At today’s BMW Annual General Meeting in Munich, Dr. Norbert Reithofer as Chairman of the Board of Management of BMW AG. Reason enough to say goodbye to the shareholders with a detailed speech and to take stock. In his speech, the outgoing BMW boss takes a detailed look at developments in recent years and also underlines the ambitious goals for the future.
In the nearly nine years that Dr. Norbert Reithofer was at the helm of the BMW Group, the company was able to increase its worldwide sales from under 1.4 to over 2.1 million units, while sales rose in the same period from under 50 to over 75 billion euros.
In 2015, the BMW Group wants to keep its model range young with 15 new or revised models, in addition to some vehicles that have already been launched, these include the new BMW X1 F48, the BMW 7 Series G11 and the MINI Clubman F54.
Dr. Norbert Reithofer in the wording:
Ladies and gentlemen,
Your company is ready for the future.
BMW – that’s tradition. It’s a culture of its own. These are reliable values. Mobility is our business model, our passion, our passion. We measure ourselves against the expectations of our customers. This is how we create added value and how we secure 116,000 jobs.
Even more: we act. And so we change ourselves. Yes, we change the world. We see ourselves as part of the society in which we live and work. Cohesion as we live it – that is what our complex world needs. Cohesion requires responsibility and responsibility is the basis of our business success. Committed to responsibility. Cohesion and responsibility – that’s what I stand for. That is firmly established belief.
Your company will be 100 years old on March 7, 2016 – a milestone. 100 years of long-term corporate philosophy. Our story is the foundation. We build our future on this. Experience gives us confidence. We know our strengths. This gives us strength and confidence for future decisions.
We are proud of the successes of the past. But in the here and now, only one thing has priority: the future of the BMW Group. We always look ahead. We use our anniversary as a stepping stone into the future.
Sustainable companies – question their own actions and break new ground. You implement innovations in the interests of customers. You are competitive today for tomorrow.
I am standing in front of you today for the ninth time at our Annual General Meeting. Every appearance was a privilege and an honor. Routine is something else. I have always seen it as an opportunity to show you the performance and prospects of your company. We steered it through difficult waters. You have supported our decisions and have always stood by our side, dear shareholders. We know each other well enough. They know: we keep what we promise. This is BMW.
At my first appearance in 2007, I made you a promise: We will make sure that your investment pays off – at all times. We acted. We made choices. And we did it deliberately.
- Strategy Number ONE is our guard rail until 2020.
- With Efficient Dynamics and BMW i we are realigning corporate technology. Our goal is sustainable mobility.
- During the economic and financial crisis, we were in the black and paid you a dividend.
- Since then, the BMW Group has grown profitably – year after year.
We acted and made decisions. It pays off.
- Your company is performing better than ever.
- Your money is well invested with the BMW Group.
- We can and will continue to justify your trust.
This is not a sure-fire success. Our company is facing new challenges – just like the entire automotive industry. We deal with this every day. We prepare for this in everyday business life. For me it always applies: permanent change is the new constant. We continue on our way – the BMW way. Please accompany us further on this path, dear shareholders.
With this in mind – to you here in the Olympiahalle and to the audience on the Internet: Welcome to the 95th Annual General Meeting of BMW AG!
Dear shareholders and shareholder representatives, dear employees, dear guests,
these are my topics today:
- The review of 2014.
- The outlook for 2015.
- Looking ahead: 100 years of the BMW Group in 2016.
We think and act long-term.
With the Number ONE strategy, the group developed dynamically from 2007 to 2014.
- Sales have increased by over 40 percent.
- Sales increased by 44 percent.
- The pre-tax profit more than doubled.
- BMW ordinary shares performed five times better than the DAX.
The BMW Group has reached a new level of performance.
For the 2014 financial year we set ourselves:
- Sales of over two million vehicles.
- Consolidated earnings before taxes that are well above the previous year’s figure.
- An EBIT margin in the automotive segment in the range of 8 to 10 percent.
Today we take stock. In terms of sales, revenue and earnings in the Group, we have
new records achieved. 2014 is the fifth record year in a row for the BMW Group.
We owe that to our customers. The customer alone decides. He is the focus for us, we owe our success to him. The BMW Group has been at the forefront of the global premium segment – for a decade.
In 2014, for the first time in a year, we delivered more than two million automobiles.
The sales figures in detail:
- BMW Group: Over 2.1 million vehicles.
- BMW: Over 1.8 million automobiles.
- MINI: Over 302,000 automobiles.
- Rolls-Royce: Exactly 4,063 vehicles.
- BMW Motorrad: Over 123,000 motorcycles.
BMW, Rolls-Royce and BMW Motorrad have each achieved new highs. MINI has almost reached the previous year’s level – despite the model change.
Our three premium brands – BMW, MINI and Rolls-Royce – have one characteristic in common: They are coveted – that is our recipe for success. Our success is based on this brand strength and desire.
Here are our financial metrics for 2014:
- Group turnover: 80 billion euros. We generated an increase of 5.7 percent compared to the previous year in all operating segments.
- Consolidated profit before taxes: 8.7 billion euros. With a plus of 10.3 percent, our result has increased significantly compared to the previous year – as announced.
- Annual surplus: 5.8 billion euros. This value increased by 9.2 percent compared to 2013.
- The EBIT margin in the Automotive segment: 9.6 percent. It is still at the upper end of our target corridor of 8 to 10 percent.
- With more than 1.7 billion euros, our financial services business again made a significant contribution to the pre-tax profit of the BMW Group. This segment is profitable and dynamic. It benefits from the increasing global demand for financial services products. We continue to strive for a balance between leasing and financing.
- Our motorcycle segment contributed 107 million euros to the overall result.
If you want to grow, you have to be financially flexible. At the end of 2014, our liquidity was over 11 billion euros. Your company has the best credit rating of all European automobile manufacturers.
In 2014 the BMW Group continued its successful development. You are our shareholders. You have a right to be part of it. The Board of Management and the Supervisory Board propose to you today that you use BMW AG’s retained earnings for 2014 to distribute a dividend.
- 2.90 euros per common share.
- 2.92 euros per preferred share.
That’s the highest dividend the company has ever paid. The dividend total is 1.9 billion euros. This means that almost 33 percent of the annual profit goes to you. We are aiming for a payout ratio of 30 to 40 percent. In addition to the dividend, you as shareholders benefit from the price increases in BMW shares.
The BMW trunks have risen sharply in recent years.
- In 2014 they increased by a further 5.3 percent.
- In a 10-year review, BMW shares have gained more than 140 percent.
- In a 20-year review it has increased sevenfold.
This corresponds to an average annual growth rate of our share price of almost 11 percent during this period. This year the BMW share already reached a new all-time high of over 123 euros. The share is currently up again by around 18 percent compared to the end of 2014.
We confidently state that the positive development of the BMW share reflects the dynamic development of the company. Investors believe in us. You trust us to do something in the future too.
Your company is successful. Our employees also benefit from this. This is what BMW has stood for for more than 40 years. Employees are additionally motivated if they see themselves as part of a community that also honors top performance. Added value increases through appreciation. 2014 was the best financial year in our company’s history so far, so our employees did their best in 2014. All permanent employees in Germany receive a profit-sharing bonus. It’s the highest so far. In addition, many employees benefit from the dividend through the employee share program.
On behalf of the Executive Board and in the presence of our shareholders, I say to all of our employees worldwide: Thank you very much for your great commitment in 2014!
Businesses are made by people. We are successful in the global world because we are a global company through and through. People with more than 100 nationalities work for the BMW Group in Germany alone. The world is at home at BMW. That is why we in the BMW Group live the “global village”. Different skills, different cultures and ways of thinking – all of this enriches us. It strengthens the company’s reputation. Yes, we live diversity. That is why we better understand what moves our customers around the world.
What matters is what unites us all at the BMW Group. We identify ourselves – with the company, our brands and products.
Diversity makes us strong, creative and self-confident. That is why we invest in our employees worldwide. We invested 335 million euros in training and further education in 2014 alone. That’s a pound. In a year we spend about as much money as a larger German university. Since 2007, more than 1.8 billion euros have flowed into training and further education.
Everyone wins: the company. The employees. Society.
Young top performers nowadays very consciously decide where to apply and in which industry they see potential. Your company is considered the best employer in many rankings, for example in the current study by “XING”. The research institute "trendence" also surveyed 40,000 students in Germany. BMW is the most popular employer among young economists. BMW is also the first choice as a trainer. In September 2014, more than 1,500 trainees started their careers with us. 1,200 of them in Germany. The BMW Group is training a total of 4,595 young people. That is 150 junior employees more than in the previous year.
We shape technological change on our own. Our innovative strength is in demand more than ever – in all fields of individual mobility.
We hire new employees, but with a sense of proportion. At the end of 2014, 5,973 more employees worked for our company worldwide than at the end of 2013. Here in Germany, we have hired many temporary workers on a permanent basis. Youth unemployment is dramatic in many European countries. That’s why we wanted to set an example. Young professionals and graduates from Spain worked for the BMW Group for one year. We wanted to increase their professional opportunities. Today almost everyone has a permanent employment contract – with us or with another company. This year we are continuing the program.
- We invest in our people.
- We train young people.
- We employ targeted specialists.
This is how we live up to our responsibility – in society and for the common good.
Our investments also require the support of our shareholders. Premium lives from innovation. Innovations require investments. Our spending on research and development remains at a high level. In 2014 it was over 4.5 billion euros. The F&E-quota was 5.7 percent of sales. As our sales increase, our F decreases accordingly&E quota. We continue to set ourselves a target corridor of 5 to 5.5 percent of sales. In 2014, our investments totaled around 6.1 billion euros. Here the corresponding quota is 7.6 percent of sales. Our target value remains below 7 percent.
We invest in our locations, new products and technologies, including innovative drive concepts, lightweight construction and the networking of vehicles with their environment.
In 2014 we significantly renewed our product range: 16 new models and model revisions. Never before have there been more new models in a year.
Our successful Efficient Dynamics technology package also includes the new generation of engines. We use a kit. It includes 3-, 4- and 6-cylinder drives with reduced weight. That increases our efficiency.
At the same time, we are further reducing the CO2 emissions of our new vehicle fleet. Our fleet value in Europe currently averages 130 grams of CO2 per kilometer. It’s easy to forget where we come from: More than 210 grams of CO2 per km. And that was only a few years ago. All BMW model series are electrified. With each series, the customer has a choice: efficient combustion engine or hybrid drive.
Our goal is clearly formulated: by 2020, we want to halve the emissions of our fleet in Europe compared to 1995. Less CO2 in the fleet and resource-saving production go hand in hand.
An example: We are using less and less electricity in production. In 2014 we broke through an important mark: for the first time, more than half of the electrical energy we purchase worldwide came from renewable sources. The future of mobility at BMW is sustainable – that is and will remain our conviction.
Two trends are irreversible:
- Progressive urbanization with all its consequences for life and mobility in large metropolises.
- The political guidelines for climate protection – in the EU, the USA, China and Japan.
We have technological answers – with Efficient Dynamics, hybridization and electric mobility.
Last year I introduced you to the BMW i8. An extraordinary vehicle. Customers experience that too. You order significantly more BMW i8s than we manufacture. Twice as many i8s now roll off the assembly line at the Leipzig plant. From the market launch in June 2014 to the end of April 2015, we sold around 3,500 vehicles. Sustainability and emotion inspire each other. The i8 is the best example.
Our BMW i3 has shaken up the market for electric vehicles: We delivered more than 16,000 i3 vehicles in 2014.
This means that the BMW i3 has already ranks third among the world’s electric vehicles in its first full year. From January to April 2015, over 6,500 customers opted for a BMW i3. Most of them – and this is an important aspect – are new customers for us. 80 percent of i3 buyers have not yet driven a BMW.
In total, we have sold over 27,000 BMW i vehicles to date. BMW i is present in 32 countries today. Of course, we also wish that the development of electromobility would advance faster. We have made the experience: Customers choose electric cars wherever politicians set sensible incentives. This applies to Norway, for example. Almost a quarter of all BMWs we sold in Norway in 2014 were promptly BMW i3 vehicles. Here in Germany, the share of the i3 in total BMW sales was less than one percent last year. The automobile manufacturers here in Germany – the land of engineers and innovations – have delivered.
Now it is the turn of politics. It is up to you how quickly e-mobility advances. After all, Germany claims to be a role model worldwide when it comes to sustainable technologies. We also support electromobility by setting up a charging infrastructure in Europe, China and the USA. BMW i has expanded the range of the BMW brand in keeping with the times.
BMW M is also part of BMW – and is gaining more and more fans. Never before have more customers opted for a high-performance BMW M model than in 2014. BMW M GmbH has delivered over 45,000 BMW M and M Performance automobiles. An increase of 44 percent compared to the previous year.
BMW i and BMW M – both support the radiance of our core brand BMW from different perspectives. Sheer driving pleasure works with BMW, BMW i and BMW M. That’s what counts.
Ladies and gentlemen,
So to the second topic: the outlook for 2015.
We set ambitious goals. This is what drives us; we keep our promises.
This also applies to our goals for the 2015 financial year.
- We want to grow solidly in terms of sales and Group earnings before taxes. That would be a new record for the BMW Group.
- We want to remain the world’s leading manufacturer of premium vehicles.
- In terms of the EBIT margin in the Automotive segment, we want to stay within the target range of 8 to 10 percent. Sales in the automotive segment are expected to increase significantly.
Our economic environment is not very stable. Solid planning today can be wasted tomorrow. Our forecasts always assume that the economic and political framework conditions are robust. They assume that global trade will not be disrupted by unforeseeable events.
For 2015 we see opportunities and risks. The world economy is growing moderately. The global automotive market is growing. The global premium segment is also growing. More automobile sales are expected in the US and Europe.
On the other hand – the uncertainty in important markets:
- New registrations continue to decline in Japan, Russia and Brazil.
- In China, economic momentum is weakening. The government is targeting GDP growth of 7 percent in 2015. She speaks of "normalization". This is understandable after the strong growth in recent years. Automobile sales have also risen sharply year after year. Today China is the largest automobile market in the world. Now the consolidation follows with lower growth rates. This development is normal. We have taken this into account in our planning. Nevertheless, China still offers potential. We are strengthening our local production at the Shenyang location. In future, we will be producing six BMW models on site for our Chinese customers. We extended our joint venture with Brilliance early on until 2028.
We have always avoided one-sided dependencies; our approach is global. Every market is important.
- We sell our vehicles in 140 countries.
- 30 locations in 14 countries belong to our production network.
- Our research and innovation network comprises 12 locations in 5 countries.
It pays off: With our strategy, we balance out imbalances in the markets. With our flexible production network, we can react quickly to local market fluctuations. With a global focus on design and research, we are continuing to develop our brands in a contemporary way. Thanks to their desire, we can also sell vehicles in other markets at short notice.
All of this helps ensure that our sales are evenly distributed across the major regions of the world: Europe – Asia – America. That remains our strength in competition.
We are systematically expanding our global production network. Our focus is on the American continent.
- The new plant in Brazil started production in autumn 2014. Brazil is the fourth largest automobile market in the world.
- Preparations for our new plant begin in Mexico. This means that we will have a second pillar in the NAFTA region from 2019. We are also optimizing our currency equalization.
- In the USA we are significantly expanding the Spartanburg plant. In 2016 it will be the largest plant in our production network. I directed this work. Americans are positively open to innovation. That always impressed me. It goes without saying that humans and robots have recently been standing side by side on the assembly line. This is Spartanburg. This new form of cooperation in the context of Industry 4.0 relieves our employees of heavy physical work. The health of our employees is important to us.
These examples make it clear that we see a lot of potential in America. A free trade agreement between the EU and the USA would bring additional growth.
We take advantage of opportunities – in the long term as well as in the medium and short term.
So for the 2015 financial year.
The first quarter is over. We are on course.
- We achieved new records for unit sales, sales and Group earnings before taxes.
- At 9.5 percent, the EBIT margin in the Automotive segment is still at the upper end of our profitability corridor of 8 to 10 percent.
Premium has one claim: to inspire customers and to exceed their expectations. Make yourself a picture! Experience the future of our BMW Group!
Here are the new models for 2015.
- The revised BMW 1 Series has been available since March. This also includes the new CO2 champion from BMW – the 116d Efficient Dynamics. With its 3-cylinder engine, it consumes 3.4 liters per 100 km with emissions of 89 grams of CO2 per km.
- The new BMW 2 Series Convertible started just in time for the convertible season.
- The BMW 2 Series Gran Tourer is the first highly functional BMW with up to seven seats. This type of vehicle has the highest growth rates in the compact class. There was no premium offer so far. As with the BMW 2 Series Active Tourer, with this vehicle we want to attract new customers to BMW, especially families.
- The model revision of the BMW 3 Series had its world premiere a few days ago. The new 3 Series Sedan is here in front of the stage. The 3 Series has been the foundation of our success for 40 years. A hybrid version will follow next year.
- We have also revised our BMW 6 Series: Convertible, Coupe, Gran Coupe and the M6 models.
- The BMW X5 M and X6 M are already on sale.
- Here in front of the stage you can see the BMW X5. In case you are wondering: Why does the Reithofer show us a model that has been known for a long time? It is the first BMW X5 plug-in hybrid. In the current EU test cycle, it consumes 3.3 liters of petrol per 100 km, 15.3 kWh of electricity and emits 77 g of CO2 per km. This is progress. Our BMW X family is very popular. In the hybrid version, it is even more efficient.
- Our most important model this year is the new BMW 7 Series. It’s the sixth generation. We focus on luxury. But we are reinterpreting automotive luxury. The new 7 series creates a perfect balance between the demands of our customers, maximum comfort and innovations. There has always been luxury, ladies and gentlemen. And it will always be there. Only our ideas about it change over time. And we stand for change.
Our MINI brand has a very young portfolio.
The new MINI 3-door was launched in spring 2014. The first MINI Hatch with 5 doors followed in autumn. Many customers have been waiting for this MINI. MINI is on the up. Since October 2014, sales have been increasing month by month. This year we are introducing the new MINI Clubman.
And that’s where MINI’s journey goes: in future, MINI will concentrate on five models with their own character. MINI will also offer electrified models.
Our Rolls-Royce brand has been making history in the absolute luxury segment since 2003. The phantom was often copied and never matched. The Ghost has attracted new customers for the brand. The Wraith combines automotive luxury with your own driving experience behind the wheel. Now Rolls-Royce is breaking new ground again. In future, customers will also be able to enjoy the highest levels of luxury and effortless driving comfort off the road.
Some people prefer to travel on two wheels. BMW Motorrad offers an attractive product range for this. The best-selling motorcycle last year was the large travel enduro R 1200 GS. The R nineT also got off to a successful start. Our anniversary roadster is the first motorcycle from BMW that is offered in different versions and that customers can design according to their ideas. That works. The R nineT immediately became our third most powerful model.
This year five new motorcycles will be launched.
- The new BMW S 1000 RR has been revised.
- With the BMW R 1200 R and the R 1200 RS, we are bringing two new boxer models.
- The second generation of the BMW F 800 R is coming.
- The new S 1000 XR impresses sporty motorcyclists.
Our motorcycle business is growing profitably. Germany is our strongest single market. And BMW leads the segment here. In the coming years we will continue to expand BMW Motorrad. This year we are launching a total of 20 new models and model updates for automobiles and motorcycles. We inspire customers worldwide. And I hope you like our new products, too, ladies and gentlemen.
We are also expanding our services. In 2007 we formulated a vision: in 2020 we will be the leading provider of premium products and premium services for individual mobility. A directional decision: we are already more than just a manufacturer of vehicles. In addition, we offer customers comprehensive services. Here too we want to be the leader.
Intelligent mobility services have been part of our strategy from the start. DriveNow is our car sharing offer together with Sixt. It is already profitable in Germany. Around 450,000 members are registered, mostly young people. About 20 more cities worldwide are planned. The BMW i3 will also be integrated into the fleet – in London, San Francisco, Hamburg, Berlin and Munich.
The automobile has long since entered the digital age. BMW Connected Drive has been around for almost two decades. Networking shapes our society. And we supplement the joy of driving with the "joy of connected driving". Premium manufacturers in particular have to differentiate themselves through digitization.
- On the one hand, this concerns the very personal networking of driver and occupant.
- On the other hand, this applies to driver assistance systems. Today, our customers expect the digital world to be fully available to them in the car.
We develop intelligent assistance systems with the goal: More safety and more comfort for the driver.
- The driver will soon be able to control certain functions in the car with a hand movement. For example, calls can be accepted or rejected with a hand signal.
- The new 360 degree collision avoidance reliably detects obstacles and brakes independently. Step by step we are approaching accident-free driving.
There is concern that technology will soon take full control. Customers’ concerns are our concerns. With us, the driver decides: When does he want to enjoy driving pleasure? When does it hand over to the technology in the vehicle?
Technical systems offer added value in certain situations. Think of the full parking garage in downtown Munich on Saturday afternoon: you get out. The car looks for a free parking space. When you come back, use your smartwatch to order your car back to the starting point.
Our vehicles will be your chauffeur in the future. This is not a dream of the future. We’re not talking about highly automated driving. We do it. We are technically ready: Our vehicles can drive highly automated – in the parking garage and also on the racetrack. However, politics is responsible for the legal basis.
- It is a question of liability. What are the responsibilities of drivers, manufacturers, insurance companies and all types of service providers?
- It’s about the question of data protection. Which data go in and out of the car and under which conditions?
All of these discussions are still at the very beginning – in Brussels and Berlin, in Washington, Beijing and Tokyo.
Our position at the BMW Group is clear:
- We relieve the driver in specific situations.
- We increase its security.
- And we guarantee his privacy.
Based on these premises, we are consistently developing the joy of driving. We do this responsibly – in the interests of our customers.
So to the last topic for today: Looking ahead to 2016.
BMW is a joint effort. At the BMW Group, the focus is on the products, our customers and of course the company. We stick together. That makes us strong. 55 years ago Herbert Quandt gave us a future with his decision. That still shapes our company today. We look ahead and tackle it.
Your company is well positioned.
- We make long-term decisions independently.
- We have a solid financial base.
- We own premium brands known worldwide. Fortune Magazine has once again selected the BMW Group as the only European company among the top 15 of the 500 most important companies in the world.
This is our foundation on which we build the future. As a recognized global company. We create real value. We produce. This is modern industrial production. Where we are, we add value, we pay taxes. Germany lives from such companies.
Every time has its challenges. Every time needs the right answers. Sometimes this requires foresight, always entrepreneurial courage and the ability to anticipate new trends at all times. The future always belongs to the next generation. There is also the BMW way.
We made the change at the top early on – noiselessly. This is BMW. BMW was my home for 28 years. For 28 years I was able to help shape the future of the BMW Group. Almost nine years at the helm of the company. It has been an honor for me to serve this company. Today is a piece of farewell. And of course there is a little sadness about it, but most of all, it’s time to say thank you.
- I thank our customers worldwide. Without them we wouldn’t be who we are.
- I thank all suppliers and partners. They are part of our global success story.
- I thank our dealers. You are the customer’s dedicated face.
- My special thanks go to you, Professor Milberg, for the good cooperation, my colleagues on the Board of Management and all employees. Every CEO is only as good as his team. And this team is fantastic. I know what I’m talking about.
Permanent change is the new constant. That affects the company, the technology and the people.
There is still a lot to do – for my successor and the entire team. It’s in the nature of our business. I am sure: the BMW Group will continue on its successful path.
Above all, I would like to thank you, dear shareholders. Your trust has been important to me for almost nine years.
This company was, is and will remain unique.
This is BMW. Your business!