Ladies and Gentlemen,
100 years of Bayerische Motoren Werke – a century of bold
decision-making, passion and pioneering spirit – a history built by
exceptional people.
100 years of Bayerische Motoren Werke – an achievement we owe, first
and foremost, to our customers, whose decision to buy our products
lays the foundation for our success. I would therefore like to take
this opportunity to thank all our BMW Group customers worldwide!
100 years of Bayerische Motoren Werke – more than anything, this is
the achievement of our employees – from the date the company was
founded in 1916 to the present day. In this, our centenary year, I
would also like to thank all our current and former employees. Your
hard work and dedication have made the BMW Group what it is today. We
have been inspiring people and shaping the history of mobility for the
past 100 years. I think that deserves a round of applause. Many of
those employees are here with us today. I have been with this company
myself for 24 years – so I know that our employees always give their
very best – because:
- A passion for mobility is part of who they are.
- They identify with our vehicles and services.
- They create a little piece of the future every single day.
On 7 March, our production lines stood still, as nearly all our
locations joined us live for the official celebration in the
Olympiahalle. You just saw the scenes for yourselves. It was a
fantastic occasion.
And the response was quite overwhelming: 50,000 people outside of the
company watched the live broadcast. We also reached 13 million users
through social media, such as Facebook and Twitter. We did not want it
to be just a showcase of our past achievements. That is history. But a
company’s future is determined by – profitable growth, its innovative
strength and competitiveness.
That requires consistency and flexibility: From a manufacturer of
aircraft engines and motorcycles to the world’s leading manufacturer
of premium automobiles to the leading provider of premium mobility and
premium services.
That is the BMW way: past, present and future. We are on the
threshold of a new era: a chance to seize the opportunities of
digitalisation to take individual mobility into a new era. Take a look
at our Vision Vehicle, the BMW VISION NEXT 100, which we presented in
Beijing last week. It provides a glimpse of “Sheer Driving Pleasure”
in the years beyond 2030 – sustainable, connected, and
highly-automated. This vehicle embodies our philosophy perfectly: We
are naturally proud of our tradition – but our sights are set firmly
on the road ahead.
Our thinking and actions are geared towards the long term. That is
something we have in common with you, our shareholders. That is the
reason you invest in this company – and give us the support we need to
implement change. In this way, you also contribute to the success of
the company. Together, we can be proud of those 100 years of
fortitude, passion and pioneering spirit.
On that note, I would like to welcome everyone joining us via
internet, as well as everyone here in the Olympiahalle: A warm welcome
to the 96th Annual General Meeting of BMW AG!
Dear Shareholders and Shareholder Representatives,
Customers,
Employees,
Honoured guests!
I can assure you: your further support of the BMW Group is well worthwhile.
- 2015 was our sixth consecutive record year.
- In 2016, we will also be targeting new all-time highs.
- With our Strategy NUMBER ONE NEXT we are setting the course
for the coming years. - Of course, our horizon extends much farther than that, to “The
next 100 years”.
We have plenty of ideas for the future of this company.
The areas I would like to focus on today are:
- A review of 2015 and our outlook for 2016, and
- Our Strategy NUMBER ONE NEXT.
Ladies and Gentlemen,
2015 was a successful year for the BMW Group. You are all familiar
with the goals we set ourselves:
- Solid growth in both sales and Group earnings before tax.
- The leading position in the premium segment worldwide.
- An EBIT margin in the range between 8 to 10 per cent in the
Automotive segment.
Our environment was characterised by intense competition, uneven
markets and the debate over diesel technology. At the BMW Group, we
deliver on our promises. We fulfilled our goals. Sales, pre-tax
earnings and net profit for the year all reached new all-time highs.
Here are the key financials compared with the previous year:
- Group earnings of over 92 billion euros – almost 15 per cent higher.
- Profit before tax of 9.2 billion euros – an increase of 5.9 per cent.
- Net profit of around 6.4 billion euros – a 10.0 per cent increase.
- EBIT margin in the Automotive segment of 9.2 per cent – and
therefore within our target range. - Financial Services segment: 1.9 billion euros – an increase of
14.6 per cent in earnings before tax, which means the segment
remains profitable. - Motorcycles segment: 179 million euros – an increase of 67 per
cent in pre-tax earnings over the previous year.
One thing is certain: We have the resources to invest in our own
future. At the end of 2015, our liquidity totalled more than 11
billion euros. In fact, your company has the highest credit rating of
any automotive manufacturer in Europe.
This financial strength comes from a powerful source: Our strong and
desirable premium brands. We delivered a total of 2.24 million
vehicles to customers last year. This is an increase of 6.1 per cent
over the previous year – and a new record. Our BMW, MINI and BMW
Motorrad brands all posted new all-time highs; while Rolls-Royce
continues to dominate its segment.
You – our shareholders – stand by us, and therefore share in the
company’s success. For 2015, the Board of Management and the
Supervisory Board propose to use the unappropriated profit of BMW AG
to issue a dividend. In the BMW Group’s centenary year, you will
receive the highest dividend in the history of the company:
- 3.20 euros per share of common stock
- 3.22 euros per share of preferred stock
That is 30 cents more than last year. The dividend rate has therefore
increased by more than 10 per cent. For the first time, we are paying
out more than two billion euros in dividends.
This means that almost 33 per cent of our net profit for the year
will be distributed to you, our shareholders. The dividend yield for
common stock stands at just over four per cent and just under five per
cent for preferred stock.
BMW share performance is also relevant to you:
- In 2015, the BMW share price rose by 8.8 per cent.
- Over the past 10 years, it has gained over 70 per cent.
- And over a 20-year period, it has increased more than six-fold.
Since the start of the year, the BMW share price has decreased by
over 20 per cent from its level at the end of 2015. The same principle
applies to our share price: We do not focus on quarterly results. The
BMW Group is successful over the long term because our employees are
highly motivated.
Of course, they also benefit when the company performs well. That is
what we call profit sharing. All our permanent employees in Germany
will receive a profit-related bonus for 2015 – the highest we have
ever paid. Our employees have earned it. It shows our appreciation for
their efforts. And I also believe it is an important aspect of social fairness.
The company aims to continue its growth – and we are strengthening
and enabling our team to do so. We spent more than 350 million euros
on training and qualification in 2015. 1,500 young people started an
apprenticeship with us in 2015. All in all, the BMW Group is currently
training 4,700 young people – with new training facilities in Brazil,
Mexico and Thailand. We hired more than 5,900 new employees last year.
Today, our company employs almost a third more people than it did just
five years ago. By the end of 2015, our headcount in Germany had
increased by more than 4,300 compared with the previous year. Many of
them were former temporary workers.
Your company is viewed as an attractive employer – especially in the
age of digitalisation. The ranking compiled by the Universum agency is
quite clear:
First place for the BMW Group across all industries in Germany. First
place among all automotive companies worldwide.
Young people are looking for a global career – and the BMW Group is
truly global. We serve customers in 140 countries worldwide. We
operate 31 production sites in 14 countries. Our workforce reflects
this world. More than 100 nationalities work here at our Munich
location alone. Diversity is a source of enrichment for our company –
and essential to maintaining our competitiveness.
But globalisation must not be a one-way street.
That is one of the reasons we launched our “WORK HERE” initiative,
which enables young refugees to spend several weeks at the company
getting to know the world of work – each of them with their own mentor
for support. A community depends on the contribution of each and every
person. That is the key to successful integration.
Ladies and Gentlemen,
“perspective” is the real currency of the economy. And that takes
investment. In 2015, research and development totalled almost 5.2
billion euros. This represents an increase of 13 per cent
year-on-year, with an RD ratio of 5.6 per cent of revenues. We
expect the ratio for 2016 to remain at the same high level as in 2015.
Last year, we reported total capital expenditure of 5.9 billion
euros, including capitalised development costs of around two billion
euros. However, effective immediately, these costs are no longer
included in the definition of our capex ratio. The target for this
ratio is now less than 5 per cent of revenues. In 2015, this ratio
would have stood at 4.2 per cent regarding the new definition. This
new capex target will ensure even greater transparency.
We are investing in both new and existing locations.
- Production has begun at our new engine plant and foundry in
Shenyang, China, which will build two additional models locally for
our Chinese customers: the BMW 2 Series Active Tourer and the
long-wheelbase version of the BMW X1. The X1 will also be available
as a plug-in hybrid variant within this year. China remains a market
with potential. - In Mexico, preparations for construction of our new plant in San
Luis Potosí are on track. - The US is home to our largest production location, Plant
Spartanburg, which has undergone major expansion to meet growing
demand for BMW X models. - Germany is, and will remain, our home base. We are strengthening
our production here and investing around 700 million euros in our
main plant in Munich up to 2018. We are also expanding our FIZ
Research and Development Centre. This demonstrates our strong
commitment to Germany as a manufacturing location – and to our roots.
Industrial manufacture of highly-complex products is the main
strength of the German automobile industry. Industry 4.0 will open up
new opportunities for lean processes and enhancing quality. There are
many jobs robots can perform with greater accuracy than humans to make
working on the assembly line easier. Our production already combines
the best of both worlds – the real and the virtual – in a
state-of-the-art network that is both efficient and highly flexible.
Innovative vehicles are rolling off the assembly lines at all our
plants – with the new BMW 7 Series leading the way. It is our
innovation driver. This vehicle showcases everything we are capable of
at BMW today.
Let me give you three examples:
- The body has a core made of carbon. This is the first time so many
different materials have been intelligently combined in a vehicle.
As a result, the 7 Series weighs up to 130 kilograms less than its
predecessor – which is quite a sensation in the luxury class. - The new 7 Series is also the first vehicle to offer
remote-controlled parking. It can drive itself into a garage or
parking space – using just one of its many automated driving
functions and assistance systems. - Gesture control is another unique new feature. So, if you want to
turn up the radio or answer the phone, all you have to do is move
your hand.
Modern luxury caters to the highest demands. The new 7 Series has
been widely acclaimed all over the world: In Germany, for example, it
won the Golden Steering Wheel in the luxury class. Modern luxury is
multifaceted. For the first time, the new 7 Series will be offered as
an M Performance Model – as requested by many of our customers – and
also available with a plug-in hybrid drive train. Here, in front of
the stage, you can see our 7 Series centenary model – one of only 100 built.
We are committed to meeting the European Union’s CO2 requirements
from 2020 onwards. Therefore, more and more of the vehicles in our
fleet come with a battery or plug-in hybrid drive train, building on
our electro-mobility experience with BMW i. In addition to the new 7
Series and the Long-Wheelbase version, the 2 Series, 3 Series and X5
will also be available as plug-in hybrids. These are not just
announcements: These five BMW models with plug-in hybrid drivetrain
will be in showrooms this summer. No other manufacturer offers its
customers this kind of variety – from the compact segment to the
luxury class. One name encompasses all our plug-in hybrids: BMW iPerformance.
The new MINI Cabrio has been available since March. Rolls-Royce also
has a new convertible, the Dawn – which is a real dream car. Our BMW
Motorcycles segment will continue its successful course. BMW is
currently the world’s most successful premium manufacturer of
motorcycles and maxi-scooters. Our offering is broader and more
individual than ever. The R NineT Scrambler – a true lifestyle
motorcycle – was launched in the spring. In the second half of the
year, we will be entering into the smaller-capacity segments below 500
cc for the first time.
Ladies and Gentlemen,
We have a young and attractive product line-up. Premium is our
promise. In our 2016 centenary year, we aim to sell more vehicles than
ever before. We are also targeting a new all-time high for Group
pre-tax earnings. Both figures are expected to be slightly higher than
last year. The EBIT margin in the Automotive segment should remain
within our target range of 8 to 10 per cent – assuming conditions
remain stable.
According to the forecasts for 2016:
- The global car market will show positive growth.
- The premium segment will expand, and
- New car registrations will increase in major sales regions.
All of this gives us reason for optimism. After the first quarter, we
are on track for the full year. We have always stressed that our
centenary is a springboard to the future. This brief film will give
you an idea of what lies ahead.
Ladies and Gentlemen,
Our world is changing: We are seizing this opportunity to transform
the BMW Group into a high-tech mobility company. And that brings me to
the second part of my speech: Our Strategy NUMBER ONE NEXT. Since
2007 and the introduction of Strategy Number ONE, your company has
grown to a new level. But our world continues to change and mobility
has reached a turning point.
The following areas will be
critical for us in the future:
- Digitalisation.
- Changing customer interfaces.
- Established and new competitors.
- Operational excellence in all that we do.
- Increasingly strict legal requirements.
- And, of course, volatility is a constant.
To this end, we have updated our Strategy Number ONE to include both
evolutionary and disruptive elements. Both are encompassed in the name
NUMBER ONE NEXT. We have set ourselves two specific target points:
2020 and 2025. The BMW Group is leading the way. The arrow symbolises
the current dynamic momentum. Everything is moving faster – and so are
we. This means we need to think much more outside the box.
Our new vision is to be Number ONE. We combine passion,
responsibility and success. We deliver the most emotional products and
most attractive services. We aim to offer the best customer experience
with the most desirable brands in the premium environment.
There are six reasons why we will stay NUMBER ONE:
- Brands and design.
- Products.
- Technologies.
- Customer experience and services.
- Digitalisation and
- Profitability.
I would like to say a few words about each.
First: brands and
design. We want to maintain our design leadership – especially
since design remains the number-one reason for buying premium. In the
future, we will assess our product line-up more from an overall Group perspective.
A Group-wide orchestration of all brands and models is the key to
overall success.
Second: products. We
will be expanding our product portfolio in all brands and all
segments, including:
- Market leadership for BMW in the upper segments.
- Expansion of the BMW M programme.
- Expansion of the BMW i family.
Our large models strengthen the premium positioning of the BMW brand.
We will be introducing an additional BMW model in the luxury class.
There will also be a strong new addition to the successful BMW X
line-up in 2018, with the X7. Rolls-Royce is also planning a new model
with the project name Cullinan. High demand and profitability converge
at BMW M, where sales have almost quadrupled since 2010. Now, we will
continue to expand BMW M, with new M and M Performance models,
including the M2 Coupé, which came out in April. The new M4 GTS was
released in a limited edition.
Sheer Driving Pleasure has many different faces – and the
high-performance sector has a lot of fans worldwide.
As you can see: We are growing in high-margin segments. This
evolution will ultimately continue to pay for revolution over the
coming years. Since 2013, revolution in automotive engineering has
been all about the electric BMW i3. So, let’s take a look at our
expansion of BMW i. We have sold more than 50,000 I vehicles to date.
But BMW i is more than just a car. BMW i attracts new customers to
BMW. BMW i provides access to electro-mobility: 20 per cent of our
DriveNow car-sharing fleet is already electric. I have always
emphasised that electro-mobility is a marathon, not a sprint. We are
further expanding the BMW i line-up. In just a few weeks, we will
offer an i3 with 50 per cent more battery capacity. In 2018, we will
launch a BMW i8 Roadster. This will be followed in 2021 by the BMW i
NEXT, our new innovation driver, with autonomous driving, digital
connectivity, intelligent lightweight design, a totally new interior
and ultimately bringing the next generation of electro-mobility to the road.
The discussion about e-mobility is an emotional one, but the decisive
factor is that we move things forward. I am certain that government
measures will prove effective. It is always better to make a decision
than to wait – and the purchase incentive will directly benefit
customers. There was never any doubt that we would participate. Such a
participation by the industry is unique worldwide. After all, the only
way to make progress is by manufacturers, customers, lawmakers and
society all working together.
The future belongs to sustainable mobility – which we regard as both
our duty and obligation. We will continue to chart our own course. It
is still unclear which drivetrain will prevail, but we are prepared:
We are optimising the combustion engine with Efficient Dynamics NEXT,
in which efficient diesel engines will continue to play an important
role. At the same time, we are electrifying our vehicles – focusing on
battery power for short distances and fuel cells for longer trips. In
this area, we are working closely with our partner, Toyota.
The technologies of
the future also include:
- Enhanced connectivity.
- The use of artificial intelligence, and
- The development of autonomous driving.
Our top priority is vehicle safety and the security of our customers’
personal data – something that distinguishes us from other providers.
People often ask me, when will we be driving autonomously? My answer
is: We already can. A BMW test vehicle autonomously completed a lap of
the Hockenheimring racetrack back in 2006. In 2011, a BMW drove on the
A9 autobahn from Munich towards Nuremberg – without any driver
intervention. It will be a while before these cars reach series
maturity – also because the proper legal framework for customers and
manufacturers has not yet been decided.
Our goal is already clearly-defined – to be Number ONE in autonomous
driving. However, with us, the customer always decides – because Sheer
Driving Pleasure also means: freedom to choose. When do I hand over
control? When do I drive myself? Autonomous driving depends on highly
accurate real-time maps and data. In 2015, we paved the way for this
when we joined with partner companies to acquire map service HERE from Nokia.
Digitalisation is a core element of our strategy. It is not only
changing driving, but also our business processes and the customer
experience. Mobility services have been part of our business model for
a long time.
Our car-sharing service DriveNow is growing in Europe, with almost
580,000 registered users by the end of 2015. We recently launched
ReachNow in the US, based on the DriveNow model. It got off to a great
start in Seattle – with around 13,000 members registering in the first
month alone.
Digitalisation helps
us satisfy customer needs. In the future, we want to provide
appropriate products and services to support our customers
throughout all stages of their lives.
All of these plans depend on one thing: profitability. We are
investing – in vehicles, technologies, locations and new business
segments. Nevertheless, we are still targeting an EBIT margin in the
Automotive segment of between 8 and 10 per cent. We are improving our
productivity and operational excellence through initiatives to enhance
profitability in all divisions. Our aim is to reduce both costs and complexity.
Ladies and Gentlemen,
Our strategy is only as strong as the commitment we put into it. We
have defined five
values to guide our cooperation within the company:
Responsibility, appreciation, transparency, trust and openness. These
values create a sound foundation for mastering future challenges and
provide orientation in a dynamic world.
In the automotive industry, a certain amount of valuable trust has
been lost. At the BMW Group, we have strong values. We do not
manipulate. Starting in 2017, fuel consumption and emissions will be
measured under realistic conditions. We have supported the
introduction of new test cycles from the very beginning. That is the
only way to rebuild trust.
Dear Shareholders,
100 years of Bayerische Motoren Werke – because we are constantly
evolving. Because we view change as an opportunity. Because
perspective is more important to us than the here and now.
We are shaping the mobility of the future. That is our vision. The
way I see it, it is ultimately about inspiring people and making their
mobility safer and more pleasant. It has been a year now since I took
over as Chairman of the Board of Management. It has been an exciting
and eventful year, and I would like to thank you all for the trust you
have placed in me.
An important milestone deserves to be celebrated. Visit our “100
Masterpieces” exhibition at the BMW Museum. And join us for the BMW
Festival from 9th to 11th September in the Olympiapark.
Our centenary year is the starting point for the BMW Group’s next 100
years. And you, our shareholders, are accompanying us on that path
into the future. Continue to stand at our side! I assure you: It will
be worth it.
Thank you for your attention.