Good Morning to all our shareholders!
A very warm welcome from BMW Welt in Munich.
The Annual General Meeting is the most important event of the year for us. It is where we answer to you – the owners of BMW AG – and show you where your company is headed.
All members of the Board of Management and almost all the Supervisory Board are here today – naturally in compliance with coronavirus restrictions – as Dr Reithofer mentioned – and as a sign of our respect for you.
BMW has a “WE” culture.
“WE” includes our customers; fans of BMW, MINI, Rolls-Royce and BMW Motorrad – all those who are the key to our success. Even in the year of the coronavirus, 2020, we delivered more than 2.3 million vehicles to customers. That was only 8.4 percent less than in 2019.
I would therefore like to start by thanking all our customers worldwide, who choose to buy our products and motivate us to do our very best.
“WE” also refers to our associates – who share dedication, discipline and a tremendous passion for mobility. Together, we proved in 2020 that BMW can turn crisis into progress. On behalf of the entire Board of Management, I would like to thank each and every associate. It can be challenging working on the assembly line, wearing a mask, shift after shift. I’m sure, if we were in the Olympiahalle, all our shareholders would be applauding right now to show their appreciation.
We stand together – because that is our culture.There might be tough discussions sometimes between company managers and employee representatives – but, at the end of the day, they always find the best solution for BMW. That is something we learned from the entrepreneur Herbert Quandt. He believed in BMW. He stepped in to rescue the company in 1959, laying the foundations for our success. This spirit lives on to this day. And we look forward to the next generation carrying it together with us into the future.
“WE” includes our retailers and suppliers, whom we consider our partners, in whom we place our trust and who trust us.
“WE” also means you, Ladies and Gentlemen, our shareholders.You take the long term view, just like we do. This is our 101st Annual General Meeting. You give us stability and support – and so it is only natural that you should also share in our success.
The Board of Management and Supervisory Board propose a dividend of 1.90 euros per share of common stock and 1.92 euros per share of preferred stock for the financial year 2020. This is lower than last year; however, we also earned less than last year: Our net profit totalled 1.25 billion euros. The most important factor is the payout ratio, which remains within our target range of 30 to 40 percent.
In good times and in bad, our dividend policy remains reliable – and this year is no different.
Our employees have certainly earned their profit-sharing bonus for 2020. For 45 years, that has been the case, provided we are successful together.
Our “WE culture” also carries over to society – a society that challenges us and asks:
How can you contribute to the common good?
How do your actions meet the needs of our global world?
You already know who we are:
We look far into the future and take bold, determined action in the here and now.
This is the BMW road to 2050 – and I would like to describe this road for you today.
The BMW Group is always focused on the future.
The most pressing question for you is: What are the prospects for your company in a changing environment?
That is why I would like to begin my speech by looking ahead.
Technology is BMW’s core expertise – and that is why our approach is tech-forward.
We meet the requirements set by the global community with technological innovations.
We believe in doing things our own way, like we have with Efficient Dynamics since 2007 and the BMW i3 since 2013. To this day, the i3 is the only electric car in the world with a sustainable 360-degree approach. Our electro-offensive is another example.
Our capacity for innovation is rooted in our ability to implement and scale highly complex requirements efficiently.
This physical industrialisation will retain its value to society even in the digital age.
These days, technological progress comes from integrated interaction between software, hardware and the customer experience – especially in our industry, because the car is one of the most complex and most sophisticated products there is.
Technology is the key to the future here.
One of the biggest and most important challenge for humanity currently is effective climate protection.
This is another area where we can – and will – make a difference by using technology in a targeted manner.
Climate neutrality unites people around the world; it touches our lives and mobilises us.
The world’s three largest markets, Europe, the US and China, along with other industrial nations, are firmly committed to climate neutrality.
The plans are ambitious, and the pace is getting faster.
At the BMW Group, we are already planning two steps ahead.
For us, AVOIDANCE comes before OFFSETTING.
We will use technology to avoid producing over 200 million tonnes of CO2 by 2030.
That is 20 times more than a city with over a million inhabitants, like Munich, emits in a year.
You know how ambitious BMW is.
Our goal for reducing our own CO2 emissions is more ambitious than merely limiting the increase in global temperature to two degrees; in some areas, it is even lower than the 1.5-degree goal.
We are only measuring ourselves against goals we can actually achieve. That is why we joined the Science-Based Targets Initiative.
Our approach is holistic:
RE:THINK. RE:DUCE. RE:USE. RE:CYCLE.
That is also our core idea for the IAA MOBILITY in September and the circular economy is our central theme.
How much energy do we consume?
How many resources?
What do we use them for?
Every business model will have to answer these questions in the future.
Humankind is still taking more than 100 billion tonnes of raw materials out of the earth every year: This cannot work as a long-term solution.
Our electric cars are designed to be sustainable. This will be the overall product of:
How efficiently we can create motion from electricity.
How consistently we can lower supply chain CO2 emissions.
How reliably we can avoid using so-called critical raw materials.
And how quickly and dramatically we can reduce our resource consumption as part of a circular economy.
The technology for this is extremely demanding, because a climate-friendly car is not created simply by using green power.
We are completely rethinking our vehicles, from the very first moment of their development.
The “NEUE KLASSE” is a radical new approach.
The name will be familiar to some of you, I’m sure.
BMW completely reinvented itself back in the early 60s.
BMW completely reinvented itself back in the early 60s.
Back then, our new mid-size models captured the spirit of the times – fresh, dynamic and progressive.
Today, although the circumstances are different, we are once again living through a time of change.
Now, by naming a whole vehicle generation the “NEUE KLASSE”, we are once again sending a clear signal for the future and for the coming decades.
The “NEUE KLASSE” we will launch in 2025 is a radically new product offering for the markets of the future.
Our combined know-how will go into this development, as well as massive investment.
Electric. Digital. Circular.
That is what characterises the “NEUE KLASSE”.
It will bring a variety of very different and surprising vehicles.
It represents a decisive step in the transformation of your company and includes a new vehicle architecture that is uncompromisingly tailored to electric drive trains.
Our battery cells are not only powerful, safe and cost-effective – they will also be recyclable.
The high-voltage battery is an important factor in the carbon footprint of any electric car.
The next generation will reduce the battery’s carbon footprint by half, compared to the current Gen5 technology.
One thing is clear: The situation in the global raw materials markets will remain very difficult.
That’s why we are tying the “NEUE KLASSE” to a new efficiency imperative.
Instead of precious primary materials, we are using secondary materials in our vehicles, such as recycled steel, plastics and aluminium.
I refer to this paradigm shift as “secondary first”.
We are creating a “NEUE KLASSE” for a new age and making your company sustainable.
By 2030, we will reduce our carbon footprint per vehicle by at least a third from 2019 levels.
This is not just an ambition or a vision; it is a binding target for us, because attitudes are reflected in behaviour.
Long before the US elections, your company agreed on ambitious climate goals with the State of California.
These are now being discussed with the Biden administration.
This is just one example of how we also act consistently in our second home – in accordance with our convictions.
There will be no sudden U-turns from BMW.
This year, for the first time and as the first company in our industry to do so, we are presenting an integrated report.
We are documenting our sustainable development and financial indicators with equal weighting in a single report; both are subject to the same degree of scrutiny.
Overall, our promise regarding e-mobility is: 80 – 40 – 20.
This is how we intend to reduce CO2 emissions per vehicle throughout the entire lifecycle by 2030:
In production, by another 80 percent.
During the use phase, by over 40 percent.
In the supply chain, by more than 20 percent.Although CO2 emissions would actually increase significantly here due to the ramp-up of e-mobility.
Therefore our entire approach is holistic and implemented in conjunction with our suppliers.Take a look for yourselves.
Sustainability is like a jigsaw puzzle.
Together, the individual pieces create the perfect picture:
From 2021, production at all our locations will be net carbon neutral.
Our suppliers are using only green power to produce battery cells.
We have signed supply contracts for sustainable lithium from South America.
Half the aluminium for our light metal foundry in Landshut is produced using solar electricity from the desert outside of Dubai.
At the same time, we are working with the WWF to protect the deep seas and have pledged not to source minerals from deep-sea mining.
As you can see:
Your company is taking responsible action to create completely sustainable mobility.
According to forecasts, e-mobility will continue to grow in leaps and bounds from 2025.
That is why we are electrifying BMW faster than ever and our production network is integrating electrification into the existing plant structure.
Take a look at our e-mobility roadmap up to 2030:
We aim to deliver more than 100,000 fully-electric vehicles to customers in 2021 and currently have five electric models ready to go.
2023 will be a tipping point for us, with 13 pure electric models on the roads that year. The number of vehicles is not the only criterion for us – so is the breadth of our product range: There will then be at least one fully-electric option for customers in 90 percent of segments – from the compact class to the ultra-luxury segment. In fact, there are certain markets where demand could shift entirely to e-mobility in the next few years. We expect this to happen and we are prepared for it. Our customers can find the right model in their preferred segment. This is the way for us to gain market share and stay profitable.
By the end of 2025, we will have delivered around two million electric vehicles to customers – ten times more than in 2020.
In 2030, more than half the vehicles we sell worldwide will be fully electric. Over the next ten years, we will release a total of about ten million pure electric vehicles onto the roads.
Your company is growing and entering a new electric dimension.
How quickly this happens will also depend on charging infrastructure. Everyone is asking how quickly it can be expanded: As far as I’m concerned, it can’t happen quickly enough.
Right now, sales of electric cars are growing four times faster than charging stations in Germany.
Individual manufacturers’ exclusive charging networks are of little use in this respect.
Our charging station joint venture Ionity can be used by anyone for high-power charging along motorways. By the end of the year, we will have set up 400 charging stations with over 1,500 charging points.
E-mobility is a project for the whole of society.
If we do it right, it should become a flagship project for a sustainable world – without having to make any sacrifices.
Let’s move on to the second topic:
We are laying the foundation for the BMW road to 2030 and beyond right now.
Under the challenging conditions of the coronavirus pandemic, we focused on two things:
Steering the company with maximum flexibility and precision.
Significantly upping the pace of our transformation.
You will remember that our last Annual General Meeting was held in the middle of the global lockdown, a time full of uncertainty.
But the BMW Group never really stood still.
I promised you then that we were working on the best-possible restart for your company – and, in fact, we did achieve our adjusted targets for 2020.
Group earnings before tax of 5.2 billion euros.
An EBIT margin in the Automotive Segment at the high end of our adjusted target range: It already reached 7.7 percent in the fourth quarter.
In addition to this, our global market share increased during the pandemic: from 2.9 percent in the first quarter of 2019 – i.e. before the pandemic, to 3.3 percent in the first quarter of 2021.
2020 gave our electrified vehicles a real boost.
Sales of fully-electric vehicles were up 13 percent and plug-in hybrids 40 percent – a combined increase of a third over the previous year.
Electrified vehicles accounted for 15 percent of our total European sales last year.We had, after all, made a binding commitment to meet the European Union’s CO2 goals for 2020.
We delivered on that promise, with fleet emissions of 99.1 g CO2 per kilometre. This means that we are significantly below the limit value assigned to us.
We will do the same again this year.
You might think this would make high-performance models less desirable, but BMW M GmbH had its best year ever in 2020.
BMW Motorrad presented 13 new models and reported the second-best sales result in its history.
We also made your company even leaner and more efficient in 2020.
Let me give you two examples:
We are reducing complexity, with fewer variants and fewer drive trains – keeping only those for which there is real demand: About half the current drive train variants will no longer be offered by 2025.
We are qualifying our team for the transition to e-mobility, developing expertise and reallocating competences. That is what transformation looks like at BMW. More than 5,000 colleagues took advantage of voluntary severance packages. At the same time, 4,000 new experts were hired in future areas of activity, heralding a phase of renewal.
We promised to take everyone along with us – and you can see this at our oldest plant in the heart of Munich: Our main plant is going electric and becoming state-of-the-art. Engine production is being relocated to make room for a new assembly.
To summarise the year 2020 for BMW:
We dealt successfully with the effects of the pandemic.
We achieved solid Group earnings.
Our global business model is robust.
We have learned once again that everything is constantly in motion.Many trends can be predicted; others cannot.
For this reason, we must continue to pull together in 2021.
We anticipate a solid year-on-year increase in automotive deliveries and aim to build on our pre-coronavirus level of around 2.5 million vehicles.
Our earnings before tax are expected to increase significantly.
The EBIT margin in the Automotive Segment should be at the high end of the 6 and 8 percent range.
We already got off to a good start:
Our customers bought more vehicles than ever before in a first quarter, especially in our largest market, China.
April was another strong month, with sales up more than 10 percent, compared to the comparable figure for the pre-coronavirus year 2019.
The Automotive Segment delivered an EBIT margin of 9.8 percent in the first quarter – back within our usual medium-term target range of 8 to 10 percent for the first time in ten quarters.
Our good start to the year is also reflected in the BMW share price, with the price of our common stock up around 15 percent since the start of the year alone (updated 7 May, +16.1%).
However, there is still a long way to go until the end of the year – and there are still a number of risks: the course of the coronavirus pandemic; difficulties with semiconductor supplies; the situation in the raw material markets.
Risks are part of our business – and companies aim to grow in every environment.
Global companies also face an additional challenge.
Whether they are progressive or established, they need to identify where markets are headed.
We are targeting the milestone of three million vehicles per year well before the end of the decade.
Our aim is to achieve profitable growth within our target range.
I am confident we will succeed because our product portfolio is perfectly suited to the current demographic and economic trends, with the technology to meet varied demand for different types of drive train.
Our intelligent vehicle architectures show how good your company is at integrating very different systems and requirements in an optimal manner.
Our plants produce different types of drive trains within a single structure.
BMW is global.
We serve 140 markets – and that’s why offer our customers exactly the drive trains they ask for – because we do not want to miss out on any market opportunities; because we are not on a consolidation course; and because we have the expertise to master the complexity.
This is referred to in tech jargon as “flexible exchangeability”.
The popular BMW X3 already comes with four drive train variants, including the fully-electric iX3 built in China.
The iX3 received the highest praise from German magazine Auto Motor und Sport, beating all its rivals in a comparative test.
Now, we are ramping things up with the BMW X1 model series, the 5 Series, 7 Series and the MINI Countryman – all with a choice of drive technologies.
Technology openness pays off – as shown by the fact that BMW is the global market leader in plug-in hybrids.
At the same time, we are conducting research into e-fuels and hydrogen.
Next year we will unveil a BMW X5 with a fuel cell drive. A small series of the BMW i Hydrogen NEXT will show how we envision the hydrogen drive train.
Ladies and Gentlemen,
Climate protection through technological innovations is not just an exciting area of activity – it is also a lot of joy.
When we, the Board of Management, get to test and rate our vehicles, we always try to be as neutral as possible.
But, truth be told, we are always absolutely thrilled by our products.
And I was very happy to see for myself that the media had big smiles on their faces last week when they tested our fully-electric BMW i4. Their feedback was extremely positive. We are delighted – but not surprised.
The i4 comes right from the heart of BMW.
Last year, it was the BMW i4 concept car standing here.
Today, it is the production model that will be available as of autumn, along with our innovation and technology flagship, the BMW iX, which really has it all: up to 600 km electric range, according to WLTP, short charging times and an experiential interior. It represents technology in its purest form – but you don’t see it and you don’t feel it, because everything is intuitive:
We call this shy tech.
Check it out for yourselves!
The i4 and iX offer the very best of electric driving pleasure.
They are also produced using domestic hydroelectric power from the Isar and Lech rivers.
Our new sales approach will come into effect with the launch of the i4 and iX.
Our Sales and Marketing team is digitalising the product and purchasing experience so mobility can be experienced in digital form: Configuration, ordering and delivery are all available digital and contact-free in more than 60 countries already.
It is our firm belief that digitalisation should serve humankind.
And because we all just expect it to work, without being too obvious, we are making the technology in our vehicles simple and precise. Shy tech is designed to inspire our customers and make their lives easier.
Together with Apple, we developed the BMW Digital Key, the first car key integrated directly into the iPhone.
In the BMW iX, the Digital Key Plus comes with ultra-wideband technology, making it even safer and more convenient.
The iX is a digital powerhouse, with our most powerful data processing system ever:
Our BMW Operating System 8 with 5G processes 20 times more data than before.
We developed it ourselves for the new BMW iDrive.
Our new operating system – the simplest and most secure in our industry – connects people with their cars.
Third-party services can be seamlessly integrated – whether they are from Apple, Google, Tencent or Spotify.
Our customers can be sure that their vehicles come with the very latest technology, which we update in real time over the air.Take a look for yourselves.
We are not only digitalising our vehicles, but also processes across the company and in production.
Take our partnership with NVIDIA, the global market leader in graphics cards:
Together, we are creating a virtual version of our production network.
Imagine each plant having a digital twin.
This makes our planning processes even more precise, faster and more efficient.
Standing here next to me is the fully-electric MINI.
Customers love it – and our order books are full.
It has been 20 years since the first MINI developed by BMW rolled off the production line at Plant Oxford.
Since then, we have built more than five million MINIs in the UK. I actually spent two years in charge of production in Oxford myself, so I am especially pleased to share with you today that MINI will be our first all-electric brand.
MINI is perfect for the city and for e-mobility. We will be releasing the last model with a combustion-engine variant in 2025.
By the early 2030s, the brand will be exclusively fully electric.
BMW Motorrad also went electric a long time ago.
Our Definition CE 04 is also perfect for the city.
Its world premiere will be in summer.
We will have a lot more to show you at the IAA MOBILITY.
The Rolls-Royce team is also hard at work on a fully-electric offering. Look out for that!
Dear Shareholders,
Electric. Digital. Sustainable. This is your company.
For a new age, when individual mobility will no longer be a climate factor.
We are making big plans:
Because we want to and because we can.
Because we have an obligation towards our customers – so they can stay mobile.
Because we want the investment made by you, our shareholders, to continue to be worthwhile.
And because we have an obligation towards the BMW Group, our unique company with emotional, globally desirable brands.
Our long-term perspective is our way of making an effective contribution to society.
We are looking far into the future and laying the foundation today for the BMW road to 2050.
We hope you will continue to stand by us. Stay healthy – and thank you for your attention.