Bmw investor presentation

We publish best presentations at presportal.ru - presentation knowledge bank.

1. BMW Group
Investor Presentation
September 2009
Page 1
BMW Group

Investor Presentation September 2009

2. BMW Group
Investor Presentation
September 2009
Page 2
BMW Group.
Key figures H1-2009.
Euro million
2009
1 Jan. -

30 June
2008
1 Jan. –

30June
Change
in %
Revenues24,48027,837-12.1
Loss / profit before financial result (EBIT)1141,252-90.9
Automobiles -2821,014-
Motorcycles5492-41.3
Financial Services14511822.9
Other entities38124-69.4
Eliminations159-96-
Loss / profit before tax -471,243-
Net loss / net profit-31994-
EPS in Euro (common / preferred)-0.05/-0.041.52/1.53-/-
Operating Cash flow (Automobiles)2,1092,383-11.5
Equity20,16222,019-8.4

3. BMW Group
Investor Presentation
September 2009
Page 3
BMW Group Update.
Successful financial management in H1-2009. ƒ
Proactive, foresighted financial management:
ƒ
Net current assets and other items*:
reduced by EUR 1,607 million
ƒ
Free cash flow*: EUR 516 million
ƒ
Net interest bearing assets*: EUR 10,041 million
ƒ
Group liquidity: EUR 11,989 million *Automobiles Segment

4. BMW Group
Investor Presentation
September 2009
Page 4
BMW Group Update.
Outlook and action for 2009. ƒ
Focused cost management is the top priority.
ƒ
Increased efforts to reduce material costs
(more than EUR 4 billion) until 2012.
ƒ
EUR 500 million cost savings from headcount reduction
from 2009 onwards.
ƒ
Optimization of capital employed.
ƒ
Reduction of capital expenditure without sacrificing
investment in the future.
ƒ
Continuation of strict working capital and free cash flow
management.
ƒ
Resolute pursuit of strategy Number ONE.

5. BMW Group
Investor Presentation
September 2009
Page 5
BMW Group Update.
Targets and guidance. ƒDue 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.
ƒWe expect the entire industry’s global auto sales to drop by
10 to 20 % in 2009 and pick up over the course of 2010.
ƒWe 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.
ƒWe remain committed to achieving our profitability and
FCF targets for 2012!

6. BMW Group
Investor Presentation
September 2009
Page 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

7. BMW Group
Investor Presentation
September 2009
Page 7
BMW Group Strategy.
Strategic objective.
The BMW Group is the leading
provider of premium products
and premium services for
individual mobility.

8. BMW Group
Investor Presentation
September 2009
Page 8
BMW Group Strategy.
The way ahead –

Number ONE. Number ONEdefines ƒour vision for the year 2020.
ƒour mid-term targets for the year 2012.
ƒour internal milestones. Our vision is targeted towards
creating value and securing future
success. We are driven by our goal to
increase profitability.

9. BMW Group
Investor Presentation
September 2009
Page 9
BMW Group Strategy.
Targets 2012.
Group
2006
2012
Auto Sales (‘000 units)
1,374
-
Motorcycle Sales (‘000 units)
100
150
1)
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)
956
2)
>2,000
2)

Free Cash Flow from Industrial Operations
1)

Projected growth until 2012 includes Husqvarna brand sales

10. BMW Group
Investor Presentation
September 2009
Page 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
2002200320042005200620072012
7.0%
4.0%
2008
5.4%

11. BMW Group
Investor Presentation
September 2009
Page 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%
2002200320042005200620072012
6.0%
2008
7.9%

12. BMW Group
Investor Presentation
September 2009
Page 12
BMW Group Strategy.
Reduction of material costs.
ƒThe material costs represent
the biggest cost pool.
ƒWe want to achieve
significant cost reductions in
the supply chain.
ƒWe will not only negotiate
harder but we will work close
together with the suppliers
to ensure sustainable cost
reductions.
ƒWe will implement the
efficiency-enhancement
measures in all future
product and technology
projects.
~€

44bn*
Cost of sales
~€

24bn*
*2008 figures
Material costs

13. BMW Group
Investor Presentation
September 2009
Page 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
20082009201020112012
6,000
5,000
4,000
3,000
2,000
1,000
0
Cost of materials / purchasing
Expenses / fixed costs / R&D
7,000

14. BMW Group
Investor Presentation
September 2009
Page 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
Spartanburg
240k 150k+60%
260k 200k
+30%
44k 30k+47%

15. BMW Group
Investor Presentation
September 2009
Page 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

16. BMW Group
Investor Presentation
September 2009
Page 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

17. BMW Group
Investor Presentation
September 2009
Page 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

18. BMW Group
Investor Presentation
September 2009
Page 18
USA
Eastern Europe
India
China
Russia
BMW Group Automobiles.
Priority on growth markets.

19. BMW Group
Investor Presentation
September 2009
Page 19
BMW Group Automobiles.
Deliveries to customers through July 2009.
Deliveries of automobiles
in units
2009 ytd.2008 ytd.
Change in %
Total BMW604,190744,025-18.8
1 series128,822137,570-6.4
3 series226,803298,568-24.0
5 series99,631124,830-20.2
6 series5,62511,210-49.8
7 series25,11223,1758.4
X332,49854,113-39.9
X550,69872,699-30.3
X623,5618,696170.9
Z411,44013,164-13.1
Total MINI120,813146,040-17.3
Total Rolls-Royce 374597-37.4 BMW Group725,377890,662-18.6

20. BMW Group
Investor Presentation
September 2009
Page 20
BMW Group Automobiles.
Premium segment sales vs. BMW Group retail
sales development (month on month).
BMW Group retail sales
Premium Segment sales

(estimates)
20082009

21. BMW Group
Investor Presentation
September 2009
Page 21
BMW Group Automobiles.
Deliveries to customers 2008.
Deliveries of automobiles
in units
20082007
Change in %
Total BMW1,202,2391,276,793-5.8%
1 series225,095165,80335.8%
3 series474,208555,219-14.6%
5 series202,287230,845-12.4%
6 series16,29919,626-17.0%
7 series38,83644,421-12.6%
X384,440111,879-24.5%
X5116,489120,617-3.4%
X626,5800-
Z418,00528,383-36.6%
Total MINI232,425222,8754.3%
Total Rolls-Royce 1,2121,01020.0% BMW Group1,435,8761,500,678-4.3%

22. BMW Group
Investor Presentation
September 2009
Page 22
BMW Group Automobiles.
BMW and MINI retail by model 2008 (2007).
Total BMW1 Series3 Series5 Series6 Series7 SeriesX3X5Z4
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 DCooperCooper DCooper SConvert.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.

23. BMW Group
Investor Presentation
September 2009
Page 23
SedanWagonHatchCoupeConvert.RoadsterNew 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 Series
Z4
Z4
X3
3 Series
MINI
MINI
MINI
1 Series
1 Series
1 Series
X5, X6
5 Series
5 Series
GT
New products to be launched until 2012
X1

24. BMW Group
Investor Presentation
September 2009
Page 24
BMW Group Automobiles.
Current models –

lifecycle overview.
1 Series
X Models
MINI
5 Series 3 Series6 Series7 Series
2004
2005
2006
2007
2010 -

2012
Rolls Royce
Z4
Phantom Drophead
Coupé
Sedan
Cooper / Cooper S
One / Cooper D
LCI
3 door hatch
5 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

25. BMW Group
Investor Presentation
September 2009
Page 25
3%
10%
20%
40%
>60%
0%
10%
20%
30%
40%
50%
60%
70%
20082009201020112012
0.0
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

26. BMW Group
Investor Presentation
September 2009
Page 26
BMW Group Automobiles.
Product overview MINI.
Launch 03/2009
MINI Clubman.
MINI Hatch.MINI Convertible.

27. BMW Group
Investor Presentation
September 2009
Page 27
BMW Group Automobiles.
New product 2008.
BMW 7 series

28. BMW Group
Investor Presentation
September 2009
Page 28
BMW Group Automobiles.
New product 2009.
Launch 05/2009
BMW Z4

29. BMW Group
Investor Presentation
September 2009
Page 29
BMW Group Automobiles.
New product 2009.
BMW X1
Launch 10/2009

30. BMW Group
Investor Presentation
September 2009
Page 30
BMW Group Automobiles.
New product 2009.
BMW 5 series Gran Turismo
Launch 10/2009

31. BMW Group
Investor Presentation
September 2009
Page 31
BMW Group Automobiles.
BMW Advanced Diesel with Blue Performance.
X5 Xdrive 35d ƒEmission Standard LEVII / Bin5
ƒ265 hp, 0-60 mph < 7.4s
ƒFuel consumption > 27 mpg (USC)
335d ƒEmission Standard LEVII / Bin5
ƒ265 hp, 0-60 mph < 6.2s
ƒFuel consumption > 33 mpg (USC)US market introduction: December 2008

32. BMW Group
Investor Presentation
September 2009
Page 32
BMW Group Automobiles.
BMW Active Hybrid. US Market introduction: End of 2009 (EU: 04/2010)
X6 Active Hybrid ƒFull (Two-Mode) Hybrid system
ƒEmission Standard ULEVII / EU5
ƒSystem Power: 485 hp, 0-60 mph: 5.6s
ƒConsumption: 9.9l/100km (28.5mpg)
(-20% compared to base X6 xdrive
50i) 7 series Active Hybrid ƒMild Hybrid system
ƒEmission Standard ULEVII / EU5
ƒSystem Power: 465 hp, 0-60 mph: 4.9s
ƒConsumption 9.4l/100km (29.1mpg)
(-15% compared to base 750li)US Market introduction: End of 2009 (EU: 04/2010)

33. BMW Group
Investor Presentation
September 2009
Page 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
200820092010201120122013201420152016201720182019202020212022
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

34. BMW Group
Investor Presentation
September 2009
Page 34
BMW Group Automobiles.
Premium segment growth in emerging
markets. Source: Global Insight, in ‘000 units
1)
China includes Mainland China, Hong Kong and Taiwan
2)
GCC: Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates
3)
New EU Countries: Bulgaria, Estonia, Latvia, Lithuania, Poland, Rumania, Slovakia, Slovenia, Czech Republic, Hungary
4)
Latin America: Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Puerto Rico, Uruguay, Venezuela
572
105
91
70
0
100
200
300
400
500
600
700
800
900
1,000
China
1)
RussiaGCC
2)
New EU

Countries
3)
Latin

America
4)
South KoreaUkraineIndiaMalaysiaThailand
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
82
61
38
22
8 9 7
914
264
184
151
7272
32
622720

35. BMW Group
Investor Presentation
September 2009
Page 35
Germany
United Kingdom
Italy
USA
France
Russia
China
Japan
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

36. BMW Group
Investor Presentation
September 2009
Page 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 R
R 1200 R
G 650 X Country
G 650 X
Moto
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.

37. BMW Group
Investor Presentation
September 2009
Page 37
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1990 1995 2000 2001 2002 20032004 2005 2006 2007 2008 2012
BMW Group Motorcycles.
Retail unit sales 1990–

2012.
units
* Projected growth until 2012 includes Husqvarna brand sales.
*

38. BMW Group
Investor Presentation
September 2009
Page 38
BMW Group Financial Services.
Global presence in 54 countries with 4,000
employees.
BMW Financial Services MINI Financial Services

39. BMW Group
Investor Presentation
September 2009
Page 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 1Year 12
(1)
average ownership cycle in Germany;
(2)
German market, 2006 data
9,838
7,115
02,0004,0006,0008,00010,00012,000
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%

40. BMW Group
Investor Presentation
September 2009
Page 40
345
387
422
515
605
685
743
-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

41. BMW Group
Investor Presentation
September 2009
Page 41
BMW Group Financial Services.
Additional risk provisions in 2008. Automobiles
Segment:
EUR 911 million
residual values
Financial
Services
segment: EUR
1,057 million
EUR 694 million
residual values
EUR 363 million credit losses
Total: EUR 1,968 million

42. BMW Group
Investor Presentation
September 2009
Page 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%

43. BMW Group
Investor Presentation
September 2009
Page 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%
2002200320042005200620072008H1-2009

44. BMW Group
Investor Presentation
September 2009
Page 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
99/0200/0301/0402/0503/0604/0706/09 05/08
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 retention
36 months residual value (ALG)
BMW Group Financial Services.
Resale value development in the USA.
52 %
46 %

45. BMW Group
Investor Presentation
September 2009
Page 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

46. BMW Group
Investor Presentation
September 2009
Page 46
BMW Group Financial Services.
Development of CPO retail in the USA.
60
40
20
0
6.1
80
100
120
199719981999200020012002200320042005200620072008
16.8
28.3
44.7
39.9
60.6
65.7
71.1
73.2
80.4
89.8
104.5
in 1,000 units

47. BMW Group
Investor Presentation
September 2009
Page 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

48. BMW Group
Investor Presentation
September 2009
Page 48
BMW Group Global Production Network.
Automobile production by plant in 2008.
in 1,000 units
Regensburg, Germany Production of BMW 1, 3 Series, Z4
274.0
Leipzig, Germany Production of BMW 1, 3 Series
150.0
Dingolfing, Germany Production of BMW 5, 6, 7 Series
241.3
Rosslyn, South Africa Production of BMW 3 Series
48.0
Oxford, UK Production of MINI
235.0
Goodwood, UK Production of Rolls-Royce
1.4
Munich, Germany Production of BMW 3 Series
202.9
Shenyang
1
, China

Production of BMW 3, 5 Series
33.7
Spartanburg, USA Production of BMW X5, X6
170.7
Steyr
2
, Austria
Contract Production of BMW X3
82.9
1

Joint venture
2

Contract production

49. BMW Group
Investor Presentation
September 2009
Page 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)

50. BMW Group
Investor Presentation
September 2009
Page 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

51. BMW Group
Investor Presentation
September 2009
Page 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 performance
Change 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.

52. BMW Group
Investor Presentation
September 2009
Page 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

53. BMW Group
Investor Presentation
September 2009
Page 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:

54. BMW Group
Investor Presentation
September 2009
Page 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.

55. BMW Group
Investor Presentation
September 2009
Page 55
Sustainability actions of the BMW Group are
honored externally.
BMWGroup 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 th ese 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)

56. BMW Group
Investor Presentation
September 2009
Page 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

57. BMW Group
Investor Presentation
September 2009
Page 57
BMW EfficientDynamics.
Efficiency increases powertrain.
CO
2

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

58. BMW Group
Investor Presentation
September 2009
Page 58
BMW EfficientDynamics.
Tailor-made energy management packages.
Electric water pump

Electric steering
Decoupled A/C compressor
Pressure controlled fuel pump
Brake Energy Regeneration
Auto Start Stop function
Gear shift display
Power Steering
Aerodynamics
Cooling air flap system
Brake air flap system
Tyres with reduced rolling resistance
Light weight contruction Energy management:ICE improvements:
High Precision Injection /
Common Rail high pressure fuel injection
Driving Resistance:

59. BMW Group
Investor Presentation
September 2009
Page 59
14
13
12
11
10
9
8
7
6
5
4
Fuel consumption [ltr/100 km]
5.5 6.5 7. 5 8.5 9.5 10.5 11.5
BMW X3 3.0 d
Hybrid #1
MINI Cooper D
BMW 118d
BMW 120d
Hybrid
BMW
EU 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

60. BMW Group
Investor Presentation
September 2009
Page 60
BMW EfficientDynamics.
The product portfolio.
Customer-oriented, sustainable strategy.
High Precision Injection
in lean-burn mode
High Precision Injection
with Twin Turbo Technology
VALVETRONIC Technology
Variable Twin Turbo
Diesel Technology
3rd Generation Piezo

Common Rail Diesel
Technology
Brake 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 Series3 Series5 Series6 Series7 SeriesX3X5Z4
X6
1.) Direct injection with Twin Scroll Turbo 2.) System comparable to VALVETRONIC
2.)
1.)

61. BMW Group
Investor Presentation
September 2009
Page 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 CO
2

/km.

62. BMW Group
Investor Presentation
September 2009
Page 62
180
160
140
200
220
240
BMW GroupCompetitors ACEA
BMW EfficientDynamics.
ACEA voluntary commitment exceeded.
EU fleet emissions
(g CO
2
/km)
ACEA, 1995 -

2008: approx. -16%
BMW Group, 1995 -

2008: > -

25%
199519981999200020012002200320042005200620072008 19961997
156

63. BMW Group
Investor Presentation
September 2009
Page 63
BMW EfficientDynamics.
A competitive advantage not
only at the fuel pump…
EU-Countries with a CO
2

based
registration or annual tax
14 of the 27 EU member
countries already have a
CO
2

-based registration or
annual tax in place.
CO
2

based annual tax was
introduced in Germany at

July 1st, 2009

64. BMW Group
Investor Presentation
September 2009
Page 64
BMW EfficientDynamics.
CO
2

emissions of new cars registered in
Germany in 2008.
Source: Federal Motor Transport Authority (KBA)

65. BMW Group
Investor Presentation
September 2009
Page 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).

66. BMW Group
Investor Presentation
September 2009
Page 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).

67. BMW Group
Investor Presentation
September 2009
Page 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

68. BMW Group
Investor Presentation
September 2009
Page 68
BMW Efficient Dynamics.
Next steps (examples).
Thermoelectric

Generator
Predictive Energy Management
Solar roof
New turbocharged ICE generations

69. BMW Group
Investor Presentation
September 2009
Page 69
BMW EfficientDynamics –

Next Steps.
Thermoelectric Generator.
ƒTechnology transfer from deep space
exploration to the automotive
industry.
ƒDirect conversion of thermal into
electrical energy.
ƒUp to 5% lower fuel consumption.
ƒReady for series production in
~ 5 years.
Application: Power Generation
for Deep Space Exploration
pn
U
Heat Sink
(Coolant)
Heat Source
(Exhaust)
Thermo-
electric
Material
Electrode

70. BMW Group
Investor Presentation
September 2009
Page 70
BMW EfficientDynamics –

Next Steps.
Predictive Energy Management.
Predictive Energy
Management
ACC
Navigation
Camera
DSC
PDC
DME
Light/Rain Sensor
Merging all
available
sensor
information
Prediction of
upcoming
situations
Optimized
vehicle
conditioning
Brake Energy
Regeneration
Heat-
management
Green Routing /
Driver assistence
Aerodynamics
Air conditioning
Auto Start
Stop Function
… …

71. BMW Group
Investor Presentation
September 2009
Page 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

72. BMW Group
Investor Presentation
September 2009
Page 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

73. BMW Group
Investor Presentation
September 2009
Page 73
BMW Group Financial Strategy.
Effects on Automobiles segment earnings.
20072008
EUR million
–387
–196
–16
3.450
690
Depreci-

ation &

amorti-

zation
Raw

materials
Currency
Profit before financial result (EBIT)
Volume/

mix/
market
Efficiency
enhance-

ments
-1.446
–153
6.4%
1.4% EBIT margin
Risk
provi-
sions
-911
Personnel

reduction
-452
+ 801
Other

changes

74. BMW Group
Investor Presentation
September 2009
Page 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 cash
equivalents
Marketable
securities
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 cash
equivalents
Marketable
securities
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

75. BMW Group
Investor Presentation
September 2009
Page 75
BMW Group Financial Strategy.
Operating cash flow and free cash flow.
in million Euro
4,970
6,1576,184
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-groupAutomotive Segment

76. BMW Group
Investor Presentation
September 2009
Page 76
3,226
2,597
2,777
2,934
2,865
1,121
1,396
1,536
1,333
1,224
9.8%
8.6%
8.8%
7.6%
7.9%
0
1,000
2,000
3,000
4,000
5,000
6,000
20042005200620072008
0.0%
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
4,347
3,993
4,267
4,313
4,204

77. BMW Group
Investor Presentation
September 2009
Page 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%
20042005200620072008
0%
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
20042005200620072008
Research & Development Costs (IFRS)2,3342,4642,5442,9202,825
Research & Development Costs (HGB)2,8183,1153,2083,1442,864

78. BMW Group
Investor Presentation
September 2009
Page 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 00Jul 00Jan 01Jul 01Jan 02Jul 02Jan 03Jul 03Jan 04Jul 04Jan 05Jul 05Jan 06Jul 06Jan 07Jul 07Jan 08Jul 08Jan 09Jul 09
Spot rate
Equilibrium rate

79. BMW Group
Investor Presentation
September 2009
Page 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 00Jan 01Jul 01Jan 02Jul 02Jan 03Jul 03Jan 04Jul 04Jan 05Jul 05Jan 06Jul 06Jan 07Jul 07Jan 08Jul 08Jan 09Jul 09
Spot rate
Equilibrium rate

80. BMW Group
Investor Presentation
September 2009
Page 80
BMW Group Financial Strategy.
Spot & equilibrium rate euro / JP yen.
90
100
110
120
130
140
150
160
170
Jan 00Jul 00Jan 01Jul 01Jan 02Jul 02Jan 03Jul 03Jan 04Jul 04Jan 05Jul 05Jan 06Jul 06Jan 07Jul 07Jan 08Jul 08Jan 09Jul 09
Spot rate
Equilibrium rate

81. BMW Group
Investor Presentation
September 2009
Page 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 strategic
important capital markets worldwide.
Ensure independence

from individual lenders, banks and financial
Instruments.
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).

82. BMW Group
Investor Presentation
September 2009
Page 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

83. BMW Group
Investor Presentation
September 2009
Page 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, LLC
BMW Finance N.V.

BMW Australia Finance Limited
BMW (UK) Capital plc BMW Japan Finance Corp.
BMW AG
BMW Finance N.V.
BMW Coordination Center V.O.F.
BMW (UK) Capital plc
BMW 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.

84. BMW Group
Investor Presentation
September 2009
Page 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.

85. BMW Group
Investor Presentation
September 2009
Page 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
5.4
4.84.9
8.2
10.1
11.9

86. BMW Group
Investor Presentation
September 2009
Page 86
BMW Group Treasury.
Development of BMW 5-year CDS. Source: Reuters Credit Views
bps

87. BMW Group
Investor Presentation
September 2009
Page 87
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
20092010201120122013201420152016201720182019
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 th ings to reduce financial liabilities from
other instruments (such as bank lines).
Maturities based on nominal values excluding derivatives.
Issuance ytd
EUR million

88. BMW Group
Investor Presentation
September 2009
Page 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

89. BMW Group
Investor Presentation
September 2009
Page 89
BMW Group Treasury.
ABS Volumes 1997-

2009 ytd.
BMW Group has actively used asset-backed funding over the last 12 years.
# of deals Volume 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
1997199819992000200120022003200420052006200720082009
USA
GB
Japan
Australia
South Africa
Germany
Canada
# Deals

90. BMW Group
Investor Presentation
September 2009
Page 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

91. BMW Group
Investor Presentation
September 2009
Page 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

92. BMW Group
Investor Presentation
September 2009
Page 92
BMW Group Treasury.
Recent funding activity.
ABS
ƒLease TALF Deal, USD 2bn, settlement 9 June 2009
ƒLoan Conduit Deal, JPY 25bn, settlement 4 May 2009
ƒLoan Conduit Deal, AUD 350mn, settlement 7 July 2009
Bonds
ƒEUR benchmark bond EUR 1.5bn, maturity 3.5 years, settlement 23 Jan. 2009
ƒEUR benchmark bond EUR 500mn, maturity 5 years, settlement 13 Feb. 2009
(tap of EUR 750mn benchmark, settlement 19 Nov. 2008)
ƒEUR benchmark bond EUR 1.25bn, maturity 3 years, settlement 2 March 2009
ƒEurodollar USD 400mn, maturity 2. 5 years, settlement 22 June 2009
Private
Placements
ƒOver EUR 3.0bn 2009 ytd.
ƒConstant issuance in different currencies
(EUR, JPY, SEK, USD)
Commercial
Paper
ƒUp to USD 8bn
ƒUSD 6.2bn outstanding as of August 31, 2009
Certificate of
Indebtedness
(Schuldschein)
ƒEUR 2bn, private transaction, maturity 2 years,
settlement 15 Dec. 2008
ƒEUR 145mn 2009 ytd.