investor presentation of bmw group 2009
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BMW GroupInvestor PresentationSeptember 2009Page 1
BMW Group Investor Presentation
September 2009
BMW GroupInvestor PresentationSeptember 2009Page 2
BMW Group.Key figures H1-2009.
Euro million 20091 Jan. -
30 June2008
1 Jan. –
30JuneChange
in %
Revenues 24,480 27,837 -12.1
Loss / profit before financial result (EBIT) 114 1,252 -90.9
Automobiles -282 1,014 -
Motorcycles 54 92 -41.3
Financial Services 145 118 22.9
Other entities 38 124 -69.4
Eliminations 159 -96 -
Loss / profit before tax -47 1,243 -
Net loss / net profit -31 994 -
EPS in Euro (common / preferred) -0.05/-0.04 1.52/1.53 -/-
Operating Cash flow (Automobiles) 2,109 2,383 -11.5
Equity 20,162 22,019 -8.4
BMW GroupInvestor PresentationSeptember 2009Page 3
BMW Group Update. Successful financial management in H1-2009.
Proactive, foresighted financial management:
Net current assets and other items*:reduced by EUR 1,607 million
Free cash flow*: EUR 516 million
Net interest bearing assets*: EUR 10,041 million
Group liquidity: EUR 11,989 million
*Automobiles Segment
BMW GroupInvestor PresentationSeptember 2009Page 4
BMW Group Update. Outlook and action for 2009.
Focused cost management is the top priority.
Increased efforts to reduce material costs(more than EUR 4 billion) until 2012.
EUR 500 million cost savings from headcount reduction from 2009 onwards.
Optimization of capital employed.
Reduction of capital expenditure without sacrificing investment in the future.
Continuation of strict working capital and free cash flow management.
Resolute pursuit of strategy Number ONE.
BMW GroupInvestor PresentationSeptember 2009Page 5
BMW Group Update. Targets and guidance.
Due to the considerable uncertainty about how the global economy will develop from here, it is currently impossible to make stable forecasts for the year 2009.
We expect the entire industry’s global auto sales to drop by 10 to 20 % in 2009 and pick up over the course of 2010.
We are assuming that we will be unable to match last year´s sales figure. But we want to assert or expand our segment share in the single markets.
We remain committed to achieving our profitability and FCF targets for 2012!
BMW GroupInvestor PresentationSeptember 2009Page 6
BMW Group Strategy. Core elements of our corporate strategy.
Financial Strategy
Process management:
Flexibility in production
Component
exchange
Networking
Premium Brand Strategy:
Focus on premium segments in the automobile and
motorcycle market
Strategic Realignment
Sustainability & Efficient Dynamics
BMW GroupInvestor PresentationSeptember 2009Page 7
BMW Group Strategy. Strategic objective.
The BMW Group is the leading provider of premium products and premium services for individual mobility.
BMW GroupInvestor PresentationSeptember 2009Page 8
BMW Group Strategy. The way ahead –
Number ONE.
Number ONE definesour vision for the year 2020.
our mid-term targets for the year 2012.
our internal milestones.
Our vision is targeted towards creating value and securing future success. We are driven by our goal to increase profitability.
BMW GroupInvestor PresentationSeptember 2009Page 9
BMW Group Strategy. Targets 2012.
Group 2006 2012
Auto Sales (‘000 units) 1,374 -
Motorcycle Sales (‘000 units) 100 1501)
R&D ratio (%) 6.5 5.0 –
5.5
Capex ratio (%) 8.8 <7.0
Dividend (euro, common/prefered) 0.70/0.72 substantial increase
Automobiles Segment
RoCE (%) 21.7 >26
Return on Sales (EBIT, %) 6.4 8 –
10
Free Cash Flow (euro million) 9562) >2,0002)
Free Cash Flow from Industrial Operations1)
Projected growth until 2012 includes Husqvarna brand sales
BMW GroupInvestor PresentationSeptember 2009Page 10
BMW Group Strategy. Improvement of R&D ratio.
R&D ratio: R&D Expenditure (HGB) / Revenues
6.5%
6.0%
5.5%
5.0%
4.5% 4.9%
5.8%
6.2%
6.4%6.7%
6.5%
5.6%
2001 2002 2003 2004 2005 2006 2007 2012
7.0%
4.0%
2008
5.4%
BMW GroupInvestor PresentationSeptember 2009Page 11
BMW Group Strategy. Improvement of capex ratio.
Capex ratio: Total Capex / Revenues
11.0%
10.0%
9.0%
8.0%
9.1%9.5%
10.2%9.8%
8.6%
8.8%
2001
Target: <7%
7.6%7.0%
2002 2003 2004 2005 2006 2007 2012
6.0%
2008
7.9%
BMW GroupInvestor PresentationSeptember 2009Page 12
BMW Group Strategy. Reduction of material costs.
The material costs represent the biggest cost pool.We want to achieve significant cost reductions in the supply chain. We will not only negotiate harder but we will work close together with the suppliers to ensure sustainable cost reductions.We will implement the efficiency-enhancement measures in all future product and technology projects.
~€
44bn* Cost of sales
~€
24bn*
*2008 figures
Material costs
BMW GroupInvestor PresentationSeptember 2009Page 13
BMW Group Strategy. Efficiency improvements.
Expenses/fixed costs/R&D:
€2bn or 1/3 of the total potential
Cost of materials/purchasing:
>€4bn or at least 2/3 of the total potential
2008 2009 2010 2011 2012
6,000
5,000
4,000
3,000
2,000
1,000
0Cost of materials / purchasing
Expenses / fixed costs / R&D
7,000
BMW GroupInvestor PresentationSeptember 2009Page 14
Significant increase in purchasing volume in the NAFTA region
(based on 13% of total purchasing in 2008).
BMW Group Strategy. Natural hedging.
Shenyang
Oxford
Spartanburg240k150k
+60%
260k200k
+30%
44k30k
+47%
BMW GroupInvestor PresentationSeptember 2009Page 15
BMW Group Strategy. Core elements of our corporate strategy.
Financial Strategy
Process management:
Flexibility in production
Component
exchange
Networking
Premium Brand Strategy:
Focus on premium segments in the automobile and
motorcycle market
Strategic Realignment
Sustainability
BMW GroupInvestor PresentationSeptember 2009Page 16
BMW Group Automobiles. Three authentic premium brands.
The world’s most exciting premium small car brand
Sheer driving pleasure
The pinnacle of automobile luxury
BMW GroupInvestor PresentationSeptember 2009Page 17
BMW Group Automobiles. Growth with new models.
Expansion of BMW X model series with BMW X6 and X1
BMW 5 series Gran Turismo
Rolls-Royce Phantom Coupe
Expansion of Rolls-Royce range with smaller model
MINI Crossover Concept
Project i
BMW GroupInvestor PresentationSeptember 2009Page 18
USA
Eastern Europe
IndiaChina
Russia
BMW Group Automobiles. Priority on growth markets.
BMW GroupInvestor PresentationSeptember 2009Page 19
BMW Group Automobiles.Deliveries to customers through July 2009.
Deliveries of automobilesin units 2009 ytd. 2008 ytd. Change in %
Total BMW 604,190 744,025 -18.8
1 series 128,822 137,570 -6.4
3 series 226,803 298,568 -24.0
5 series 99,631 124,830 -20.2
6 series 5,625 11,210 -49.8
7 series 25,112 23,175 8.4
X3 32,498 54,113 -39.9
X5 50,698 72,699 -30.3
X6 23,561 8,696 170.9
Z4 11,440 13,164 -13.1
Total MINI 120,813 146,040 -17.3
Total Rolls-Royce 374 597 -37.4
BMW Group 725,377 890,662 -18.6
BMW GroupInvestor PresentationSeptember 2009Page 20
BMW Group Automobiles.Premium segment sales vs. BMW Group retail sales development (month on month).
BMW Group retail salesPremium Segment sales
(estimates)
2008 2009
BMW GroupInvestor PresentationSeptember 2009Page 21
BMW Group Automobiles.Deliveries to customers 2008.
Deliveries of automobilesin units 2008 2007 Change in %
Total BMW 1,202,239 1,276,793 -5.8%
1 series 225,095 165,803 35.8%
3 series 474,208 555,219 -14.6%
5 series 202,287 230,845 -12.4%
6 series 16,299 19,626 -17.0%
7 series 38,836 44,421 -12.6%
X3 84,440 111,879 -24.5%
X5 116,489 120,617 -3.4%
X6 26,580 0 -
Z4 18,005 28,383 -36.6%
Total MINI 232,425 222,875 4.3%
Total Rolls-Royce 1,212 1,010 20.0%
BMW Group 1,435,876 1,500,678 -4.3%
BMW GroupInvestor PresentationSeptember 2009Page 22
BMW Group Automobiles. BMW and MINI retail by model 2008 (2007).
Total BMW 1 Series 3 Series 5 Series 6 Series 7 Series X3 X5 Z4
1,202,239
(1,276,793)
100% 18.7% 39.4% 16.8% 1.4% 3.2% 7.0% 9.7% 1.5%
225,095
(165,803)
474,208
(555,219)
202,287
(230,845) 16,299
(19,626)
38,836
(44,421) 84,440
(111,879)
18,005
(28,383)
MINI retail by model 2008 (2007).
(100%) (13.0%) (43.5%) (18.1%) (1.5%) (3.5%) (8.8%) (9.4%) (2.2%)
X6
2.2%
116,489
(120,617)
26,580
Total MINIOne, One D Cooper Cooper D Cooper S Convert. Clubman
232,425
(222,875)
100% 11.8% 26.6% 12.7% 16.8% 10.0% 20.3%
27,488
(35,720)
61,934
(77,124)
29,581
(21,764)
43,132
(48,245)
23,208
(35,108)
47,082
(4,914)
(100%) (16.0%) (34.6%) (9.8%) (21.6%) (15.8%) (2.2%)
Total BMW Group sales: 1,435,476 (1,500,678) units.BMW brand share: 1,202,239 (1,276,793) units or 83.8% (85.1%) of
total sales.
MINI brand share: 232,425 (222,875) units or 16.2% (14.9%) of total sales.
BMW GroupInvestor PresentationSeptember 2009Page 23
Sedan Wagon Hatch Coupe Convert. Roadster New Seg. SAV
BMW Group Automobiles. Brand and product overview.
Plus
Base
Plus
PlusPlus
Base
7 Series 6 Series 6 Series
Plus
Base
Luxury
Compact
Lower
Medium
Small
Plus
Base
Upper
Medium
Base
Plus
PlusPlus
Convert.Phantom Coupe
3 Series 3 Series 3 SeriesZ4 Z4 X33 Series
MINIMINI MINI
1 Series 1 Series 1 Series
X5, X65 Series 5 Series GT
New products to be launched until 2012
X1
BMW GroupInvestor PresentationSeptember 2009Page 24
BMW Group Automobiles. Current models –
lifecycle overview.
1 Series
X Models
MINI
5 Series
3 Series
6 Series
7 Series
2004 2005 2006 2007 2010 -
2012
Rolls Royce
Z4
Phantom Drophead Coupé
Sedan
Cooper / Cooper S
One / Cooper D
LCI
3 door hatch5 door hatch
Touring
Coupe
Convert.
LCI
X5 NG
Coupe
Convert.
Touring
X3 LCI
LCI
Coupe
LCI
*LCI: Lifecycle
Impulse
Clubman
LCI
Coupe
X6
GT
Sedan NG
M3 Coupe
M3 Sedan, Convert.
Phantom Coupé
Crossover
Convert.
X6 Active Hybrid
X3 NG
NG
LCI Sedan/Touring
X1
NG
NG
Convertible
Active Hybrid
MINI E
2008
NG
NG
Ghost
2009
BMW GroupInvestor PresentationSeptember 2009Page 25
3%
10%
20%
40%
>60%
0%
10%
20%
30%
40%
50%
60%
70%
2008 2009 2010 2011 20120.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
BMW Group Automobiles. Model renewal rate.
Ø age of product portfolio
(sales & mix adjusted)
Cumulated Model Renewal Rate (as % of total expected annual sales volume)
3.3 years
2.6 years
BMW GroupInvestor PresentationSeptember 2009Page 26
BMW Group Automobiles. Product overview MINI.
Launch 03/2009
MINI Clubman.
MINI Hatch. MINI Convertible.
BMW GroupInvestor PresentationSeptember 2009Page 27
BMW Group Automobiles. New product 2008.
BMW 7 series
BMW GroupInvestor PresentationSeptember 2009Page 28
BMW Group Automobiles. New product 2009.
Launch 05/2009BMW Z4
BMW GroupInvestor PresentationSeptember 2009Page 29
BMW Group Automobiles. New product 2009.
BMW X1Launch 10/2009
BMW GroupInvestor PresentationSeptember 2009Page 30
BMW Group Automobiles. New product 2009.
BMW 5 series Gran TurismoLaunch 10/2009
BMW GroupInvestor PresentationSeptember 2009Page 31
BMW Group Automobiles. BMW Advanced Diesel with Blue Performance.
X5 Xdrive 35dEmission Standard LEVII / Bin5
265 hp, 0-60 mph < 7.4s
Fuel consumption > 27 mpg (USC)
335dEmission Standard LEVII / Bin5
265 hp, 0-60 mph < 6.2s
Fuel consumption > 33 mpg (USC)
US market introduction: December 2008
BMW GroupInvestor PresentationSeptember 2009Page 32
BMW Group Automobiles. BMW Active Hybrid.
US Market introduction: End of 2009 (EU: 04/2010)
X6 Active HybridFull (Two-Mode) Hybrid system
Emission Standard ULEVII / EU5
System Power: 485 hp, 0-60 mph: 5.6s
Consumption: 9.9l/100km (28.5mpg)(-20% compared to base X6 xdrive 50i)
7 series Active HybridMild Hybrid system
Emission Standard ULEVII / EU5
System Power: 465 hp, 0-60 mph: 4.9s
Consumption 9.4l/100km (29.1mpg)(-15% compared to base 750li)
US Market introduction: End of 2009 (EU: 04/2010)
BMW GroupInvestor PresentationSeptember 2009Page 33
BMW Group Automobiles. The worldwide premium segment is expected
to grow to 8.2mn units p.a. in 2022.
Source: Global Insight
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Region
(‘000 units) 2008 2022 Chg.World 5,836 8,220 41%
China* 342 914 167%
Asia, Pacific & Africa 526 932 77%
Americas 1,921 2,519 31%
Europe (ex Germany) 2,086 2,737 31%
Germany 954 1,107 16%
CAGR +2.0%
CAGR +2.0%
CAGR +4.2%
CAGR +7.3%
CAGR +1.1%
Premium Segment:
CAGR
2008-2022: 2.5%
Total Growth
2008-2022: 41%
*China includes Mainland China, Hong Kong and Taiwan
BMW GroupInvestor PresentationSeptember 2009Page 34
BMW Group Automobiles. Premium segment growth in emerging
markets.Source: Global Insight, in ‘000 units
1) China includes Mainland China, Hong Kong and Taiwan2) GCC: Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates3) New EU Countries: Bulgaria, Estonia, Latvia, Lithuania, Poland, Rumania, Slovakia, Slovenia, Czech Republic, Hungary4) Latin America: Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Puerto Rico, Uruguay, Venezuela
572
105
9170
0
100
200
300
400
500
600
700
800
900
1,000
China1) Russia GCC2) New EU
Countries3)
Latin
America4)
South Korea Ukraine India Malaysia Thailand
167.3%
65.6%
98.2%85.0%
19.3% 91.0%44.2% 694.2% 188.8% 181.8%
2008 Sales Sales Forecast by 2022
342
159
93 8261
3822 8 9 7
914
264
184151
72 7232
62 27 20
BMW GroupInvestor PresentationSeptember 2009Page 35
Ge
rman
y
Un
ite
d K
ing
do
m
Ital
y
US
A
Fra
nce
Ru
ssia
Ch
ina
Jap
an
RoW
0%
5%
10%
15%
20%
25%
30%
35%
BMW Group Automobiles. Premium segment share of total market.
World Average: 9.3%
Premium Segment Share of Total Market
2008
BMW GroupInvestor PresentationSeptember 2009Page 36
Price (€)ENDURO TOUR
R 1200 RT
20,000
10,000
R 1200 GS
Adventure
F 800 ST
F 650 GS (2 Cyl.)G 650 X
Challenge
G 450 X
R 1200 GS
F 800 GS
2 Cyl.
URBAN
K 1300 RR 1200 R
G 650 X Country
G 650 XMoto
SPORT
F 800 S
HP2 Sport
HP2 Megamoto
G 650 GS (1 Cyl.)
K 1300 S
K 1300 GT
F 800 R
BMW Group Motorcycles. Product overview.
BMW GroupInvestor PresentationSeptember 2009Page 37
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2012
BMW Group Motorcycles. Retail unit sales 1990–
2012.
units
* Projected growth until 2012 includes Husqvarna brand sales.*
BMW GroupInvestor PresentationSeptember 2009Page 38
BMW Group Financial Services. Global presence in 54 countries with 4,000 employees.
BMW Financial Services
MINI Financial Services
BMW GroupInvestor PresentationSeptember 2009Page 39
BMW Group Financial Services. Leasing has multiple benefits for the BMW
Group.
Cash buyers
61.6 months (1)
Leasing
36.2 months (1)
Year 1 Year 12
(1) average ownership cycle in Germany; (2)German market, 2006 data
9,838
7,115
0 2,000 4,000 6,000 8,000 10,000 12,000
Leasing
Cash buyer
Average level of optional equipment in Germany (Example, in EUR):
+ 38 %Basis: German market, 9.000 customers, all model lines, 2006 data
Loyalty Rates (2)
75.2%
62.7%
BMW GroupInvestor PresentationSeptember 2009Page 40
345387
422
515
605
685743
-292
452
-400
-200
0
200
400
600
800
2000 2001 2002 2003 2004 2005 2006 2007 2008
BMW Group Financial Services. Profit before Tax (PbT) Financial Services.
in million Euro
BMW GroupInvestor PresentationSeptember 2009Page 41
BMW Group Financial Services. Additional risk provisions in 2008.
Automobiles Segment:EUR 911 millionresidual values
FinancialServicessegment: EUR 1,057 million
EUR 694 millionresidual values
EUR 363 millioncredit losses
Total: EUR 1,968 million
BMW GroupInvestor PresentationSeptember 2009Page 42
BMW Group Financial Services. Penetration rate retail business.
34.5% 35.0% 36.1%
38.3%42.0% 41.1%
42.4%
46.4%
48.5%47.0%
44.6%
BMW GroupInvestor PresentationSeptember 2009Page 43
BMW Group Financial Services. Development of credit loss rates.
0.54%
0.46%
0.41%
0.37%
0.41%
0.46%
0.59%
0.74%
0.35%
0.40%
0.45%
0.50%
0.55%
0.60%
0.65%
0.70%
0.75%
0.80%
2002 2003 2004 2005 2006 2007 2008 H1-2009
BMW GroupInvestor PresentationSeptember 2009Page 44
BMW received The Automotive Leasing Guide (ALG) Residual Value Award in 2004, 2005 and 2006 for “the highest predicted resale value of any luxury brand”.
BMW was named “Best Brand”
in Kelley Blue Book’s 2005 and 2006 “Best Resale Value Awards”.
2009 BMW X5 awarded by Kelley Blue Book for “Best resale value in the Luxury Crossover Segment”.
50 %
52 %
58 %
54 %
56 %
98/01 99/02 00/03 01/04 02/05 03/06 04/07 06/0905/08
55 % 55 % 57 % 54 % 55 % 54 %
54 %54 %
55 %55 %
54 %54 %
52 %52 %
53 %53 %
52 %52 % 52 %52 %
51 %51 % 51 %51 %
3 year old retention36 months residual value (ALG)
BMW Group Financial Services. Resale value development in the USA.
52 % 46 %
BMW GroupInvestor PresentationSeptember 2009Page 45
BMW Group Financial Services. Residual value development in the USA.
BMW brand
Source: Manheim Used Vehicle Value Index, mix and mileage adjusted
BMW brand vs. all luxury brands
All luxury brands
BMW GroupInvestor PresentationSeptember 2009Page 46
BMW Group Financial Services. Development of CPO retail in the USA.
60
40
20
0 6.1
80
100
120
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
16.8
28.3
44.7
39.9
60.665.7
71.173.2
80.489.8
104.5in 1,000 units
BMW GroupInvestor PresentationSeptember 2009Page 47
BMW Group Strategy. Core elements of our corporate strategy.
Financial Strategy
Process management:
Flexibility in production
Component
exchange
Networking
Premium Brand Strategy:
Focus on premium segments in the automobile and
motorcycle market
Strategic Realignment
Sustainability & Efficient Dynamics
BMW GroupInvestor PresentationSeptember 2009Page 48
BMW Group Global Production Network. Automobile production by plant in 2008.
in 1,000 units
Regensburg, GermanyProduction of BMW 1, 3 Series, Z4 274.0 Leipzig, Germany
Production of BMW 1, 3 Series 150.0
Dingolfing, GermanyProduction of BMW 5, 6, 7 Series 241.3 Rosslyn, South Africa
Production of BMW 3 Series 48.0
Oxford, UKProduction of MINI 235.0 Goodwood, UK
Production of Rolls-Royce 1.4
Munich, GermanyProduction of BMW 3 Series 202.9 Shenyang1, China
Production of BMW 3, 5 Series 33.7
Spartanburg, USAProduction of BMW X5, X6 170.7 Steyr2, Austria
Contract Production of BMW X3 82.9
1
Joint venture2
Contract production
BMW GroupInvestor PresentationSeptember 2009Page 49
BMW Group Global Production Network. Adjustment of production volume.
Q-on-Q development of production and retail sales.
Q1-08
(vs. Q1-07)Q2-08
(vs. Q2-07)
Q3-08
(vs. Q3-07)Q4-08
(vs. Q4-07)Q1-09
(vs. Q1-08)
Q2-09
(vs. Q2-08)
BMW GroupInvestor PresentationSeptember 2009Page 50
0
BMW Group Global Production Network. Work time accounts
for high volume flexibility.
Market demand
Volume[units p.a.]
+300 hours
-300 hours
Work time account flexibility
BMW GroupInvestor PresentationSeptember 2009Page 51
BMW Group Global Production Network. Continuous growth.
-
Product design suitable for production processes
-
Specific investments only for sustainable capacity increases (e.g. Oxford plant)
Cost productivity
=Change in performanceChange in costs (incl. depreciation)
(in %)
Development of cost productivity
-
Strict economic steering of product and production projects
-
Permanent benchmarking process with competitors
Old target until 2006: Improvement of 5% p.a.New target: Improvement of 7-8% p.a.
BMW GroupInvestor PresentationSeptember 2009Page 52
BMW Group Strategy. Core elements of our corporate strategy.
Financial Strategy
Process management:
Flexibility in production
Component
exchange
Networking
Premium Brand Strategy:
Focus on premium segments in the automobile and
motorcycle market
Strategic Realignment
Sustainability & Efficient Dynamics
BMW GroupInvestor PresentationSeptember 2009Page 53
The BMW Group’s understanding. Anchoring of the topic in the BMW Group.
For its products Clean Mobility: zero-emissions driving
As an industrial Responsible use of natural resources enterprise
As an active Corporate Citizenship activities corporate citizen
Within the company Basic principles
Executive Board Resolution in 2000: „The BMW Group will continue to pursue sustainable development as principle of corporate strategy.“
„Sustainability throughout the value added chain is inseparable from our corporate self-image. That is why we choose to take responsibility. Because of our convictions, but also our self-interest, now and in the future.“Dr. Norbert Reithofer, Chairman of the Board of Management of the BMW AG, in the Sustainable Value Report 2007/2008
Strategy Number ONE (09/2007). BMW Group assumes responsibility:
BMW GroupInvestor PresentationSeptember 2009Page 54
The BMW Group’s understanding. Commitments and guidelines.
The BMW Group complies with:-
The Global Compact and its ten principles
-
The Cleaner Production Declaration of the UN Environmental Programme (UNEP)
In addition, the BMW Group is guided by:-
The agreements of the International Labour Organisation (ILO)
-
The OECD guidelines for multinational companies-
The Business Charter for Sustainable Development of the International Chamber of Commerce (ICC)
The BMW Group’s understanding of Corporate Sustainability:
-
For us, corporate sustainability means making a lasting, positive contribution to the economic success of the company. This is the
basis
for exercising ecological and social responsibility.
-
For us, an awareness of our social responsibilities is inseparable from our corporate self-image.
BMW GroupInvestor PresentationSeptember 2009Page 55
Sustainability actions of the BMW Group are honored externally. BMW Group is the industry leader.Sustainability oriented ratings and financial indices are growing in number and importance. The BMW Group is among the top companies represented in these sustainability indices:
-
Dow Jones Sustainability Indexes/Dow Jones STOXX Sustainability Indexes: Business Leader since 2005. The BMW Group is the only automotive company continuously listed since the establishment of this most important sustainability index in 1999.
-
Listed in FTSE4Good/FTSE4Good Environmental Index-
Listed in Merrill Lynch ML Carbon Leaders Europe Index
-
3rd Place in "DAX 30 Nachhaltigkeitsrating" by Scoris in 2007-
Oekom: Corporate Responsibility Rating Oekom 2006 Status Prime
-
ÖKO-Trend certificate for outstanding corporate responsibility (most points in the automotive industry)
BMW GroupInvestor PresentationSeptember 2009Page 56
BMW EfficientDynamics. The vision of the BMW Group.
2008 > 2020
today
future
tomorrow
hydrogen / electric
–
ICE Improvements–
Brake Energy Regeneration–
Active Aerodynamics–
Electric steering–
Electric water pump
–
Further ICE improvements
–
Active Hybrid
–
Clean Diesel
–
Predictive energy management
–
Thermoelectric generator
BMW GroupInvestor PresentationSeptember 2009Page 57
BMW EfficientDynamics. Efficiency increases powertrain.
CO2
free
-
12 %
-
20 %
100 %
-3 to
-
15 %
4 valve,BMW Bi-Vanos
Energy Mgmnt. Hybrid Vehicles
BMW CleanEnergy
BMW VALVETRONIC
BMW High Precision Injection
Intelligent management of energy flows
BMW GroupInvestor PresentationSeptember 2009Page 58
BMW EfficientDynamics. Tailor-made energy management packages.
Electric water pump Electric steering
Decoupled A/C compressorPressure controlled fuel pump Brake Energy RegenerationAuto Start Stop functionGear shift displayPower Steering
AerodynamicsCooling air flap systemBrake air flap systemTyres with reduced rolling resistanceLight weight contruction
Energy management: ICE improvements: High Precision Injection / Common Rail high pressure fuel injection
Driving Resistance:
BMW GroupInvestor PresentationSeptember 2009Page 59
14
13
12
11
10
9
8
7
6
5
4
Fue
l con
sum
ptio
n [lt
r/10
0 km
]
5.5 6.5 7.5 8.5 9.5 10.5 11.5
BMW X3 3.0 d
Hybrid #1MINI Cooper D
BMW 118dBMW 120d
HybridBMWEU test cycle
Customer driving profile*
Acceleration 0-100 km/h [s]
BMW EfficientDynamics. Exceeding even today‘s hybrid concepts...
* = measured by at least one German motoring magazine
Hybrid #2
BMW X3 3.0 sd
BMW GroupInvestor PresentationSeptember 2009Page 60
BMW EfficientDynamics. The product portfolio.
Customer-oriented, sustainable strategy.
High Precision Injectionin lean-burn modeHigh Precision Injectionwith Twin Turbo TechnologyVALVETRONIC TechnologyVariable Twin Turbo Diesel Technology3rd Generation Piezo
Common Rail Diesel TechnologyBrake Energy Regeneration
Auto Start-Stop Function
Active Aerodynamics
Tires with low Rolling Friction
Electric Waterpump
Electric Steering
Shifting point indicator
MINI
BMW EfficientDynamics
measures applied:Some restrictions may apply,
depending on individual car configuration
1 Series 3 Series 5 Series 6 Series 7 Series X3 X5 Z4X6
1.) Direct injection with Twin Scroll Turbo 2.) System comparable to VALVETRONIC
2.)
1.)
BMW GroupInvestor PresentationSeptember 2009Page 61
BMW EfficientDynamics. MY 2010:
The BMW Group 140 g fleet…
Fuel consumption according to new EU test cycle in l/100km. CO2 emissions in g/km.
32 BMW Group models have a maximum of 140 g CO2
/km.
BMW GroupInvestor PresentationSeptember 2009Page 62
180
160
140
200
220
240
BMW Group CompetitorsACEA
BMW EfficientDynamics. ACEA voluntary commitment exceeded.
EU fleet emissions(g CO2 /km)
ACEA, 1995 -
2008: approx. -16%
BMW Group, 1995 -
2008: > -
25%
1995 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20081996 1997
156
BMW GroupInvestor PresentationSeptember 2009Page 63
BMW EfficientDynamics. A competitive advantage not
only at the fuel pump…
EU-Countries with a CO2
based registration or annual tax
14 of the 27 EU member countries already have a CO2
-based registration or annual tax in place.
CO2
based annual tax wasintroduced in Germany at
July 1st, 2009
BMW GroupInvestor PresentationSeptember 2009Page 64
BMW EfficientDynamics. CO2
emissions of new cars registered in Germany in 2008.
Source: Federal Motor Transport Authority (KBA)
BMW GroupInvestor PresentationSeptember 2009Page 65
BMW EfficientDynamics. BMW 7 series Active Hybrid.
(1)
High efficient BMW V8 gasoline engine (330kW / 650Nm) with High Precision Injection and TwinPower Turbo.
(2)
Electric motor (15kW / 210Nm).
(3)
8-speed automatic transmission.
(4)
High voltage electronics (120Volts).
(5)
Lithium-Ion battery (120Volts / 800Wh).
BMW GroupInvestor PresentationSeptember 2009Page 66
BMW EfficientDynamics. BMW X6 Active Hybrid.
(1)
High efficient BMW V8 gasoline engine (300kW / 600Nm) with High Precision Injection and TwinPower Turbo.
(2)
Two-mode ActiveHybrid transmission (2 electric motors max. 67kW / 780Nm each, planetary gearbox, power split, 7 speeds).
(3)
High Voltage Electronics (max. 425Volts).
(4)
High performance Ni-MH battery (312Volts / 2.4kWh).
BMW GroupInvestor PresentationSeptember 2009Page 67
BMW EfficientDynamics. BMW Group prepares for technical field trials
with electric vehicles.
Number of units:
In total 550 units will be offered in LA, the greater NYC region, Munich, Berlin and London
Power:
150kw
Range:
up to 240km or 150 miles
Basis:
MINI hatch
Start:
December 2008
Lease terms:
850 USD per month, contract ends after 12 month
Target:
to gain detailed knowledge of how mobility can be achieved
efficiently using pure electrically powered vehicles
BMW GroupInvestor PresentationSeptember 2009Page 68
BMW Efficient Dynamics. Next steps (examples).
Thermoelectric
Generator
Predictive Energy ManagementSolar roof
New turbocharged ICE generations
BMW GroupInvestor PresentationSeptember 2009Page 69
BMW EfficientDynamics –
Next Steps. Thermoelectric Generator.
Technology transfer from deep space exploration to the automotive industry.
Direct conversion of thermal into electrical energy.
Up to 5% lower fuel consumption.
Ready for series production in~ 5 years.
Application: Power Generationfor Deep Space Exploration
p n
U
Heat Sink(Coolant)
Heat Source(Exhaust)
Thermo-electric Material
Electrode
BMW GroupInvestor PresentationSeptember 2009Page 70
BMW EfficientDynamics –
Next Steps. Predictive Energy Management.
Predictive Energy ManagementACC
Navigation
Camera
DSC
PDC
DME
Light/Rain Sensor
Merging all available sensor information
Prediction of upcoming situations
Optimized vehicleconditioning
Brake Energy Regeneration
Heat-management
Green Routing / Driver assistence
Aerodynamics
Air conditioning
Auto Start Stop Function
……
BMW GroupInvestor PresentationSeptember 2009Page 71
BMW Group Strategy. Core elements of our corporate strategy.
Financial Strategy
Process management:
Flexibility in production
Component
exchange
Networking
Premium Brand Strategy:
Focus on premium segments in the automobile and
motorcycle market
Strategic Realignment
Sustainability & Efficient Dynamics
BMW GroupInvestor PresentationSeptember 2009Page 72
BMW Group Financial Strategy.Value orientation.
Automobiles:
Return on Capital Employed
Vehicle projects:
Model return based on DCF
Vehicle projects:
Model return based on DCF
Finance & lease portfolio:
Cash flows
Motorcycles:
Return on Capital Employed
Financial Services:
Return on Equity
BMW GroupInvestor PresentationSeptember 2009Page 73
BMW Group Financial Strategy. Effects on Automobiles segment earnings.
2007 2008
EUR million
– 387
– 196– 16
3.450
690
Depreci-
ation &
amorti-
zation
Raw
materials
Currency
Profit before financial result (EBIT)
Volume/
mix/
market
Efficiencyenhance-
ments
-1.446– 153
6.4% 1.4%EBIT margin
Riskprovi-sions
-911
Personnel
reduction
-452
+ 801
Other
changes
BMW GroupInvestor PresentationSeptember 2009Page 74
BMW Group Financial Strategy. Net interest-bearing assets Automobiles
segment.
in €
Mil.30.06.2009
+ 5,073 + 557
+ 3,501
-4,769
9,046
in €
Mil.31.12.2008
Cash and cashequivalents
Marketablesecurities
Financial
liabilities
Net interest-
bearing assets
Internal net financial
Receivables from
Financial Services
Segment
+4,684
Internal net financial
Receivables from
Other Entities
Segment
Cash and cashequivalents
Marketablesecurities
Financial
liabilities
Net interest-
bearing assets
Internal net financial
Receivables from
Financial Services
Segment
Internal net financial
Receivables from
Other Entities
Segment
+ 7,086 + 562
-3,997
10,041
+2,192+ 4,198
BMW GroupInvestor PresentationSeptember 2009Page 75
BMW Group Financial Strategy. Operating cash flow and free cash flow.
in million Euro
4,970
6,157 6,184
5,373
6,340 6,246
4,471
124
2,042
956
2,291 2,147
-81
3,717
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2003 2004 2005 2006 2007 2007 2008
Cash inflow from operating activities Free cash flow
Industrial Operations sub-group Automotive Segment
BMW GroupInvestor PresentationSeptember 2009Page 76
3,226
2,5972,777
2,934 2,865
1,121
1,396
1,536 1,3331,224
9.8%
8.6% 8.8%7.6%
7.9%
0
1,000
2,000
3,000
4,000
5,000
6,000
2004 2005 2006 2007 20080.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Capitalized development costs
Capital expenditure in property, plant equipment and intangible assets
Capital expenditure ratio
BMW Group Financial Strategy. Capital expenditure.
EUR million
4,3473,993 4,267
4,313
4,204
BMW GroupInvestor PresentationSeptember 2009Page 77
5.3% 5.3% 5.2% 5.2% 5.3%
6.4%6.5%
5.6%5.4%
6.7%39.8%
44.8%42.4% 42.8%
47.9%
1%
2%
3%
4%
5%
6%
7%
8%
2004 2005 2006 2007 20080%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
R&D Costs (IFRS) / Revenues in % R&D Costs (HGB )/ Revenues in % Capitalisation Ratio
BMW Group Financial Strategy. Research & Development costs.
in million Euro 2004 2005 2006 2007 2008
Research & Development Costs (IFRS) 2,334 2,464 2,544 2,920 2,825
Research & Development Costs (HGB) 2,818 3,115 3,208 3,144 2,864
BMW GroupInvestor PresentationSeptember 2009Page 78
BMW Group Financial Strategy. Spot & equilibrium rate euro / US dollar.
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
Jan 00 Jul 00 Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09
Spot rate Equilibrium rate
BMW GroupInvestor PresentationSeptember 2009Page 79
BMW Group Financial Strategy. Spot & equilibrium rate euro / GB pound.
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
Jan 00Jul 00 Jan 01Jul 01 Jan 02Jul 02 Jan 03Jul 03 Jan 04Jul 04 Jan 05Jul 05 Jan 06Jul 06 Jan 07Jul 07 Jan 08Jul 08 Jan 09Jul 09
Spot rate Equilibrium rate
BMW GroupInvestor PresentationSeptember 2009Page 80
BMW Group Financial Strategy. Spot & equilibrium rate euro / JP yen.
90
100
110
120
130
140
150
160
170
Jan 00 Jul 00 Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09
Spot rate Equilibrium rate
BMW GroupInvestor PresentationSeptember 2009Page 81
BMW Group Treasury. Global funding objectives.
The different objectives are interdependent and of equal importance.
Value Orientation
Financial Flexibility
Financial Independence
Ensure sustainable
access
to international financial markets.Explore and maintain presence
and competence
in all strategicimportant capital markets worldwide.
Ensure independence
from individual lenders, banks and financialInstruments.Diversification
of funding sources, investors and products.
Create value by optimizing financing costs on overall Group basis.Credit spread
management for each
financial instrument.Ensure long-term, strategic
perspective (instrument mix).
BMW GroupInvestor PresentationSeptember 2009Page 82
BMW Group Treasury. Corporate finance capabilities.
Categories of available instruments over the spectrum of maturities:
CP
ABCP
<1yr 1yr 2yrs 3yrs 4yrs 5yrs 7yrs 10yrs+
(EMTN) PPs
ABS -
Term
Bonds
Retail Institutional
Bank Loans
CP
Attractive and flexible short-
term funding.
Deposits:
Diversification of funding instruments and investors
(EMTN) Private Placements
Attractive funding source.
Effective management of spreads provides support for the short end of the BMW Credit Curve.
ABS
ABS supports investor diversification.
Bank Loans
Local source of funding, mainly where access to capital markets is limited.
Retail
Diversification of investor base.
Limited potential of opportunistic access.
Institutional
Highest liquidity and depth of the market, i.e. highest funding potential.
Typical for Benchmark bonds.
Creation of a BMW Credit Spread Curve.
Customer Deposits / Brokered CDs
BMW GroupInvestor PresentationSeptember 2009Page 83
BMW Group Treasury. Issuing programs.
EUR 30bn EMTN-Program
EUR 5bn ECP-Program EUR 2bn FCP-Program
USD 7bn USCP-Program
BMW AG
BMW US Capital, LLCBMW Finance N.V.
BMW Australia Finance LimitedBMW (UK) Capital plc BMW Japan Finance Corp.
BMW AGBMW Finance N.V.BMW Coordination Center V.O.F.BMW (UK) Capital plcBMW Malta Finance Ltd
BMW Finance N.V.
BMW US Capital, LLC
EMTN Program as main mid-
to long-term refinancing program. Three Commercial Paper Programs to cover short-term liquidity needs.
BMW GroupInvestor PresentationSeptember 2009Page 84
BMW Group Treasury. Broad investor base.
USA
USD Extendible Notes USD Commercial Paper
USD US PP
USD ABS
Euro Capital Markets
EUR Commercial Paper
French Commercial Paper
EUR (EMTN) PPs
EUR Benchmark Bonds
EUR Retail Bonds
USD Eurodollar
AUD Euroaussie
JPY Euroyen
EUR ABS
Great Britain
GBP Commercial Paper
GBP (EMTN) PPs
GBP Bonds
GBP ABS
Switzerland
CHF (EMTN) PPs
CHF Bonds
Japan
JPY (EMTN) PPs
JPY Insurance PPs
Offshore US
USD (EMTN) PPs
Australia
AUD (EMTM) PP
AUD ABS
Singapore
SGD (EMTN) PP
South Africa
ZAR ABS
Canada
CAD ABS
CAD (EMTN) PPs
Mexico
MXN (EMTN) PP
Funding is done worldwide to optimize refinancing costs and to establish a
broad investor base.
BMW GroupInvestor PresentationSeptember 2009Page 85
BMW Group Treasury. Development of BMW Group liquidity.
The BMW Group was able to substantially increase its liquidity position during the course of 2008 and in H1 2009.
EUR billion
5.44.8 4.9
8.2
10.1
11.9
BMW GroupInvestor PresentationSeptember 2009Page 86
BMW Group Treasury. Development of BMW 5-year CDS.
Source: Reuters Credit Views
bps
BMW GroupInvestor PresentationSeptember 2009Page 87
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
BMW Group Treasury. Bonds, private placements and Schuldscheindarlehen maturities.
Issuance as of August 31, 2009, covers all maturities from bonds, PPs and SSD in 2009. Excess amounts are used among other things to reduce financial liabilities from
other instruments (such as bank lines).
Maturities based on nominal values excluding derivatives.
Issuance ytd
EUR million
BMW GroupInvestor PresentationSeptember 2009Page 88
BMW Group Capital Market Financing. BMW Group CP outstandings.
Total in USD Backup Line
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q2
05
Q3
05
Q4
05
Q1
06
Q2
06
Q3
06
Q4
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
USD million
Q2
09
BMW GroupInvestor PresentationSeptember 2009Page 89
BMW Group Treasury. ABS Volumes 1997-
2009 ytd.
BMW Group has actively used asset-backed funding over the last 12 years.
# of dealsVolume in EUR million
0
2
4
6
8
10
12
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
USA GB Japan Australia South Africa Germany Canada # Deals
BMW GroupInvestor PresentationSeptember 2009Page 90
BMW Group Treasury. Regional Focus of ABS activities.
US and Europe are strategic ABS Markets for the BMW Group.
USA:
–
BMW Group is an established participant in the US ABS market
–
Over USD 20bn of loan, lease and wholesale assets securitized over the last 10 years
–
ABCP and ABS term financing used
Europe:
–
BMW Group executed its first public ABS transaction in Europe in 2007 (€800m German lease ABS)
–
Besides, ABCP funding is used in the UK and Germany.
–
BMW Group aims to establish itself as a regular and respected player in the European ABS market.
RoW:
–
BMW Group uses ABS funding very actively in Australia, Canada, Japan and South Africa
–
Mainly used as local and “opportunistic”
funding alternative
BMW GroupInvestor PresentationSeptember 2009Page 91
BMW Group Treasury. Financial debt as of June 30, 2009.
BMW Group maintained a well-diversified debt structure even in difficult markets.
The average maturity of financial liabilities is approximately 2 years.
*Adjusted, excluding currency and interest rate derivatives.
Bank Loans
Commercial Paper
ABS
Others 2%
Customer Deposits
Bonds /
PP /
BrokeredCDs
EUR 60.7bn*.
7%15%
44%
12%
8%
Schuldschein-
darlehen
12%
≤1 year
55%45%
Debt Maturity
> 1 year
BMW GroupInvestor PresentationSeptember 2009Page 92
BMW Group Treasury. Recent funding activity.
ABSLease TALF Deal, USD 2bn, settlement 9 June 2009Loan Conduit Deal, JPY 25bn, settlement 4 May 2009Loan Conduit Deal, AUD 350mn, settlement 7 July 2009
Bonds
EUR benchmark bond EUR 1.5bn, maturity 3.5 years, settlement 23 Jan. 2009EUR benchmark bond EUR 500mn, maturity 5 years, settlement 13 Feb. 2009 (tap of EUR 750mn benchmark, settlement 19 Nov. 2008)EUR benchmark bond EUR 1.25bn, maturity 3 years, settlement 2 March 2009Eurodollar USD 400mn, maturity 2.5 years, settlement 22 June 2009
Private Placements
Over EUR 3.0bn 2009 ytd.Constant issuance in different currencies(EUR, JPY, SEK, USD)
Commercial Paper
Up to USD 8bnUSD 6.2bn outstanding as of August 31, 2009
Certificate of Indebtedness (Schuldschein)
EUR 2bn, private transaction, maturity 2 years, settlement 15 Dec. 2008EUR 145mn 2009 ytd.