January 2014 INVESTOR PRESENTATION
BMW Group Investor Presentation, January 2014 Page 1 THIRD QUARTER / NINE MONTH 2013 RESULTS. in euro million Q3-2013 Q3-2012* Change 9M-2013 9M-2012* Change in % in % Retail sales (units) 481,657 434,963 10.7 1,436,178 1,335,502 7.5 Group revenues 18,750 18,817 -0.4 55,848 56,312 -0.8 Automotive 17,196 17,187 0.1 51,304 50,712 1.2 Financial Services 4,994 4,916 1.6 14,882 14,582 2.1 Penetration Rate (in %) - - - 45.0 39.2 - Group profit before financial result (EBIT) 1,928 2,002 -3.7 6,035 6,403 -5.7 Automotive 1,549 1,647 -6.0 4,887 5,545 -11.9 EBIT Margin Automotive (in %) 9.0 9.6 - 9.5 10.9 - Financial Services 390 424 -8.0 1,308 1,291 1.3 Group profit before tax (PBT) 1,989 1,987 0.1 6,024 6,043 -0.3 Group net profit 1,330 1,289 3.2 4,034 3,918 3.0 Earnings per share (in euro) 2.02 / 2.02 1.95 / 1.95 3.6 / 3.6 6.12 / 6.13 5.94 / 5.95 3.0 / 3.0 Free cash flow (Automotive)1) 784 1,268 -38.2 2,454 3,224 -23.9 Research & Development Costs (HGB) 1,270 988 28.5 3,228 2,831 14.0 % of Revenues 6.8 5.3 - 5.8 5.0 - Capital Expenditure 1,956 1,232 58.8 4,334 2,721 59.3 % of Revenues 10.4 6.5 - 7.8 4.8 - *) Prior year figures have been adjusted in accordance with the revised version of IAS 19, see note 4 on page 37 of the quarterly report to September 30, 2013. 1) Adjusted for reclassifications as described in note 42 on page 141 of the annual report 2012. BMW Group Investor Presentation, January 2014 Page 2 GUIDANCE 2013.
BMW Group Group profit before tax in 2013 should be on a similar scale to that reported for 2012.
Automotive Segment
• Single digit sales volume growth with a new sales record in FY-2013. • EBIT margin of 8-10%. • Return on Capital Employed of >26%.
Motorcycles Segment
Increased sales volumes in 2013 should result in higher revenues and earnings.
Financial Services Segment
Return on Equity of > 18%.
BMW Group Investor Presentation, January 2014 Page 3 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 4 BMW GROUP. STRATEGY NUMBER ONE.
BMW Group Investor Presentation, January 2014 Page 5 STRATEGIC OBJECTIVE.
We want to be the leading provider of premium products and premium services for individual mobility.
BMW Group Investor Presentation, January 2014 Page 6 THE WAY AHEAD – NUMBER ONE.
Number ONE defines . our vision for the year 2020. . our mid-term targets for the year 2016. . our internal milestones. Our vision is targeted towards creating value and securing future success. We are driven by our goal to increase profitability.
BMW Group Investor Presentation, January 2014 Page 7 STRATEGY NUMBER ONE – MANAGING THE TECHNOLOGICAL CHANGE TO REMAIN FUTURE PROOF.
Evolution Revolution Efficient combustion engines Alternative drive trains Innovative technologies Mobility services
BMW Group Investor Presentation, January 2014 Page 8 TECHNOLOGICAL CHANGE – TURNING A CHALLENGE INTO AN OPPORTUNITY.
Growth, REVOLUTION technological Alternative drive trains progress Mobility services
EVOLUTION Technological change Efficient combustion engines Innovative technologies
In times of technological change we have to improve our existing technologies and invest heavily in new E-Mobility technologies to remain future proof. Hybrids
Internal Combustion Engine
time
BMW Group Investor Presentation, January 2014 Page 9 CAPEX FOR ESTABLISHED PROJECTS BUT ALSO SIGNIFICANT UPFRONT INVESTMENTS NEEDED TO SECURE BMW GROUP’S FUTURE.
i3 / i8 New products
2013: Increasing capex + CFRP Future Retail additional upfront investments
Modular system powertrains
BMW Group Investor Presentation, January 2014 Page 10 TARGETS 2016.
BMW Group 2012 2016 R&D ratio (cash R&D, %) 5.1 5.0 – 5.5 Capex ratio (%) 6.8 <7.0
Payout ratio (%) 32.0 30.0 – 40.0
Automotive Segment Retail unit sales (‘000 units) 1,845 > 2,000 Return on Capital Employed (%) 75.0 > 26.0 Return on Sales (EBIT, %) 10.9 8.0 – 10.0
Free cash flow (euro million) 3,809 > 3,000
Segment Financial Services Return on Equity (%) 21.2 > 18.0
BMW Group Investor Presentation, January 2014 Page 11 DEVELOPMENT OF R&D RATIO.
7.0% 6.7% 6.4% 6.5% 6.5% 6.2%
6.0% 5.6% 5.8% 5.4% 5.5% 5.1%
5.0%
4.8% 4.9% 4.5% 4.6%
4.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
R&D Ratio: R&D Expenditure (HGB) / Group Revenues
BMW Group Investor Presentation, January 2014 Page 12 DEVELOPMENT OF CAPEX RATIO.
10.2% 9.8% 10.0%
9.5% 8.8% 9.0%
8.6% 7.9% 8.0%
7.6% 7.0% Target: <7.0% 6.8% 6.8% 6.0%
5.4% 5.4% 5.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Capex Ratio: Total Capex / Group Revenues
BMW Group Investor Presentation, January 2014 Page 13 MANAGING VOLUME GROWTH, INNOVATION AND PROFITABILITY THROUGH COST-CONSCIOUS, EFFICIENT R&D.
Standardisation
• E-mobility • New materials • New technologies
Profitability • Strong growth of Innovation product portfolio • Seizing new opportunities Broader R&D spectrum
BMW Group Investor Presentation, January 2014 Page 14 OUR GOAL: TO MANAGE A THREE-TIMES LARGER PORTFOLIO WITH RESOURCES THAT HAVE NOT INCREASED PROPORTIONATELY.
2005 2015 2020
Without a Modular Strategy, a three-fold increase in model numbers would send costs and resources spiralling along the process chain. The Modular Strategy enables shorter development cycles and enhanced flexibility in our plants.
BMW Group Investor Presentation, January 2014 Page 15 THE MODULAR STRATEGY IS THE ENABLER FOR THE EXPANSION OF THE BMW GROUP MODEL RANGE.
Architectures Modular product Modular system
Underbody Modular front seat Front seat attachment e.g.: Common elements e.g.: Front seat e.g.: Standardised attachments Structure seat installation Head restraint process
Shorter development time Lower investment costs Lower development costs Shorter time to market Lower manufacturing costs Lower fixed costs
BMW Group Investor Presentation, January 2014 Page 16 COMMON ARCHITECTURE, NOT PLATFORMS. IN PREMIUM VEHICLES DIFFERENTIATION IS KEY.
BMW architecture = 3 core areas – drivetrain, front wall and fuel/energy space.
Engine compartment Drivetrain Rear
BMW architectures allow maximum differentiation between models in terms of design and dimensions and account for about 70% of all production cost. BMW Group Investor Presentation, January 2014 Page 17 THE NEW BMW EFFICIENTDYNAMICS ENGINE FAMILY– HIGH LEVELS OF COMMONALITY BETWEEN AND WITHIN DIESEL AND GASOLINE ENGINES.
Cylinders (inline) -3 -4 -6
Common parts shared within gasoline or diesel engines is approx. 60%. Gasoline >60 %
Between the gasoline and 40 % 40
- diesel engines there is a
30 40% sharing.
Diesel >60 %
BMW Group Investor Presentation, January 2014 Page 18 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 19 A REVOLUTION. PURPOSE BUILT. BMW i3 – EXTERIEUR. Launch 11/2013
Please click on the picture to get to additional videos.
BMW Group Investor Presentation, January 2014 Page 20 A REVOLUTION. PURPOSE BUILT. BMW i3 – EXTERIEUR.
BMW Group Investor Presentation, January 2014 Page 21 A REVOLUTION. PURPOSE BUILT. BMW i3 – INTERIEUR.
BMW Group Investor Presentation, January 2014 Page 22 A REVOLUTION. PURPOSE BUILT. BMW i3 – PROFILE & SPECIFICATIONS.
MSRP starts at 34,950 EUR* Weight (DIN) 1,195kg Turning circle 9.86m Output 170hp/250Nm Battery capacity 22kWh 0-60km/h (37mph) in 3.7s 0-100km/h (62mph) in 7.2s Top speed 150km/h (93mph) Charging times from < 30min at 50 kW fast charge to ~8h at domestic socket Range 130-160km (80-100miles), up to 200km (124miles) in most efficient mode BMW Group Investor Presentation, January 2014 * MSRP in Germany including 19% VAT Page 23 THE WORLD’S MOST PROGRESSIVE SPORTS CAR: THE BMW i8. Launch H1/2014 MSRP starts at 126,000 EUR* Weight (DIN) 1,490kg Output 362hp/320Nm 0-100km/h (62mph) in 4.4s Top speed 250km/h (155mph) Electric driving range 35km (22miles) Fuel consumption 2.5l/100km (94mpg)
59g CO2/km
* MSRP in Germany including 19% VAT Please click on the picture to get to additional videos. BMW Group Investor Presentation, January 2014 Page 24 THE LIFE / DRIVE CONCEPT. BMW i3 AND BMW i8.
BMW Group Investor Presentation, January 2014 Page 25 STRATEGIC OBJECTIVES OF BMW i DERIVED FROM CORPORATE STRATEGY NUMBER ONE.
Number ONE Technologies/ Generate growth Shaping the future customers
Growth New target groups. Pioneering Sharpen BMW image New products and technologies and as sustainable brand. services. design. Differentiation from Visionary services. competition. Shaping the future New sales concepts. Future-proof product portfolio.
Profitability
Access to new technologies/ customers
BMW Group Investor Presentation, January 2014 Page 26 OVER 32 MILLION ELECTRIC KILOMETERS WITH REAL USERS OF THE MINI E AND BMW ActiveE LEADING UP TO BMW i.
MINI E (2009-2012) BMW ActiveE (2011-2014) BMW i3 and BMW i8
16 million kilometers 16 million kilometers ~600 vehicles ~1,000 vehicles
High satisfaction of mobility needs. Adequate vehicle. BMW i is more than just an electric car.
Range was rarely the limiting factor. High interest of purchase. BMW i offers 360° ELECTRIC.
Most users charge 2-3 times per week and Joy of driving and one-pedal-feeling. BMW i delivers joy of driving. charging events decreased during usage.
BMW Group Investor Presentation, January 2014 Page 27 BMW i – A HOLISTIC APPROACH.
LifeDrive 360° Electric BMW eDrive Mobility services
Holistic Premium Carbon fibres Connectivity sustainability design of the future
BMW Group Investor Presentation, January 2014 Page 28 BMW i WILL PROVIDE FLEXIBLE MOBILITY.
ASSISTANCE SERVICES HOME CHARGING “Provide assurance” “Convenient charging at home”
360° ELECTRIC.
FLEXIBLE MOBILITY PUBLIC CHARGING “A new mobile lifestyle” “On the road”
BMW Group Investor Presentation, January 2014 Page 29 SUSTAINABLE PRODUCTION FOR BMW i3 AND i8. BENCHMARK IN THE AUTOMOTIVE INDUSTRY.
100% –50% energy –70% water renewable energy
Please click on this production picture for additional video content.
BMW Group Investor Presentation, January 2014 Page 30 NEW PRODUCTION CONCEPT. NO PRESS SHOP NEEDED. PAINTING OF THE EXTERIOR PLASTIC PARTS ONLY.
Conventional vehicle production
Press shop Body shop Paint shop Assembly
BMW i production • Total production processing time reduced by ~50% Externally • ~50% less storage space requirements sourced parts • Number of components in the body shop reduced by 1/3 to ~130 • No painting of full body, no anti-corrosion needed
BMW plant Body shop Assembly Leipzig
BMW plants Painted plastic CFRP parts Drive module Dingolfing & Landshut cladding exterior
BMW Group Investor Presentation, January 2014 Page 31 Carbon Fibers e PAN Oxidation Surface
r Precursor Carbonization Treatment
u
F
t
C
n
A e
Carbon Fibers
V
L e
PAN Oxidation Surface
t
r G
n Precursor Carbonization Treatment u
F CF-Textiles
i
S
t o
C Carbon Fibers Recycling Non-crimp fabrics n
J (residual fabrics)
A
e
V L
CARBON FIBER PRODUCTION –
t G
n CF-Textiles i
CORE COMPETENCES WITHIN BMW GROUP.
o Carbon Fibers Recycling Non-crimp fabrics
J Recycling Preforms (residual fabrics) Mitsubishi Rayon Co. Ltd. (MRC), Otake/Japan BMW GROUP Stacking Preforming Stamping • (Steam) Cracking
• Ammoxidation W
Acrylonitrile M
JV MSP*, Preforms B CFRP- Otake/Japan Components • Polymerisation / Spinning Stacking Tailoring Preforming Resin Transfer MoldingStamping Machining *) Joint Venture Mitsubishi Rayon – SGL Precursor Co. Ltd. (MSP)
PAN-Precursor W SGL ACF, M Preform CFRP- BMW i3 & i8 Moses Lake/USA Moses Lake, USA Wackersdorf, Germany Landshut/Leipzig, Germany
B components • Oxidation CFRP- • Carbonisation The production of CFRP components is our core competence Carbon Fibers Components Tailoring Resin Transfer Molding Machining – preforming, Resin-Transfer-Moulding (RTM), milling and SGL ACF, tempering is all done in the BMW Group plant in Landshut. Wackersdorf/Germany CF Painting and final assembly is done in the BMW Group plant in • Knitting Fabrics Leipzig. Moses Lake, USA Wackersdorf, Germany Landshut/Leipzig, Germany SGL Automotive Carbon Fibers – a BMW Group and SGL Group JV
BMW Group Investor Presentation, January 2014 Page 32 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 33 Russia PRIORITY ON GROWTH MARKETS. Turkey
Eastern Europe
USA China
India Brazil South Korea
BMW Group Investor Presentation, January 2014 Page 34 NUMBER OF MILLIONAIRES IN THE ESTABLISHED AND BRIKT MARKETS.
CAGR +5.7% 50,000 3,000 thsd. thsd. 45,701 2011 2020 45,000 +7.4% 2,500 2,500 40,000 2020
35,000 2,000 +14.3% 1,730 30,000 27,764
25,000 1,500 +13.9% 1,312 2011 1,205 +14.2% 20,000 1,001 1,000 +10.4% 15,000 694 +9.2% 601 520 10,000 500 375 303 286 273 5,000
0 0 Brazil Russia India Turkey South Korea Mainland Established Markets China (USA, Japan, Germany, United Kingdom, France, Italy) Source: Deloitte (June 2011): „The next decade in global wealth among millionaire households”
BMW Group Investor Presentation, January 2014 Page 35 BMW GROUP’S CHINA STRATEGY FOCUSES ON DYNAMIC AND PROFITABLE GROWTH.
China’s premium segment has highest CAGR + worldwide of 9.9% (2012-2020; Global Insight Data)
Attractive growth prospects: + rising per capita income and growing upper middle class
BMW Group Investor Presentation, January 2014 Page 36 BMW AND MINI RETAIL DEVELOPMENT IN MAINLAND CHINA, FY-2013.
450 in ‘000 units BMW MINI 400 390.7
350 326.4
300
250 232.6
200 169.0
150
90.5 100 65.8 51.6 50 36.4 24.0
0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: BMW Group Retail data, FY-2013. BMW Group Investor Presentation, January 2014 Page 37 BMW AND MINI RETAIL MIX IN CHINA FY-2013.
MINI: 7.3% 1 series: 4.3% 7 series: 6.6% 6 series: 0.5% X1: 9.7% X6: 2.8% X5: 6.6% 3 series: 19.1%
X3: 8.2% 5 series: 34.6% Z4: 0.4%
Source: BMW & MINI Retail data, FY-2013
BMW Group Investor Presentation, January 2014 Page 38 URBANIZATION IN CHINA – ONGOING POTENTIAL.
China cities – brief introduction China urbanization forecast by 2025
cities 9 population >10 million Beijing 16.5 million Tianjin 11.5 million cities Shanghai 18.5 population 5-10 million 89 Chengdu million 13 million Chongqing 36 million cities population 1-5 million 176 Guangzhou Shenzhen 10 million 12 million Highly-developed areas Less-developed areas
• Huge number of cities in China: 350 prefecture level cities and 100 county level cities. • City development level is quite different. • 350 million people will be added to China’s urban population by 2025 (more than the population of today’s United States, McKinsey estimates). The scale of China’s cities and the trend towards city urbanization ensure that China will remain a substantial market.
BMW Group Investor Presentation, January 2014 Page 39 CHINA PREMIUM SEGMENT DEVELOPMENT. assumed Ø annual growth rate ca. +6% 3,000 in ‘000 units CAGR 2012-2020: 9.9% 2,609 2,500 assumed Ø annual growth rate ca. +16% 1,927 2,000
1,500 Ø annual growth rate 1,224 +41% 1,000
500
111 0 2005 2012 2015E 2020E Source: Global Insight With this development, China will become the biggest market for the BMW Group worldwide.
BMW Group Investor Presentation, January 2014 Page 40 420 BMW AND 92 MINI DEALER OUTLETS IN OPERATION BY 31 DECEMBER 2013.
Hulunbei’er Daqing Qiqihar Jiamusi Harbin Kelamayi Songyuan Mudanjiang Changchun Urumqi Jilin Shenyang Hohhot Yanji Jinzhou Baotou Beijing Panjin Anshan Wuhai Erdos Yingkou Datong Qinhuangdao Langfang Tangshan Baoding Dalian Yulin Tianjin Shijiazhuang Dongying Yinchuan Taiyuan Yantai Lvliang Handan Weifang Xining Changzhi Jinan Qingdao Lanzhou Linfen Zibo Yuncheng Linyi Luoyang Xinxiang Lianyungang Zhengzhou Xuzhou Huai’an Yancheng Xi`an Bengbu Yangzhou Pingdingshan Hefei Wuxi Weinan Fuyang Nantong Deyang Mianyang AnyangNanjing Suzhou Wuhan ChangzhouZhenjiang Shanghai Yichang Huzhou Jiaxing Wuhu Hangzhou Chengdu Ningbo Lhasa Jinhua Chongqing Shangrao Shaoxing Leshan Yibin Changsha TongxiangTaizhou Lishui Outlet BMW MINI Zunyi Xiangtan Wenzhou Panzhihua Zhuzhou Nanchang Ningde Chenzhou Qujing Guiyang Ganzhou Fuzhou East 131 30 Putian Zengcheng Quanzhou 4S/5S* Guilin Longyan North 111 22 Kunming Liuzhou Guangzhou Showroom Zhaoqing Xiamen Dali Nanning Foshan Dongguan Service outlet South 96 20 Jjiangmen Shantou Zhongshan Huizhou UCC West 82 20 Zhuhai Shenzhen Total 420 92 * 4S: sales, service, spare parts, survey, Haikou BMW Group Investor Presentation, January 2014 * 5S: sales, service, spare parts, survey, sustainability Page 41 BMW BRILLIANCE AUTOMOTIVE – A SUCCESS STORY WITH GROWING REVENUE AND EARNINGS CONTRIBUTION. BBA retail sales in 1,000 units 160
140 149 141 120 100 80 94 BBA‘s contribution to BMW Group‘s at-equity result (in EUR million) 60 400 40 54 44 350 379 35 20 31 300 0 250 280 2007 2008 2009 2010 2011 2012 9M-2013 200 BMW Group revenues from goods and services sold to BBA (in EUR million) 150 175 3,500 100 102 3,000 50 11 42 2,962 25 2,500 0 2,575 2007 2008 2009 2010 2011 2012 9M-2013 2,000
1,500 1,729
1,000 1,046 500 406 532 0 293 BMW Group2007 Investor 2008 Presentation, 2009 January 2010 2014 2011 2012 9M-2013 Page 42 COMBINED BRIKT SALES ARE WITHIN THE TOP 5 MARKETS FOR BMW GROUP IN FY-2013.
in 1,000 units 450 BMW MINI 400 391 376
350
300 259 250
200 189
150 131
100 64 64 59 43 50 37 37
0 China* USA Germany UK BRIKT** Japan France Italy Belgium Canada Nordics***
*China: Mainland China only; **BRIKT: Brazil, Russia, India, South Korea and Turkey *** Nordics: Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Sweden Source: BMW & MINI Retail data, FY-2013 BMW Group Investor Presentation, January 2014 Page 43 BRIKT MARKETS BMW AND MINI RETAIL DEVELOPMENT IN FY-2013.
Retail development in BRIKT Retail development in Brazil Retail development in Russia 140 131 18 17 50 45 16 15 45 120 110 40 99 14 40 100 35 12 30 10 10 30 80 70 10 25 22 60 8 19 45 6 20 17 40 6 15 40 35 15 10 25 4 3 3 10 20 2 2 5 0 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2006 2007 2008 2009 2010 2011 2012 2013 2006 2007 2008 2009 2010 2011 2012 2013
Retail development in India Retail development in South Korea Retail development in Turkey
12 45 25 40 22 10 40 10 9 35 34 20 17 17 8 7 30 27 6 15 25 13 6 20 19 4 10 8 7 4 3 15 10 11 6 5 1 10 7 8 5 2 0 5 0 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2006 2007 2008 2009 2010 2011 2012 2013 2006 2007 2008 2009 2010 2011 2012 2013 In 1,000 units BMW MINI Source: BMW & MINI Retail data, FY-2013 BMW Group Investor Presentation, January 2014 Page 44 PREMIUM SEGMENT SHARE OF TOTAL MARKET 2012.
35 in %
29.6 30
25.0 25
20
16.3
15 11.9 11.8
10 9.1 World Average: 9.4% 7.2 6.8 5.7 5 3.9
1.0 0.9 0 Germany United Italy USA France China Russia Turkey S. Korea Japan India Brazil Kingdom
BMW Group Investor Presentation, January 2014 Page 45 THE WORLDWIDE PREMIUM SEGMENT IS EXPECTED TO GROW TO 9.9 MN UNITS PER YEAR IN 2020.
12,000 Premium Segment: CAGR 2012-2020: 4.7% Total Growth 2012-2020: 45% 10,000 Rest of World, CAGR +4.7% BRIKT*, CAGR +6.7% 8,000 China, CAGR +9.9%
6,000 Japan, CAGR 0%
Region (‘000 units) 2012 2020 Chg. North America, CAGR +3.9% 4,000 World 6,836 9,884 45% Rest of World 500 720 44% BRIKT* 407 687 69% 2,000 China (Mainland) 1,224 2,609 113% Japan 194 194 0% Western Europe, CAGR +2.2% North America 1,884 2,559 36% Western Europe 2,626 3,116 19% 0 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Global Insight *BRIKT refers to Brazil, Russia, India, South Korea and Turkey
BMW Group Investor Presentation, January 2014 Page 46 PREMIUM SEGMENT GROWTH IN EMERGING MARKETS.
350 in ‘000 units 2012 Sales Sales Forecast by 2020 50.3% 301 300
250
200 200 50.2% 87.6% 72.1% 159 144 150 235.5% 126 169.1% 120 106 10.4% 43.8% 100 100 90 81 77 73 76 53 93.3% 50 37 36 30 15
0 RussiaRussia GCCGCC 1) NewNew EU Countries EU SouthSouth3) America SouthSouth Korea BrazilBrazil TurkeyTurkey IndiaIndia UkraineUkraine Countries2) America3) 1) GCC: Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates 2) New EU Countries: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Rumania, Slovakia, Slovenia 3) South America: Argentina, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Uruguay, Venezuela
Source: Global Insight BMW Group Investor Presentation, January 2014 Page 47 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 48 THREE AUTHENTIC PREMIUM BRANDS.
Sheer driving The world’s most exciting The pinnacle of pleasure premium small car brand automobile luxury
BMW Group Investor Presentation, January 2014 Page 49 BMW GROUP AUTOMOTIVE MAJOR MARKETS. DELIVERIES TO CUSTOMERS FY-2013.
Deliveries of automobiles (in units) 2013 2012 Change in %
Mainland China 390,713 326,444 19.7 USA 375,782 347,583 8.1 Germany 259,135 287,299 -9.8 United Kingdom 188,837 174,215 8.4 BRIKT* 131,447 110,363 19.1 Japan 64,216 56,607 13.4 France 64,082 67,318 -4.8 Italy 59,200 60,505 -2.2 Belgium 43,255 43,828 -1.3 Canada 37,723 37,707 0.0 Nordics** 37,072 34,510 7.4 Rest of world 312,336 298,807 4.5 BMW Group 1,963,798 1,845,186 6.4
*BRIKT: Brazil, Russia , India, South Korea and Turkey; ** Nordics: Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Sweden Data for individual markets includes BMW and MINI vehicles; Rolls Royce sales are included in “Rest of World” and in the total figures. BMW Group Investor Presentation, January 2014 Page 50 DELIVERIES TO CUSTOMERS FY-2013.
Deliveries of automobiles (in units) 2013 2012 Change in %
Total BMW 1,655,138 1,540,085 7.5 1 series 213,578 226,829 -5.8 3 series (incl. GT) 500,695 406,752 23.1 4 series 14,749 - - 5 series (incl. GT) 366,992 359,016 2.2 6 series 27,687 23,193 19.4 7 series 56,001 59,184 -5.4 X1 161,353 147,776 9.2 X3 157,298 149,853 5.0 X5 107,231 108,544 -1.2 X6 36,688 43,689 -16.0 Z4 12,866 15,249 -15.6 Total MINI 305,030 301,526 1.2 Total Rolls-Royce 3,630 3,575 1.5 BMW Group 1,963,798 1,845,186 6.4
BMW Group Investor Presentation, January 2014 Page 51 BMW GROUP AUTOMOTIVE. REGIONAL SPLIT OF RETAIL SALES: FY-2013.
Americas Europe Mainland Asia (w/o China) China and Rest of World
+19.7 %
Growth +9.1% +9.6 % rate -0.7%
13% Share of 24% 20% 44% global sales
Source: BMW and MINI Retail Sales only, FY-2013 (figures do not add to 100% due to rounding)
BMW Group Investor Presentation, January 2014 Page 52 REGIONAL RETAIL MIX FY-2013.
Canada: 1.9% Mainland China: 19.9% USA: 19.2%
Rest of Japan: 3.0% Europe: 12.2% BRIKT1): 6.7%
GCC2): 1.1% Belgium: 2.2% Rest of the World: 4.4% France: 3.3% Germany: 13.2% Italy: 3.3% UK: 9.6%
1) BRIKT: Brazil, Russia, India, South Korea, Turkey 2) GCC: Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates Source: BMW and MINI Retail Sales only, FY-2013 BMW Group Investor Presentation, January 2014 Page 53 BMW RETAIL BY MODEL 2013 (2012).
Total BMW Group sales: 1,963,798 (1,845,186 ) units. 12,866 36,688 BMW brand share: 1,655,138 (1,540,085) units 107,231 (15,249) (43,689 ) (108,544) or 84.3% (83.5%) of total sales. 157,298 1,655,138 (149,853) (1,540,085) 161,353 (147,776) 56,001 27,687 366,992 (59,184) (23,193) (337,929)
500,695 14,749 (406,752) (-)
213,578 (226,829)
1 Series 3 Series 4 Series 5 Series 6 Series 7 Series X1 X3 X5 X6 Z4 (incl. GT) (incl. GT) 12.9% 30.3% 0.9% 22.2% 1.7% 3.4% 9.7% 9.5% 6.5% 2.2% 0.8% 100% (14.7%) (26.4%) (-) (21.9%) (1.5%) (3.8%) (9.6%) (9.7%) (7.0%) (2.8%) (1.0%) (100%)
BMW Group Investor Presentation, January 2014 Page 54 MINI RETAIL BY MODEL 2013 (2012).
Total BMW Group sales: 1,963,798 (1,845,186) units. 234,175 MINI brand share: 305,030 (301,526) units (216,538) or 15.5% (16.3%) of total sales. 14,687 9,315 (-) 8,436 (9,202) 101,897 (11,311) 305,030 (102,271) (301,526)
21,030 (22,699) 21,167 (24,474) 128,498 (131,569)
Hatch Convertible Clubman Countryman Coupe Roadster Paceman 42.1% 6.9% 6.9% 33.4% 2.8% 3.1% 4.8% 100% (43.6%) (8.1%) (7.5%) (33.9%) (3.8%) (3.1%) (-) (100%)
BMW Group Investor Presentation, January 2014 Page 55 BMW GROUP RETAIL DEVELOPMENT 2003 UNTIL 2013.
+6.4% 2,000 in 1,000 units BMW MINI Rolls-Royce +10.6% 1,964 1,800 +14.2% 1,845
1,600 +9.2% 1,669 -4.3% +13.6% +3.5% +9.9% 1,501 1,400 1,436 -10.4% 1,461 +9.4% 1,374 1,328 1,200 1,286 1,209
1,000 1,105
800
600
400
200
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
BMW Group Investor Presentation, January 2014 Page 56 BMW GROUP BRAND AND PRODUCT OVERVIEW.
Sedan Wagon Hatch Coupe Convert. Roadster New Seg. SAV
Luxury PlusPlus Phantom Coupe Convert.
PlusPlus Ghost Wraith
Plus 7 Series 6 Series 6 Series 6 Series
Base
Upper Plus 5 Series 5 Series GT X5, X6 Medium Base
Lower Plus 3 Series 3 Series 4 Series 4 Series Z4 GT X3, X4 Medium Base
Compact Plus 1 Series 2 Series 2 Series X1
Base
Small Plus MINI MINI MINI MINI MINI
Base
BMW Group Investor Presentation, January 2014 Page 57 ATTRACTIVE MODEL PORTFOLIO UNTIL 2016 DUE TO A HIGH RENEWAL RATE AND ADDITIONAL MODELS.
3.5
3.0 Ø age of product portfolio (sales & mix adjusted)
2.5
2.0 Cumulated Model Renewal Rate: 1.5 ~ 75% of total expected annual sales volume will be renewed until 2016 1.0
0.5
0 2011 2012 2013 2014 2015 2016
BMW Group Investor Presentation, January 2014 Page 58 NEW PRODUCT 2013. BMW 3 SERIES GRAN TURISMO. Launch 06/2013
BMW Group Investor Presentation, January 2014 Page 59 NEW PRODUCT 2013. BMW 4 SERIES COUPE. Launch 10/2013
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BMW Group Investor Presentation, January 2014 Page 60 NEW PRODUCT 2013. BMW X5. Launch 11/2013
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BMW Group Investor Presentation, January 2014 Page 61 NEW PRODUCT 2014. BMW 4 SERIES CONVERTIBLE. Launch 03/2014
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BMW Group Investor Presentation, January 2014 Page 62 NEW PRODUCT 2014. BMW 2 SERIES COUPE. Launch 03/2014
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BMW Group Investor Presentation, January 2014 Page 63 FUTURE PROSPECTS. BMW CONCEPT ACTIVE TOURER.
BMW Group Investor Presentation, January 2014 Page 64 FUTURE PROSPECTS. BMW CONCEPT X4.
BMW Group Investor Presentation, January 2014 Page 65 NEW PRODUCT 2014. NEW MINI. Launch 03/2014
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BMW Group Investor Presentation, January 2014 Page 66 NEW PRODUCT 2013. ROLLS-ROYCE WRAITH. Launch 09/2013
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BMW Group Investor Presentation, January 2014 Page 67 THE BMW ActiveHybrid-FLEET.
BMW ActiveHybrid 7 BMW ActiveHybrid 5 BMW ActiveHybrid 3 (Facelift, new hybrid system, launch 07/2012) (Launch 03/2012) (Launch 09/2012)
BMW Group Investor Presentation, January 2014 Page 68 BMW ActiveHybrid 3 – HYBRID COMPONENTS.
Eight-speed automatic transmission. BMW TwinPower Turbo six-cylinder inline engine.
High-performance Power electronics. lithium-ion battery.
Synchronous electric motor (integrated in the transmission housing).
BMW Group Investor Presentation, January 2014 Page 69 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 70 BMW MOTORCYCLES PRODUCT OVERVIEW.
URBAN ENDURO TOUR SPORT ROADSTER MOBILTIY Price (€)
20,000
K1600 GT/GTL
HP4
R1200 GS R1200 RT Adventure K1300 S S1000 RR K 1300 R
Maxi Scooter Maxi Scooter Electric Tourer R1200 GS MJ 2013
F800 GS 2 Cyl. 10,000 R1200 R
Maxi Scooter F800 GT Sport F 700 GS 2 Cyl.
G650 GS / GS Sertao F800 R
BMW Group Investor Presentation, January 2014 Page 71 BMW MOTORCYCLES RETAIL SALES 1990 – 2013.
120 in 1,000 units 115.2
106.4 100 102.5 104.3 100.1 101.7 97.5 98.0 92.6 93.0 92.3 87.3 80 84.7
74.6
60
50.2 40
31.3 20
0 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
BMW Group Investor Presentation, January 2014 Page 72 MOST IMPORTANT MARKETS FOR BMW MOTORCYCLES IN 2012.
Germany
Other markets United States
Spain France United Kingdom Italy Brazil
Germany 19.1% Brazil 6.4%
United States 12.3% United Kingdom 5.0%
France 9.8% Spain 4.5%
Italy 9.7% Other markets 33.2%
BMW Group Investor Presentation, January 2014 Page 73 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 74 GLOBAL PRESENCE IN 53 COUNTRIES WITH 6,771 EMPLOYEES.
BMW Financial Services
MINI Financial Services
Status: September 30, 2013 BMW Group Investor Presentation, January 2014 Page 75 PROFIT BEFORE TAX (PBT) FINANCIAL SERVICES.
2,000 ADDITIONAL RISK PROVISIONS IN 2008. in euro million Total: EUR 1,968 million 1,790 2) Automotive Segment: Financial Services 1,750 EUR 911 million segment: residual values EUR 1,057 million 3) 1,561 EUR 363 million 1,500 credit losses 1,314 1) EUR 694 million 1,214 1,250 residual values
1,000
743 750 685 605 515 500 452 387 422 345 365
250
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 9M-2013
-250 -292 -500 1) FY-10 EBT includes a positive effect of EUR 122 million from better than expected off-lease business. 2) FY-11 EBT includes a positive effect of EUR 439 million from adjustment of residual value and credit risk provisions and a better than expected off-lease business. 3) FY-12 EBT includes a positive effect of EUR 124 million from better than expected off-lease business.
BMW Group Investor Presentation, January 2014 Page 76 RETURN ON EQUITY (ROE) FINANCIAL SERVICES.
ADDITIONAL RISK PROVISIONS IN 2008. 35% in % Total: EUR 1,968 million Automotive Segment: Financial Services EUR 911 million segment: 29.4% 2) 30% residual values EUR 1,057 million
EUR 363 million 1) credit losses 26.1% 25% EUR 694 million residual values 21.2% 3) 20% 18.1%
15%
10% 9.2%
5%
0% 2007 2008 2009 2010 2011 2012
-5%
-7.3% -10% 1) FY-10 RoE includes a positive PBT effect of EUR 122 million from better than expected off-lease business (adjusted RoE: 23.5%). 2) FY-11 RoE includes a positive PBT effect of EUR 439 million from adjustment of residual value and credit risk provisions and a better than expected off-lease business (adjusted RoE: 22.2%) 3) FY-12 EBT includes a positive effect of EUR 124 million from better than expected off-lease business (adjusted RoE: 19.6%). BMW Group Investor Presentation, January 2014 Page 77 PENETRATION RATE RETAIL BUSINESS.
55% Financing Leasing 49.0% 50% 48.5% 48.2%
44.6% 45% 45.0% 42.0% 42.4% 41.1% 41.1% 40.4% 40% 38.3% 36.1% 35.0% 24.3% 24.1% 35% 34.5% 27.6% 21.8%
22.5% 27.2% 21.1% 19.7% 30% 25.2% 19.1% 24.0% 17.2% 18.3% 25% 20.9%
20%
15% 24.7% 24.1% 23.2% 20.9% 20.7% 10% 19.2% 19.5% 20.0% 17.8% 17.8% 17.1% 17.2% 17.4% 13.6% 5%
0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012 9M-2013
* The penetration rate dropped significantly due to the consolidation of BMW Group Financial Services China as of January 1st, 2011.
BMW Group Investor Presentation, January 2014 Page 78 DEVELOPMENT OF CREDIT LOSS RATES.
0.9% 0.84%
0.8%
0.7% 0.67%
0.6% 0.54% 0.59% 0.49% 0.5% 0.48%
0.46% 0.46%
0.4% 0.41% 0.41% 0.39% 0.37% 0.3% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 9M-2013
BMW Group Investor Presentation, January 2014 Page 79 RESIDUAL VALUE DEVELOPMENT IN THE USA.
BMW brand used car index (through December 2013)
120
115
110
105
100
95
90
85
80
75
70 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13
Source: Manheim Used Vehicle Index, mix and mileage adjusted.
BMW Group Investor Presentation, January 2014 Page 80 STRATEGIC FUTURE DEVELOPMENT OF FINANCIAL SERVICES.
E-Mobility Expansion of New Sales & BMW Bank Fleet Business Service Channels
2012 FR
2011 BaLea* DE
since 2010 IT
since 2009 ES
DE PT
* BMW Leasing GmbH was merged into the BMW Bank GmbH
BMW Group Investor Presentation, January 2014 Page 81 ALPHABET AMONGST TOP FLEET COMPANIES IN EUROPE AFTER ACQUISITION OF ING CAR LEASE.
New Alphabet : 600,000 A truly European company Number of Serviced Contracts
500,000
400,000
300,000
200,000
100,000
0
ING Car Lease Alphabet both (old) Alphabet Former ING Car Lease Alphabet
BMW Group Investor Presentation, January 2014 Page 82 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 83 BMW GROUP GLOBAL PRODUCTION NETWORK.
Kaliningrad
Hams Hall Berlin Oxford Swindon Eisenach Goodwood Born Leipzig (2014) Wackersdorf Regensburg Landshut Dingolfing Munich Steyr Graz
Moses Lake Shenyang Spartanburg Cairo
Chennai Rayong Kulim Manaus Jakarta Vehicle Plant Assembly Plant Engines / Components Rosslyn BMW Group Santa Catarina (2014) Joint Venture Contract Production
BMW Group Investor Presentation, January 2014 Page 84 AUTOMOBILE PRODUCTION BY PLANT IN 2012.
Dingolfing Assembly plants Graz 2 Spartanburg Tiexi1 Dadong1 Regensburg Goodwood Rosslyn
Leipzig Munich Oxford
in 1,000 units Dingolfing, Germany Rosslyn, South Africa 332.7 45.7 Production of BMW 5, 6, 7 Series Production of BMW 3 Series Spartanburg, USA Goodwood, UK 301.5 3.3 Production of BMW X3, X5, X6 Production of Rolls-Royce Regensburg, Germany Dadong1, China 300.3 108.9 Production of BMW 1, 3 Series, Z4 Production of BMW 5 Series Munich, Germany Tiexi1, China 214.1 41.1 Production of BMW 3 Series Production of BMW 3 Series, X1 Oxford, UK Graz (Magna Steyr2), Austria 207.8 103.7 Production of MINI MINI Countryman Leipzig, Germany 164.3 Assembly plants 38.4 Production of BMW 1 Series, X1
1 Joint venture 2 Contract production BMW Group Investor Presentation, January 2014 Page 85 AUTOMOBILE PRODUCTION BY ASSEMBLY PLANT IN 2012.
Chennai Jakarta
Cairo
Kaliningrad
Rayong
Kulim
In units Cairo, Egypt Kaliningrad, Russia 2,232 15,480 3, 5 & 7 series, X1, X3 3,5 & 7 series, X1, X3, X5, X6 Jakarta, Indonesia Kulim, Malaysia 1,992 5,448 3 & 5 series, X1, X3 3 & 5 series, X1, X3 Chennai, India Rayong, Thailand 6,768 6,492 3, 5 & 7 series, X1, X3 3, 5 & 7 series, X1, X3
BMW Group Investor Presentation, January 2014 Page 86 THE BMW GROUP’S CLEAN PRODUCTION PHILOSOPHY.
Certified environmental management systems (ISO 14001/EMAS) at all sites worldwide
Reducing water usage Saving energy and Reducing Solvent Avoiding or recycling and process reducing CO Emissions 2 waste wastewater emissions
Targeted management of environmental performance: - Monthly recording of consumption/emission figures at all sites - Target: 45% reduction in emissions/resource usage from 2006-2020 - Average improvement in resource efficiency 2006 - 2011: 32%
BMW Group Investor Presentation, January 2014 Page 87 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 88 CORPORATE SUSTAINABILITY HAS A LONG HISTORY AT BMW GROUP.
1973: First Environmental Officer in the Automotive Industry. 2000: Executive Board Resolution „Sustainability is the guiding principle of the BMW Group corporate strategy“. 2009: Establishment of a Sustainability Circle and Board; corporate sustainability is established as corporate target.
1997 2001 2007 2008 2011 Dr. Norbert Reithofer, CEO of BMW AG: „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.“
BMW Group Investor Presentation, January 2014 Page 89 CORPORATE SUSTAINABILITY ENCOMPASSES THE WHOLE VALUE CHAIN.
Vision
BMW Group The BMW Group is the most sustainable company in the automotive industry. Objective Ecology Economy Society Sustainable Mobility Shareholder Value Responsibility for Employees Concepts
Product Responsibility Key Issues Risk Management Value Orientation in the Efficient Dynamics Supply Chain
Environmental Protection Corporate Governance & Commitment to Society Clean Production Compliance
Sustainability Sustainability-based Evaluation of the Environment Communication management Radar Decisions Value Chain
Basic We regard sustainability as a lasting and positive contribution towards the economic success of the company. This is the basis principles of our ecological and social responsibility. We consider awareness of social responsibility an inseparable part of our corporate self-conception.
BMW Group Investor Presentation, January 2014 Page 90 THE ENTIRE BOARD OF MANAGEMENT IS COMMITTED TO SUSTAINABILITY.
BMW Group Investor Presentation, January 2014 Page 91 MOST IMPORTANT RATINGS / RANKINGS SHOW THAT BMW GROUP IS THE INDUSTRY LEADER IN SUSTAINABILITY.
- Dow Jones Sustainability Indexes/Dow Jones STOXX Sustainability Indexes: Industry leader since 2005, the only automotive company continuously listed since 1999. - FTSE4Good: listed in FTSE4Good Index. - Carbon Disclosure Project: Industry leader 2011 and 2012, No. 3 across sectors in 2012. - Oekom: Corporate Responsibility Rating oekom 2012, Status Prime. - Sustainalytics: 1st place in "DAX 30 Nachhaltigkeitsrating” in 2011. - ÖKOTREND: certificate for outstanding corporate responsibility (most points in the automotive industry). - Corporate Knights: BMW Group ranked Number 16 among the 4,000 companies surveyed with the highest score in the automotive industry.
BMW Group Investor Presentation, January 2014 Page 92 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 93 EFFICIENTDYNAMICS – OUR WAY TO REDUCE CO2.
BMW Group Investor Presentation, January 2014 Page 94 FUTURE CO2 TARGETS CAN ONLY BE ACHIEVED WITH THE HELP OF NEW DRIVETRAIN TECHNOLOGIES.
Today Tomorrow
Lower CO2 emissions Zero emissions
Improved combustion engines Aerodynamics
Lightweight construction
Auto Start-Stop function Hybrid Brake energy regeneration Plug-in hybrid Electro-mobility Fuel cell technology
BMW Group Investor Presentation, January 2014 Page 95 TAILOR-MADE ENERGY MANAGEMENT PACKAGES.
Electric High Precision Gear shift indicator. water pump. Injection. Auto Start Stop function. Decoupled A/C Common Rail High compressor. Pressure Injection. ECO Mode.
Controlled fuel pump.
Controlled oil pump.
Electric steering.
Aerowheels. Tires with reduced rolling resistance. Air Curtain.
Active aerodynamics Break energy regeneration. with cooling air flap system.
BMW Group Investor Presentation, January 2014 Page 96 EFFICIENTDYNAMICS IN THE NEW BMW 3 SERIES.
• High-efficiency petrol and diesel engines • ECO PRO mode • Eight-speed automatic transmission • Six-speed manual transmission • Brake Energy Regeneration • Optimum Shift Indicator • Disengageable air conditioning compressor • Auto Start-Stop function • Needs-based operation of ancillary components • Intelligent lightweight design • Air Curtain for improved air flow around the front wheels
Cd = 0.26
Flow-optimised underbody structure
BMW Group Investor Presentation, January 2014 Page 97 EFFICIENTDYNAMICS IN THE NEW BMW 3 SERIES.
BMW Group Investor Presentation, January 2014 Page 98 BMW TWIN POWER TURBO TECHNOLOGY.
VARIABILITY DIRECT INJECTION TURBOCHARGING
GASOLINE + ++ + ++ +
VALVETRONIC HIGH PRECISION INJECTION SINGLE TURBO TWIN-SCROLL TURBO TWIN TURBO TWIN POWER TURBO VARIABILITY DIRECT INJECTION TURBOCHARGING DIESEL + +
VARIABLE 3RD GENERATION SINGLE TURBO TURBOCHARGER GEOMETRY COMMON RAIL TECHNOLOGY TWIN TURBO TRI TURBO BMW Group Investor Presentation, January 2014 Page 99 THE BMW GROUP 120g FLEET.
In autumn 2013 already 39 BMW Group models come with a maximum 120 g CO2/km.
BMW 114d 5-Door BMW 116d 5-Door BMW 116d 5-Door * BMW 118d 5-Door BMW 120d 5-Door BMW 114d 3-Door BMW 116d 3-Door BMW 116d 3-Door * 70 kW / 95 hp 85 kW / 116 hp 85 kW / 116 hp 105 kW / 143 hp 135 kW / 184 hp 70 kW / 95 hp 85 kW / 116 hp 85 kW / 116 hp 4.1 l / 109 g 4.1 l / 109 g 3.8 l / 99 g 4.1 l / 109 g 4.2 l / 110 g 4.1 l / 109 g 4.1 l / 109 g 3.8 l / 99 g
BMW 118d 3-Door BMW 120d 3-Door BMW 118d Coupé BMW 316d BMW 318d BMW 320d BMW i3 BMW i3 Rex 105 kW / 143 hp 135 kW / 184 hp 105 kW / 143 hp 85 kW / 116 hp 105 kW / 143 hp 135 kW / 184 hp 125 kW / 170 hp 125 kW / 170 hp 4.1 l / 109 g 4.2 l / 110 g 4.5 l / 118 g 4.3 l / 114 g 4.3 l / 114 g 4.4 l / 117 g 0 l / 0g 0,6 l / 13g
BMW 320d * BMW 316d Touring BMW 318d Touring BMW 320d Touring* BMW 518d BMW 520d BMW 318d GT BMW X1 sDrive20d * 120 kW / 163 hp 85 kW / 116 hp 105 kW / 143 hp 120 kW / 163 hp 105 kW / 143 hp 135 kW / 184 hp 105 kW / 143 hp 120 kW / 163 hp 4.1 l / 109 g 4.5 l / 119 g 4.5 l / 119 g 4.3 l / 112 g 4.5 l / 119 g 4.5 l / 119 g 4.5 l / 119 g 4.5 l / 119 g
MINI One MINIMALIST MINI One D MINI Cooper D MINI Cooper SD MINI Cooper D Convertible MINI Cooper SD Convertible MINI One D Clubman 55 kW / 75 hp. 72 kW / 98 hp 66 kW / 90 hp 82 kW / 112 hp 105 kW / 143 hp 82 kW / 112 hp 105 kW / 143 hp 66 kW / 90 hp 5.1 l / 119 g 3.8 l / 99 g 3.8 l / 99 g 4.3 l / 114 g 4.0 l / 105 g 4.5 l / 118 g 3.9 l / 103 g
MINI Cooper D Clubman MINI Cooper SD Clubman MINI One D Countryman MINI Cooper D Countryman MINI Cooper SD Roadster MINI Cooper SD Coupé MINI Cooper D Paceman 82 kW / 112 hp 105 kW / 143 hp 66 kW / 90 hp 82 kW / 112 hp 105 kW / 143 hp 105 kW / 143 hp 82 kW / 112 hp 3.9 l / 103 g 4.4 l / 115 g 4.4 l / 115 g 4.4 l / 115 g 4.5 l / 118 g 4.3 l / 114 g 4.4 l / 115 g
Fuel consumption figures: liters/100 km in EU test cycle, CO2 figures: g/km. * EfficientDynamics Edition. BMW Group Investor Presentation, January 2014 Page 100 50 PER CENT REDUCTION IN CO2 EMISSIONS 1995-2020.
50 PER CENT REDUCTION IN CO2 EMISSIONS 1995-2020
2020 TARGET BMW GROUP BMW GROUP FOR TOTAL FLEET 1995 FLEET 2012 EU FLEET
> 200 CO2 g/km 138 CO2 g/km 95 CO2 g/km*
*Value for the BMW Group fleet 100-110 CO2 g/km
BMW Group Investor Presentation, January 2014 Page 101 THE NEW BMW EFFICIENTDYNAMICS ENGINE FAMILY - SCALABILITY OF BASIC DESIGN OF ENGINE FAMILY ALLOWS A BROADER APPLICATION ACROSS VEHICLE PROJECTS AND TECHNOLOGIES.
New Engine Family
Vehicles Technologies
BMW Group Investor Presentation, January 2014 Page 102 THE NEW BMW EFFICIENTDYNAMICS ENGINE FAMILY– HIGH LEVELS OF COMMONALITY BETWEEN AND WITHIN DIESEL AND GASOLINE ENGINES.
Cylinders (inline) -3 -4 -6
Common parts shared within gasoline or diesel engines is approx. 60%. Gasoline >60 %
Between the gasoline and 40 % 40
- diesel engines there is a
30 40% sharing.
Diesel >60 %
BMW Group Investor Presentation, January 2014 Page 103 THE NEW BMW EFFICIENTDYNAMICS ENGINE FAMILY – MODULAR STRATEGY.
Combustion Chamber: • Optimal size, roundabout 500 ccm • Central injector • Minimized friction
Different aspects for Gasoline/Diesel: • Cylinder head elements • Combustion process
Approximate range of torque and power per cylinder: • Gasoline: 60-100 Nm, 30-50 kW • Diesel: 75-100 Nm, 20-40 kW
BMW Group Investor Presentation, January 2014 Page 104 NEXT STEPS – PREDICTIVE ENERGY MANAGEMENT.
Brake Energy Predictive Energy Regeneration ACC Management Merging all Heat- Navigation management available sensor information Camera Auto Start Stop Function Prediction of Light/Rain Sensor Green Routing / upcoming Driver assistence situations PDC Aerodynamics Optimized DSC vehicle Air conditioning conditioning DME
BMW Group Investor Presentation, January 2014 Page 105 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 106 VALUE ORIENTATION.
Automotive: Motorcycles: Financial Services: Return on Capital Return on Capital Return on Equity Employed Employed
Vehicle projects: Vehicle projects: Finance & lease Model return based on Model return based on portfolio: DCF DCF Cash flows
BMW Group Investor Presentation, January 2014 Page 107 EFFECTS ON AUTOMOTIVE SEGMENT’S EARNINGS IN 2012.
in euro million +131 -653 +437 Depreciation +106 +1,026 -85 Volume/ -815 HR Other Mix/Market Residual operating values income & expenses
Net effects Net effects Number 7,624 7,477 FX/ ONE Raw material
EBIT 2011 EBIT 2012 EBIT margin 11.8% 10.9%
BMW Group Investor Presentation, January 2014 Page 108 EBIT MARGIN DEVELOPMENT AUTOMOTIVE SEGMENT. TARGET PROFITABILITY OF 8 – 10%.
13 in % 11.8 12 10.9 11 9.9 10 9.6 9.0 8.8 9.0 9 8.1 7.9 7.8 8.0 8 6.7 7 6.4 6.4 6 5 4 3
2 1.4 1 0
-1 -0.6 -2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1- Q2- Q3- 2013 2013 2013
BMW Group Investor Presentation, January 2014 Page 109 DIVIDEND DEVELOPMENT AND PAYOUT RATIO. TARGET PAYOUT RATIO OF 30 – 40%.
2,000 93.8% 100.0% Total payout (in € million, LHS) Payout ratio* (RHS) 90.0%
1,640 80.0% 1,500 1,508 70.0%
59.7% 60.0%
1,000 50.0%
852 40.0% 30.7% 32.0% 694 30.0% 500 20.1% 18.8% 17.4% 18.7% 18.7% 26.3% 458 20.0% 419 22.1% 392 419 350 351 15.9% 10.0% 197 197 0 0.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Dividend per share (in €) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Ordinary share 0.52 0.52 0.58 0.62 0.64 0.70 1.06 0.30 0.30 1.30 2.30 2.50 Preferred share 0.54 0.54 0.60 0.64 0.66 0.72 1.08 0.32 0.32 1.32 2.32 2.52 *Payout ratio based on Group net income before minority interest. BMW Group Investor Presentation, January 2014 Page 110 NET INTEREST-BEARING ASSETS AUTOMOTIVE SEGMENT. 31.12.2012 +1,078 -2,224 Euro million + 4,784 Internal net financial receivables from Financial 13,327 + 2,205 Other Entities liabilities + 7,484 Internal net financial Segment Marketable receivables from securities Financial Services Segment
Cash and1 cash 2 3 4 5 Net interest6 - equivalents bearing assets
30.09.2013 +1,407 -2,305 Euro million + 3,889 Internal net financial Financial + 2,714 receivables from 12,446 Other Entities liabilities Internal net financial Segment + 6,741 receivables from Marketable Financial Services securities Segment
Cash and1 cash 2 3 4 5 Net interest6 - equivalents bearing assets BMW Group Investor Presentation, January 2014 Page 111 OPERATING CASH FLOW AND FREE CASH FLOW AUTOMOTIVE SEGMENT.
10,000 in euro million 9,167
8,150 8,110 8,000
6,246 6,000 4,921 4,471 4,471 3,809 4,000 3,637 3,166 2,608 2,385 2,147 2,000 1,456
197 0 2007 2008 2009 2010 2011* 2012 -81 -754
-2,000
Cash inflow from operating activities Free Cash Flow including net investments in securities Free Cash Flow before net investments in securities
* 2011 restated: the reclassification from operating activities to financing activities resulted in an increase in the operating cash flow.
BMW Group Investor Presentation, January 2014 Page 112 CAPITAL EXPENDITURE.
6,000 12% in euro million
5,240 5,000 3,993 4,313 1,089 10%
8.6% 8.8% 4,267 4,204 3,471 1,536 4,000 1,333 1,224 8% 1,396 3,692 7.9% 6.8% 6.8% 7.6% 3,263 972 1,087 951 3,000 5.4% 6%
5.4% 5.4% 5.4% 5.2% 5.2% 4.8% 2,000 4.6% 4%
3.7% 3.8%
1,000 2%
2,597 2,777 2,934 2,980 2,384 2,312 2,720 4,151 0 0% 2005 2006 2007 2008 2009 2010 2011 2012
Capital expenditure in property, plant, equipment and intangible assets Capitalized development costs
Capital expenditure ratio* Capex into PPE ratio* * based on Group revenues
BMW Group Investor Presentation, January 2014 Page 113 RESEARCH & DEVELOPMENT COSTS.
8% 47.9% 50% 44.8% 44.4% 42.4% 42.8% 7% 40% 6.7% 6.5% 34.3% 6% 28.8% 5.6% 27.6% 30% 5% 5.3% 5.3% 5.4% 5.2% 5.2% 5.1% 5.1% 5.2% 4.8% 4.9% 4.6% 5.2% 5.1% 4% 20%
3%
10% 2%
1% 0% 2005 2006 2007 2008 2009 2010 2011 2012
R&D Costs (IFRS) / Group revenues in % R&D Costs (HGB ) / Group revenues in % Capitalisation Ratio
in euro million 2005 2006 2007 2008 2009 2010 2011 2012
Research & Development Costs (IFRS) 2,464 2,544 2,920 2,825 2,587 3,082 3,610 3,993
Research & Development Costs (HGB) 3,115 3,208 3,144 2,864 2,448 2,773 3,373 3,952
BMW Group Investor Presentation, January 2014 Page 114 CONTENT.
1 Corporate Strategy 7 Production Network
2 BMW i 8 Sustainability
3 Growth Markets 9 EfficientDynamics
4 Automotive 10 Financials
5 Motorcycles 11 Funding
6 Financial Services
BMW Group Investor Presentation, January 2014 Page 115 GLOBAL FUNDING OBJECTIVES TO ENSURE BMW GROUP’S SOLVENCY.
Financial Ensure sustainable access to international financial markets. Flexibility Explore and maintain presence and competence in all strategic important capital markets worldwide.
Financial Ensure independence from individual lenders, banks and financial Independence Instruments. Diversification of funding sources, investors and products.
Value Create value by optimizing financing costs on overall Group basis. Orientation Credit spread management for each financial instrument. Ensure long-term, strategic perspective (instrument mix).
The different objectives are interdependent and of equal importance.
BMW Group Investor Presentation, January 2014 Page 116 CORPORATE FINANCE CAPABILITIES.
Categories of available instruments over the spectrum of maturities: <1yr 1yr 2yrs 3yrs 4yrs 5yrs 7yrs 10yrs+
CP (EMTN) PPs Bonds
ABCP ABS - Term Retail Institutional
Customer Deposits / Brokered CDs
Bank Loans
CP (EMTN) Private Placements Retail Institutional Attractive and Attractive funding source. Diversification of investor base. Highest liquidity and depth of the market, flexible short- Effective management of spreads provides Limited potential of i.e. highest funding potential. term funding. support for the short end of the BMW opportunistic access. Typical for Benchmark bonds. Credit Curve. Creation of a BMW Credit Spread Curve. Deposits Diversification of ABS funding ABS supports investor diversification. instruments and investors Bank Loans Local source of funding, mainly where access to capital markets is limited.
BMW Group Investor Presentation, January 2014 Page 117 ISSUING PROGRAMS.
EUR 35bn EMTN-Program
BMW AG BMW Australia Finance Limited BMW Finance N.V. BMW Japan Finance Corp. BMW US Capital, LLC
EUR 5bn ECP-Program EUR 2bn FCP-Program
BMW AG BMW Finance N.V. BMW Finance N.V. BMW Coordination Center V.O.F. BMW Malta Finance Ltd USD 7bn USCP-Program
BMW US Capital, LLC
EMTN Program as main mid- to long-term refinancing program with commercial paper programs to cover short-term liquidity needs. All issuing programs carry an unconditional guarantee from BMW AG.
BMW Group Investor Presentation, January 2014 Page 118 BROAD INVESTOR BASE.
Offshore US Euro Capital Markets USD (EMTN) PPs EUR Commercial Paper French Commercial Paper USA Great Britain EUR (EMTN) PPs USD Commercial Paper GBP Commercial Paper EUR Benchmark Bonds South Korea USD US PP GBP (EMTN) PPs USD Eurodollar USD ABS GBP Bonds AUD Euroaussie KRW Domestic Bond GBP ABS NOK (EMTN) Bonds KRW ABS SEK (EMTN) Bonds Japan Canada EUR ABS JPY (EMTN) PPs CAD ABS JPY Euro-Yen CAD (EMTN) PPs JPY ABS CAD Domestic Bonds Switzerland Hong Kong Mexico CHF (EMTN) PPs RMB (EMTN) PP CHF Bonds HKD (EMTN) PP MXN (EMTN) PP India CHF ABS INR Domestic Bond
Australia South Africa AUD (EMTN) PP AUD ABS ZAR ABS ZAR Domestic Bonds
Funding is done worldwide to optimize refinancing costs and to establish a broad investor base.
BMW Group Investor Presentation, January 2014 Page 119 DEVELOPMENT OF BMW GROUP LIQUIDITY.
Cash & cash equivalents Marketable securities & investment funds 14 in euro billion
11.9 12.0 12 10.9 10.8 11.0 11.0 11.0 11.0 1.1 10.7 2.7 10.1 9.9 9.7 9.7 10.1 10 9.4 2.4 2.6 0.8 8.7 9.0 9.1 2.7 2.7 3.0 2.9 1.5 8.6 3.0 1.7 1.7 2.3 8.2 1.6 1.6 1.7 8 0.7 1.6 1.5
6 5.4 4.8 4.9 10.8 9.3 9.3 1.9 1.2 8.4 8.5 8.5 8.4 4 7.8 8.0 8.0 7.8 8.1 7.9 8.1 7.7 2.1 7.5 7.1 7.4 7.1 7.5
2 3.5 3.7 2.7
0 Q1-08 Q2-08 Q3-08 FY-08 Q1-09 Q2-09 Q3-09 FY-09 Q1-10 Q2-10 Q3-10 FY-10 Q1-11 Q2-11 Q3-11 FY-11 Q1-12 Q2-12 Q3-12 FY-12 Q1-13 Q2-13 Q3-13
After significantly increasing liquidity during the economic and financial crisis, the BMW Group continues to maintain a solid liquidity position.
BMW Group Investor Presentation, January 2014 Page 120 DEVELOPMENT OF 5-YEAR CDS.
500 bps
400
300
200
100
0 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14
Source: Reuters Credit Views as of 01/10/2014
BMW Group Investor Presentation, January 2014 Page 121 BOND AND PRIVATE PLACEMENT MATURITIES.
10,000 in euro million Issuance Maturities 9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Maturities based on nominal values excluding derivatives.
BMW Group Investor Presentation, January 2014 Page 122 FINANCIAL DEBT AS OF SEPTEMBER 30, 2013.
EUR 68.0 bn* Debt Maturity Structured finance Bank loans ≤1 year 4% 7%
Customer 12% deposits 43 %
Bonds / 48% 6% Brokered CDs (44%**) 57 % PPs/ (56%**) SSDs 7%
Commercial Paper 15%
ABS > 1 year Others 1% *Adjusted, excluding currency and interest rate derivatives. ** comparative figures as of 31 December 2012
BMW Group maintained a well-diversified debt structure. The average maturity of financial liabilities is approximately 2.0 years.
BMW Group Investor Presentation, January 2014 Page 123 FUNDING ACTIVITY IN 2013 AND 2014.
. Japanese Loan Conduit, March 2013, JPY 30bn . Swiss Public Lease Deal, May 2013, CHF 300mn . German Public Loan Deal, June 2013, EUR 800mn . Canadian Loan Conduit, September 2013, CAD 500mn ABS . US Public Loan Deal, November 2014, USD 1.0bn . Australian Loan Conduit, November 2013, AUD 500mn . Korean Public Loan & Lease Deal, November 2013, USD 250mn . South African Loan Conduit, December 2013, ZAR 2.0bn
. USD 500mn bond, 4 year term, settlement 5 April 2013 (1.375% coupon) . EUR 1bn benchmark, 4.25 year term, settlement 18 April 2013 (1.0% coupon) . CAD 450mn dual tranche benchmark bond, settlement 23 May 2013: . CAD200mn, 1.5 year term (CDOR +23bps coupon) . CAD250mn, 5 year term (2.33% coupon) . EUR 1.25bn dual tranche benchmark bond, settlement 4 September 2013: Bonds . EUR 500mn, 3 year term (3M Euribor +22bp coupon) . EUR 750mn, 7 year term (2% coupon) . GBP 300mn bond, 4 year term, settlement 20 November 2013 (1.75% coupon) . EUR 1.5bn dual tranche benchmark bond, settlement 17 January 2014: . EUR 750mn, 5.5 year term (1.625% coupon) . EUR 750mn, 10 year term (2.625% coupon)
. Issuance 2012: EUR 2.5bn Private Placements . Issuance 2013: EUR 3.3bn . Constant issuance in different currencies (EUR, JPY, AUD, SEK, USD, CHF, HKD, CNY)
. Issuance 2012: EUR 728mn Schuldschein . Issuance 2013: EUR 587mn
Commercial Paper . EUR 6.3bn outstanding as of December 31, 2013
BMW Group Investor Presentation, January 2014 Page 124 BMW GROUP INVESTOR RELATIONS – CONTACTS.
Torsten Schüssler Bernd Daser Helge Jorch Head of Investor Relations Debt & Equity IR Equity & SRI IR
+49-89-382-25387 +49-89-382-31684 +49-89-382-24272 torsten.schuessler@bmw.de [email protected] [email protected]
Andreas Stöffler Carina Wollmann Ziye Zhou Equity IR Equity & SRI IR Debt & Equity IR
+49-89-382-17944 +49-89-382-21378 +49-89-382-16190 [email protected] [email protected] [email protected]
BMW Group Investor Presentation, January 2014 Page 125