The end-of-lease business for BEV previously included in economic activity CCM 6.5 is now re-
ported under economic activity CE 5.4 following the redefinition of this activity.
² SSP1-2.6, SSP2-4.5, SSP5-8.5.
82
82
Climate change adaptation
and Taxonomy-aligned capital
expenditure for economic activity CCM 6.5, the allocator is based
on the Taxonomy-aligned financing volume for new customers
in the current financial year:
Allocator for economic activity CCM 6.5: DNSH alignment
factor x BEV proportion x financing volume attributable to
new customer contracts (2023)
It refers to capital expenditure on leased products.
2023
2022
in € million
in %
in %
by activity
of which
Taxonomy-aligned
Proportion
Proportion
105,573
23,340
22.1
15.74
18,465
2023
350
1.44
18,799
n/a
n/a
n/a
12,661
n/a
n/a
n/a
155,498
23,690
15.2
11.0
of which
1.9
in € million
2023
Transport by motorbikes, passenger cars and light commercial
vehicles (CCM 6.5)
Improvement in all three performance indicators for
reporting year 2023
The following overview tables summarise the performance indi-
cators revenues, capital expenditure and operating expenditure
from Taxonomy-eligible and Taxonomy-aligned economic activ-
ities of the BMW Group. Regardless of the Taxonomy require-
ments, the BMW Group regularly and comprehensively ad-
dresses risks arising from climate change and their potential im-
pact on its sites and supply chains. 7 DNSH adaptation to climate
change, TCFD climate risks
BMW Group perspective
All three performance indicators have grown markedly on
the previous year at BMW Group level, highlighting that the
BMW Group is on the right track with its sustainable eco-
nomic activities relating to the EU Taxonomy.
Taxonomy-aligned revenues of the BMW Group amounted
to € 23,690 million (2022: € 15,705 million), correspond-
ing to 15% of total Group revenues and an increase on the
previous year of four percentage points. The Taxonomy-
aligned share of capital expenditure was 26% (€ 7,926 mil-
lion), which corresponds to an increase of almost five per-
centage points on 2022. Taxonomy-aligned capital ex-
penditure as a proportion of the BMW Group's total capital
expenditure is impacted significantly by additions related to
leased products. Consequently, an examination of the pro-
portion of Taxonomy-aligned capital expenditure at BMW
Group level does not reflect the huge investment in sustain-
able economic activities and products. Operating expendi-
ture incurred for Taxonomy-aligned economic activities
amounted to € 2,051 million, corresponding to over 31% of
Taxonomy-eligible operating expenditure (2022: 29%).
7 Voluntary additional information on the Taxonomy-aligned share per
economic activity
Economic activity CCM 3.3, "Manufacture of low-carbon
technologies for transport”
The Taxonomy-aligned share of revenues generated by the
Automotive and Motorcycles segment corresponded to
15.0% (economic activity CCM 3.3 "Manufacture of low-
carbon technologies for transport") of total Group revenues
(2022: 10.7%). As a percentage of third-party revenues of
the two segments, the Taxonomy-aligned share rose to
22.1% (2022: 15.7%). As a result, revenues from the Au-
tomotive and Motorcycles segment that are associated with
the manufacture of low-carbon technologies for transport
(CCM 3.3) increased by approximately 41%. In contrast to
the previous year, revenues from pre-owned vehicles in the
Automotive segment are reported under the new economic
activity CE 5.4, somewhat dampening the rise in Taxonomy-
aligned revenues. Segment information
The Taxonomy-aligned proportion of capital expenditure in
the Automotive and Motorcycles segment rose to 22.7%
from 19.1% in the previous year. Looking only at the Tax-
onomy-aligned additions to intangible assets and property,
plant and equipment in the context of additions recorded by
the Automotive and Motorcycles segment, however, gives
rise to a considerably higher proportion of Taxonomy-
aligned capital expenditure of more than 60%. Segment-
specific capital expenditure is thus around 17 percentage
points higher than in the previous year. This was driven by
increased investment in sustainable products and plant in-
frastructure as part of electrification. This underscores the
BMW Group's extensive capital expenditure on sustainable
products and technologies. Voluntary additional information on
the Taxonomy-aligned share per economic activity
Economic activity CCM 6.5, "Transport by motorbikes,
passenger cars and light commercial vehicles"
The Taxonomy-aligned shares for the three performance in-
dicators are at a low single-digit level for the Financial Ser-
vices segment. This is due to the fact that there is a time lag
before the effects of the vehicle fleet electrification ramp-up
are reflected in the financing and leasing lines of business.
A further reason is the varied, stricter DNSH requirements
for economic activity CCM 6.5, in particular those relating to
Environmental Objective V "Pollution prevention and con-
trol", which lead to the exclusion of almost all PHEV and a
significant restriction in the recognition of BEV (for details
see section Do no significant harm). Third-party brands are
not included in the vehicle portfolio in the reporting on Tax-
onomy alignment for economic activity CCM 6.5. A lack of
available data regarding the tyre categories or WLTP emis-
sions values of third-party products makes it impossible to
review compliance with the DNSH criteria in full. Moreover,
revenues from the sale of lease returns are reported under
the new economic activity CE 5.4, differently from the previ-
ous year. The Financial Services segment recorded a de-
cline in revenues for 2023 in absolute terms following the
reallocation of revenue components to the new economic
activity CE 5.4. The Taxonomy-aligned proportion of capital
expenditure in the Financial Services segment rose by more
than 50% on the previous year to 3.3% (€ 1,018 million).
Based on total capital expenditure in the Financial Services
segment, the Taxonomy-aligned proportion rose by signifi-
cantly more than 40% to 5.4%. Voluntary additional information
on the Taxonomy-aligned share per economic activity
Economic activity CE 5.4, "Sale of second-hand goods”
As stipulated by Delegated Regulation 2023/2486, the
BMW Group only reports on the Taxonomy-eligible propor-
tion of revenues for economic activity CE 5.4. This economic
activity includes revenues from pre-owned vehicles in the
Automotive segment and revenues from the sale of used
cars after their intended use by clients in the Financial Ser-
vices segment, but does not include revenues from the sale
of used motorcycles. Around 12% of total revenues are
Taxonomy-eligible in reporting year 2023.1]
84
BMW Group Report 2023 To Our Stakeholders
Combined Management Report Group Financial Statements
EU Taxonomy
Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Manufacture of low carbon technologies for transport (CCM 3.3)
Operating expeditures
Total CapEx BMW Group
Taxonomy-non-eligible capital expenditures
Manufacture of low carbon technologies for transport (CCM 3.3)
Transport by motorbikes, passenger cars and light commercial
vehicles (CCM 6.5)
Capital expenditures²
2022-2028
Total revenues BMW Group
Sale of second-hand goods (CE 5.4)
Manufacture of low carbon technologies for transport (CCM 3.3)
Transport by motorbikes, passenger cars and light commercial
vehicles (CCM 6.5]
Revenues¹
[[Voluntary additional information on the Taxonomy-aligned share per economic activity
[[As the overview tables from Delegated Regulation (EU)
2023/2486 do not provide a detailed picture of the BMW
Group's business model per economic activity, the following
table provides detailed information about the three performance
indicators as regards Taxonomy alignment, reported separately
for economic activities CCM 3.3 and CCM 6.5.]]
← = Q
Taxonomy-non-eligible revenues
N/EL
CCM 3.3
55,989
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of low carbon technologies for transport
Transport by motorbikes, passenger cars and light commercial vehicles
CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
A.2 Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
A. CapEx of Taxonomy-eligible activities (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities
Code(s)'
Cap Ex
in € million
2023
Proportion of CapEx²
A. TAXONOMY-ELIGIBLE ACTIVITIES
Climate change mitigation
Water
Substantial contribution criteria
("Does not significantly harm")
2022
Pollution
Circular economy
Biodiversity
DNSH criteria
in % Y;N;N/EL Y;N; N/EL Y;N; N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N Y;N Y;N Y;N Y;N Y;N Y;N
Climate change mitigation
Climate change adaption
Water
Pollution
Circular economy
Climate change adaption
Biodiversity
Economic activities
← = Q
76.6
142,837
91.9
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
1 With reference to ANNEX II of Delegated Regulation (EU) of 27 June 2023 (EU 2023/2486).
2 For economic activity CE 5.4, only the taxonomy eligibility is reported in accordance with Article 5 of Delegated Regulation (EU) of 27 June 2023 (EU 2023/2486).
3 Taxonomy-aligned share of revenues per economic activity is 22.1% for CCM 3.3 and 1.9% for CCM 6.5, Voluntary additional information on the Taxonomy-aligned share per economic activity.
12,661
8.1
155,498
100.0
57.5
།
22.9
EU Taxonomy
n/a
91.3
]]
in % E T
Total
88
88
[[Capital expenditure
Financial year 2023
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
80.3
119,147
Minimum safeguards
aligned (A.1) or eligible (A.2)
0%
0%
168
0.6
0.6%
Y
Y
Y Y Y Y Y Y Y 2-1
YYYYYYY 19.1 E
T
T
Y
Y
0.0
0%
Manufacture of low carbon technologies for transport
CCM 3.3; CCA 3.3
CCM 6.5; CCA 6.5
4,524
14.9
EL
EL
N/EL
N/EL
N/EL
N/EL
17,924
58.9
EL
EL
N/EL
Transport by motorbikes, passenger cars and light commercial vehicles
Proportion of Taxonomy
0%
22.7
Cap Ex
Category enabling activity
Category transitional activity
CCM 3.3; CCA 3.3
6,908
22.7
Y
N
N/EL
N/EL
N/EL
N/EL
Y Y Y Y Y Y Y 19.1 E
CCM 6.5; CCA 6.5
22.7%
1,018
Y
N
N/EL
N/EL
N/EL
7,926
26.0
26.0%
0%
0%
0%
0%
N/EL
0%
6,908
3.3
Revenues of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
N/EL
EL
Substantial contribution criteria
("Does not significantly harm")
2022
Pollution
Circular economy
Biodiversity
DNSH criteria
in € million
in % Y;N;N/EL Y;N; N/EL Y;N; N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N Y;N Y;N Y;N Y;N Y;N Y;N
Climate change mitigation
Climate change adaption
Water
Pollution
Circular economy
Water
Biodiversity
Proportion of Taxonomy
aligned (A.1) or eligible (A.2)
revenues
Category enabling activity
Category transitional activity
CCM 3.3; CCA 3.3
CCM 6.5; CCA 6.5
23,340
15.0
Y
N
N/EL
N/EL
N/EL
N/EL
Minimum safeguards
Y Y Y Y Y Y Y 10.7 E
Climate change adaption
Proportion of Revenues³
CCM 6.5
24,847
16,520
93,320
72,509 ]]
[Revenues
Financial year 2023
87
BMW Group Report 2023
To Our Stakeholders
Combined Management Report
Group Financial Statements Responsibility Statement and Auditor's Report
Remuneration Report
Other Information
Climate change mitigation
← = Q
Economic activities
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of low carbon technologies for transport
Transport by motorbikes, passenger cars and light commercial vehicles
Revenues of environmentally sustainable activities (Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
A.2 Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
A. Revenues of Taxonomy-eligible activities (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Revenues of Taxonomy-non-eligible activities
Total
Code(s)¹
Revenues
2023
EU Taxonomy
350
0.2
Y
19
0.0
0%
T
Manufacture of low carbon technologies for transport
CCM 3.3; CCA 3.3
82,233
52.9
EL
EL
N/EL
N/EL
N/EL
N/EL
Y
Transport by motorbikes, passenger cars and light commercial vehicles
Sale of second-hand goods²
18,115
11.6
EL
EL
N/EL
N/EL
N/EL
N/EL
18,799
12.1
N/EL
N/EL
N/EL
N/EL
CCM 6.5; CCA 6.5
CE 5.4
Y
VVVVVVV 110 E
Y
N
N/EL
N/EL
N/EL
23,690
15.2
15.2%
0%
0%
0%
0%
N/EL
0% Y
V V V V V V V 0.3
T
Y
Y
Y
Y
Y
Y
Y
0%
0%
68,473
0%
0%
15.0%
15.0
23,340
11.0
Y
0%
Total OpEx BMW Group³