Automotive   |   BMW AG
A N N U A L R E P O R T 2 0 1 9  
Power of Choice  
CONTENTS  
1
3
TO OUR SHAREHOLDERS  
GROUP FINANCIAL  
STATEMENTS  
Page  
Page  
4
8
BMW Group in Figures  
Report of the Supervisory Board  
Page 108 Income Statement  
Page 18 Statement of the Chairman of the  
Board of Management  
Page 108 Statement of Comprehensive Income  
Page 110 Balance Sheet  
Page 22 BMW AG Stock and Capital Markets in 2019  
Page 24 Financial Calendar  
Page 112 Cash Flow Statement  
Page 114 Statement of Changes in Equity  
Page 24 Contacts  
Page 116 Notes to the Group Financial Statements  
Page 116 Accounting Principles and Policies  
Page 133 Notes to the Income Statement  
Page 141 Notes to the Statement of Comprehensive Income  
Page 142 Notes to the Balance Sheet  
2
Page 164 Other Disclosures  
COMBINED  
Page 184 Segment Information  
MANAGEMENT REPORT  
Page 190 List of Investments at 31 December 2019  
Page 26 General Information and Group Profile  
Page 26 Organisation and Business Model  
Page 44 Management System  
4
Page 48 Report on Economic Position  
Page 48 General and Sector-specific Environment  
Page 52 Overall Assessment by Management  
Page 53 Comparison of Forecasts for 2019 with Actual Results in 2019  
Page 64 Review of Operations  
CORPORATE  
GOVERNANCE  
Page 200 Corporate Governance  
Page 76 Comments on Financial Statements of BMW AG  
(
Part of the Combined Management Report)  
Page 82 Report on Outlook, Risks and Opportunities  
Page 82 Outlook  
Page 200 Information on the Company’s Governing Constitution  
Page 201 Board of Management  
Page 88 Risks and Opportunities  
Page 201 Supervisory Board  
Page 202 Shareholders and Annual General Meeting  
Page 202 Declaration of Compliance  
Page 101 Internal Control System Relevant for Accounting and  
Financial Reporting Processes  
Page 202 Corporate Governance Statement  
Page 203 Members of the Board of Management  
Page 204 Members of the Supervisory Board  
Page 102 Disclosures Relevant for Takeovers and  
Explanatory Comments  
Page 207 Overview of Supervisory Board committees  
and their composition  
Page 208 Compliance and Human Rights in the BMW Group  
Page 211 Compensation Report  
(
Part of the Combined Management Report)  
Page 242 Glossary – Explanation of Key Figures  
Page 246 Responsibility Statement by the  
Company’s Legal Representatives  
Page 247 Independent Auditor’s Report  
5
OTHER INFORMATION  
Page 256 BMW Group Ten-year Comparison  
Our customers  
across the globe  
have different  
mobility demands.  
Ultimately, they  
decide for  
T A D A M I S A C H I K O  
J A P A N  
themselves what  
they want and  
desire. That’s the  
Power of Choice.  
R O B V A N R O O N  
N E T H E R L A N D S  
Discover the Power of Choice from Rob, Faith and  
Sachiko as well as our financial year 2019 in our  
digital Annual Report.  
F A I T H M K H O M B E  
S O U T H A F R I C A  
annualreport.bmwgroup.com/2019  
2
The figures for fuel consumption, CO emissions and power consumption are calculated  
based on the measurement methods stipulated in the current version of Regulation  
EU) 715 / 2007. This information is based on a vehicle with basic equipment in Germany;  
ranges take into account differences in wheel and tire size selected as well as optional  
(
2
equipment and can change based on configuration. Fuel consumption and CO emissions  
information are available on page 70.  
ꢀ
ꢀ
TheꢀfiguresꢀhaveꢀbeenꢀcalculatedꢀbasedꢀonꢀtheꢀnewꢀWLTPꢀtestꢀcycleꢀandꢀadaptedꢀtoꢀNEDCꢀ  
forꢀcomparisonꢀpurposes.ꢀInꢀtheseꢀvehicles,ꢀdifferentꢀfiguresꢀthanꢀthoseꢀpublishedꢀhereꢀmayꢀ  
apply for the assessment of taxes and other vehicle-related duties which are (also) based  
2
on CO emissions.  
ForꢀfurtherꢀdetailsꢀofꢀtheꢀofficialꢀfuelꢀconsumptionꢀfiguresꢀandꢀofficialꢀspecificꢀCO  
2
emissions  
of new cars, please refer to the “Manual on fuel consumption, CO  
consumption of new cars”, available at www.dat.de/co2/.  
2
emissions and power  
TO OUR SHAREHOLDERS  
1
To Our  
Shareholders  
BMW Group in  
Figures  
Report of the  
Supervisory Board  
Statement of  
the Chairman of  
the Board of  
Page  
Page  
4
8
BMW Group in Figures  
Management  
BMW AG Stock and  
Capital Markets  
Report of the Supervisory Board  
Page 18 Statement of the Chairman of the Board of Management  
Page 22 BMW AG Stock and Capital Markets in 2019  
Page 24 Financial Calendar  
Page 24 Contacts  
4
To Our  
Shareholders  
BMW GROUP IN FIGURES  
BMW Group  
in Figures  
Key non-financial performance indicators  
•
01  
2
015  
2016  
2017  
2018  
2019  
Change in %  
Group  
Workforceꢀatꢀyear-endꢀ1  
122,244  
124,729  
129,932  
134,682  
133,778  
– 0.7  
Automotive seGment  
Deliveriesꢀ2, 3  
2,257,851  
127  
2,352,440  
124  
2,468,658  
128  
2,483,292  
128  
2,538,367  
127  
2.2  
Fleet emissions in g CO  
2
/ km4, 5  
– 0.8  
motorcycles seGment  
Deliveries  
136,963  
145,032  
164,153  
165,566  
175,162  
5.8  
Further non-financial performance figures  
•
02  
2
015  
2016  
2017  
2018  
2019  
Change in %  
Automotive seGment  
Deliveries  
BMWꢀ2, 3  
MINIꢀ3  
Rolls-Royce3  
Total2, 3  
1,913,213  
340,880  
3,758  
1,989,817  
358,586  
4,037  
2,093,026  
372,194  
3,438  
2,114,963  
364,135  
4,194  
2,185,793  
347,474  
5,100  
3.3  
– 4.6  
21.6  
2.2  
2,257,851  
2,352,440  
2,468,658  
2,483,292  
2,538,367  
Productionꢀvolume  
BMWꢀ6  
1,933,647  
342,008  
3,848  
2,002,997  
352,580  
4,179  
2,123,947  
378,486  
3,308  
2,168,496  
368,685  
4,353  
2,205,841  
352,729  
5,455  
1.7  
– 4.3  
25.3  
0.9  
MINI  
Rolls-Royce  
Total6  
2,279,503  
2,359,756  
2,505,741  
2,541,534  
2,564,025  
motorcycles seGment  
Productionꢀvolume  
BMW  
151,004  
145,555  
185,682  
162,687  
187,116  
15.0  
5.0  
FinAnciAl services seGment  
Newꢀcontractsꢀwithꢀretailꢀcustomers  
1,655,961  
1,811,157  
1,828,604  
1,908,640  
2,003,782  
1
Figures exclude suspended contracts of employment, employees in the non-work phases of pre-retirement part-time working arrangements and low income earners.  
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀShenyangꢀ(2015:ꢀ281,357ꢀunits,ꢀ2016:ꢀ311,473ꢀunits,ꢀ2017:ꢀ385,705ꢀunits,ꢀ2018:ꢀ455,581ꢀunits,ꢀ2019:ꢀ538,612ꢀunits).  
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015.ꢀTheꢀbasisꢀforꢀtheꢀadjustmentsꢀisꢀaꢀreviewꢀofꢀsalesꢀdataꢀinꢀpriorꢀperiodsꢀforꢀtheꢀBMWꢀGroup’sꢀmostꢀimportantꢀmarketsꢀ  
2
3
ꢀ
ꢀ
(
China,ꢀUSA,ꢀGermany,ꢀUK,ꢀItalyꢀandꢀJapan).ꢀTheꢀretrospectiveꢀadjustmentꢀenablesꢀbetterꢀcomparability.ꢀAdditionalꢀinformationꢀcanꢀbeꢀfoundꢀinꢀtheꢀsectionꢀ“ComparisonꢀofꢀForecastsꢀforꢀ2019ꢀ  
withꢀActualꢀResultsꢀinꢀ2019”.  
EU-28.  
4
5
6
ꢀ
ꢀ
Fromꢀ2018,ꢀadjustedꢀvalueꢀbasedꢀonꢀplannedꢀconversionꢀtoꢀWLTPꢀ(WorldwideꢀHarmonisedꢀLightꢀVehiclesꢀTestꢀProcedure).  
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀShenyangꢀ(2015:ꢀ287,755ꢀunits,ꢀ2016:ꢀ305,726ꢀunits,ꢀ2017:ꢀ396,749ꢀunits,ꢀ2018:ꢀ491,872ꢀunits,ꢀ2019:ꢀ536,509ꢀunits).  
5
Key financial performance indicators  
•
03  
2
015  
2016  
2017  
2018  
2019  
Change in %  
Group  
1
Profitꢀbeforeꢀtax in € million  
9,224  
9,665  
10,675  
9,627  
7,118  
– 26.1  
Automotive seGment  
EBIT margin in % (change in %pts)  
RoCE in % (change in %pts)  
9.2  
8.9  
9.2  
7.2  
4.9  
– 2.3  
72.2  
74.3  
77.7  
49.8  
29.0  
– 20.8  
motorcycles seGment  
EBIT margin in % (change in %pts)  
RoCE in % (change in %pts)  
9.1  
9.0  
9.1  
8.1  
8.2  
0.1  
1.0  
31.6  
33.0  
34.0  
28.4  
29.4  
FinAnciAl services seGment  
RoE in % (change in %pts)  
20.2  
21.2  
18.1  
14.8  
15.0  
0.2  
Further financial performance figures  
•
04  
in € million  
2015  
2016  
2017  
2018  
2019  
Change in %  
Total capital expenditure2  
5,890  
4,659  
5,404  
5,823  
4,806  
5,792  
7,112  
4,822  
4,459  
8,013  
5,113  
2,713  
7,784  
6,017  
2,567  
– 2.9  
17.7  
– 5.4  
Depreciation and amortisation  
Free cash flow Automotive segment  
Group revenues1  
Automotive  
92,175  
85,536  
1,990  
94,163  
86,424  
2,069  
98,282  
85,742  
2,272  
96,855  
85,846  
2,173  
104,210  
91,682  
2,368  
29,598  
5
7.6  
6.8  
Motorcycles  
9.0  
FinancialꢀServices1  
Other Entities  
Eliminations1  
23,739  
7
25,681  
6
27,567  
7
27,705  
6
6.8  
–16.7  
– 3.0  
–19,097  
– 20,017  
–17,306  
–18,875  
–19,443  
Group profit before financial result (EBIT)1  
Automotive  
9,593  
7,836  
182  
9,386  
7,695  
187  
9,899  
7,888  
207  
8,933  
6,182  
175  
7,411  
4,499  
194  
–17.0  
– 27.2  
10.9  
6.4  
Motorcycles  
FinancialꢀServices1  
1,981  
169  
2,184  
–17  
2,194  
14  
2,172  
– 27  
2,312  
29  
Other Entities  
–
Eliminations1  
– 575  
– 663  
– 404  
431  
377  
–12.5  
Group profit before tax (EBT)1  
Automotive  
9,224  
7,523  
179  
9,665  
7,916  
185  
10,675  
8,717  
205  
9,627  
6,977  
169  
7,118  
4,467  
187  
– 26.1  
– 36.0  
10.7  
6.0  
Motorcycles  
FinancialꢀServices1  
1,975  
211  
2,166  
170  
2,207  
80  
2,143  
– 45  
2,272  
– 96  
Other Entities  
–
Eliminations1  
– 664  
– 772  
– 534  
383  
288  
– 24.8  
Group income taxes1  
– 2,828  
6,396  
–
– 2,755  
6,910  
– 2,000  
8,675  
– 2,530  
7,097  
– 2,140  
4,978  
44  
15.4  
– 29.9  
Profit / loss from continuing operations1  
Profitꢀ/ꢀlossꢀfromꢀdiscontinuedꢀoperations  
Group net profit1  
–
–
– 33  
–
6,396  
9.70/9.72  
10.0  
6,910  
8,675  
7,064  
5,022  
7.47/7.49  
6.8  
– 28.9  
1
Earnings per share in €  
10.45/10.47  
10.3  
13.07/13.09  
10.9  
10.60/10.62  
9.9  
– 29.5/– 29.5  
– 3.1  
Pre-tax return on sales1, 3 in % (change in %pts)  
1
ꢀ
Priorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
Expenditure for capitalised development costs, other intangible assets and property, plant and equipment.  
ꢀ
2
3
ꢀ
GroupꢀprofitꢀbeforeꢀtaxꢀasꢀaꢀpercentageꢀofꢀGroupꢀrevenues.  
6
To Our  
Shareholders  
1, 2  
BMW Group deliveries of automobilesꢀ  
BMW Group revenuesꢀ  
• 07  
•
05  
BMW Group  
in Figures  
in 1,000 units  
in € billion  
2
,538.4  
2
,468.7 2,483.3  
104.2  
2
1
0
,600  
2,352.4  
110  
9
8.3  
96.9  
2
,257.9  
94.2  
9
2.2  
,300  
55  
0
3
2
015  
2016  
2017  
2018  
2019  
2015  
2016  
2017  
2018  
2019  
1
2
ꢀ
ꢀ
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀ Sꢀ henyangꢀ  
2015:ꢀ281,357ꢀunits,ꢀ2016:ꢀ311,473ꢀunits,ꢀ2017:ꢀ385,705ꢀunits,ꢀ2018:ꢀ455,581ꢀunits,ꢀ  
019:ꢀ538,612ꢀunits).  
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015.ꢀTheꢀbasisꢀforꢀtheꢀ  
adjustmentsꢀisꢀaꢀreviewꢀofꢀsalesꢀdataꢀinꢀpriorꢀperiodsꢀforꢀtheꢀBMWꢀGroup’sꢀmostꢀimportantꢀ  
marketsꢀ(China,ꢀUSA,ꢀGermany,ꢀUK,ꢀItalyꢀandꢀJapan).ꢀTheꢀretrospectiveꢀadjustmentꢀen-  
ablesꢀbetterꢀcomparability.ꢀAdditionalꢀinformationꢀcanꢀbeꢀfoundꢀinꢀtheꢀsectionꢀ“Comparisonꢀ  
ofꢀForecastsꢀforꢀ2019ꢀwithꢀActualꢀResultsꢀinꢀ2019”.  
(
2
BMW Group profit before financial result (EBIT)ꢀ  
BMW Group profit before taxꢀ  
• 08  
•
06  
in € million  
in € million  
10,675  
1
1,000  
9,899  
11,000  
5,500  
0
9
,593  
9,665  
9,627  
9
,386  
9,224  
8
,933  
7,411  
7,118  
5
0
,500  
3
2
2
015  
2016  
2017  
2018  
2019  
2015  
2016  
2017  
2018  
2019  
3
ꢀ
ꢀP riorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀ  
adoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ ꢀI nꢀaddition,ꢀfiguresꢀforꢀ  
the prior year have been adjusted due to changes in presentation of selected items, which  
are not material overall.  
REPORT OF THE  
SUPERVISORY BOARD  
1
To Our  
Shareholders  
STATEMENT OF THE  
CHAIRMAN OF THE  
BOARD OF MANAGEMENT  
BMW Group in  
Figures  
Report of the  
Supervisory Board  
Statement of  
the Chairman of  
the Board of  
Management  
BMW AG Stock and  
Capital Markets  
BMW AG STOCK AND  
CAPITAL MARKETS IN 2019  
FINANCIAL CALENDAR  
CONTACTS  
8
To Our  
Shareholders  
Report of the  
Supervisory Board  
Norbert Reithofer  
ChairmanꢀofꢀtheꢀSupervisoryꢀBoard  
9
Dear Shareholders,  
The BMW Group faced numerous challenges in 2019. Despite retaining its leading position in  
the premium segment in terms of delivery volumes, it did not generate the level of earnings  
we aspire to. In our capacity as Supervisory Board, we stand firmly behind the Board of Man-  
agement’s objective of increasing profitability again in the coming years and continuing in the  
long and highly successful tradition of the BMW Group despite the difficult global economic  
conditions. Customer focus is always our highest priority. At the same time, the BMW Group  
is committed to assuming a pioneering role in the field of sustainability. The importance we  
attach to this topic is most evident in the rapid expansion of our range of electrified vehicles  
driven by the BMW Group’s new model offensive this year.  
With its product portfolio firmly on the right track, the BMW Group is well positioned to meet  
the challenges posed by technological change.  
Focus of the Supervisory Board’s activities during the past financial year  
The Supervisory Board performed the duties incumbent upon it with the utmost diligence.  
In 2019, we made major decisions regarding the leadership of the BMW Group, with  
Mr Oliver Zipse designated as new Chairman of the Board of Management and two new  
members appointed to the Board.  
The Supervisory Board continuously monitored the running of the business in a thorough  
manner and advised the Board of Management on matters relating to the management and  
further development of the BMW Group. In five meetings of the full Supervisory Board  
(
including one two-day meeting), we deliberated in detail with the Board of Management on  
the performance of the BMW Group. The Board of Management also kept the Supervisory  
Board well informed on matters of particular significance between meetings. Furthermore, the  
Chairman of the Supervisory Board was in frequent direct contact with the Chairman of the  
Board of Management, as was the Chairman of the Audit Committee with the Chief Financial  
Officer regarding current topics.  
The work of the Supervisory Board focused in particular on the strategic development of the  
BMW Group against the backdrop of digitalisation and electrification, including the core topic  
of automated driving. Key cooperations, such as the joint venture with Daimler in the field of  
mobility services, were subject to intensive scrutiny.  
The Audit Committee and the full Supervisory Board also deliberated at great length on the  
challenges posed by trade conflicts as well as the various Brexit scenarios.  
I personally held a number of individual discussions with investor representatives on Super-  
visory Board-related matters, especially in light of the planned changes to the German Cor-  
porate Governance Code. The main topics discussed were the compensation of the Board of  
Management, the independence of Supervisory Board members and the planned change in  
the compensation system for the Supervisory Board.  
1
0
To Our  
Shareholders  
In its regular reports on the BMW Group’s current situation, the Board of Management report-  
ed to the Supervisory Board on new models and model revisions in the Automotive and  
Motorcycles segments, delivery volumes (in particular of electrified models) and the competitive  
situation, as well as the development of new and total business volume in the Financial Services  
segment. Any variances from budget were also brought to the Supervisory Board’s attention.  
The Board of Management’s status reports also covered changes in the workforce size as well  
as economic developments in key markets.  
Report of the  
Supervisory Board  
The Board of Management also informed us about important current topics such as the opening  
of the BMW plant in Mexico, the Battery Cell Competence Centre in Munich and the new  
#
NEXTGen technology and future fair held at the BMW Welt site in Munich. The Board of  
Management also reported on the state of negotiations with FC Bayern and the BMW Group’s  
participation at the IAA in Frankfurt. Moreover, the Board of Management kept the Supervisory  
Board well informed on matters of product quality, the joint venture with Great Wall Motor  
and the cooperation with Northvolt in the field of battery cell production.  
The Supervisory Board also deliberated at length on important issues arising in the Board of  
Management’s various areas of responsibility. For instance, the Board of Management  
presented the core elements of the Group’s Finance function, including a description of its  
financing strategy. We also considered the strategy and risk profile of the Financial Services  
segment. In addition to strategy realignment within the sales organisation, a further topic  
of focus was the contribution of the Purchasing and Supplier Network to the profitability  
and future viability of the BMW Group. The Board of Management reported in detail on the  
current status of and overall strategy regarding the BMW brand.  
We paid particular attention to the implementation of Strategy NUMBER ONE > NEXT.  
The Board of Management elaborated on the current status, highlighting changes in the market  
environment attributable to trade conflicts, regulatory issues – especially fleet CO2 emis-  
sions – as well as corporate social responsibility considerations. Together with the Board of  
Management, we discussed in detail the decisions reached and measures taken to implement  
the strategy over the past 12 months. The Board of Management reported in detail on its  
strategies adopted for brands and design, for products as well as for customer experience  
and services, focusing in particular on the expansion of the Group’s electrified product  
portfolio and the luxury segment. The strategic fields of technology and digitalisation were  
also the subject of intensive debate, specifically focusing on the core topics of electric mobility  
and automated driving.  
In the third quarter, the Supervisory Board conferred extensively on the BMW Group’s fore-  
casts for the period from 2020 to 2025. In this context, the Board of Management outlined  
the currently volatile nature of external business conditions, highlighting in particular risks  
arising from trade policies and weaker economic forecasts for certain markets. The potential  
impact of a range of risk scenarios on forecasts was also discussed at length. After a thorough  
examination, the Supervisory Board approved the BMW Group’s long-term corporate forecast.  
Based on this long-term assessment, the Board of Management presented the annual budget  
for the financial year 2020, which the Supervisory Board likewise deliberated upon at length.  
The Board of Management also reported on the current status of diversity concepts for  
the Group.  
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1
With regard to Board of Management compensation, the Supervisory Board spent a significant  
amount of time addressing issues related to the Act on the Implementation of the Second Share-  
holder Rights Directive (ARUG II) and the new version of the German Corporate Governance  
Code as well as assessing any resulting need for change at the BMW Group. We intend to revise  
the compensation system for the Board of Management during the financial year 2020 and  
will put forward the revised system for shareholder approval at the Annual General Meeting  
to be held in the financial year 2021.  
For the financial year 2019, the Supervisory Board examined the structure and level of compen-  
sation paid to the members of the Board of Management. In this context, we took into account  
trends in Group business performance, executive manager compensation and the remuneration  
of BMW Group employees in Germany. Based on comparative studies conducted by an external  
compensation consultant, we concluded that the compensation of the members of the Board  
of Management is commensurate. Detailed information on the compensation of the Board of  
Management is contained in the Compensation Report.  
We also addressed the compensation of the Supervisory Board, which has remained unchanged  
since 2013, and spoke in favour of changing to a purely fixed compensation model. A corresponding  
proposal will be submitted for shareholder approval at the Annual General Meeting 2020.  
We also deliberated intensively on corporate governance within the BMW Group and the  
application of the recommendations contained in the German Corporate Governance Code.  
In December, the Board of Management and the Supervisory Board issued their Declaration of  
Compliance with the German Corporate Governance Code. We intend to fully comply with all  
recommendations made in the Code in the version dated 7 February 2017, which was valid at  
the date of the Declaration. The wording of the Declaration of Compliance is available in the  
Statement on Corporate Governance on our website.  
We also reviewed current targets for the composition of the Supervisory Board and the com-  
petency profile set out for its members. We concluded that the composition of the Supervisory  
Board at 31 December 2019 was in line with the targets stipulated in the diversity concept, the  
competency profile and other composition targets. In view of the major strategic importance  
of automated driving, we have decided to expand our competency profile to include the fields  
of digitalisation and artificial intelligence. The composition targets for the financial year 2020  
were further developed in line with the recommendations contained in the draft version of the  
new German Corporate Governance Code. An overview of the members of the Supervisory  
Board, describing their specific fields of expertise, is available in the Statement on Corporate  
Governance on our website.  
No conflicts of interest pertaining to members of the Supervisory Board arose during the year  
under report. Significant transactions with Supervisory Board members and other related  
parties as defined by IAS 24, including their close relatives and intermediary entities, were  
examined on a quarterly basis.  
We reviewed the efficiency of our work on the Supervisory Board and prepared for the related  
deliberations within the full Supervisory Board based on a questionnaire and detailed individual  
discussions between the Chairman and all members. Overall, the work of the Supervisory  
Board was deemed efficient and given a positive assessment. Valuable feedback and suggestions  
relating to the work of the Supervisory Board were welcomed and will be taken up in the  
new financial year.  
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2
To Our  
Shareholders  
Description of Presiding Board and committee work  
The Supervisory Board has established a Presiding Board and four committees, whose work  
during the financial year 2019 was reported on by their respective chairpersons at the subsequent  
meetings of the full Supervisory Board. You can read more about the tasks, the composition  
and the working methods of the Presiding Board and the various committees of the Supervisory  
Board in the Statement on Corporate Governance on our website.  
Report of the  
Supervisory Board  
The Presiding Board convened four times during the year under report. Its focus was on  
preparing the detailed agenda of full Supervisory Board meetings, unless a committee was  
responsible for doing so. Working closely with the Board of Management and senior heads of  
department, we made suggestions for topics to be reported on at Supervisory Board meetings.  
Furthermore, the Presiding Board devoted time to following the latest developments regarding  
corporate governance.  
The Audit Committee held five meetings and two telephone conference calls during the  
financial year 2019.  
The meeting held in February 2019 focused primarily on preparing for the Supervisory Board  
meeting at which the financial statements and on the planned change of the Group auditor  
were examined. The committee recommended to the full Supervisory Board that Pricewa-  
terhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC) be elected as Company and  
Group auditor at the Annual General Meeting 2019. Prior to this, PwC issued a Declaration  
of Independence, and the planned scope of non-audit services to be provided by PwC was  
discussed. In connection with the audits of the financial statements for the financial year 2018  
,
which were performed for the last time by KPMG Wirtschaftsprüfungsgesellschaft mbH, the  
Audit Committee considered the scope of non-audit services provided by KPMG entities to the  
BMW Group in 2018. There were no indications of conflicts of interest, grounds for exclusion  
or lack of independence on the part of the auditor.  
The Audit Committee discussed PwC’s fee proposal for the audits of the Company and Group  
Financial Statements 2019 and for the review of the Half-Year Financial Report, and deemed  
it appropriate. Following the approval at the Annual General Meeting held in May 2019, the  
Audit Committee appointed PwC for the relevant engagements and specified audit focus areas.  
It also approved the scope of non-audit services to be provided by PwC and subsequently  
received regular reports on the relevant matters.  
The quarterly financial reports were discussed with the Board of Management prior to their  
publication. Representatives of the external auditors were present when the Half-Year Financial  
Report was discussed at the end of July 2019.  
During the year under report, the Audit Committee again dealt intensively with the topic  
of compliance within the BMW Group. In his regular report, the Chairman of the Com-  
pliance Committee provided a summary of ongoing compliance-related proceedings and  
presented the improvements being made to the compliance system, which is now known as  
“
Compliance 4.0”.  
In February 2019, the Board of Management informed the Audit Committee of the result of the  
proceedings conducted by the Public Prosecutor’s Office Munich regarding a faulty software  
update. Based on its classification as a misdemeanour, a fine of €ꢀ8.5 million was imposed,  
which the Company accepted. The investigations undertaken by the Public Prosecutor did  
not identify any evidence of test-stand-related defeat devices, fraud or any other deliberate  
legal violations.  
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3
The Audit Committee continued to deal intensively with the EU Commission’s investigation  
into the antitrust allegations in connection with the former working groups of several German  
automobile manufacturers. Subsequent to receiving the EU Commission’s Statement of Objec-  
tions in April 2019, which resulted in the BMW Group recognising a significant provision for  
a possible fine, the Audit Committee held a separate meeting on this topic. At that meeting,  
the Audit Committee was provided with detailed information concerning allegations made  
by the EU Commission and was fully briefed on the Company’s viewpoint, which denies the  
allegations and intends to contest them – with all the legal means at its disposal if necessary.  
The Company’s Chief Legal Counsel and a representative of the law firm engaged by the  
Company explained the Company’s legal position to the Committee.  
At the following meeting of the Supervisory Board, the Chairman of the Audit Committee  
reported on these matters in great detail. At the recommendation of the Audit Committee, the  
Supervisory Board decided to obtain a second opinion from an independent antitrust law expert  
in addition to the advice received from the law firm engaged by the Company. At a subsequent  
meeting of the Audit Committee, the expert confirmed the Company’s legal opinion and its  
defence strategy.  
The Board of Management also reported in detail to the Audit Committee on the mutually  
agreeable completion of proceedings initiated by the German Federal Cartel Office in 2016  
regarding the purchase of long steel by the BMW Group. The proceedings were terminated  
in November 2019 with the imposition of a fine of €ꢀ28 million, which the Company did not  
contest. The Board of Management stressed that the exchange of information in question had  
no effect on the selling prices of BMW Group vehicles.  
Furthermore, the main results of the audits conducted by Group Internal Audit, along with  
details of further audit planning, were reported to the Audit Committee. The Audit Committee  
also discussed risk management and the BMW Group’s current risk profile as well as the internal  
control system and the report on major legal disputes. The EMIR audit report (“European Market  
Infrastructure Regulation”) pursuant to § 32 of the German Securities Trading Act (WpHG  
)
was also presented to the Audit Committee by an auditor, and the effectiveness of the system  
in place at BMW AG to ensure compliance with regulatory requirements was confirmed.  
The Audit Committee concurred with the decision of the Board of Management to raise the  
Company’s share capital in accordance with Article  
Authorised Capital 2019) by €ꢀ740 400 and to issue a corresponding number of new non-voting  
bearer shares of preferred stock in conjunction with an Employee Share Programme.  
4 (5) of the Articles of Incorporation  
(
,
A key aspect of the Personnel Committee’s work during its five meetings held during 2019  
involved preparing decisions in connection with the composition of the Board of Management.  
The Personnel Committee held discussions on Board of Management compensation, not least  
against the background of the implementation of ARUG II and revision of the German Corporate  
Governance Code. In individual cases it also granted approval for Board of Management members  
to assume mandates outside the Group.  
The Nomination Committee held one meeting during the financial year 2019, at which it addressed  
the subject of succession planning for shareholder representatives on the Supervisory Board going  
forward, taking into account the composition targets decided upon by the Supervisory Board.  
The Mediation Committee, which is prescribed by law, did not need to convene during the  
financial year 2019.  
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4
To Our  
Shareholders  
Composition of the Board of Management  
The Supervisory Board made several decisions regarding the composition of the Board of  
Management during the 2019 financial year:  
Report of the  
Supervisory Board  
The mandate of the Chairman of the Board of Management, Harald Krüger, was terminated by  
mutual agreement on 15 August 2019, after Mr Krüger had previously informed the Chairman  
of the Supervisory Board that he was not available for a further term of office. We wish to  
thank Mr Krüger for his outstanding work and the key momentum he provided with great  
enthusiasm during his long tenure at the BMW Group as Chairman and Member of the Board  
of Management as well as in his previous functions.  
The Supervisory Board appointed Oliver Zipse as Chairman of the Board of Management with  
effect from 16 August 2019. Mr Zipse initially became a Board of Management member with  
responsibility for Production in 2015 and has worked for the BMW Group since 1991. Apart  
from his expertise in the field of production, he has also gained a wealth of experience in  
various strategic management functions.  
On 16 August 2019, Dr Andreas Wendt was temporarily given Board responsibility for  
Production in addition to his role as Board member responsible for the Purchasing and  
Supplier Network.  
With effect from  
1 October 2019, Dr Milan Nedeljković was appointed member of the Board of  
Management and assumed responsibility for Production. Dr Nedeljković joined the BMW Group  
in 1993 and, after serving as Managing Director of the Leipzig and Munich production plants,  
most recently worked as Senior Vice President for Corporate Quality.  
The mandate of Milagros Caiña Carreiro-Andree was terminated by mutual agreement with  
effect from 31 October 2019. We would like to thank Ms Caiña Carreiro-Andree for her  
positive contribution to the further development of human resource policies throughout  
the BMW Group.  
With effect from 1 November 2019, Ilka Horstmeier was appointed member of the Board of  
Management with responsibility for Human Resources and as Labour Relations Director.  
Ms Horstmeier has worked for the BMW Group since 1995, most recently as Managing Director  
of the Dingolfing plant.  
In 2019, we resolved to extend the mandate of one Board of Management member.  
Peter Schwarzenbauer left the Board of Management on 31 October 2019 after reaching the  
stipulated retirement age. We wish to thank him for his dedication, his excellent work and  
the dynamic contribution he made to the field of digitalisation in particular. As part of the  
realignment of Board member portfolios, Mr Pieter Nota has been given combined responsibility  
for all BMW Group brands as head of “Customer, Brands, Sales” and the size of the Board  
has been reduced overall.  
Composition of the Supervisory Board, the Presiding Board and the Supervisory  
Board’s committees  
Messrs Franz Haniel, Ralf Hattler and Jürgen Wechsler resigned from the Supervisory Board  
with effect from the end of the Annual General Meeting 2019. We would like to thank all three of  
them for their faithful, constructive cooperation during their respective periods of office on the  
Supervisory Board. Mr Haniel was a member of the Supervisory Board for a period of 15 years.  
1
5
We therefore wish to express our gratitude to him in particular for his many years of loyal service  
to the BMW Group. Within the framework of elections pursuant to the German Co-Determi-  
nation Act, the employees elected Verena zu Dohna-Jaeger and Dr Thomas Wittig as members  
of the Supervisory Board, the former as representative of IG Metall and the latter as executive  
staff representative. The remaining employee representatives were re-elected. The Annual  
General Meeting elected Dr Vishal Sikka, founder and CEO of Vianai Systems, Inc., as a new  
member of the Supervisory Board. Susanne Klatten and Stefan Quandt, both entrepreneurs,  
were re-elected as shareholder representatives.  
The composition of the Presiding Board and the committees of the Supervisory Board remained  
unchanged during the financial year 2019. The Supervisory Board plans to make a mutually  
agreed change to the position of chair of the Audit Committee directly following the 2020  
Annual General Meeting. As in the past, the future chairperson also needs to meet the required  
criteria as an independent financial expert. The composition of the Supervisory Board and its  
committees is contained in the Corporate Governance Report and the Statement on Corporate  
Governance, which is available on our website. You can also find the curricula vitae of the  
Supervisory Board members on our website.  
Disclosure of attendance at meetings by individual members  
The attendance rate at the meetings of the Supervisory Board and its committees was 99.6%  
overall. The following table shows attendance by individual member:  
Supervisory Board Member  
Meetings  
Attendance  
Attendance in %  
Dr.-Ing.ꢀNorbertꢀReithofer  
ManfredꢀSchoch  
StefanꢀQuandt  
22  
21  
22  
21  
22  
5
22  
21  
22  
21  
21  
5
100  
100  
100  
100  
95  
StefanꢀSchmid  
Dr.ꢀKarl-LudwigꢀKley  
Christiane Benner  
Dr.ꢀKurtꢀBock  
100  
100  
100  
100  
100  
100  
80  
5
5
VerenaꢀzuꢀDohna-Jaegerꢀ1  
FranzꢀHanielꢀ2  
4
4
1
1
RalfꢀHattlerꢀ2  
1
1
Dr.-Ing.ꢀHeinrichꢀHiesinger  
Prof.ꢀDr.ꢀReinhardꢀHüttl  
SusanneꢀKlatten  
Prof.ꢀDr.ꢀRenateꢀKöcher  
HorstꢀLischka  
5
5
5
4
6
6
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
5
5
5
5
WillibaldꢀLöw  
5
5
SimoneꢀMenne  
5
5
Dr.ꢀDominiqueꢀMohabeer  
5
5
BrigitteꢀRödig  
5
5
Dr.ꢀVishalꢀSikkaꢀ1  
JürgenꢀWechslerꢀ2  
Dr.ꢀThomasꢀWittigꢀ1  
WernerꢀZierer  
4
4
1
1
4
4
5
5
1
ꢀ
ꢀ
SupervisoryꢀBoardꢀMemberꢀsinceꢀ16ꢀMayꢀ2019  
SupervisoryꢀBoardꢀMemberꢀuntilꢀ16ꢀMayꢀ2019ꢀ  
2
1
6
To Our  
Shareholders  
Examination of financial statements, including the separate non-financial report and  
the proposal for the appropriation of profits  
Report of the  
Supervisory Board  
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (“PwC”) was appointed as  
auditor for the first time for the financial year 2019. PwC conducted a review of the condensed  
Interim Group Financial Statements and Interim Group Management Report for the six-month  
period ended 30 June 2019 and presented the findings of its review to the Audit Committee.  
No issues were identified that might indicate that the condensed Interim Group Financial  
Statements and Interim Group Management Report had not been prepared in accordance  
with the applicable provisions in all material respects.  
PwC audited the Company and Group Financial Statements of BMW AG for the financial year  
2
019 as well as the Combined Company and Group Management Report – as authorised for  
issue by the Board of Management on 10 March 2020 – and issued an unqualified audit opinion,  
signed by the auditor Petra Justenhoven as independent auditor (Wirtschaftsprüferin) and  
by Andreas Fell as independent auditor (Wirtschaftsprüfer) and auditor responsible for the  
performance of the engagement.  
At its meeting held on 27 February 2020, the Audit Committee initially considered in detail  
the preliminary version of the Company and Group Financial Statements for the finan-  
cial year 2019, the Combined Management Report (including the Statement of Corporate  
Governance), the auditor’s long-form reports and the Board of Management’s proposal for  
the appropriation of profits.  
Immediately after authorising their issue, the Board of Management submitted the Company  
and Group Financial Statements for the 2019 financial year, the Combined Management Report  
(
including the Statement of Corporate Governance) and the proposal for the appropriation of  
profits to the Supervisory Board. The long-form audit reports of the auditor were also made  
available to the Supervisory Board without delay.  
At its meeting on 12 March 2020, the Audit Committee carefully examined and deliberated  
on these documents before they were considered in detail at the plenary session of the  
Supervisory Board.  
At the respective meetings, the Board of Management provided the Audit Committee and the  
Supervisory Board with detailed explanations of the financial reports presented. Representatives  
of the external auditor were also present at both meetings. They reported on the main findings of  
their audit, explained the key audit matters and answered additional questions put by members  
of the Audit Committee and the Supervisory Board. The Audit Committee and the Supervisory  
Board reviewed the key audit issues and the related audit procedures in great detail.  
The representatives of the external auditor confirmed that the risk management system estab-  
lished by the Board of Management is capable of identifying at an early stage any developments  
that might threaten the Company’s going-concern status. They confirmed that no material  
weaknesses in the internal control system and risk management system with regard to the  
financial reporting process were identified. Similarly, they did not identify in the course  
of their audit work any facts that were inconsistent with the contents of the Declaration of  
Compliance pursuant to § 161 of the German Stock Corporation Act (AktG) issued by the  
Board of Management and the Supervisory Board.  
Based on a thorough examination conducted by the Audit Committee and the full Supervisory  
Board, we concurred with the results of the external audit. In accordance with the conclusion  
reached after the examination by the Audit Committee and the Supervisory Board, no objections  
were raised. The Group and Company Financial Statements of Bayerische Motoren Werke  
Aktiengesellschaft for the financial year 2019 drawn up by the Board of Management were  
subsequently approved at our meeting held on 12 March 2020.  
1
7
We also examined the proposal of the Board of Management to use the unappropriated profit  
to pay a dividend of €ꢀ2 50 per share of common stock and €ꢀ 52 per share of non-voting  
.
2.  
preferred stock, in each case on shares entitled to receive a dividend. We consider the proposal  
appropriate and have therefore given it our approval.  
Due to the rapidly deteriorating situation caused by the proliferation of coronavirus, the Board  
of Management resolved on 16 March 2020 to revise the forecast for the financial year 2020 and  
to draw up the Company and Group Financial Statements anew, together with the Combined  
Management Report. In a telephone conference of the Audit Committee held on the same day,  
the Board of Management reported in detail on the adjustments made. Representatives of  
the auditor reported on the supplementary audit performed and the findings identified and  
confirmed that no objections had arisen in the course of this work. After thorough examination  
and deliberation, the Audit Committee recommended that the Supervisory Board approve  
the revised versions of the Company and Group Financial Statements for the financial year  
2
019. After concluding its own examination, the Supervisory Board determined that it had no  
objections and accordingly approved the revised versions of the Company and Group Financial  
Statements for the financial year 2019 on 17 March 2020. The Company Financial Statements  
have therefore been adopted.  
Furthermore, in conjunction with the presentation of the Sustainable Value Report, the Audit  
Committee and the Supervisory Board considered the separate non-financial report of BMWAG  
(
Company and Group) at 31 December 2019 drawn up by the Board of Management. The  
Board of Management provided a detailed explanation of the reports at the meetings. Repre-  
sentatives of the auditor presented the main findings of their audit and answered additional  
questions put by the members of the Supervisory Board. PwC performed a “limited assurance”  
review of these reports and issued an unqualified statement thereon. The Supervisory Board  
acknowledged and approved the separate non-financial report (Company and Group) drawn  
up by the Board of Management.  
Expression of appreciation by the Supervisory Board  
We wish to express our appreciation to the members of the Board of Management and the  
entire workforce of the BMW Group worldwide for their commitment and joint achievements  
in the financial year 2019.  
The readiness of our employees to deliver outstanding performance alongside their passion and  
enthusiasm for the enterprise and its products make us confident in the ability of the BMW Group  
to successfully shape individual mobility as a technological pioneer moving forward.  
Munich, 17 March 2020  
On behalf of the Supervisory Board  
Norbert Reithofer  
ChairmanꢀofꢀtheꢀSupervisoryꢀBoard  
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8
To Our  
Shareholders  
Statement of the  
Chairman  
of the Board of  
Management  
Oliver Zipse  
Chairman of the Board of Management  
1
9
Dear Shareholders,  
At the BMW Group, the customer always takes centre stage. That is what makes your Company  
strong. But we also know that success doesn’t happen by itself – and certainly not in times of  
technological transformation. We seek to offer our customers the best products and services  
so they can be mobile in a way that suits their personal needs. Together, we are leading “sheer  
driving pleasure” into a sustainable future – as intended by the Paris Climate Agreement. To  
achieve this, we are systematically directing our focus towards new technologies and connectivity.  
Because we want your Company to emerge as a winner of this transformation.  
Our customers are the key to our success.  
In 2019 we reached a new record level of vehicles delivered to customers for the ninth con-  
secutive year. Personally, and on behalf of my Board of Management team, I would like to  
thank our more than two-and-a-half million BMW, MINI and Rolls-Royce customers – and  
over 175,000 BMW Motorrad customers.  
I would also like to thank our high-performing retail organisation, as well as the suppliers we  
work with as partners. The dedication and ideas of our more than 133,000 associates worldwide  
drive the Company forwards.  
Our team is proud to work for the BMW Group.  
This was confirmed by our most recent employee survey – even at a time when the role of the  
automotive industry is the subject of intense debate. The BMW Group is considered one of the  
world’s most attractive employers and is the number one automobile manufacturer in various  
renowned rankings. Our associates value that you, our shareholders, support the Company’s  
long-term course. This gives us the backing and internal stability we need to continue to chart  
our own course and differentiate ourselves from the competition.  
The BMW Group strategy is dynamic.  
Our business environment is shaped by uncertain developments, which we need to respond  
to quickly and appropriately, but it is also shaped by stable trends. That is why enhancing  
our strategy is an ongoing task.  
Our corporate spirit is rooted in the values of responsibility, appreciation, transparency, trust  
and openness. In the Board of Management, we have geared the BMW Group’s strategy towards  
the relevant areas of future activity and adjusted core elements: what does the BMW Group  
stand for? What drives us? What are we working towards? And how can we achieve our goals?  
It is imperative that we focus on business, environmental and social challenges equally.  
Everything today is interconnected. There are no simple solutions to long-term success.  
People still want to be mobile.  
This forms the basis of our business model and our confidence. Demand for premium mobility  
worldwide is expected to grow until 2030. Our goal is to gain or regain market share – but not  
at any price. Rising sales must also generate the necessary earnings.  
2
0
To Our  
Shareholders  
We aim to improve our profitability.  
The financial year 2019 was impacted by a variety of headwinds. As previously announced, our  
Group earnings before tax were significantly lower than the previous year.  
Statement of the  
Chairman  
of the Board of  
Management  
The EBIT margin in the Automotive Segment was within our adjusted target range of  
cent. The Board of Management and the Supervisory Board will propose a dividend of €ꢀ  
share of common stock and €ꢀ 52 per share of preferred stock to the Annual General Meeting.  
4
.
5
to  
2
6
.
5
per-  
.50 per  
2
.
We are working intensively to bring the EBIT margin in the Automotive Segment back within  
our target range of 8 to 10 percent. This is the standard we hold ourselves to – and what you  
expect as shareholders. We will realise over 12 billion euros in efficiency potential through our  
Performance > NEXT programme by the end of 2022 – for example, through current measures  
aimed at digitalising our processes. We will continue to make significant investments in our  
future. In 2019 alone, we invested 6.4 billion euros in research and development.  
The biggest model offensive in our history continues.  
Nearly all model series have been updated over the past two years. They will be joined this  
year by new models like the BMW 2 Series Gran Coupé, highly profitable BMW M models,  
new plug-in hybrids and electric models. Our portfolio is younger, more attractive and more  
technologically diverse than ever before. This allows us to meet every customer’s needs and  
desires – no matter where they are in the world. As a result we are challenging the competition  
in every segment.  
We offer our customers the Power of Choice.  
Customers choose the vehicle segment that best suits their living environment – we provide  
the right drivetrain to go with it. The popular BMW X3 is a good example of this. Starting this  
year, four different drivetrain variants will be offered: efficient diesel and petrol, plug-in hybrid  
and pure electric. Mobility needs will continue to vary around the world and from region to  
region – in some cases, significantly. Our plants have the flexibility to produce all types of  
drivetrains. In this way, we are able to inspire our customers and win them over to sustainable  
drivetrains. Our online Annual Report features customers from the Netherlands, South Africa  
and Japan and shows how they use different drivetrains in their everyday lives.  
More than one million electrified vehicles by the end of 2021.  
Our experience with e-mobility is delivering results. By the end of 2019, the BMW Group had  
more than 500,000 electrified vehicles on roads across the world. This, in itself, is already a  
significant contribution to climate protection. In Germany, BMW clearly leads the market for  
electrified vehicles, with a share of 21 percent. In 2019, the average share of battery-electric  
vehicles and plug-in hybrids in the European Union was three percent.  
The BMW Group figure was nearly double that. We will continue in this direction: the goal is  
for a quarter of our European new vehicle fleet to be electrified in 2021; a third in 2025 and  
half in 2030. The next fully-electric models are already in the starting blocks: the MINI SE and  
BMWiX3 this year, followed by the BMWi4 and iNEXT from 2021.  
We provide maximum vertical integration for e-mobility.  
The iX3, i4 and iNEXT use our entirely newly developed fifth-generation electric drivetrain. The  
electric motor is designed in such a way that no rare earths are needed. Long-term contracts  
will secure our supply of battery cells.  
2
1
We plan to meet the EU’s new CO standards.  
2
We geared up for sustainable mobility early. This year alone, we plan to lower the CO2 emissions  
of our European new vehicle fleet by another 20 percent. This would allow us to meet the  
European Union’s new CO targets for 2020 and 2021. To achieve this, we are forging ahead  
2
with our electric offensive and, at the same time, continuing to make our conventional engines  
more efficient. Too little attention is paid to these efforts and their effects – even though they  
have a rapid and noticeable impact.  
Offering effective solutions. Creating a real impact. Ensuring sustainability.  
That’s what we stand for.  
Climate protection achieves the biggest impact through implementation, not announcements.  
Our understanding of responsibility has always encompassed the entire value chain. Last year  
alone, we reduced CO emissions from production by 25 percent from the previous year. The  
2
“
footprint” of every new plug-in hybrid is certified: from raw material procurement, through the  
supply chain, production and use phase, all the way to recycling. E-mobility requires cobalt and  
lithium. Starting this year, we will be sourcing both raw materials ourselves and making them  
available to our suppliers. This creates transparency. You will find more details on this in our  
Sustainable Value Report 2019. We will no longer be printing our Annual Report, which will  
now be exclusively available on our website as part of our expanded digital offering.  
Reliability even in difficult times.  
The latest developments regarding the coronavirus pose major challenges for us all – including  
the BMW Group. In close cooperation with our business partners, we are working on targeted  
measures to avoid supply bottlenecks where possible. As a Company, we have initiated measures  
worldwide to protect the health and safety of our employees, in consultation with our works  
council representatives. At the same time I have been witnessing a remarkable solidarity:  
employees are supporting each other. That is what sets your Company apart – taking on  
responsibility as a key member of society.  
Optimism secures success – and success secures the future.  
Dear Shareholders,  
We firmly believe that the far-reaching technological transformation will strengthen our business  
model.  
We are systematically further developing our highly complex and digitally connected vehicles  
in the interests of our customers and society. We have the capability, the ambition and the  
determination to be a pioneer in the age of new mobility – and, at the same time, to remain  
an attractive and safe investment for you, our shareholders.  
I invite you to accompany the BMW Group on our continued path towards the future.  
Oliver Zipse  
Chairman of the Board of Management  
2
2
To Our  
Shareholders  
Ratings remain at top level  
The BMW Group continues to be the best-rated auto-  
mobile manufacturer in Europe.  
BMW AG STOCK  
AND CAPITAL  
MARKETS  
BMW AG Stock and  
Capital Markets  
in 2019  
Moody’s has given BMWAG a long-term rating of A1  
(
stable outlook) since January 2017. The short-term  
rating is P-1. The overall positive assessment reflects  
the launch of attractive products in conjunction with  
the current model offensive, the excellent positioning  
of the BMW Group with respect to the challenges  
faced by the automobile industry and its consistently  
strong operating performance and robust financial and  
capital structure. The rating agency Standard & Poor’s  
has given BMWAG a long-term rating of A+ (negative  
outlook) and a short-term rating of A-1.  
IN 2019  
Top ratings unchanged  
Dividend payout ratio increases  
www.bmwgroup.com/ir  
These rating assessments are underpinned by the  
BMW Group’s dependable financial profile and excel-  
lent creditworthiness. Consequently, the Company not  
only has good access to international capital markets,  
but also benefits from attractive refinancing conditions.  
Standard &  
Company rating  
Moody’s  
Poor’s  
Non-currentꢀfinancialꢀliabilities  
Currentꢀfinancialꢀliabilities  
Outlook  
A1  
P ꢀ- 1  
A+  
A ꢀ- 1  
stable  
negative  
2
3
Dividend and payout ratio  
(
2018: €ꢀ  
2
,
303 million) be used to pay a dividend of  
50) and  
In view of the Group’s good earnings performance,  
the Board of Management and the Supervisory Board  
will propose to the Annual General Meeting that  
€ꢀ 50 per share of common stock (2018: €ꢀ3.  
2
.
a dividend of €ꢀ2.52 for each share of preferred stock  
(2018: €ꢀ3.52). The payout ratio for 2019 therefore  
stands at 32.8% (2018: 32.0%).  
BMWAG’s unappropriated profit of €ꢀ1,646 million  
BMW AG stock  
•
09  
2
019  
2018  
2017  
2016  
2015  
common stock  
Numberꢀofꢀsharesꢀinꢀ1,000  
Stockꢀexchangeꢀpriceꢀinꢀ€ꢀ1  
Year-end closing price  
High  
601,995  
601,995  
601,995  
601,995  
601,995  
73.14  
77.75  
58.70  
70.70  
96.26  
69.86  
86.83  
90.83  
77.71  
88.75  
92.25  
65.10  
97.63  
122.60  
75.68  
Low  
preFerred stock  
Numberꢀofꢀsharesꢀinꢀ1,000  
Stockꢀexchangeꢀpriceꢀinꢀ€ꢀ1  
Year-end closing price  
High  
56,867  
56,127  
55,605  
55,114  
54,809  
55.05  
67.85  
47.54  
62.10  
82.50  
60.70  
74.64  
78.89  
67.29  
72.70  
74.15  
56.53  
77.41  
92.19  
58.96  
Low  
key dAtA per shAre in €  
Dividend  
Common stock  
2.502  
2.522  
7.47  
3.50  
3.52  
4.00  
4.02  
3.50  
3.52  
3.20  
3.22  
9.70  
9.72  
8.23  
65.11  
Preferredꢀstock  
Earnings per share of common stock3  
Earnings per share of preferred stock4  
FreeꢀcashꢀflowꢀAutomotiveꢀsegment  
Equity  
10.605  
10.625  
4.12  
13.07  
13.09  
6.78  
10.45  
10.47  
8.81  
7.49  
3.90  
90.92  
87.875  
82.30  
72.08  
1
Xetra closing prices.  
Proposedꢀbyꢀmanagement.  
Weightedꢀaverageꢀnumberꢀofꢀsharesꢀforꢀtheꢀyear.  
Stockꢀweightedꢀaccordingꢀtoꢀdividendꢀentitlements.  
2
ꢀ
ꢀ
ꢀ
ꢀ
3
4
5
Priorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
2
4
To Our  
Shareholders  
FINANCIAL CALENDAR  
CONTACTS  
Financial Calendar  
Contacts  
Business and Finance Press  
2
020  
Telephone +ꢀ49 89 382-2 45 44  
+
ꢀ49 89 382-2 41 18  
1
8 March 2020  
Fax  
+ꢀ49 89 382-2 44 18  
Annual Accounts Press Conference  
E-mail  
presse@bmwgroup.com  
1
9 March 2020  
Analyst and Investor Conference  
Investor Relations  
Telephone +ꢀ49 89 382-2 53 87  
6
May 2020  
Fax  
+ꢀ49 89 382-1 46 61  
Quarterly Statement to 31 March 2020  
E-mail  
ir@bmwgroup.com  
1
4 May 2020  
Annual General Meeting  
The BMW Group on the Internet  
Further information about the BMW Group is  
5
August 2020  
available online at  
Investor Relations information is available directly  
at  
Information about the various BMW Group brands  
is available at  
www.bmwgroup.com.  
Quarterly Report to 30 June 2020  
www.bmwgroup.com/ir  
.
4
November 2020  
Quarterly Statement to 30 September 2020  
www.bmw.com  
,
www.mini.com  
,
www.rolls-roycemotorcars.com and  
www.bmw-motorrad.com  
.
2
021  
1
7 March 2021  
Annual Report 2020  
1
7 March 2021  
Annual Accounts Press Conference  
1
8 March 2021  
Analyst and Investor Conference  
7
May 2021  
Quarterly Statement to 31 March 2021  
1
2 May 2021  
Annual General Meeting  
3
August 2021  
Quarterly Report to 30 June 2021  
3
November 2021  
Quarterly Statement to 30 September 2021  
COMBINED MANAGEMENT  
REPORT  
2
Combined  
Management  
Report  
General Information  
and Group Profile  
Economic Position  
Outlook, Risks and  
Opportunities  
Page 26 General Information and Group Profile  
Page 26 Organisation and Business Model  
Page 28 Research and Development  
Page 31 Production Network  
Page 38 Purchasing and Supplier Network  
Page 39 Workforce  
Page 41 Sustainability  
Page 43 Cooperation Agreements and Partnerships  
Page 44 Management System  
Page 48 Report on Economic Position  
Page 48 General and Sector-specific Environment  
Page 52 Overall Assessment by Management  
Page 53 Comparison of Forecasts for 2019 with Actual Results in 2019  
Page 64 Review of Operations  
Page 64 Automotive Segment  
Page 71 Motorcycles Segment  
Page 73 Financial Services Segment  
Page 76 Comments on Financial Statements of BMW AG  
Page 82 Report on Outlook, Risks and Opportunities  
Page 82 Outlook  
Page 88 Risks and Opportunities  
Page 101 Internal Control System Relevant for Accounting  
and Financial Reporting Processes  
Page 102 Disclosures Relevant for Takeovers and Explanatory Comments  
2
6
Combined  
Management  
Report  
ORGANISATION AND  
GENERAL  
BUSINESS MODEL  
General Information  
and Group Profile  
www.bmwgroup.com/company  
INFORMATION  
AND GROUP  
PROFILE  
Organisation and  
Business Model  
This Combined Management Report incorporates the  
management reports of Bayerische Motoren Werke  
Aktiengesellschaft (BMWAG) and the BMW Group.  
Substantial upfront expenditure for  
future-oriented projects  
On 10 March 2020, the Financial Statements of  
BMW AG were drawn up by the Board of Manage-  
ment and the Board of Management granted approval  
for publication of the Group Financial Statements.  
Based on current developments regarding the spread  
of the coronavirus, the Board of Management on  
Production running at full swing  
1
6 March 2020 adjusted the original outlook for the  
BMW Group, the assumptions regarding the devel-  
opment of the global economy and the economic  
risks and opportunities for the financial year 2020  
in the Combined Management Report, as well as  
the statement regarding the Events after the end of  
the reporting period. On the same day, the Board of  
Management again drew up the Financial Statements  
of BMW AG and once again gave approval for the  
publication of the Group Financial Statements.  
General information on the BMW Group is provided  
below. There have been no significant changes to the  
Group’s structure compared to the previous year.  
Based in Munich, Germany, Bayerische Motoren Werke  
Aktiengesellschaft (BMWAG) is the parent Company  
of the BMW Group, which is the most successful maker  
of automobiles and motorcycles in the premium seg-  
ment worldwide. With BMW, MINI and Rolls-Royce,  
the BMW Group owns three of the best-known pre-  
mium brands in the automotive industry. In addition  
to a strong market position in the premium segment  
of the global motorcycles sector, the BMW Group is  
also well-positioned in the financial services business.  
The BMW Group comprises BMW AG itself and all  
subsidiaries over which BMW AG has either direct  
or indirect control. BMW AG is also responsible  
for managing the Group, which is sub-divided into  
the Automotive, Motorcycles and Financial Services  
operating segments. The Other Entities segment  
primarily comprises holding companies and Group  
financing companies.  
The BMW Group sets itself clear targets in terms of sus-  
tainable, individual mobility, resource-efficient value  
creation, the continued development of its workforce  
potential and its own social commitment. Sustain-  
ability is therefore an integral part of the Group’s  
business model and plays a vital role in ensuring its  
viability going forward.  
2
7
The BMW Group operates on a global scale and  
employed a workforce of 133,778 people worldwide  
at the end of the year. In 2019, the BMW Group  
strengthened its position as one of the world’s most  
attractive employers. Its leading role in terms of  
sustainability contributes to employee loyalty within  
the BMW Group and is one of the reasons for the low  
staff attrition rate.  
Motorcycles segment  
The Motorcycles business is also clearly focused on  
the premium segment. The model range currently  
comprises motorcycles for the Sport, Tour, Roadster,  
Heritage and Adventure segments as well as scooter  
models for the Urban Mobility segment. BMW Motor-  
rad also offers a broad range of equipment options to  
enhance rider safety and comfort. The Motorcycles  
business sales network is organised similarly to that  
of the automobiles business. Currently, BMW motor-  
The BMW Group’s underlying principle in all aspects  
of corporate strategy is its customer-oriented approach.  
In its ongoing efforts to develop its products, brands  
and services, the BMW Group is currently focusing  
on new technologies such as alternative drivetrains,  
digitalisation, connectivity and autonomous driving.  
cycles are sold by more than 1,200 dealerships and  
importers in over 90 countries.  
Financial Services segment  
The BMW Group is a leading provider of financial  
services in the automobile sector. These services are  
offered in almost 60 countries worldwide via com-  
panies and cooperation arrangements in place with  
local financial service providers and importers. The  
segment’s main business comprises credit financ-  
ing and the leasing of BMW Group brand cars and  
motorcycles to retail customers. Customers can also  
choose from an attractive array of insurance and  
banking products. Operating under the brand name  
Alphabet and working together with Alphabet coop-  
eration partners, the BMW Group’s international  
multi-brand fleet business provides financing and  
comprehensive management services for corporate  
car fleets in 20 countries. The segment also supports  
the BMW Group’s dealership organisation by financ-  
ing dealership vehicle inventories.  
Presentation of segments  
In order to provide a better insight into the Group as a  
whole, this report also contains separate presentations  
of the operating segments Automotive, Motorcycles  
and Financial Services.  
Automotive segment  
The BMW brand caters to a wide variety of customer  
requirements. Its portfolio encompasses a broad range  
of models, starting with the premium compact class  
and extending – via the premium mid-class – through  
to the ultra-luxury class. Alongside all-electric mod-  
els such as the BMWi3, it also offers its customers  
state-of-the-art plug-in hybrids and a whole array  
of vehicles driven by highly efficient combustion  
engines. Together with its extremely popular X-model  
family and high-performance BMW M range, the  
BMW Group meets the varying needs and wishes of  
its customers worldwide.  
The MINI brand promises outstanding driving pleasure  
in the premium small car segment and, apart from its  
highly efficient combustion-engine-driven models,  
also offers plug-in hybrid and all-electric drivetrains.  
Rolls-Royce is the ultimate marque in the ultra-luxury  
segment, boasting a tradition that stretches back over  
more than 100 years. Rolls-Royce Motor Cars spe-  
cialises in bespoke customer specifications and offers  
the very highest level of both quality and service.  
The global sales network of the BMW Group’s automo-  
bile business currently comprises around 3,500 BMW,  
,600 MINI and 150 Rolls-Royce dealerships. Within  
1
Germany, sales are conducted through branches of  
the BMW Group and independent authorised dealer-  
ships. Sales outside Germany are handled primarily  
by subsidiary companies and by independent import  
companies in some markets.  
2
8
Combined  
Management  
Report  
ResearchꢀandꢀDevelopment  
In July 2019, the BMW Group and Daimler AG  
signed an agreement on long-term strategic coop-  
eration in the field of automated driving. The  
two companies intend to jointly develop the next  
generation of technology for driver assistance  
systems and automated driving on motorways as  
well as automated parking features. The cooper-  
ation is open for further OEM and technology  
partners and the results of this collaboration  
will also be offered to other OEMs for licensing.  
www.bmwgroup.com/innovation  
General Information  
and Group Profile  
Organisation and  
Business Model  
A major factor in the enduring success of the  
BMW Group is its consistent focus on the future. Inno-  
vation is an integral part of its corporate philosophy.  
Shaping individual mobility and finding innovative  
solutions today for the needs of tomorrow is a key  
driving force. Research and development (R&D) are  
therefore of major importance for the BMW Group  
in ensuring its long-term commercial success as a  
premium manufacturer.  
Research and  
Development  
3. Connectivity  
The demands and needs of customers for mod-  
ern, digital mobility are the top priority for the  
BMW Group. One of the most important effects  
of digitalisation in the automotive industry is  
that the vehicle itself has become focal point of  
the digital customer experience. The BMW Group  
prepared itself at an early stage in this area.  
With BMW Connected and the growing digital  
offerings, the Company is prepared for the ex-  
pectations and wishes of its customers. In this  
regard, the focus is not just on the develop-  
ment and integration of new technologies and  
services for the vehicle, but on customers and  
their contemporary demands. Digital services,  
which customers are used to, should be avail-  
able seamlessly and without restrictions even out-  
side of the vehicle.  
In its development of new technologies, the BMW Group  
focuses on the topics of emissions-reducing drivetrain  
systems, digitalisation and autonomous driving with  
the aim of creating completely new experiences and  
future ways of travelling. A key prerequisite for success  
both now and in the future is the ability to anticipate  
customer needs and wishes in all fields of technol-  
ogy and implement developments in a way that adds  
value for the customer. However, as a premium manu-  
facturer, the BMW Group is driven by the aspiration  
to exceed customer expectations in every respect.  
With this approach, the BMW Group strives to find  
outstanding solutions for the overall (mobility) needs  
of its customers.  
The BMW Group addresses the key trends shaping  
tomorrow’s individual mobility via the central topics  
of Design, Autonomous, Connectivity, Electrified and  
Services.  
The ability to use services from the BMW Group  
nearly everywhere at all times is the prerequi-  
site for a digital services offering that is solely fo-  
cused on the customers and their individual  
needs. This includes, for example, personalised  
and context-based information in the vehicle.  
For customers of the BMW Group it is very easy  
to keep the vehicle digitally up-to-date and to  
tailor the vehicle to customers’ individual wishes  
over the entire life cycle. With the Remote Soft-  
ware Update, the vehicle can always be updated  
with the latest software, functions are continu-  
ously expanded and digital services can be booked  
at any time. In this way, the security and quality  
of the vehicle is continually improved. BMW drivers  
can therefore keep their vehicles up to date as they  
are accustomed to from the smartphone world.  
1
. Design  
The BMW Group sees design as the characteristic  
combination of aesthetics and technology. Out-  
standing design involves focusing keenly on peo-  
ple and their needs. Ground-breaking design  
underlines the inimitable character of each new  
vehicle, thereby strengthening all of the Group’s  
brands.  
2
. Autonomous  
Since 2018, the BMW Group has been pooling its  
expertise with the aim of developing state-of-  
the-art driver assistance systems in its own devel-  
opment centre. The goal is to create an open  
platform for highly and fully automated driving  
that will serve as an industry standard going  
forward. Today, the latest generation of driver as-  
sistance systems already supports customers in  
a variety of driving situations. However, “safety  
first” always has the foremost priority in all  
development work performed.  
2
9
With digital services such as on-street parking or  
digital charging services, which are available to  
book over the BMW ConnectedDrive Store, it has  
been possible since 2014 to constantly customise  
the vehicle toward individual preferences. The next  
step for more flexibility involves offering addi-  
tional vehicle functions after purchase, such as a  
high-beam assistant or driver assistant system,  
Active Cruise Control (ACC). The expanded, cus-  
tomer-oriented and digital offerings of the  
BMW Group make it possible to update the vehi-  
cle for many years with the newest functions.  
Therefore, customers do not need to decide about  
specific optional equipment at purchase, but  
they can regularly customise their vehicle based  
on individual needs.  
Due to its role as a technology carrier and its en-  
during sales success, the BMWꢁi3 is also being  
developed to the next level. Launched at the end of  
2019, the MINI Cooper SE* is a further all-electric  
vehicle that complements the BMW Group’s range  
of electrified models. Over 90,000 registered  
prospective customers (as of 2019) reflect the avid  
interest of consumers in this first all-electric  
MINI model. Rolls-Royce Motor Cars is also work-  
ing hard on developing an electric vehicle. In line  
with the expectations of its customers, the brand  
will immediately focus on manufacturing all-  
electric models.  
The BMW Group’s range of models includes highly  
efficient combustion engines as well as state-of-  
the-art plug-in hybrids and all-electric drivetrains.  
This broad array of options enables the Group to  
meet the varying requirements and wishes of its  
customers in different regions of the world while  
at the same time making an effective contribution  
Together with automated driving, the systematic  
expansion of connectivity on the path towards a  
digital and emissions-free future is one of the cen-  
tral areas of action, with which the BMW Group  
is shaping the transformation of the mobility in-  
dustry in line with its corporate strategy.  
to cutting CO emissions. Regardless of the type  
2
of drivetrain the customer chooses, all current and  
future models, each with their own specific  
characteristics, will feature the driving pleasure  
typical of the brand.  
4
. Electrified  
During the 2019 reporting period, the BMW Group  
reached a further milestone with the delivery  
of its 500,000th electrified automobile. With 11  
electrified models in its range (as of 2019), the  
BMW Group is among the world’s leading providers  
of electric mobility. Since 2016, the Company  
has been the market leader for electrified vehicles  
in Germany and also occupies a top position  
not only in Europe, but worldwide.  
5. Services  
The BMW Group aims to be one of the leading  
providers of premium mobility services going  
forward. In order to do so, it is essential to have a  
clear understanding of the needs of customers  
worldwide. This knowledge is the basis for offer-  
ing customers an attractive, comprehensive range  
of services in this field, too. These include easy-  
to-use, digitally supported mobility services  
that also feature bring-and-collect services or help  
customers find open parking spaces in urban  
environments. In order to reinforce this strategic  
field, the BMW Group founded the joint venture  
YOUR NOW together with Daimler AG during the  
period under report. Further information is pro-  
vided in the section Cooperation Agreements  
and Partnerships.  
Its many years of experience have given the  
BMW Group a broad and sound base of knowl-  
edge in the field of electric mobility. On this  
basis, the Company develops the drivetrain tech-  
nology such as the motor, the power electronics  
and also the battery, including the battery cell it-  
self, guaranteeing the typical driving charac-  
teristics for its electrified vehicles that customers  
associate with the brand.  
In 2020, the BMW X3 will be the first BMW Group  
model to be available in four different drive-  
train versions: with an efficient diesel or petrol  
engine, as a plug-in hybrid, and with an all-electric  
powertrain system in the form of the BMWꢁiX3*.  
The BMWꢁiX3 is the first model to benefit from a  
new generation of highly efficient BMW electric  
drivetrains, which enables a new balance between  
range and battery size.  
* Fuel  
consumption  
and CO emis-  
sions informa-  
tion are available  
on page 70.  
2
3
0
Combined  
Management  
Report  
Battery cell competence centre opened  
tailor-made solutions that satisfy their own individual  
mobility needs. In 2019, the BMW Group presented a  
further milestone in this strategy at the IAA with its fuel  
cell-powered development vehicle BMWi Hydrogen  
NEXT. This innovative vehicle provides an initial  
preview of a small series of hydrogen fuel cell electric  
drivetrains based on the current BMW X5.  
The BMW Group has combined its wealth of experi-  
ence in the field of e-mobility with its wide-ranging  
knowledge of battery cells to form a new competence  
centre in Munich. It is tasked with continuing to  
develop battery cell technology and master the  
processes required for cell production. Based on  
current technology, the aim is to significantly increase  
the energy density of battery cells and thus also the  
range for customers.  
General Information  
and Group Profile  
Organisation and  
Business Model  
Research and  
Development  
Production Network  
The BMW Group has already demonstrated the  
practical viability of the technology. Since 2013, the  
BMW Group and the Toyota Motor Corporation have  
been collaborating on the joint development of a  
powertrain system based on hydrogen fuel cell tech-  
The further development of battery cell technology  
is a key success factor in the BMW Group’s electric  
offensive strategy, enabling it to have a direct impact  
on both the performance and the cost of the battery.  
This holistic approach ensures that the BMW Group  
is always at the cutting edge of technology while  
simultaneously covering the entire value chain,  
including research and development, assembly and  
design of battery cells. Swift decision-making and  
comprehensive collaboration are making it possible  
to develop battery cells in a complete, transparent  
and sustainable manner. Moreover, it is crucial to  
take recycling into account from the very beginning.  
nology. Since summer 2015, BMW Group researchers  
have been testing a small fleet of BMW 5 Series GT  
hydrogen fuel cell prototypes with a jointly developed  
powertrain system.  
Global research and innovation network expanded  
At 31 December 2019, more than 15,700 people in  
12 countries were working in the BMW Group’s global  
research and innovation network. The following tables  
summarise the key financial figures for research and  
development:  
Sustainability is also a key factor for the expansion of  
electric mobility. For the BMW Group, responsible raw  
material extraction and processing starts at the very  
beginning of the value chain. Supply chains for the  
upcoming fifth generation of high-voltage electrical  
storage systems have also been restructured, including  
the plan to purchase cobalt and lithium for battery  
cells directly with effect from 2020. The strategy will  
provide complete transparency regarding the origin  
of these two essential raw materials for manufactur-  
ing batteries. Further information is available in the  
BMW Group performance indicators relating  
to research and development expenses  
•
10  
in € million  
2019  
2018  
Research and development expenses  
5,952  
5,320  
Amortisation  
–1,667  
–1,414  
Newꢀexpenditureꢀforꢀcapitalisedꢀ  
development costs  
2,134  
6,419  
2,984  
Sustainable Value Report at  
www.bmwgroup.com/svr.  
Research and development expenditure  
6,890  
With the opening of the competence centre, the  
BMW Group is not only setting the future strategic  
course in technological terms, it is also securing jobs  
and key qualifications in the long term.  
Change in  
%pts  
1
1
2019  
2018  
Research and development  
expenditure ratio2  
6.2  
7.1  
– 0.9  
Capitalisation rate3  
33.2  
43.3  
–10.1  
BMW i Hydrogen NEXT presented  
1
The BMW Group assumes that various alternative  
drivetrain systems will coexist in future years, as the  
mobility requirements of customers worldwide cannot  
be met by one solution alone. Hydrogen-powered vehi-  
cles could become an important alternative to, as well  
as a supplement for, battery-electric powered vehicles.  
This diversity in the field of electrified drivetrain tech-  
nologies, which also includes plug-in hybrids alongside  
highly efficient combustion engines, underlines the  
BMW Group’s commitment to offering its customers  
ꢀPriorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀ  
adoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ Iꢀ nꢀaddition,ꢀfiguresꢀforꢀ  
the prior year have been adjusted due to changes in presentation of selected items, which  
are not material overall.  
Research and development expenditure as a percentage of Group revenues.  
Capitalised development costs as a percentage of research and development expenditure.  
2
3
Further information on research and development  
see expenditure is provided in note 8 to the Group  
note 8  
Financial Statements.  
3
1
ProductionꢀNetwork  
for many years. The Company has been continually  
reducing the use of resources such as energy and water  
and produces less waste and CO emissions. In 2019  
2
The BMW Group’s production system is characterised  
by its high flexibility and efficiency, enabling it to  
respond rapidly to changing market situations and fluc-  
tuating regional demand. The BMW Group’s production  
expertise also makes a contribution to its profitability.  
the production of a vehicle required on average  
only half the resources and CO2 as in 2006. From  
2020 onwards all plants operated directly by the  
BMW Group globally as well as those of the joint  
venture BMW Brilliance Automotive in China will  
obtain energy exclusively from renewable sources.  
Its production network leverages innovative technolo-  
gies from the fields of digitalisation and Industry 4.0,  
including applications from the worlds of virtual reality,  
High capacity utilisation throughout the entire  
production network  
artificial intelligence and 3D printing. Standardised  
processes and structures ensure consistent premium  
quality throughout the production system. At the  
same time, the BMW Group offers its customers a high  
degree of individualisation.  
The Group set a new production volume record in the  
1
year under report, totalling  
and Rolls-Royce brand vehicles (2018: 2,541,534ꢀ  
2
,
564  
,
025ꢀ BMW  
,
MINI  
1
1
units; +0.9%). The figure comprised 2,205,841ꢀ BMW  
1
(
2018  
368  
4,353 units; +25.3%) brand vehicles.  
:
2
,
168  
,
496ꢀ units; +ꢀ1  
.
7
%), 352  
,
729 MINI  
(
2018  
:
Sustainability in production and along the value chain  
has played a fundamental role for the BMW Group  
,
685 units; –  
4
.
3
%) and  
5
,
455 Rolls-Royce (2018  
:
Vehicle production of the BMW Group by plant  
•
11  
Proportion of  
in units  
2019  
2018  
Change in %  
production in %  
Spartanburg  
Dingolfing  
Regensburg  
Leipzig  
411,620  
284,907  
255,804  
230,284  
222,340  
221,077  
69,463  
356,749  
328,862  
319,592  
244,248  
234,501  
157,799  
50,224  
15,612  
10,956  
7,752  
15.4  
–13.4  
– 20.0  
– 5.7  
– 5.2  
40.1  
38.3  
51.8  
–18.1  
5.9  
16.1  
11.1  
10.0  
9.0  
Oxford  
8.7  
Munich  
8.6  
Rosslyn  
2.7  
Rayong  
23,700  
0.9  
Chennai  
8,976  
0.3  
Araquari  
8,208  
0.3  
Goodwood  
SanꢀLuisꢀPotosí  
Tiexiꢀ(BBA)ꢀ2  
Dadongꢀ(BBA)ꢀ2  
Bornꢀ(VDLꢀNedcar)ꢀ3  
Grazꢀ(MagnaꢀSteyr)ꢀ3  
Partnerꢀplants  
Group  
5,455  
4,353  
25.3  
–
0.2  
25,538  
308  
1.0  
250,241  
286,268  
174,097  
52,231  
299,939  
191,888  
211,660  
64,431  
42,660  
2,541,534  
–16.6  
49.2  
–17.7  
–18.9  
– 20.7  
0.9  
9.8  
11.2  
6.8  
2.0  
33,816  
1.3  
2,564,025  
100.0  
1
ꢀ
ꢀ
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀShenyangꢀ(2019:ꢀ536,509ꢀunits,ꢀ2018:ꢀ491,872ꢀunits).ꢀ  
JointꢀVentureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀShenyang.  
Contract production.  
2
3
3
2
Combined  
Management  
Report  
Production of electrified automobiles in the  
existing production system  
Expansion of the international production network  
In its efforts to remain successful going forward,  
the BMW Group continues to invest in expanding  
existing and establishing new production capacities,  
thereby increasing its manufacturing capability and  
enhancing the flexibility of its production network.  
The BMW Group endeavours to achieve an even dis-  
tribution of production and deliveries in the various  
regions of the world.  
The BMW Group is integrating the production of  
fully and partially electrified vehicles in its existing  
production system, enabling it to ensure the long-  
term capacity utilisation of the production network,  
while at the same time being able to respond swiftly  
and flexibly to customer requirements. In 2019, the  
Group produced electrified models at 11 different  
locations worldwide.  
General Information  
and Group Profile  
Organisation and  
Business Model  
Production Network  
In 2019, the BMW Group opened a new plant in  
San Luis Potosí (Mexico). The new facility, which  
has the capacity to manufacture up to 175,000 units  
per year, produces the BMW 3 Series Sedan, thus sig-  
nificantly boosting production flexibility within the  
network. The BMW 3 Series Sedan is also produced  
in Germany and China.  
The BMW Group plants in Germany play a leading  
role in integrating e-mobility throughout the Group’s  
production network. The technologies used to produce  
electric powertrain components and high-voltage  
batteries are developed at the Group’s prototype con-  
struction centre in Munich. As a competence centre  
for electric powertrain systems, the Dingolfing site  
acts as lead production plant, and the e-motors for  
the BMW Group’s electrified vehicles are manufac-  
tured there. The corresponding battery modules and  
high-voltage batteries are produced at the Group’s  
three battery factories in Dingolfing (Germany),  
Spartanburg (USA) and Shenyang (China). In Thailand,  
the BMW Group works closely with a partner that  
manufactures batteries for electrified vehicles pro-  
duced locally.  
The BMW Brilliance Automotive Ltd, Shenyang (BBA  
)
joint venture in China is currently building a new facil-  
ity on the premises of the Tiexi plant and carrying out  
major extensions to its automobile plant in Dadong.  
Its ability to produce electric powertrain systems,  
batteries and prototypes for battery cells in-house  
gives the BMW Group a competitive edge that enables  
it to secure valuable knowledge of new technologies,  
gain important system expertise and leverage cost  
advantages.  
The BMW Group combines its wealth of experience  
and broad knowledge of battery cell technologies in  
its own new competence centre, which was opened  
in Munich in 2019.  
3
3
International production network  
The production network comprises 31 locations in  
A further eight production sites are operated either  
by partners or contract manufacturers. The same  
standards of quality, safety and sustainability apply  
at all locations within the BMW Group’s production  
network worldwide.  
1
5 countries, 20 of which are BMW Group plants.  
Three of these locations belong to the BMW Brilliance  
Automotive joint venture in Shenyang, China.  
Locations  
Country  
Products  
BmW Group plAnts  
Araquari  
Berlin  
Brazil  
Germany  
India  
BMWꢀ3ꢀSeries,ꢀBMWꢀX1,ꢀBMWꢀX3,ꢀBMWꢀX4,ꢀBMWꢀX5  
BMWꢀmotorcycles,ꢀMaxi-Scooters,ꢀcarꢀbrakeꢀdiscs  
Chennai  
BMWꢀ3ꢀSeries,ꢀBMWꢀ5ꢀSeries,ꢀBMWꢀ6ꢀSeries,ꢀBMWꢀ7ꢀSeriesꢀ  
BMWꢀX1,ꢀBMWꢀX3,ꢀBMWꢀX4,ꢀBMWꢀX5,ꢀBMWꢀX7,ꢀMINIꢀCountryman  
Dingolfing  
Germany  
BMWꢀ3ꢀSeries,ꢀBMWꢀ4ꢀSeries,ꢀBMWꢀ5ꢀSeries,ꢀBMWꢀ6ꢀSeries,ꢀ  
BMWꢀ7ꢀSeries,ꢀBMWꢀ8ꢀSeries,ꢀBMWꢀMꢀ  
Chassis and drivetrain components  
Components for electric mobility  
Rolls-Royce bodywork, pressed parts  
Eisenach  
Germany  
Toolmaking,ꢀouterꢀbodyꢀpartsꢀforꢀRolls-Royce,ꢀaluminiumꢀtanksꢀforꢀBMWꢀMotorrad  
HamsꢀHall  
UnitedꢀKingdom  
PetrolꢀenginesꢀforꢀBMW,ꢀBMWꢀi,ꢀMINIꢀ  
Core engine parts  
Landshut  
Leipzig  
Germany  
Germany  
Brazil  
Lightweightꢀconstructionꢀcomponents,ꢀelectricꢀdrivetrainꢀsystemsꢀandꢀspecialꢀengines  
BMWꢀ1ꢀSeries,ꢀBMWꢀ2ꢀSeries,ꢀBMWꢀi,ꢀBMWꢀM  
Motorcycles  
Manaus  
Munich  
Germany  
BMWꢀ3ꢀSeries,ꢀBMWꢀ4ꢀSeries,ꢀBMWꢀMꢀ  
Petrolꢀandꢀdieselꢀengines,ꢀhigh-performanceꢀenginesꢀforꢀMꢀmodelsꢀ  
Core engine parts  
Oxford  
UnitedꢀKingdom  
MINI,ꢀMINIꢀClubmanꢀ  
Rayong  
Thailand  
BMWꢀ3ꢀSeries,ꢀBMWꢀ5ꢀSeries,ꢀBMWꢀ7ꢀSeriesꢀ  
BMWꢀX1,ꢀBMWꢀX3,ꢀBMWꢀX5,ꢀBMWꢀX6ꢀ  
Motorcycles  
Regensburg  
Germany  
BMWꢀ1ꢀSeries,ꢀBMWꢀ2ꢀSeries,ꢀBMWꢀ3ꢀSeries,ꢀBMWꢀ4ꢀSeriesꢀ  
BMWꢀX1,ꢀBMWꢀX2,ꢀBMWꢀM  
Rosslyn  
SouthꢀAfrica  
Mexico  
USA  
BMWꢀX3  
BMWꢀ3ꢀSeries  
SanꢀLuisꢀPotosí  
Spartanburg  
Steyr  
BMWꢀX3,ꢀBMWꢀX4,ꢀBMWꢀX5,ꢀBMWꢀX6,ꢀBMWꢀX7,ꢀBMWꢀM  
Austria  
PetrolꢀandꢀdieselꢀenginesꢀforꢀBMWꢀandꢀMINIꢀ  
Core engine parts  
High-performanceꢀenginesꢀforꢀMꢀmodels  
Swindon  
UnitedꢀKingdom  
Pressedꢀpartsꢀandꢀbodyworkꢀcomponents  
Wackersdorf  
Germany  
Distributionꢀcentreꢀforꢀpartsꢀandꢀcomponentsꢀ  
Cockpit assembly  
Processingꢀofꢀcarbonꢀfibreꢀcomponentsꢀ  
Rolls-RoyceꢀManufacturingꢀPlantꢀGoodwood  
UnitedꢀKingdom  
Rolls-RoyceꢀPhantom ꢀ, ꢀGhost,ꢀWraith,ꢀDawn,ꢀCullinan*  
*
2
Fuel consumption and CO emissions information are available on page 70.  
3
4
Combined  
Management  
Report  
The plants in Shenyang (China) are operated by the  
BMW Brilliance Automotive (BBA) joint venture. The  
Shenyang production location comprises the Dadong  
and Tiexi automobile plants. Tiexi also has an engine  
plant with an adjacent foundry and battery factory.  
General Information  
and Group Profile  
Organisation and  
Business Model  
Locations  
Country  
Products  
Production Network  
Joint venture BmW BrilliAnce  
AUTOMOTIVE HOꢁDINGS ꢁTD.  
Dadongꢀ(Shenyang)  
Tiexiꢀ(Shenyang)  
Tiexiꢀ(Shenyang)  
China  
China  
China  
BMWꢀ5ꢀSeries  
ꢀ
BMWꢀX3  
BMWꢀ1ꢀSeries,ꢀBMWꢀ2ꢀSeries,ꢀBMWꢀ3ꢀSeries  
ꢀ
BMWꢀX1,ꢀBMWꢀX2  
Petrolꢀengines,ꢀproductionꢀofꢀcoreꢀengineꢀparts  
The BMW Group’s four automobile partner plants in  
Jakarta (Indonesia), Cairo (Egypt), Kaliningrad (Russia)  
and Kulim (Malaysia) primarily serve their respective  
regional markets.  
Locations  
Country  
Products  
PARTNER PꢁANTSꢂ  
Jakarta  
Indonesia  
BMWꢀ3ꢀSeries,ꢀBMWꢀ5ꢀSeries,ꢀBMWꢀ7ꢀSeries,ꢀ  
BMWꢀX1,ꢀBMWꢀX3,ꢀBMWꢀX5  
ꢀ
MINIꢀCountryman  
Cairo  
Egypt  
Russia  
BMWꢀ5ꢀSeries,ꢀBMWꢀ7ꢀSeries  
BMWꢀX1,ꢀBMWꢀX3,ꢀBMWꢀX4,ꢀBMWꢀX5,ꢀBMWꢀX6,ꢀBMWꢀX7ꢀ  
ꢀ
Kaliningrad  
Kulim  
BMWꢀ5ꢀSeries,ꢀBMWꢀ7ꢀSeries  
BMWꢀX1,ꢀBMWꢀX3,ꢀBMWꢀX4,ꢀBMWꢀX5,ꢀBMWꢀX6,ꢀBMWꢀX7  
ꢀ
Malaysia  
BMWꢀ3ꢀSeries,ꢀBMWꢀ5ꢀSeries,ꢀBMWꢀ6ꢀSeries,ꢀBMWꢀ7ꢀSeriesꢀ  
BMWꢀX1,ꢀBMWꢀX3,ꢀBMWꢀX4,ꢀBMWꢀX5  
ꢀ
MINIꢀCountrymanꢀ  
3
5
The BMW Group also awards contracts to external  
partners for the production of specific types of  
vehicle as well as motorcycles. During the period  
under report, Magna Steyr Fahrzeugtechnik pro-  
duced the BMW 5 Series Sedan and the BMW Z4 in  
Graz (Austria).  
Moreover, various MINI models and the BMW X1 were  
assembled at VDL Nedcar in Born (the Netherlands).  
BMW motorcycles were also manufactured by the  
TVS Motor Company in Hosur (India) and the Loncin  
Motor Company in Chongqing (China).  
Locations  
Country  
Products  
contrAct production  
Born  
TheꢀNetherlands  
MINIꢀConvertible,ꢀMINIꢀCountryman  
ꢀ
BMWꢀX1  
Chongqing  
Graz  
China  
Motorcycles  
Austria  
BMWꢀ5ꢀSeries  
ꢀ
BMWꢀZ4  
Hosur  
India  
Motorcycles  
Motorcycle production up sharply  
In 2019, a total of 187,116 motorcycles rolled off produc-  
tion lines at five different locations worldwide (2018:  
62,687 units; +ꢀ15.0%). The significant increase was  
1
primarily due to the fact that the production of BMW  
scooters at the Chinese partner Loncin Motor Co.,Ltd  
in Chongqing now covers the full product range. In  
September 2019, BMW Motorrad celebrated 50 years  
of motorcycle production at the Berlin plant together  
with over 10,000 visitors.  
3
6
Combined  
Management  
Report  
BMW Group locations worldwide  
• 12  
General Information  
and Group Profile  
Organisation and  
Business Model  
4
3
31  
12  
Sales subsidiaries and  
Financial Services  
Production and  
assembly plants  
Countries with  
research and development  
locations  
locations worldwide  
Headquarters  
Russia  
India  
China  
Canada  
South Korea  
Japan  
usA  
Hong Kong  
Mexico  
Thailand  
Malaysia  
United Arab  
Emiratesꢀ  
Singaporeꢀ1  
Brazil  
Indonesiaꢀ1  
Australia  
Argentinaꢀ1  
South Africa  
New Zealand  
Research and development  
network outside Europe  
ꢀB MWꢀGroupꢀDesignworks,ꢀNewburyꢀ  
Park,ꢀUSA  
ꢀ
ꢀ
ꢀB MWꢀGroupꢀEngineeringꢀJapan,ꢀ  
Tokyo,ꢀJapan  
ꢀ
ꢀ
ꢀ
Production  
outside Europe  
ꢀB MWꢀGroupꢀEngineeringꢀUSA,ꢀ  
WoodcliffꢀLake,ꢀUSA  
ꢀB MWꢀGroupꢀTechnologyꢀOfficeꢀUSA,ꢀ  
MountainꢀView,ꢀUSA  
ꢀ
ꢀ
BMWꢀTechnology,ꢀChicago,ꢀUSA  
ꢀ
BMWꢀGroupꢀplantꢀAraquari,ꢀBrazil  
BMWꢀGroupꢀplantꢀChennai,ꢀIndia  
BMWꢀGroupꢀplantꢀManaus,ꢀBrazil  
BMWꢀGroupꢀplantꢀRayong,ꢀThailand  
ꢀB MWꢀGroupꢀplantꢀRosslyn,ꢀSouthꢀAfrica  
ꢀB MWꢀGroupꢀEngineeringꢀandꢀ  
Emission Test Center,  
Oxnard,ꢀUSA  
ꢀB MWꢀGroupꢀITꢀTechnologyꢀOffice,ꢀ  
Greenville,ꢀUSA  
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
Partner plants  
outside Europe  
ꢀ
ꢀ
ꢀ
ꢀ
ꢀB MWꢀGroupꢀITꢀDevOpsꢀHub,ꢀ  
Rosslyn,ꢀSouthꢀAfrica  
ꢀ
ꢀB MWꢀGroupꢀConnectedDriveꢀLabꢀ  
China,ꢀShanghai,ꢀChina,ꢀandꢀ  
BMWꢀGroupꢀDesignworksꢀStudioꢀ  
Shanghai,ꢀChina  
ꢀB MWꢀdoꢀBrasil,ꢀAraquari,ꢀ  
Brazil  
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
Partnerꢀplant,ꢀChongqing,ꢀChina  
Partnerꢀplant,ꢀHosur,ꢀIndia  
Partnerꢀplant,ꢀJakarta,ꢀIndonesia  
Partnerꢀplant,ꢀCairo,ꢀEgypt  
Partnerꢀplant,ꢀKulim,ꢀMalaysia  
ꢀB MWꢀGroupꢀplantꢀSanꢀLuisꢀPotosí,ꢀ  
Mexico  
ꢀ
ꢀ
ꢀB MWꢀGroupꢀTechnologyꢀOffice,ꢀ  
Shanghai,ꢀChina  
ꢀB MWꢀGroupꢀTechnologyꢀOfficeꢀTelꢀAviv,ꢀ  
TelꢀAviv,ꢀIsrael  
ꢀ
BMWꢀGroupꢀplantꢀSpartanburg,ꢀUSA  
ꢀ
ꢀB MWꢀBrillianceꢀAutomotive,ꢀChinaꢀ  
ꢀB MWꢀGroupꢀEngineeringꢀChina,ꢀ  
Beijing, China  
ꢀB MWꢀGroupꢀR&DꢀCenterꢀSeoul,ꢀ  
Seoul,ꢀSouthꢀKorea  
(
joint venture – 3 plants)  
1
ꢀ
Salesꢀlocationsꢀonly.  
3
7
BMW Group locations in Europe  
•
13  
Norway  
Sweden  
Finlandꢀ1  
Germany  
The Netherlands  
uk  
Denmark  
Czech  
Republic  
Ireland  
Poland  
Austria  
Slovakiaꢀ1  
Hungaryꢀ1  
Belgium  
France  
Romaniaꢀ1  
Bulgariaꢀ1  
Switzerland  
Spain  
Portugal  
Italy  
Sloveniaꢀ1  
Malta  
Greece  
Production in Europe  
BMWꢀGroupꢀplantꢀBerlin  
Research and development  
network in Europe  
ꢀB MWꢀGroupꢀResearchꢀandꢀInnovationꢀ  
Centreꢀ(FIZ),ꢀMunich,ꢀGermany  
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
BMWꢀGroupꢀplantꢀDingolfing  
BMWꢀGroupꢀplantꢀEisenach  
BMWꢀGroupꢀplantꢀLandshut  
BMWꢀGroupꢀplantꢀLeipzig  
ꢀ
ꢀ
ꢀ
ꢀB MWꢀGroupꢀAutonomousꢀDrivingꢀ  
Campus, Unterschleißheim, Germany  
BMWꢀGroupꢀplantꢀMunich  
ꢀB MWꢀGroupꢀDesignworks,ꢀMunich,ꢀ  
Germany  
BMWꢀGroupꢀplantꢀRegensburg  
BMWꢀGroupꢀplantꢀWackersdorfꢀ  
BMWꢀGroupꢀplantꢀSteyr,ꢀAustria  
BMWꢀGroupꢀplantꢀHamsꢀHall,ꢀUK  
BMWꢀGroupꢀplantꢀOxford,ꢀUK  
BMWꢀGroupꢀplantꢀSwindon,ꢀUK  
Partner plants  
in Europe  
ꢀP artnerꢀplant,ꢀBorn,ꢀ  
theꢀNetherlands  
ꢀ
ꢀ
ꢀB MWꢀCarꢀIT,ꢀMunich,ꢀGermany  
ꢀB MWꢀGroupꢀLightweightꢀ  
Construction and Technology Center,  
Landshut,ꢀGermany  
ꢀ
ꢀ
ꢀ
ꢀP artnerꢀplant,ꢀGraz,ꢀ  
Austria  
ꢀ
ꢀ
ꢀB MWꢀGroupꢀDieselꢀCompetenceꢀ  
Centre,ꢀSteyr,ꢀAustria  
BMWꢀFrance,ꢀS.ꢀA.ꢀS.,ꢀ  
Montigny, France  
Sales subsidiaries  
and Financial Services  
locations  
ꢀR olls-RoyceꢀManufacturingꢀPlant,ꢀ  
Goodwood,ꢀUK  
ꢀP artnerꢀplant,ꢀ  
Kaliningrad,ꢀRussia  
ꢀC riticalꢀTechWorksꢀS.A.,ꢀ  
Porto,ꢀPortugal  
Rolls-RoyceꢀMotorꢀCarsꢀLtd.,ꢀ  
Goodwood,ꢀUK  
3
8
Combined  
Management  
Report  
PurchasingꢀandꢀSupplierꢀNetwork  
Further information is available in the Sustainable  
Value Report 2019 online at  
www.bmwgroup.com/svr  
.
General Information  
and Group Profile  
Ensuring access to resources in a volatile  
environment  
Organisation and  
Business Model  
Connecting procurement markets  
The international orientation of the Purchasing and  
Supplier Network provides the BMW Group with good  
access to global procurement markets. It is responsible  
for the worldwide procurement and quality assurance  
of production materials, raw materials, capital goods  
and services as well as the manufacturing of vehicle  
components produced in-house. External suppliers  
are selected systematically on the basis of competitive-  
ness according to the criteria of operating excellence,  
quality, innovation, flexibility, cost and sustainability.  
The BMW Group remains committed to its strategy  
of maintaining a regional balance with regard to  
sales volume, production and purchasing volumes,  
thereby making an important contribution to natural  
hedging against currency fluctuations. In particular,  
the proportion of purchase volumes attributable to the  
Americas region grew in 2019, mainly due to the sig-  
nificant increase in vehicle production in Spartanburg,  
USA, and the start-up of the vehicle plant in San Luis  
Potosí, Mexico. Growth in the region will continue in  
future with the ramping up of production in Mexico.  
Purchasing and  
Supplier Network  
Workforce  
Sustainability and resource efficiency  
along the value chain  
The BMW Group attaches great importance to compli  
ance with environmental and social standards as well  
as to the efficient use of resources along the entire  
value chain.  
Regional mix of BMW Group  
purchase volumes 2019  
-
•
14  
in %, basis: production material  
For these reasons, sustainability criteria based on  
the BMW Group Sustainability Standard are firmly  
embedded in its purchasing processes. These criteria  
also play an essential role in the selection and assess-  
ment of suppliers and apply across the entire supply  
chain. Sustainability management therefore creates  
greater transparency for both the BMW Group and  
its suppliers.  
2
.3 Other  
Asiaꢀ/ꢀAustraliaꢀ 6.5  
33.4  
Germany  
RestꢀofꢀWesternꢀ  
Europe 16.8  
19.0  
NorthꢀAmerica  
The BMW Group is also involved in initiatives aimed at  
standardising sustainability requirements and estab-  
lishing verification mechanisms for supply chains in  
connection with critical raw materials.  
2
2.0 Eastern Europe  
Example: cobalt  
Since cobalt is a key component for producing  
electrified vehicles, the BMW Group is working to  
achieve the greatest possible level of transparency in  
the supply chain. The Group is in continuous contact  
with battery cell manufacturers and demands disclo-  
sure of the origin of this critical raw material. The  
BMW Group has also made its information on the  
subject of cobalt, such as the smelters and countries  
of origin, publicly available and updates it regularly.  
The next step will be to restructure the supply chains  
used to acquire cobalt. From 2020 onwards, the Group  
plans to purchase cobalt for fifth-generation battery  
cells directly from mines in Morocco and Australia  
and make it available to its supply chain partners. The  
strategy increases transparency regarding the origin  
of the raw material.  
3
9
Workforce  
BMW Group apprentices at 31 December  
• 16  
www.bmwgroup.com/en/responsibility/employees  
Workforce at previous year’s level  
4
,964  
4,750  
4
,801  
At 31 December 2019, the BMW Group employed a  
workforce of 133,778 people worldwide. The number  
of employees was thus at a similar level to the end of  
the previous year (2018: 134,682 employees; –0.7%).  
During 2019, natural fluctuation was used to lever-  
age competencies to focus even more keenly on the  
major topics of the future. Specialists and IT experts  
were hired in future-oriented fields such as artificial  
intelligence and autonomous driving, electric mobility,  
smart production and logistics as well as data analysis,  
software architecture, agile software development and  
innovative drivetrain systems. The global production  
network was also further expanded.  
4,700  
5
2
0
,000  
,500  
4,613  
2
015  
2016  
2017  
2018  
2019  
High level of investment in employee qualification  
Spending on employee training and development  
totalled €ꢀ370 million and therefore remained at a  
similar level to the previous year (2018: €ꢀ373 mil-  
BMW Group employees  
•
15  
3
1.12. 2019  
31.12. 2018  
Change in %  
lion; –  
0.8%). The BMW Group consistently promotes  
the principle of lifelong learning. The availability of  
Automotive  
Motorcycles  
FinancialꢀServices  
Other  
121,208  
3,658  
121,994  
3,709  
– 0.6  
–1.4  
– 0.7  
– 4.2  
– 0.7  
innovative, requirements-based learning opportuni  
ties enables employees to play an active role in shaping  
the future of the BMW Group. During 2019, the range  
of training courses on offer for key strategic areas such  
as electric mobility, robotics and data analytics was  
therefore expanded, new learning formats introduced  
in conjunction with the digitalisation initiative, and  
a greater emphasis placed on improving manager  
skill sets, in particular those relevant for leadership  
in the digital age.  
-
8,798  
8,860  
114  
119  
Group  
133,778  
134,682  
Realignment of vocational training  
Started in 2018, the realignment of vocational training  
continued to make good progress with the implemen-  
tation of various strategic action packages, aimed in  
particular at bringing about the digital transformation  
of vocational training based on three pillars: modern  
and mobile equipment, new digital collaboration and  
learning platforms, and a broadly based system of  
talent development specifically tailored to apprentices.  
In addition to the basic range of skills still needed,  
emphasis is also being placed on promoting the acqui-  
sition of new technical and interdisciplinary expertise  
across 30 vocations and 17 dual courses of study. The  
latter were expanded to include the bachelor-degree  
programmes Industry 4.0 Computer Science, Artificial  
Intelligence and Production and Automation. The  
total number of apprentices and participants in the  
BMW Group’s development programmes for young  
talent remained at a high level during the year under  
report at 4,801 (2018: 4,964; –3.3%).  
4
0
Combined  
Management  
Report  
BMW Group remains a highly attractive employer  
Again in 2019, the BMW Group was ranked among  
the world’s most attractive employers. In the latest  
“World’s Most Attractive Employers” ranking pub-  
lished by the agency Universum, the BMW Group  
was once again named the most attractive automotive  
company in the world.  
Diversity as a competitive factor  
Diversity is a key factor in ensuring the BMW Group’s  
continued competitiveness. The aim is to ensure  
equal opportunities for all employees and at the  
same time utilise and promote the diversity of the  
Group’s workforce. In this context, emphasis is placed  
on the three aspects of gender, cultural background  
and ageꢀ/ꢀexperience. In 2019, the BMW Group again  
implemented a broad array of measures in its efforts  
to promote diversity. Further information on this topic  
General Information  
and Group Profile  
Organisation and  
Business Model  
Workforce  
Sustainability  
In 2019, BMW Group China was also selected by busi-  
ness students participating in the locally conducted  
Universum student survey as the most attractive  
employer in the automotive industry. The renowned  
Zhaopin “Most Attractive Employer Award” named  
the BMW Group the most attractive employer overall.  
is also provided in the Sustainable Value Report 2019  
www.bmwgroup.com/svr  
.
The percentage of women in the BMW Group work-  
force as a whole was 19.8% (BMWAG: 16.3%), surpass-  
The BMW Group also came out on top again in  
Trendence’s “Young Professional Barometer Germany”.  
It also received the “Most Attractive Employer of the  
Last 20 Years” award for the most number one rank-  
ings over this period. Moreover, the Group matched its  
previous year’s performance in the Universum study  
ing the internal target range of between 15 and 17%.  
The number of women in management functions rose  
to 17.5% across the BMW Group (BMWAG: 15.8%).  
During the year under report, female representation  
in the BMW Group’s trainee and student development  
programmes stood at approximately 39% and 28  
respectively.  
%
“
Young Professionals Germany”, finishing first, second  
and third in the categories Business, Engineering and  
IT respectively. Based on the overall results of studies  
across all sectors, the BMW Group continued to be  
At the same time, the workforce is becoming increas-  
ingly international. Employees from over 120 countries  
work together successfully for BMWAG. Moreover, a  
balanced age structure in the workforce encourages  
an exchange of ideas and knowledge between gen-  
erations and plays a key role in reducing the loss of  
know-how when valuable employees retire.  
one of the world’s highest-ranked companies in 2019  
.
Employee attrition rate at BMW AG*  
•
17  
as a percentage of workforce  
Proportion of female employees in manage-  
ment functions at BMW AG / BMW Group*  
7.0  
•
18  
in %  
3
.39  
3
0
.5  
2.78  
2
.70  
2.64  
1
7.5  
2
.08  
18  
17.2  
1
1
6.0  
5.8  
1
5.3  
15.1  
BMWꢀGroup 14.3  
BMWꢀAG 12.5  
1
4.0  
1
3.3  
2
015  
2016  
2017  
2018  
2019  
9
0
*
ꢀNumberꢀofꢀemployeesꢀonꢀunlimitedꢀemploymentꢀcontractsꢀleavingꢀtheꢀCompany.  
2
015  
2016  
2017  
2018  
2019  
*
Sinceꢀ2017ꢀincludingꢀmaternityꢀleave.  
4
1
Sustainability  
with the “Comprehensive” option of the standards  
of the Global Reporting Initiative (GRI). This is the  
highest level of transparency set out in the GRI stan-  
dards, in which all relevant information and indicators  
of the aspects identified as material are reported on.  
The Sustainable Value Report is drawn up subject to  
a limited assurance engagement in accordance with  
ISAE 3000 (International Standard on Assurance  
Engagements 3000 (Revised): “Assurance Engagements  
other than Audits or Reviews of Historical Financial  
Information”).  
www.bmwgroup.com/responsibility  
The BMW Group sees itself as a pioneer of sustain-  
ability, not only within the automotive industry, but  
across other sectors, too. Long-term thinking and  
responsible action have long been the cornerstones of  
the BMW Group’s distinct identity and its economic  
success. As early as 1973, the BMW Group was the  
first company in the automotive sector to appoint an  
environment officer. Since 2001, the BMW Group has  
been committed to the United Nations Environment  
Programme, the UN Global Compact and the Cleaner  
Production Declaration. Through its sustainability  
policy, the BMW Group is supporting the implemen-  
tation of the UN’s Sustainable Development Goals  
Based on the requirements of the German CSR Direc-  
tive Implementation Act, since the financial year 2017  
BMWAG has been required to publish a non-financial  
declaration at both Company and Group level. The  
declaration is published jointly for BMWAG and the  
BMW Group as a separate combined non-financial  
report within the Sustainable Value Report.  
(
SDG), which were adopted in September 2015, and  
is committed to complying with the Paris Climate  
Convention.  
The separate combined non-financial report is avail-  
able online within the Sustainable Value Report 2019  
The principles and importance of managing the  
business on a sustainable basis are emphasised in  
the BMW Group’s corporate strategy, which includes  
a clear commitment to preserving resources. The  
BMW Group remains fully committed to ecological  
and social sustainability along the entire value chain  
as well as to comprehensive product responsibility.  
at  
www.bmwgroup.com/svr.  
CO fleet emissions  
2
The development of sustainable products and services  
is an integral part of the BMW Group’s business model.  
The early use of Efficient Dynamics technologies (since  
2007) across the entire fleet and the electrification of  
vehicles, which continued to make good progress in  
2019, have enabled CO2 emissions to be continuously  
reduced. Together, these two cornerstones are essen-  
tial for future compliance with statutory CO2 and fuel  
consumption limits going forward.  
Apart from the reduction of CO emissions, key  
2
components of the Group’s sustainability strategy  
include industrial environmental protection, circular  
economy, sustainability in the supply chain, employee  
orientation and social commitment.  
In order to safeguard its viability going forward, the  
BMW Group’s business model is rigorously based  
on the principle of sustainability. The Group works  
continually on technical innovations that contribute  
to solving global challenges such as climate change  
and urbanisation. In this endeavour, the BMW Group  
concentrates on three main topics:  
The BMW Group has reduced the CO emissions of its  
2
newly sold vehicles in Europe by approximately 40%  
* EU-28 between 1995 and 2019. In Europe*, average CO2 emis-  
sions were 127  
g CO2 /ꢀkm (2018: 128 g CO2 /ꢀkm; –0.8%)  
in the year under report. Based on this figure, the  
BMW Group’s new vehicle fleet* in Europe in 2019  
had an average fuel consumption of 5.0 litres of diesel  
per 100 km or 6.0 litres of petrol per 100 km.  
The development of products and services for  
sustainable individual mobility  
—
The efficient use of resources along the entire  
value chain  
With effect from September 2018, all vehicles in the  
EU were required to be approved in accordance with  
the new WLTP testing cycle. However, the calculation  
of CO2 fleet emissions by the EU Commission will  
not be converted to WLTP until 2021. Therefore, for  
reporting purposes up to and including 2020, WLTP  
fleet emissions must be translated back to the previ-  
ously applicable values calculated in accordance with  
the outgoing New European Driving Cycle (NEDC).  
Due to the changed test conditions used for WLTP  
purposes, emission values are higher when translated  
back to an NEDC basis (NEDC-correlated).  
—
Responsibility towards employees and society  
in general  
—
Further information on sustainability within the  
BMW Group is provided in the Sustainable Value Report  
2
019, which is published online at  
www.bmwgroup.com/svr.  
The Sustainable Value Report is published together  
with the Annual Report and drawn up in accordance  
4
2
Combined  
Management  
Report  
Production  
impact-oriented investments, the BMW Foundation  
Herbert Quandt supports the sustainability targets of  
In its efforts to reduce CO2 emissions generated by  
production and thus contribute to climate protection,  
the BMW Group uses energy-efficient equipment pow  
the United Nations’ Agenda 2030  
www.bmw-foundation.org.  
General Information  
and Group Profile  
-
Organisation and  
Business Model  
ered by renewable energy. In 2019 87% (2018 79%) of  
,
:
In 1959, Herbert Quandt secured the independence of  
BMWAG, thus laying the foundation for the successful  
development of the BMW Group. In recognition of his  
entrepreneurial achievements, in 1970 BMWAG estab-  
lished the “BMW Stiftung Herbert Quandt”, which  
has meanwhile been renamed the “BMW Foundation  
Herbert Quandt” with expanded endowment capital.  
the BMW Group’s electricity worldwide was generated  
from renewable sources or were compensated through  
appropriate certificates of origin. As from 2020, all the  
Group’s locations worldwide are scheduled to obtain  
their electricity exclusively from renewable sources.  
Sustainability  
Cooperation  
Agreements and  
Partnerships  
In 2019, at 2.04 MWh per vehicle* produced, the  
BMW Group further reduced the amount of energy  
consumed in the production process compared with  
the previous year (2018: 2.12 MWh; –3.8%).  
Further information on the topics of sustainability  
and human resources within the BMW Group is avail-  
able in the Sustainable Value Report 2019, which is  
published online at  
www.bmwgroup.com/svr.  
Through the use of measures to boost energy efficiency  
and the purchase and in-house generation of electricity  
from renewable sources at BMW Group manufactur-  
Stakeholder dialogues and materiality analysis as  
basis for sustainability management  
ing sites, production-related CO emissions fell by  
2
2
5
.
0
% to  
year under report compared with the previous year  
2018: 0.40 tonnes).  
0
.
30 tonnes per vehicle* produced in the  
The BMW Group is in continual dialogue with its  
numerous stakeholders, both in Germany and abroad.  
Stakeholder feedback provides the BMW Group with  
a clear picture of how current trends are changing  
the business environment and provides key input for  
the strategic decision-making process. In 2019, a total  
of four dialogue events (BMW Group Dialogues) on  
corporate responsibility and sustainability were held  
in Tel Aviv, San Luis Potosí, Seoul and Munich. The  
events addressed various topics, including product  
and production responsibility, responsibility for  
resources, and responsibility for future mobility.  
(
Social engagement  
Social engagement is also an integral part of the  
BMW Group’s corporate identity. For many years now,  
the BMW Group has firmly supported intercultural  
exchange. In partnership with the UN Alliance of Civi-  
lizations, the BMW Group presents the Intercultural  
Innovation Award for projects the Company views as  
exemplary in this field. Since 2011, each year it has  
presented the “BMW Group Award for Social Com-  
mitment” to employees who have made an exceptional  
contribution through their outstanding volunteer work.  
In the course of regular materiality analysis, social  
challenges are continually monitored and analysed  
in order to gauge their significance from the point  
of view of both external and internal stakeholders.  
The Group addresses current social challenges,  
primarily in areas where its expertise enables it to  
make the greatest impact. The main focus here is on  
problem-solving approaches that are internationally  
applicable and have a tangible long-term impact by  
helping people to help themselves. With this aim in  
mind, the BMW Group works together with the BMW  
Foundation Herbert Quandt.  
Top rankings in sustainability ratings  
The BMW Group again achieved outstanding results  
in prestigious sustainability ratings in 2019, thereby  
confirming the Company’s view of its leading posi-  
tion as a sustainable enterprise. In the Dow Jones  
Sustainability Indices (DJSI) rating, the BMW Group  
is the only German automobile manufacturer to have  
been included once again in the two indices “Europe”  
and “World” and the only company in the sector to  
have been continuously represented since the indices  
were established. In the CDP rating (formerly the  
Carbon Disclosure Project), the Group achieved the  
category Leadership with a rating of A- in the year  
under report. Furthermore, the Group was again  
listed in the British FTSE4Good Index in 2019. The  
BMW Group is also listed in the MSCI, Sustainalytics  
and ISS-oekom rankings, holding a leading position  
in each within the industry.  
BMW Foundation Herbert Quandt  
The BMW Foundation Herbert Quandt is an inde-  
pendent corporate foundation whose activities  
contribute to the BMW Group’s social responsibility  
and mission goals. The foundation endeavours to  
inspire leaders worldwide to assume and continually  
develop their social responsibility and political com-  
mitment. Leaders are also encouraged to work for a  
peaceful, just and sustainable future. With its Respon-  
sible Leadership programmes, a global network and  
*
2
ꢀEfficiencyꢀindicatorꢀcalculatedꢀfromꢀScopeꢀ1ꢀandꢀScopeꢀ2ꢀCO emissions (market-based  
methodꢀinꢀaccordanceꢀwithꢀGHGꢀProtocolꢀScopeꢀ2ꢀGuidance)ꢀofꢀvehicleꢀproduction,ꢀexclud-  
ingꢀmotorcyclesꢀ(adjustedꢀforꢀCHPꢀlosses),ꢀdividedꢀbyꢀtheꢀtotalꢀamountꢀofꢀproducedꢀvehi-  
cles,ꢀincludingꢀfromꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀShenyangꢀ(China),ꢀ  
butꢀexcludingꢀvehiclesꢀfromꢀcontractꢀproductionꢀatꢀMagnaꢀSteyrꢀandꢀNedcar.  
4
3
CooperationꢀAgreementsꢀandꢀ  
Partnerships  
Spotlight  
The BMW Group has signed an agreement with the  
Chinese manufacturer Great Wall Motor Company  
Limited to produce MINI electric vehicles via a 50:50  
joint venture based in China. In addition to MINI elec-  
tric vehicles, the Spotlight Automotive Limited joint  
venture (Spotlight) will also produce electric vehicles  
for Great Wall Motor. Apart from production, the  
joint venture model includes the joint development  
of battery-electric vehicles. Spotlight was founded on  
27 December 2019 following approval by the Chinese  
authorities.  
ꢀ
In order to ensure the success of the business in the  
long term, the BMW Group enters into specific coop-  
eration agreements and partnerships with companies  
in the automotive industry as well as technology lead-  
ers in other sectors. Against a background of rapid  
technological change, the aim of collaborating with  
external partners is to combine expertise in order to  
bring innovations to market within the shortest time  
possible.  
Alongside the planned increase in the stake in BBA,  
the BMW Group is expanding its presence in China  
on a significant scale, thereby underlining its com-  
mitment to the region.  
BMW Brilliance Automotive  
The BMW Group intends to increase its stake in  
BMW Brilliance Automotive (BBA) from 50 to 75%.  
An agreement to this effect was signed in 2018 with  
the BMW Group’s venture partner, Brilliance China  
Automotive Holdings Ltd. (CBA). The contractual term  
of the joint venture, which was due to expire in 2028,  
is to be extended up to 2040. Following approval by the  
Annual General Meeting of CBA on 18 January 2019,  
the closing of the agreement continues to be subject  
to regulatory approvals.  
HERE  
Since the acquisition of the HERE mapping service  
by BMWAG, Daimler AG and AUDI AG in 2015, the  
partners have been working on high-precision digi-  
tal maps that can be linked to real-time vehicle data.  
These digital maps are key for the next generation  
of mobility and location-based services, including  
providing the basis for new assistance systems. As  
an independent platform, HERE has ensured at all  
stages that it remains accessible to other partners in  
YOUR NOW  
the automotive sector and beyond. In December 2019,  
On 28 March 2018, the BMW Group signed an agree-  
ment with Daimler AG regarding the merger of certain  
business units that provide mobility services. Follow-  
ing approval by the relevant antitrust authorities, the  
transaction was closed on 31 January 2019. The two  
companies are now pressing ahead as planned to  
realise their joint vision of fully electric and autono-  
mous on-demand mobility. The new range of mobility  
services will be easy to access, intuitive to use, and cater  
to customers’ needs. The cooperation comprises the  
joint ventures REACH NOW (on-demand mobility and  
multimodal services), CHARGE NOW (battery charg-  
ing), FREE NOW (ride-hailing), PARK NOW (parking)  
and SHARE NOW (car-sharing). The YOUR NOW  
companies were contributed into a holding company  
with effect from 31 December 2019. Based on this, the  
BMW Group and the Daimler Group each have an  
equal share in the holding company.  
HERE announced the intention of Mitsubishi Corpo-  
ration (MC) and Nippon Telegraph and Telephone  
Corporation of Japan (NTT) to jointly acquire a 30%  
ownership stake in the business. Subject to regulatory  
approvals, the transaction is expected to be closed  
during the first half of 2020.  
Under the YOUR NOW umbrella, BMW and Daimler  
offer innovative solutions for cities and municipalities  
seeking to make mobility more efficient and sustain-  
able. Further information is provided in note 2 to  
the Group Financial Statements.  
see  
note 2  
4
4
Combined  
Management  
Report  
MANAGEMENT SYSTEM  
The BMW Group’s internal management system is  
based on a multilayered structure. Operating manage-  
ment occurs primarily at segment level. In order to  
manage long-term corporate performance and assess  
strategic issues, additional performance indicators are  
taken into account within the management system at  
Group level. In this context, the value added serves  
as one of several indicators for the contribution made  
to enterprise value during the financial year. This  
approach is made operational at both Group and  
segment level through key financial and non-finan-  
cial performance indicators (value drivers). The link  
between value added and the relevant value drivers  
is shown in a simplified form below.  
General Information  
and Group Profile  
Management System  
The business management system applied by the  
BMW Group follows a value-based approach that  
focuses on profitability, consistent growth, value  
enhancement for capital providers and job security.  
Capital is considered to be employed profitably when  
the amount of profit generated sustainably exceeds  
the cost of equity and debt capital. In this way, the  
desired degree of corporate autonomy is also secured  
in the long term.  
BMW Group – value drivers  
•
19  
Expenses  
Profit  
–
Return on sales  
Capital turnover  
Cost of capital  
÷
÷
×
Return on capital  
RoCE or RoE)  
Revenues  
Valueꢀadded  
–
×
(
Capital employed  
Averageꢀweightedꢀ  
cost of capital rate  
4
5
Due to the high level of aggregation, it is impractical  
to manage the business on the basis of value added.  
This key indicator therefore only serves for reporting  
purposes. Relevant value drivers having a significant  
impact on business performance and therefore on  
enterprise value are defined for each controlling  
level. The financial and non-financial value drivers  
are reflected in the key performance indicators used  
to manage the business. In the case of project-re-  
lated decisions, the system follows a project-oriented  
management logic that is based on value added and  
profitability performance indicators, thereby provid-  
ing a fundamental basis for decision-making.  
segments and return on equity (RoE) for the Financial  
Services segment. These indicators combine a wide  
range of relevant economic information, such as  
profitability (return on sales) and capital efficiency  
(capital turnover) to provide a measurement of segment  
performance and the development of enterprise value.  
Automotive segment  
The most comprehensive key performance indica-  
tor used for the Automotive segment is RoCE. This  
indicator provides information on the profitability of  
capital employed and the operational business. RoCE  
is measured on the basis of segment profit before  
financial result and the average capital employed in  
the segment. The strategic target for the Automotive  
segment’s RoCE is 26%.  
Management of operating performance  
at segment level  
Operating performance at segment level is managed at  
an aggregated level on the basis of returns on capital.  
Depending on the business model, the segments are  
measured on the basis of return on total capital or return  
on equity. Specifically, return on capital employed  
Profit before  
financial result  
RoCE Automotive  
=
Average capital  
employed  
(RoCE) is used for the Automotive and Motorcycles  
Return on capital employed  
•
20  
Average  
Profit before financial result in € million  
capital employed in € million  
Return on capital employed in %  
2
019  
2018  
2019  
2018  
2019  
2018  
Automotive  
4,499  
6,182  
15,513  
12,420  
29.0  
49.8  
Capital employed corresponds to the sum of all cur-  
rent and non-current operational assets, less liabilities  
that generally do not incur interest (e.ꢀg. trade payables  
and other provisions).  
as the key performance indicator for segment prof-  
itability. The management system also takes into  
account average CO2 emissions for the fleet, which,  
through their influence on ongoing development  
costs and due to regulatory requirements, can have a  
significant long-term impact on Group performance.  
Fleet emissions correspond to average CO2 emissions  
of new cars sold in the EU-28 countries.  
Due to its key importance for the Group as a whole,  
the Automotive segment is managed on the basis  
of additional performance indicators which have a  
significant impact on RoCE and hence on segment  
performance. These value drivers are the number of  
vehicle deliveries and the operating return on sales  
By managing the business on the basis of key value  
drivers, it is possible to gain a better understanding  
of the causes of changes in the RoCE and to define  
suitable measures to influence it.  
(
EBIT margin: segment-related profitꢀ/ꢀloss before  
financial result as a percentage of segment revenues)  
4
6
Combined  
Management  
Report  
Motorcycles segment  
Profit before  
As with the Automotive segment, the Motorcycles  
segment is managed on the basis of RoCE. Capital  
employed is determined on the same basis as in the  
Automotive segment. The strategic RoCE target for  
the Motorcycles segment is 26%.  
financial result  
General Information  
and Group Profile  
rꢀce  
Motorcycles  
=
Management System  
Average capital  
employed  
Return on capital employed  
•
21  
Average  
Profit before financial result in € million  
capital employed in € million  
Return on capital employed in %  
2
019  
2018  
2019  
660  
2018  
2019  
2018  
Motorcycles  
194  
175  
616  
29.4  
28.4  
The principal value drivers are the number of motor-  
cycle deliveries and the operating return on sales  
of return on equity. RoE is defined as segment profit  
before tax, divided by the average amount of equity  
capital in the Financial Services segment. The target  
is a long-term return on capital of at least 14%.  
(
EBIT margin: segment-related profitꢀ/ꢀloss before  
financial result as a percentage of segment revenues)  
as the performance indicator for segment profitability.  
Profit before tax  
RoE Financial  
Financial Services segment  
As is common practice in the banking sector, the  
Financial Services segment is managed on the basis  
=
Services  
Average equity capital  
Return on equity  
•
22  
Profit before tax in € million  
019  
Average equity capital in € million  
Return on equity in %  
2019  
2
2018*  
2019  
2018*  
2018  
FinancialꢀServices  
2,272  
2,143  
15,146  
14,522  
15.0  
14.8  
*
ꢀ ꢀP riorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
Strategic management at Group level  
Group profit before tax provides a comprehensive  
measure of the Group’s overall performance after  
consolidation effects and a transparent basis for com-  
paring performance, particularly over time. The size of  
the Group’s workforce is monitored as an additional  
key non-financial performance indicator.  
Strategic management and quantification of finan-  
cial implications for long-term corporate planning  
are performed primarily at Group level. The key  
performance indicators are Group profit before tax  
and the size of the Group’s workforce at the year-end.  
4
7
The information provided by these two key perfor-  
mance indicators is further complemented by pre-tax  
return on sales and value added. Value added, as a  
highly aggregated performance indicator, also provides  
an insight into capital efficiency and the (opportunity)  
cost of capital required to generate Group profit. A  
positive value added means that a company is gener-  
ating more value than the cost of capital.  
Value added  
Group  
earnings amount  
cost of capital  
–
–
=
=
earnings amount  
(
cost of capital rate ×  
capital employed)  
Value added Group*  
•
23  
Earnings amount  
2019  
Cost of capital (equity + debt capital)  
Value added Group  
2019  
in € million  
2018  
2019  
2018  
2018  
BMWꢀGroup  
7,369  
9,898  
7,812  
7,279  
– 443  
2,619  
*
ꢀ ꢀP riorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
Capital employed comprises the average amount of  
Group equity employed during the year as a whole,  
the financial liabilities of the Automotive and Motor-  
cycles segments, and pension provisions. The earn-  
ings amount corresponds to Group profit before tax,  
adjusted for interest expense incurred in conjunction  
with the pension provision and on the financial lia-  
bilities of the Automotive and Motorcycles segments  
Project decisions are based on calculations derived  
from expected cash flows of the individual project.  
Calculations are made for the full term of a project,  
incorporating future years in which the project is  
expected to generate cash flows. Project decisions  
are taken on the basis of net present value and the  
internal rate of return calculated for the project.  
(
earnings before interest expense and taxes). The cost  
The net present value of a project indicates the extent  
to which a project will be able to generate a positive  
contribution to earnings over and above the cost of  
capital. A project with a positive net present value  
enhances value added and therefore results in an  
increase in enterprise value. The internal rate of return  
of the project corresponds to the average return on  
capital employed in the project. It is equivalent to the  
multi-year average RoCE for an individual project. It is  
therefore consistent with one of the most important  
of the key performance indicators.  
of capital is the minimum rate of return expected by  
capital providers in return for the capital employed.  
Since capital employed comprises an equity capital  
(
e.ꢀg. share capital) and a debt capital element (e.ꢀg.  
bonds), the overall cost of capital rate is determined  
on the basis of the weighted average rates for equity  
and debt capital, measured using standard market  
procedures. The pre-tax average weighted cost of capi-  
tal for the BMW Group in 2019 was 12%, unchanged  
from the previous year.  
For all project decisions, the project criteria and  
long-term periodic results impact are measured and  
incorporated in the long-term Group forecast. This  
approach enables an analysis of the impact of project  
decisions on periodic earnings and rates of return for  
each year during the term of the project. The overall  
result is a cohesive management model.  
Value-based project management  
Operational business in the Automotive and Motor-  
cycles segments is largely shaped by its life-cycle-  
dependent project character. Projects have a substantial  
influence on future business performance. Project  
decisions are therefore a crucial component of financial  
management in the BMW Group.  
4
8
Combined  
Management  
Report  
GENERAL AND  
SECTOR-SPECIFIC  
ENVIRONMENT  
REPORT  
Report on  
Economic Position  
ON ECONOMIC  
POSITION  
General and Sector-  
specific Environment  
Automobile markets down  
on previous year  
General economic environment  
BMW Group automobile deliveries  
nonetheless at new high level  
The global economy was impacted by a variety of  
adverse factors during 2019, and the resulting 2.9%  
growth rate was the slowest recorded for years. The  
economic slowdown was broadly based. Amongst  
Financial Services segment posts  
record results  
the G7 countries, Japan was the only one to record  
an increase in economic output. The BRIC countries  
were also unable to escape the consequences of the  
slowdown, resulting in lower growth rates across  
the board.  
The 1.2% growth rate recorded in the eurozone was  
also down on the previous year. Although major  
economies in the region continued to expand, the  
pace of growth in Germany (+0.6%), France (+ꢀ1.3%),  
Italy (+0.2%) and Spain (+2.0%) was significantly low-  
er year-on-year, whereby exports, private consumption  
and a slight increase in public-sector spending con-  
tributed to the positive growth rates. Despite lower  
industrial production output, the unemployment rate  
continued to fall and is now at its lowest level since  
2
008. Against a backdrop of weaker economic per-  
formance and easing inflationary pressures, towards  
the end of the year the European Central Bank (ECB)  
decided to resume its securities purchase programme  
and reduce its deposit rate further.  
Economic performance in the United Kingdom (UK)  
was dominated by ongoing uncertainty regarding the  
terms of Brexit and hence the UK’s future relationship  
with the European Union (EU). Despite a further slight  
drop in the unemployment rate, private consumer  
sentiment failed to improve noticeably. Public-sector  
spending was increased substantially with a view to  
counteracting the slowing pace of the UK economy.  
Nevertheless, economic growth dropped for the fifth  
consecutive year to stand at 1.4%.  
4
9
Gross domestic product (GDP) in the USA was up by  
.3% in 2019, marking the country’s tenth successive  
Although the drop in consumer demand due to the  
value added tax hike was slightly greater than expect-  
ed, this effect was more than offset by the even more  
pronounced growth in consumer demand that had  
occurred prior to the hike. Government spending was  
increased on a significantly greater scale than one  
year earlier, thereby boosting the domestic economy.  
By contrast, exports fell year-on-year in 2019 as a  
consequence of the trade disputes between the USA  
and China.  
2
year of economic growth. Once again, domestic demand  
provided the momentum for growth. In addition to  
higher spending by private households, public-sector  
spending also rose significantly. Consumer sentiment  
within private households was underpinned by a his-  
torically low unemployment rate and rising wages. By  
contrast, the level of investment by companies and  
private households fell noticeably. Moreover, exports  
stagnated and industrial production contracted on a  
massive scale. Weak economic growth combined with  
a moderate inflation rate of  
1
.
8
% were the decisive  
Currency markets  
factors behind the US Reserve’s decision to cut interest  
rates sharply during the period under report.  
The US dollarꢀ/ꢀeuro exchange rate fluctuated between  
1.09 and 1.15 US dollars to the euro during 2019, fin-  
ishing at an average rate of 1.12 US dollars to the euro  
for the year.  
Growth in China came in at 6.1% in 2019, slightly  
down on the previous year. Private consumer spending  
decreased year-on-year. The trade conflict with the USA  
caused import prices to increase, thereby triggering a  
rise in the inflation rate, the effect of which was felt  
most noticeably by private households. Similarly, there  
was no improvement in the willingness of companies  
to invest, with volumes even lower than one year  
earlier. During 2019, however, numerous protective  
tariffs imposed by the USA on Chinese products  
exacerbated the factors slowing down the Chinese  
economy, causing the government to undertake fiscal  
and monetary measures to prevent the economy from  
cooling too quickly.  
The development of the British pound’s exchange  
rate over the year reflected the uncertainty of capital  
markets regarding their expectations of an orderly  
Brexit. As a consequence, the value of the British  
currency dropped to 0.93 pounds to the euro at one  
stage, compared to a high of 0.83, ultimately resulting  
in an average rate of 88 pounds to the euro in 2019  
nearly unchanged from the previous year.  
0
.
,
The Chinese renminbi stabilised year-on-year with an  
average exchange rate of 73 renminbi to the euro  
7
.
over the year. The Japanese yen also appreciated in  
value with an average exchange rate of 122 yen to the  
euro during the year under report.  
In Japan, GDP grew by 0.7%, mainly attributable to a  
moderate year-on-year increase in private consumption.  
Exchange rates compared to the euro  
•
24  
Index: December 2014 = 100  
150  
100  
50  
150  
BritishꢀPound  
Chinese Renminbi  
Russian Rouble  
100  
USꢀDollar  
JapaneseꢀYen  
50  
2
015  
2016  
2017  
2018  
2019  
2020  
Source:ꢀReuters.  
5
0
Combined  
Management  
Report  
Oil price trend  
• 25  
Report on  
Economic Position  
Price per barrel of Brent Crude  
General and Sector-  
specific Environment  
1
5
0
00  
100  
50  
0
PriceꢀinꢀUSꢀdollars  
Priceꢀinꢀeuros  
0
2
015  
2016  
2017  
2018  
2019  
2020  
Source:ꢀReuters.  
Metals price trend  
•
26  
Index: December 2014 = 100  
3
2
1
0
00  
00  
00  
300  
200  
100  
0
Palladium  
Lithiumꢀcarbonate  
Gold  
Cobalt  
Platinum  
2
015  
2016  
2017  
2018  
2019  
2020  
Source:ꢀReuters.  
5
1
Energy and raw materials prices  
International automobile markets  
Increasing uncertainty regarding the global economy  
also put pressure on commodity markets in 2019.  
After substantial rises for steel in the previous year,  
prices consolidated at a lower level in 2019.  
A downward trend was observable on most automo-  
bile markets in 2019. Accordingly, registration figures  
for passenger cars and light commercial vehicles fell  
worldwide by 2.0% to a total of 83.5 million vehicles.  
Against this backdrop, prices for precious and non-fer-  
rous metals rose only slightly. Palladium and rhodium,  
which are mainly used in catalytic converters, were  
the exception to the general trend and became signifi-  
cantly more expensive during the reporting period.  
International automobile markets  
• 28  
Change in %  
Europe  
thereof Germany  
+1.1  
+ꢀ4.9  
+ ꢀ1 .6  
+ꢀ0.1  
– 4.6  
+ꢀ4.0  
–1.2  
– 3.9  
– 0.8  
– 2.0  
Prices for lithium and cobalt, which are used as raw  
materials in batteries, were well down in 2019 com-  
pared with the high levels of the recent past. Increased  
supply capacity and significantly lower-than-expected  
demand for these materials meant that prices remained  
at a lower level than in previous years.  
thereof France  
thereof Italy  
thereofꢀSpain  
thereofꢀUK  
USA  
Despite some risks, oil markets were relatively calm  
in 2019. The drone attack on oil production facilities  
in Saudi Arabia caused prices to rise significantly in  
the short term, but had little impact on price levels  
in the medium term. Whereas prices in the region of  
China  
Japan  
Total  
5
3 US dollars per barrel were still seen on the market  
at the beginning of the year, the price of Brent crude  
oil rose to a peak of 75 US dollars due to prevailing  
concerns. Overall, the average price per barrel fell  
sharply from 72 US dollars to 64 US dollars year-on-  
International motorcycle markets  
Motorcycle markets in the 250 cc plus class generally  
performed well during 2019. The number of new reg-  
istrations worldwide increased by 3.1% year-on-year.  
year. WTI, the benchmark for crude oil in the USA  
,
followed a similar trend, with an average price of  
around 57 US dollars per barrel for the year as a whole.  
International motorcycle markets  
•
29  
Steel price trend  
Change in %  
•
27  
Index: January 2015 = 100  
Europe  
thereof Germany  
8.2  
7.5  
thereof France  
thereof Italy  
12.0  
5.5  
150  
100  
50  
thereofꢀSpain  
14.5  
– 3.3  
– 4.8  
13.2  
3.1  
America  
thereofꢀUSA  
thereof Brazil  
Total  
2
015  
2016  
2017  
2018  
2019  
2020  
Source:ꢀWorkingꢀGroupꢀforꢀtheꢀIronꢀandꢀMetalꢀProcessingꢀIndustry.  
5
2
Combined  
Management  
Report  
International interest rate environment  
OVERALL ASSESSMENT  
BY MANAGEMENT  
The trade dispute between the USA and China,  
increasing trade barriers and growing uncertainty as a  
result of geopolitical risks all had a negative impact on  
the global economy in 2019. The major central banks  
responded to these developments with expansionary  
monetary policies.  
Report on  
Economic Position  
General and Sector-  
specific Environment  
Overall Assessment  
by Management  
Comparison of  
Forecasts for 2019  
with Actual Results  
in 2019  
Overall assessment of business performance  
Despite challenging conditions and volatility on inter-  
national markets, the BMW Group can look back on  
an overall satisfactory business performance in 2019.  
Despite some downward trends in figures in the past  
financial year, the BMW Group’s results of operations,  
financial position and net assets are all indicative  
of its solid financial condition. Overall, in view of  
the various economic challenges arising during the  
year, business developed in line with management’s  
revised expectations, taking into account the provision  
recognised in connection with the EU Commission’s  
antitrust proceedings. This assessment also takes  
into account events after the end of the reporting  
period. The impact expected from the spread of the  
coronavirus has been taken into account in the out-  
look for 2020.  
In September, the European Central Bank decided to  
cut the deposit rate by 0.10 % to –0.50 % and resume  
its bond purchase programme. Since November 2019  
it has been buying securities at a monthly rate of  
ꢀ20 billion; an end to the purchase programme has  
,
€
not been set.  
With the outcome of the UK’s EU exit negotiations  
being uncertain, the Bank of England (BoE) followed  
a “wait-and-see” approach and left the key interest  
rate unchanged at 0.75% in 2019.  
During the period under report, the US Federal  
Reserve (Fed) cut interest rates for the first time since  
the financial crisis. After three reductions of  
in each case, at 31 December 2019 the benchmark  
interest rate was within a range of 50 to 75%. After  
0.25%  
1
.
1.  
its meeting in October, the Fed signalled that it would  
not reduce interest rates further in the near future.  
In August, the Bank of China (PBOC) announced a  
reform of its lending rate mechanism, replacing the  
traditional benchmark interest rate with the market-  
oriented Loan Prime Rate (LPR). On introduction of  
the new system, the LPR stood at 4.25%, 0.10% lower  
than the former traditional benchmark rate. During  
the remainder of the year, the PBOC reduced the LPR  
to 4.15% in two steps.  
Moderate economic growth, the increase of the value  
added tax and an inflation rate that continues to  
be significantly under the  
2% target prompted the  
Japanese central bank to maintain its highly expansive  
monetary policies.  
5
3
COMPARISON OF  
FORECASTS FOR 2019  
WITH ACTUAL RESULTS  
IN 2019  
The following table shows the development of key per-  
formance indicators for the BMW Group as a whole as  
well as for the Automotive, Motorcycles and Financial  
Services segments in the financial year 2019 compared  
to the forecasts made in the Annual Report 2018.  
Key figures presented in the report have been rounded  
in accordance with standard commercial practice. In  
certain cases, this may mean that values do not add up  
exactly to the stated total and that percentages cannot  
be derived exactly from the values shown.  
BMW Group comparison of 2019 forecasts with actual outcomes 2019  
•
30  
Forecast for 2019  
in 2018 Annual Report  
Forecast revision  
during the year  
Actual outcome  
in 2019  
Group  
Profitꢀbeforeꢀtax  
significantꢀdecrease  
€ million  
7,118 (– 26.1 %)  
significant decrease  
Workforceꢀatꢀyear-end  
inꢀlineꢀwithꢀlastꢀyear’sꢀlevel  
133,778 (– 0.7 %)  
in line with last  
year’s level  
Automotive seGment  
Deliveriesꢀtoꢀcustomersꢀ1  
slight increase  
slight decrease  
units  
2,538,367 (+2.2 %)  
slight increase  
Fleet emissions2  
127 (– 0.8 %)  
in line with last  
year’s level  
g CO  
2
/ km  
EBIT margin  
between 6 and 8  
Q1:ꢀbetweenꢀ4.5ꢀandꢀ6.5  
%
%
4.9 (– 2.3 %pts)  
Return on capital employed  
significantꢀdecrease  
29.0 (– 20.8 %pts)  
significant decrease  
motorcycles seGment  
Deliveriesꢀtoꢀcustomers  
solid increase  
units  
%
175,162 (+ 5.8 %)  
solid increase  
EBIT margin  
between 8 and 10  
solid increase  
8.2 (+ 0.1 %pts)  
Return on capital employed  
29.4 (+1.0 %pts)  
slight increase  
%
FinAnciAl services seGment  
Return on equity  
inꢀlineꢀwithꢀlastꢀyear’sꢀlevel  
15.0 (+ 0.2 %pts)  
in line with last  
year’s level  
%
1
ꢀ
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀ Sꢀ henyangꢀ(2019:ꢀ538,612ꢀunits).  
EU-28.  
2
In an ad hoc announcement dated 5 April 2019,  
the BMW Group reported that the EU Commission  
had informed it of a “Statement of Objections” in  
conjunction with ongoing antitrust proceedings. The  
EU Commission is investigating whether German  
automobile manufacturers cooperated in techni-  
cal working groups to restrict competition in the  
development and rollout of emissions-reduction  
technologies. The Statement of Objections leads the  
BMW Group to conclude that it is probable (“more  
likely than not”) that the EU Commission will issue  
a significant fine. If necessary, the BMW Group will  
contest the EU Commission’s allegations with all the  
legal means at its disposal.  
5
4
Combined  
Management  
Report  
Irrespective thereof, the fact that a fine is “more  
likely than not” triggers a requirement to recognise  
a provision in accordance with International Financial  
Reporting Standards. Based on information currently  
available and in accordance with International Finan-  
cial Reporting Standards, a provision of approximately  
In addition, the definition of deliveries includes  
any vehicles delivered in the United States or  
Canada if:  
—
Report on  
Economic Position  
Comparison of  
Forecasts for 2019  
with Actual Results  
in 2019  
the relevant dealers designate such vehicles as  
—
service loaner vehicles or demonstrator vehi-  
cles (BMW Group provides financial incentives  
in this regard to such dealers); or  
€ꢀ1.4 billion was recognised in the first quarter of 2019  
to take account of financial impacts that cannot yet  
be definitively assessed. Group and Automotive seg-  
ment earnings for the first quarter as well as for the  
full financial year were impacted accordingly. The  
BMW Group has examined the objections and gained  
access to the documents in the EU Commission’s  
investigation file. In December 2019, the BMW Group  
submitted a detailed response to the EU Commission,  
which the latter will now examine before determining  
the next steps in the proceedings. Consequently, it  
is not yet possible to assess the ultimate financial  
impact definitively.  
such vehicles are company vehicles purchased  
by dealers or other third parties at auctions  
or by dealers directly from BMW Group,  
—
each of which may not correlate to a sale to a  
consumer or other end user in the relevant  
reporting period.  
See Glossary – Explanation of Key Figures – Deliveries  
for the definition of deliveries.  
Detailed information on the key performance indica-  
tors for the Group is presented as part of the following  
review of the BMW Group’s results of operations,  
financial position and net assets. The development  
of the key performance indicators for the Automo-  
tive, Motorcycles and Financial Services segments is  
described in the relevant sections on each segment.  
Retail vehicle deliveries during a given reporting  
period do not correlate directly to the revenue that  
BMW Group recognises in respect of such report-  
ing period.  
In connection with reviewing its sales practices  
and related reporting practices, BMW Group also  
reviewed prior period retail vehicle delivery data and  
separately determined that certain vehicle deliveries  
were not reported in the correct periods. BMW Group  
has revised the data on those vehicle deliveries that  
had not been reported in the correct periods as  
further described below, and is making, and will  
continue to make in the future, certain adjustments  
to its policies and procedures in order to improve the  
reliability and validity of its retail vehicle delivery  
data, in particular with respect to the timing of the  
recognition of deliveries.  
In December 2019, BMW Group was informed by  
the U.ꢀS. Securities and Exchange Commission  
the SEC) that the SEC had commenced an inquiry  
(
into BMW Group’s vehicle sales* practices and * see Glossary  
reporting. On January 22, 2020, the SEC formally  
forꢀtheꢀdefinitionꢀ  
of deliveries  
opened an investigation into potential violations of  
U.ꢀS. securities laws by BMW Group relating to dis-  
closures regarding BMW Group’s unit sales of new  
vehicles. BMW Group is reviewing the matter and  
cooperating with the SEC’s investigation. Information  
on contingent liabilities is provided in note 38 to  
the Group Financial Statements.  
see  
note 38  
Specifically, the retail vehicle delivery data presented  
in this annual report (years 2015 through 2019) have  
been revised by adjusting the data for BMW Group’s  
six most significant markets to reflect the above. In  
the years 2015 through 2019, these six markets (China,  
USA, Germany, UK, Italy and Japan) represented on  
The preparation of BMW Group’s retail vehicle deliv-  
ery data involves estimates and judgments and is  
subject to other uncertainties, including:  
The vast majority of deliveries of vehicles are  
average 68.3 % of BMW Group’s total vehicle deliv-  
eries. For each of the years 2015 through 2019, these  
revisions amounted to less than % of BMW Group’s  
total retail vehicle deliveries. The retail vehicle deliv-  
ery data for BMW Group’s other markets have not  
been adjusted, as BMW Group believes the impact  
to be immaterial.  
—
carried out by independent dealerships or other  
third parties, and BMW Group is reliant on  
such third parties to correctly report relevant  
data to BMW Group.  
1
While BMW Group believes the retail vehicle delivery  
data presented in this annual report to be materially  
correct in accordance with BMW Group’s definition  
of deliveries, challenges and further revisions of such  
data cannot be ruled out.  
5
5
Results of operations of the BMW Group  
The BMW Group recorded a solid year-on-year  
exchange rates of the US dollar, Chinese renminbi,  
Japanese yen and Thai baht. In the previous year,  
revenues were also negatively impacted by the high  
level of competition due to the reaction of competitors  
to the early implementation of WLTP regulations as  
well as by the unfavourable effect of trade conflicts  
on selling prices.  
increase in revenues for the financial year 2019  
Alongside product mix effects, higher revenues from  
leasing and the sale of products previously leased to  
customers also had a positive influence in the year  
under report. Moreover, revenues were positively  
impacted by currency factors, mainly relating to the  
.
BMW Group condensed income statement  
•
31  
in € million  
2019  
2018*  
Change in %  
Revenues  
104,210  
– 86,147  
18,063  
96,855  
– 78,477  
18,378  
7.6  
– 9.8  
–1.7  
Cost of sales  
Gross profit  
Sellingꢀandꢀadministrativeꢀexpenses  
Other operating income and expenses  
Profit before financial result  
– 9,367  
–1,285  
7,411  
– 9,568  
123  
2.1  
–
8,933  
–17.0  
Financial result  
– 293  
7,118  
694  
–
Profit before tax  
9,627  
– 26.1  
Income taxes  
– 2,140  
4,978  
44  
– 2,530  
7,097  
– 33  
15.4  
– 29.9  
–
Profit from continuing operations  
Profitꢀ/ꢀlossꢀfromꢀdiscontinuedꢀoperations  
Net profit  
5,022  
7,064  
– 28.9  
Earnings per share of common stock in €  
Earnings per share of preferred stock in €  
7.47  
7.49  
10.60  
10.62  
– 29.5  
– 29.5  
in %  
2019  
2018*  
Change in %pts  
Pre-taxꢀreturnꢀonꢀsales  
Post-taxꢀreturnꢀonꢀsales  
Grossꢀprofitꢀmargin  
Effective tax rate  
6.8  
4.8  
9.9  
7.3  
– 3.1  
– 2.5  
–1.7  
3.8  
17.3  
30.1  
19.0  
26.3  
*
ꢀPriorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
5
6
Combined  
Management  
Report  
Group revenues by region were as follows:  
Report on  
Economic Position  
BMW Group revenues by region  
•
32  
in %  
2019  
2018*  
Europe  
44.4  
30.6  
22.7  
2.3  
46.2  
30.9  
20.2  
2.7  
Asia  
Americas  
Other regions  
Group  
100.0  
100.0  
BMW Group cost of sales  
•
33  
in € million  
2019  
2018*  
Change in %  
Manufacturing costs  
48,690  
23,623  
2,288  
44,558  
22,042  
2,035  
5,320  
1,414  
1,844  
1,717  
2,996  
78,477  
9.3  
7.2  
Costꢀofꢀsalesꢀrelatingꢀtoꢀfinancialꢀservicesꢀbusiness  
thereofꢀinterestꢀexpenseꢀrelatingꢀtoꢀfinancialꢀservicesꢀbusiness  
Research and development expenses  
thereof amortisation of capitalised development costs  
Serviceꢀcontracts,ꢀtelematicsꢀandꢀroadsideꢀassistance  
Warrantyꢀexpenses  
12.4  
11.9  
17.9  
–11.0  
49.4  
22.7  
9.8  
5,952  
1,667  
1,641  
2,566  
3,675  
86,147  
Other cost of sales  
Cost of sales  
*
ꢀPriorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
Group cost of sales increased compared to the pre-  
vious year. Higher manufacturing costs due to stricter  
regulatory requirements (especially in connection  
with the reduction of fleet emissions), negative  
currency effects, higher raw material prices (espe-  
cially for palladium and rhodium) as well as higher  
warranty expenses all had a negative impact on  
cost of sales.  
in € million  
2019  
2018  
Research and development expenses  
Amortisation  
5,952  
–1,667  
2,134  
5,320  
–1,414  
2,984  
Newꢀexpenditureꢀforꢀcapitalisedꢀ ꢀd evelopmentꢀcosts  
Total research and development expenditure  
6,419  
6,890  
In addition to the higher level of cost of sales incurred  
for the Financial Services business, there was a year-  
on-year increase in the area of research and develop-  
related mainly to investments in new model series such  
as the X5, the BMW 3 Series and the BMW 8 Series,  
while in 2019 they related mainly to amounts invested  
in autonomous driving, the BMW 1 Series and a new  
generation of electrified vehicles. Furthermore, the  
higher level of costs capitalised in the previous years  
referred to above also resulted in increased amortisa-  
tion on capitalised development costs in 2019.  
ment, where expenses rose to €ꢀ5,952 million (2018:  
320 million), mainly in relation to the electrification  
€ꢀ5,  
of vehicles (including the iNEXT), ongoing develop-  
ment work on autonomous driving and digitalisation.  
In the previous year, capitalised development costs  
5
7
BMW Group performance indicators relating to research and development expenses  
•
34  
in %  
2019  
2018*  
Change in %pts  
Research and development expenditure ratio  
Capitalisation rate  
6.2  
7.1  
– 0.9  
33.2  
43.3  
–10.1  
*
ꢀPriorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
Depreciation and amortisation on property, plant  
and equipment and intangible assets recorded in cost  
of sales and in selling and administrative expenses  
totalled €ꢀ6,017 million (2018: €ꢀ5,113 million).  
In addition, the higher interest expense arising in  
connection with the recognition of lease liabilities in  
accordance with IFRS 16 as well as the higher amount  
of interest unwound on non-current provisions for  
statutory and non-statutory warranty obligations had  
a negative impact on the net interest result.  
Selling and administrative expenses amounted to  
€ꢀ9,367 million and were therefore slightly down on  
the previous year (2018: €ꢀ9,568 million), helped by a  
decrease in personnel costs that was partially attrib-  
utable to amendments to pension plans in the USA.  
At a net negative amount of €ꢀ109 million, other finan-  
cial result was significantly down on the previous year  
(2018: net positive amount of €ꢀ51 million). The one-  
off revaluation gain of €ꢀ329 million arising from the  
pooling of mobility services with the Daimler Group  
was partially offset by impairment losses totalling  
€ꢀ240 million. In the previous year, other financial  
result also included a revaluation gain of €ꢀ209 million  
arising on the takeover of DriveNow. Other financial  
result was also adversely affected by revaluation losses  
recognised on interest rate hedges in connection with  
the refinancing of the Financial Services business.  
The net amount of other operating income and ex-  
penses decreased significantly from a positive amount  
of €ꢀ123 million to negative €ꢀ  
to the recognition of a provision of approximately  
billion in connection with the EU Commission  
1,285 million, mainly due  
€ꢀ1.4  
antitrust proceedings. Further information is provided  
in note 10 to the Group Financial Statements.  
see  
note 10  
As a result, profit before financial result (EBIT) de-  
creased by €ꢀ  
1
,
522 million to €ꢀ  
7
,
411 million (2018  
:
As forecast most recently in the Quarterly Statement  
to 30 September 2019, Group profit before tax for  
the full financial year was significantly down on the  
€
ꢀ8,933 million).  
The financial result deteriorated significantly year-on-  
year by €ꢀ987 million to a net expense of €ꢀ293 million.  
The main negative factor here was a €ꢀ496 million drop  
in the result from equity accounted investments,  
whereby a €ꢀ179 million increase in the Group’s share  
of earnings of BMW Brilliance Automotive Ltd. was  
more than offset by the negative at-equity result of  
previous year and, at €ꢀ7,118 million (2018: €ꢀ9,627 mil-  
lion), was therefore in line with revised expectations.  
The income tax expense for the year amounted to  
€ꢀ  
2
,
140 million (2018: €ꢀ  
2
,
530 million). The effective  
tax rate increased to 30  
.
1
% (2018 26 %), mainly due  
:
.3  
to the non-deductibility of the expense recorded for  
the provision relating to EU Commission anti-trust  
proceedings as well as the non-deductibility of impair-  
ment losses relating to the YOUR NOW Group, recog-  
nised in other financial result. Tax income received for  
prior years – mainly due to the successful conclusion  
of intergovernmental tax treaties covering the topic  
of transfer pricing – had an offsetting effect.  
€
ꢀ662 million attributable to the YOUR NOW compa-  
nies. In addition to operating losses, the YOUR NOW  
at-equity result also included write-downs recorded  
at separate entity level amounting to €ꢀ277 million  
arising in conjunction with the reorientation of the  
YOUR NOW Group. Further information is provided  
in note 2 to the Group Financial Statements.  
see  
note 2  
The net interest result deteriorated by €ꢀ331 million,  
mainly due to the reversal of provisions recorded in  
In the year under report, the workforce size, based  
on a total of 133,778 employees, remained at a simi-  
lar level year-on-year and was therefore in line with  
expectations (2018: 134,682 employees; –0.7% ).  
2
018 following the conclusion of mutual agreement  
procedures relating to taxes and customs.  
5
8
Combined  
Management  
Report  
Financial position of the BMW Group  
Cash flows from operating activities are determined  
indirectly, starting with Group and segment net profit.  
By contrast, cash flows from investing and financing  
activities are based on actual payments and receipts.  
The consolidated cash flow statements for the Group  
and the Automotive and Financial Services segments  
show the sources and applications of cash flows for the  
financial years 2019 and 2018, classified according to  
operating, investing and financing activities. Cash and  
cash equivalents in the cash flow statements corre-  
spond to the amounts disclosed in the balance sheet.  
Report on  
Economic Position  
BMW Group cash flows  
•
35  
in € million  
2019  
2018  
Change  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀoperatingꢀactivities  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀinvestingꢀactivities  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀfinancingꢀactivities  
Effects of exchange rate and changes in composition of Group  
Change in cash and cash equivalents  
3,662  
– 7,284  
4,790  
–111  
5,051  
– 7,363  
4,296  
– 44  
–1,389  
79  
494  
– 67  
1,057  
1,940  
– 883  
The decrease in cash inflow from the Group’s operat-  
ing activities was attributable in particular to higher  
tax payments, mainly relating to the tax reform in the  
USA. The decrease was exacerbated by the increase  
in working capital over the twelve-month period,  
primarily reflecting the slight increase in inventories  
held by the Automotive, Motorcycles and Financial  
Services segments.  
Total cash outflow from the Group’s investing activ-  
ities was slightly down on the previous year. Lower  
cash outflows for investments in property, plant  
and equipment and intangible assets (€ꢀ875 million  
decrease) contrasted with higher net cash outflows for  
investments in financial assets (€ꢀ761 million increase),  
the latter relating primarily to the acquisition of the  
YOUR NOW companies (cash outflow of €ꢀ890 million).  
The higher dividend received from BMW Brilliance  
Automotive Ltd., Shenyang (€ꢀ259 million increase),  
also had a positive impact.  
The amount of cash inflow from the Group’s financing  
activities resulted mainly from the higher volume of  
asset-backed securities financing, while the repay-  
ment of loans had an offsetting effect.  
5
9
Refinancing  
In 2019, the BMW Group issued three euro bench-  
mark bonds on the European capital market with a  
total issue volume of €ꢀ6.8 billion, as well as bonds  
on the US capital market with a total issue volume  
of USD 5.0 billion. Bonds were also issued in British  
pounds, Canadian dollars, Swiss francs and Norwe-  
gian krone for a total amount of €ꢀ2.0 billion. Private  
A broad range of instruments on international money  
and capital markets is used to refinance Group oper-  
ations worldwide. The funds raised are used almost  
exclusively to finance the BMW Group’s Financial  
Services business.  
The overall objective of Group financing is to ensure  
the solvency of the BMW Group at all times, focusing  
on three areas:  
placements totalling €ꢀ4.4 billion were also issued,  
including, for the first time, so-called “Panda bonds”  
for an amount of 9.5 billion Chinese renminbi.  
1
2
3
. The ability to act through permanent access  
to strategically important capital markets  
A total of 13 public ABS transactions were executed in  
2019, including five in China, two each in Japan, the  
USA and Germany, and one each in Canada and South  
Africa with a total volume equivalent to €ꢀ7.7 billion.  
Further funds were also raised via new and prolonged  
ABS conduit transactions in Japan, UK, Germany and  
. Autonomy through the diversification of refi-  
nancing instruments and investors  
. Focus on value through the optimisation of  
Australia with a total volume equivalent to €ꢀ5.6 bil-  
financing costs  
lion. Other transactions remain in place in Germany,  
Switzerland and South Africa, amongst others.  
Financing measures undertaken at corporate level  
ensure access to liquidity for the Group’s operating  
subsidiaries at standard market conditions and con-  
sistent credit terms. Funds are acquired in line with  
a target liability structure, comprising a balanced  
mix of financing instruments. The use of longer-term  
instruments to fund the Group’s Financial Services  
business and the maintenance of a sufficiently high  
liquidity reserve serves to avoid the liquidity risk in  
the portfolio. This conservative financial approach  
also helps the Group’s rating. Further information  
is provided in the section Liquidity risks within the  
The following table provides an overview of amounts  
utilised at 31 December 2019 in connection with the  
BMW Group’s money and capital market programmes:  
Programme  
framework  
Amount  
utilised*  
Programme  
in € billion  
EuroꢀMediumꢀTermꢀNotes  
AustralianꢀMediumꢀTermꢀNotes  
CommercialꢀPaper  
50.0  
1.6  
40.4  
–
13.4  
2.6  
“
Report on Outlook, Risks and Opportunities”.  
*
Measured at exchange rates at the relevant transaction dates.  
On account of its good ratings and the high level  
of acceptance it enjoys on capital markets, the  
BMW Group was again able to refinance operations at  
favourable conditions on debt capital markets during  
the financial year 2019. In addition to bonds, loan  
notes and private placements, the Group also issued  
commercial paper. As in previous years, all issues were  
in high demand, not only from private investors but  
also from institutional investors in particular. In addi-  
tion, retail customer and dealership financing receiv-  
ables as well as rights and obligations from leasing  
contracts are securitised in the form of asset-backed  
securities (ABS) financing arrangements. Specific  
banking instruments, such as customer deposits held  
by the Group’s own banks in Germany and the USA,  
are also deployed for financing purposes. In addition,  
loans are also taken from international banks.  
At 31 December 2019, liquidity remained at a solid  
level of €ꢀ17.4 billion.  
The BMW Group also has access to a syndicated credit  
line, which was newly agreed upon in July 2017. The  
syndicated credit line of €ꢀ8 billion has a term up to  
July 2024 and is being made available by a consortium  
of 44 international banks. The credit line was not  
being utilised at 31 December 2019.  
Further information with respect to financial liabilities  
see is provided in notes 31, 35 and 39 to the Group  
notes 31, 35  
and 39  
Financial Statements.  
6
0
Combined  
Management  
Report  
Net assets of the BMW Group  
BMW Group condensed balance sheet at 31 December  
• 36  
Report on  
Economic Position  
Group  
Proportion of  
balance sheet  
total in %  
Currency-adjusted  
1
2
in € million  
2019  
2018  
Change in %  
change in %  
2019  
Assets  
Intangible assets  
11,729  
23,245  
42,609  
3,199  
703  
10,971  
19,801  
38,259  
2,624  
6.9  
17.4  
11.4  
21.9  
– 4.9  
6.2  
6.8  
16.5  
9.9  
5.1  
10.2  
18.7  
1.4  
Property,ꢀplantꢀandꢀequipment  
Leasedꢀproducts  
Investments accounted for using the equity method  
Other investments  
22.0  
– 7.0  
4.0  
739  
0.3  
Receivablesꢀfromꢀsalesꢀfinancing  
Financial assets  
92,437  
7,325  
3,403  
12,939  
15,891  
2,518  
12,036  
–
87,013  
7,685  
40.5  
3.2  
– 4.7  
12.8  
22.1  
11.5  
–1.1  
9.6  
– 5.0  
9.8  
Deferredꢀandꢀcurrentꢀtax  
Other assets  
3,016  
1.5  
10,596  
14,248  
2,546  
20.7  
10.2  
–1.8  
9.1  
5.7  
Inventories  
7.0  
Trade receivables  
1.1  
Cash and cash equivalents  
Assetsꢀheldꢀforꢀsale  
10,979  
461  
5.3  
–
0.0  
0.0  
Total assets  
228,034  
208,938  
9.1  
7.6  
100.0  
equity And liABilities  
Equity  
59,907  
3,335  
57,829  
2,330  
3.6  
43.1  
15.9  
– 45.6  
12.7  
5.3  
1.4  
42.4  
15.0  
– 47.5  
11.5  
4.5  
26.3  
1.5  
Pensionꢀprovisions  
Other provisions  
13,209  
1,595  
11,401  
2,931  
5.7  
Deferredꢀandꢀcurrentꢀtax  
Financial liabilities  
0.7  
116,740  
10,182  
23,066  
–
103,597  
9,669  
51.2  
4.5  
Trade payables  
Other liabilities  
21,119  
62  
9.2  
7.5  
10.1  
0.0  
Liabilitiesꢀinꢀconjunctionꢀwithꢀassetsꢀheldꢀforꢀsale  
Total equity and liabilities  
1
–
0.0  
228,034  
208,938  
9.1  
7.6  
100.0  
ꢀ
Priorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
ꢀI nꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
Theꢀadjustmentꢀforꢀexchangeꢀrateꢀfactorsꢀisꢀcalculatedꢀbyꢀapplyingꢀtheꢀrelevantꢀcurrentꢀexchangeꢀratesꢀtoꢀtheꢀpriorꢀyearꢀfigures.  
2
ꢀ
The balance sheet total of the BMW Group was signifi-  
cantly higher than at the end of the previous financial  
year. Currency impacts from the British pound, the  
US dollar, the Canadian dollar and the Thai baht  
contributed to this increase.  
Leased products went up significantly year-on-year  
on the back of leasing portfolio growth in various  
countries, including Germany and the USA.  
Inventories also increased significantly compared to  
the previous year due to the build-up of inventories  
of higher-value vehicles such as the BMW X5 and  
X7 models. Higher inventories of raw materials and  
supplies also contributed to the rise, partly reflecting  
the higher purchase price of some precious metals,  
especially palladium.  
The sharp rise in property, plant and equipment com-  
pared to one year earlier was mainly attributable to  
the recognition of right-of-use assets in accordance  
with IFRS 16, as a result of which property, plant  
and equipment increased by €ꢀ2.8 billion. In addition,  
substantial amounts were invested to develop the  
product portfolio.  
6
1
Receivables from sales financing increased solidly  
over the twelve-month period, mainly due to larger  
credit financing volumes in the UK and China. A  
Group equity rose slightly by €ꢀ2,078 million to  
€ꢀ59 907 million, increased primarily by the profit  
of €ꢀ4,915 million attributable to shareholders of  
,
total of  
1
,
320  
,
656 new credit financing contracts with  
BMWAG and decreased by the dividend payment  
retail customers were signed during the financial  
year 2019. Compared to the end of the previous  
financial year, the contract portfolio with dealers  
and retail customers under management grew by  
of €ꢀ2,303 million. The reduction in the equity ratio  
reflected the fact that – due to the effects described  
above – the balance sheet total rose at a faster rate  
than equity. The adoption of IFRS 16 therefore only  
had a limited impact on the equity ratio.  
4
.5 % to 4,064,561 contracts.  
BMW Group equity ratio  
•
37  
in %  
31. 12. 2019  
31.12. 2018*  
Change in %pts  
Group  
26.3  
35.5  
9.9  
27.7  
41.0  
10.1  
–1.4  
– 5.5  
– 0.2  
Automotiveꢀsegment  
FinancialꢀServicesꢀsegment  
*
ꢀPriorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Pension provisions increased significantly compared  
to the end of the financial year 2018, with lower  
discount rates in Germany and the UK in particular  
contributing to the rise.  
Value added statement  
The value added statement shows the value of work  
performed by the BMW Group during the financial  
year, less the value of work bought in. Deprecia-  
tion and amortisation, cost of materials, and other  
expenses are treated as bought-in costs in the value  
added calculation. The allocation statement applies  
value added to each of the participants involved in  
the value added process. The bulk of the net value  
added benefits employees. The remaining proportion  
in the Group is retained to finance future operations.  
The gross value added amount treats depreciation as  
a component of value added which, in the allocation  
statement, would be treated as internal financing.  
Other provisions increased markedly year-on-year  
due to the provision recognised in conjunction with  
ongoing EU Commission antitrust proceedings. Fur-  
ther information is provided in note 10 to the Group  
Financial Statements.  
see  
note 10  
Financial liabilities were significantly higher than at  
the end of the previous financial year, mainly as a  
result of new bonds issued. This also includes the 144  
A
bond in the USA and the first Panda bond placed on  
the Chinese capital market.  
Net valued added by the BMW Group remained at a  
high level in the financial year 2019.  
Overall, the results of operations, financial position  
and net assets position of the BMW Group remained  
stable during the year under report.  
6
2
Combined  
Management  
Report  
BMW Group value added statement  
• 38  
Report on  
Economic Position  
1
1
2019  
in € million  
2019  
in %  
2018  
in € million  
2018  
in %  
Change  
in %  
Work perFormed  
Revenues  
104,210  
– 22  
99.0  
0.0  
96,855  
988  
98.2  
1.0  
7.6  
–
Financial income  
Other income  
1,031  
1.0  
774  
0.8  
33.2  
6.7  
Total output  
105,219  
100.0  
98,617  
100.0  
Cost of materials2  
Other expenses  
Bought-in costs  
57,358  
14,923  
72,281  
54.5  
14.2  
68.7  
53,132  
12,342  
65,474  
53.9  
12.5  
66.4  
8.0  
20.9  
10.4  
Gross value added  
32,938  
31.3  
33,143  
33.6  
– 0.6  
Depreciationꢀandꢀamortisationꢀofꢀtotalꢀtangible,ꢀ  
intangible and investment assets  
10,749  
22,189  
10.2  
21.1  
8,601  
8.7  
25.0  
Net value added  
24,542  
24.9  
– 9.6  
AllocAtion  
Employees  
12,451  
2,466  
2,250  
1,646  
3,269  
107  
56.1  
11.1  
10.1  
7.4  
12,479  
2,266  
2,733  
2,303  
4,671  
90  
50.8  
9.2  
– 0.2  
8.8  
Providersꢀofꢀfinance  
Government / public sector  
Shareholders  
Group  
11.2  
9.4  
–17.7  
– 28.5  
– 30.0  
18.9  
14.7  
0.5  
19.0  
0.4  
Minority interest  
Net value added  
1
22,189  
100.0  
24,542  
100.0  
– 9.6  
ꢀ
Priorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
2
Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).  
BMW Group value added 2019  
•
39  
in %  
Depreciationꢀandꢀamortisation 10.2  
14.2 Other expenses  
5
6.1 % Employees  
2
1.1 Netꢀvalueꢀadded  
1
1.1 % Providersꢀofꢀfinance  
0.1 % Government / public sector  
.4 % Shareholders  
4.7 % Group  
.5 % Minority interest  
1
7
Cost of materials 54.5  
1
0
6
3
Results of operations by segment  
BMW Group revenues by segment  
•
40  
Currency adjusted  
1
2
in € million  
2019  
2018  
Change in %  
change in %  
Automotive  
Motorcycles  
FinancialꢀServices  
Other Entities  
Eliminations  
Group  
91,682  
2,368  
85,846  
2,173  
6.8  
9.0  
5.2  
8.1  
29,598  
5
27,705  
6
6.8  
4.6  
–16.7  
– 3.0  
7.6  
–18.0  
0.1  
–19,443  
104,210  
–18,875  
96,855  
6.1  
BMW Group profit / loss before tax by segment  
•
41  
1
in € million  
2019  
2018  
Change in %  
Automotive  
Motorcycles  
FinancialꢀServices  
Other Entities  
Eliminations  
Group  
4,467  
187  
6,977  
169  
– 36.0  
10.7  
6.0  
2,272  
– 96  
2,143  
– 45  
–
288  
383  
– 24.8  
– 26.1  
7,118  
9,627  
BMW Group margins by segment  
•
42  
1
in %  
2019  
2018  
Change in %pts  
Automotive  
Grossꢀprofitꢀmargin  
EBIT margin  
14.9  
4.9  
16.2  
7.2  
–1.3  
– 2.3  
Motorcycles  
Grossꢀprofitꢀmargin  
EBIT margin  
1
19.3  
8.2  
20.0  
8.1  
– 0.7  
0.1  
ꢀ
Priorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀadoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
Inꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀselectedꢀitems,ꢀwhichꢀareꢀnotꢀmaterialꢀoverall.  
ꢀ
2
ꢀ
Theꢀadjustmentꢀforꢀexchangeꢀrateꢀfactorsꢀisꢀcalculatedꢀbyꢀapplyingꢀtheꢀrelevantꢀcurrentꢀexchangeꢀratesꢀtoꢀtheꢀpriorꢀyearꢀfigures.  
6
4
Combined  
Management  
Report  
REVIEW OF OPERATIONS  
Deliveries up in Asia and in the Americas,  
slightly down in Europe  
Deliveries of BMW Group automobiles in Asia rose  
Report on  
Economic Position  
1
by a solid  
and Rolls-Royce brand vehicles (2018  
6
.
8
% in 2019. In total, 930  
,
085  
ꢀ
BMW  
, MINI  
1,2  
units)  
Review of Operations  
Automotive Segment  
:
871,181ꢀ  
AutomotiveꢀSegment  
were delivered to customers in this region. Figures for  
1
China developed very positively, rising to 724  
,
733  
ꢀ
units (2018: 635,813ꢀ1 units; +ꢀ14.0%).  
,2  
Automobile deliveries at record level  
The BMW Group delivered a total of 2,538,367ꢀ BMW, Including the  
MINI and Rolls-Royce brand automobiles in 2019,  
1
1
The BMW Group’s performance in Europe was held  
down by a number of factors, in particular due to the  
joint venture  
BMWꢀBrillianceꢀ  
thereby setting a new record for the total number of AutomotiveꢀLtd.,ꢀ prevalence of political uncertainty in a number of  
ꢀ
(
5
2
1
,2  
deliveries to customers (2018  
:
2
,
483  
,
292  
ꢀ
units; +ꢀ2  
.
2
%).  
countries. At 1,083,669 units, deliveries of the Group’s  
three brands decreased marginally year-on-year (2018  
:
2
Volumes also developed well for each of the Group’s  
brands. The BMW brand achieved a new high to date,  
455,581 units).  
1
,
097  
,
117ꢀ units; –ꢀ1  
.
2
%). Contrary to this broader  
trend, business in Germany developed positively,  
1
1,2  
with  
2
,
185  
,
793ꢀ units (2018  
:
2
,
114  
,
963  
ꢀ
units; +  
3
.
3
%)  
with a total of 330  
the previous year (2018  
,
507 units delivered,  
6
.
4
% up on  
2
delivered to customers. MINI remained slightly below  
:
310  
,
576ꢀ units). In the UK  
,
the previous year’s figure, with 347  
worldwide (2018: 364,135ꢀ units; –4.6%). Rolls-Royce  
,
474 units delivered  
volumes fell slightly year-on-year to 233  
,
780 units (2018  
:
2
2
236  
,
752ꢀ units; –  
1
.
3
%), not least due to uncertainty  
Motor Cars exceeded the  
the first time, with 100 vehicles handed over to  
customers (2018 %). This signifi-  
194ꢀ2 units; +21  
cant increase also represents a new record for the  
ultra-luxury marque.  
5
,
000-unit threshold for  
regarding Brexit.  
5
,
:
4
,
.
6
On the American continent, business conditions  
were characterised by growing competition within a  
declining market. With 472,904 units delivered, the  
BMW Group nevertheless exceeded the previous year’s  
figure (2018: 457,095ꢀ units; +3.5%). Sales figures  
for the Group’s three brands in the USA were solidly  
2
As foreseen in the outlook for the financial year 2019,  
Automotive segment deliveries increased slightly and  
were therefore in line with expectations.  
up year-on-year, with 375  
,
751 units delivered (2018  
:
2
3
55,373ꢀ units; +ꢀ5.7%). The BMW Group also ended  
The ongoing electrification of the product range is  
also having a significant impact. As targeted, the  
BMW Group finished the year with half a million  
electrified vehicles on roads across the globe. The  
broad range of electrified vehicles on offer is ideally  
suited to meeting customer needs and constitutes an  
important aspect of the BMW Group’s contribution  
to effective climate protection.  
2019 as the leading premium automobile manufacturer  
in the USA.  
BMW Group – key automobile markets 2019  
• 43  
as a percentage of deliveries  
3
3
28.6 China  
Other 29.2  
Fleet carbon dioxide (CO ) emissions  
EU-28  
2
at previous year’s level  
CO emissions from fleet vehicles delivered in  
2
Europe in 2019 amounted to 127 g CO2 /ꢀkm (2018:  
28 CO2 /ꢀkm; – %) and were therefore at the  
1
g
0.8  
previous year’s level. The original forecast predicted  
a slight decrease. The lower proportion of diesel-  
powered vehicles delivered in 2019 meant that no  
further reduction in fleet CO2 emissions was achieved  
compared to the previous year.  
Japanꢀ 2.4  
Italy 2.9  
14.7ꢀ USA  
UKꢀ 9.2  
13.0 Germany  
2
ꢀ
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015.ꢀTheꢀbasisꢀforꢀtheꢀadjust-  
mentsꢀisꢀaꢀreviewꢀofꢀsalesꢀdataꢀinꢀpriorꢀperiodsꢀforꢀtheꢀBMWꢀGroup’sꢀmostꢀimportantꢀmarketsꢀ  
(
China,ꢀUSA,ꢀGermany,ꢀUK,ꢀItalyꢀandꢀJapan).ꢀTheꢀretrospectiveꢀadjustmentꢀen ꢀa blesꢀbetterꢀcom-  
parability.ꢀAdditionalꢀinformationꢀcanꢀbeꢀfoundꢀinꢀtheꢀsectionꢀ“ComparisonꢀofꢀForecastsꢀforꢀ  
019ꢀwithꢀActualꢀResultsꢀinꢀ2019”.  
2
6
5
1
BMW Group deliveries of vehicles by region and marketꢀ  
•
44  
in 1,000 units  
2019  
2018  
2017  
2016  
2015  
Europe  
1,083.7  
330.5  
233.8  
472.9  
375.8  
930.1  
724.7  
51.7  
1,097.1  
310.6  
236.8  
457.1  
355.4  
871.2  
635.8  
57.9  
1,103.2  
296.5  
242.4  
456.1  
358.8  
847.5  
595.0  
61.9  
1,091.9  
298.5  
252.4  
453.4  
359.5  
739.4  
508.8  
67.8  
1,003.1  
287.4  
232.3  
503.9  
413.8  
685.5  
465.8  
65.3  
thereof Germany  
thereofꢀUK  
Americas  
thereofꢀUSA  
Asiaꢀ2  
thereof China2  
Other markets  
Total2  
2,538.4  
2,483.3  
2,468.7  
2,352.4  
2,257.9  
1
ꢀ
ꢀ
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015.ꢀTheꢀbasisꢀforꢀtheꢀadjustmentsꢀisꢀaꢀreviewꢀofꢀsalesꢀdataꢀinꢀpriorꢀperiodsꢀforꢀtheꢀBMWꢀGroup’sꢀmostꢀimportantꢀmarketsꢀ(China,ꢀUSA,ꢀGermany,ꢀ  
UK,ꢀItalyꢀandꢀJapan).ꢀTheꢀretrospectiveꢀadjustmentꢀen ꢀa blesꢀbetterꢀcomparability.ꢀAdditionalꢀinformationꢀcanꢀbeꢀfoundꢀinꢀtheꢀsectionꢀ“ComparisonꢀofꢀForecastsꢀforꢀ2019ꢀwithꢀActualꢀResultsꢀinꢀ2019”.  
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀShenyangꢀ(2019:ꢀ538,612ꢀunits,ꢀ2018:ꢀ455,581ꢀunits,ꢀ2017:ꢀ385,705ꢀunits,ꢀ2016:ꢀ311,473ꢀunits,ꢀ2015:ꢀ281,357ꢀunits).  
2
2
BMW brand achieves new volume record  
The BMW X family again benefited from strong  
demand in 2019. Worldwide deliveries of X family  
BMW brand deliveries rose by 3.3% to 2,185,793 units  
in 2019, reaching a new record level for the ninth year  
in succession (2018: 2,114,963ꢀ units). The models of  
the BMW X family, the BMWi3, the new BMW Z4 and  
the new BMW 8 Series all made positive contributions  
to the overall growth. Moreover, the X1 and X5 (both  
from the BMW X family) as well as the BMW Z4 were  
all global market leaders in their own segments. The  
vehicles rose to 963  
,
994 units, a significant 22  
.
3
%
1
1
year-on-year increase (2018: 788,063ꢀ units). A signif-  
icant contribution to this growth was made by the  
highly successful BMW X3 model, deliveries of which  
rose by more than one-half to 316  
,
883 units (2018  
:
1
200,151ꢀ units; +58.3%) due to the full availability  
of the model produced in China. Deliveries of the  
1
BMW  
i
3
continues to perform well as a highly success-  
BMW X2  
and the X4  
increased by around one-third. At 165  
(
91  
,
812 units; 2018  
:
66  
46  
,
,
792ꢀ units; +37  
.
.
5
4
%)  
%)  
1
ful model for mobility in metropolitan areas.  
(
61  
,
598 units; 2018  
:
894ꢀ units; +31  
,
537 units, deliv-  
At 359  
,
211 units, sales of the BMW 3 Series were slightly  
eries of the BMW X5 once again exceeded the previous  
1
1
down on the previous year (2018  
:
364,347ꢀ units; –  
1.4  
%),  
year’s very high level (2018  
:
155  
,
134ꢀ units; +  
6
.
7
%).  
partially influenced by model changes to the Sedan  
in March and the Touring in September. Moreover,  
the new extended-wheelbase version has only been  
available in China since June 2019. The launch of  
the new models helped boost deliveries, particularly  
during the final quarter, resulting in double-digit  
volume growth. Between October and Decem-  
The positive resonance identified around the market  
launch of the new X7, which has been available since  
March 2019, was also reflected in its subsequent sales  
performance (2019: 39,924 units; 2018: 15 units).  
ber 2019, the BMW Group delivered 106  
,
155 units  
of the BMW 3 Series worldwide, 20  
.
6
% more than  
1
in the previous year (2018  
:
87  
,
987ꢀ units). Worldwide  
deliveries of the BMW 5 Series fell to 353  
,
268 units  
1
(
2018: 381,749ꢀ units; – 7.5 %). The new BMW Z4,  
which has been available since March 2019, enjoyed  
strong demand during the period under report (2019  
827 units). Sales figures for the new BMW 8 Series  
also developed very encouragingly and had totalled  
219 units (2018 923 units) by the end of the report-  
ing period.  
:
15,  
1
2
,
:
6
6
Combined  
Management  
Report  
1, 2  
Deliveries of BMW vehicles by model variantꢀ  
• 45  
Report on  
Economic Position  
Proportion of  
BMW sales volume  
2019 in %  
Review of Operations  
Automotive Segment  
in units  
2019  
2018  
Change in %  
BMWꢀ1ꢀSeries  
BMWꢀ2ꢀSeries  
BMWꢀ3ꢀSeries  
BMWꢀ4ꢀSeries  
BMWꢀ5ꢀSeries  
BMWꢀ6ꢀSeries  
BMWꢀ7ꢀSeries  
BMWꢀ8ꢀSeries  
BMWꢀZ4  
173,870  
115,184  
359,211  
74,238  
198,548  
153,073  
364,347  
108,376  
381,749  
26,244  
56,208  
923  
–12.4  
– 24.8  
–1.4  
– 31.5  
– 7.5  
– 4.1  
–10.1  
–
8.0  
5.3  
16.4  
3.4  
353,268  
25,181  
16.2  
1.2  
50,552  
2.3  
12,219  
0.6  
15,827  
85  
–
0.7  
BMWꢀX1  
266,124  
91,812  
283,709  
66,792  
200,151  
46,894  
155,134  
35,368  
15  
– 6.2  
37.5  
58.3  
31.4  
6.7  
12.2  
4.2  
BMWꢀX2  
BMWꢀX3  
316,883  
61,598  
14.5  
2.8  
BMWꢀX4  
BMWꢀX5  
165,537  
22,116  
7.6  
BMWꢀX6  
– 37.5  
–
1.0  
BMWꢀX7  
39,924  
1.8  
BMWꢀi  
42,249  
37,347  
2,114,963  
13.1  
3.3  
1.9  
BMW total  
2,185,793  
100.0  
1
ꢀ
ꢀ
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀShenyangꢀ(2019:ꢀ538,612ꢀunits,ꢀ2018:ꢀ455,581ꢀunits).  
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015.ꢀTheꢀbasisꢀforꢀtheꢀadjustmentsꢀisꢀaꢀreviewꢀofꢀsalesꢀdataꢀinꢀpriorꢀperiodsꢀforꢀtheꢀBMWꢀGroup’sꢀmostꢀimportantꢀmarketsꢀ(China,ꢀUSA,ꢀGermany,ꢀ  
UK,ꢀItalyꢀandꢀJapan).ꢀTheꢀretrospectiveꢀadjustmentꢀen ꢀa blesꢀbetterꢀcomparability.ꢀAdditionalꢀinformationꢀcanꢀbeꢀfoundꢀinꢀtheꢀsectionꢀ“ComparisonꢀofꢀForecastsꢀforꢀ2019ꢀwithꢀActualꢀResultsꢀinꢀ2019”.  
2
3
3
BMW model range significantly expanded  
Fuel BMW M achieves record result  
consumption  
and CO emis-  
A total of 12 new BMW models, including four  
M models, were launched during 2019. Two model  
revisions were also brought to market during the same  
period. March saw the launch of the seventh-gener-  
ation BMW 3 Series Sedan, the new BMW 8 Series  
Convertible, the BMW Z4 Roadster and the BMW X7.  
In the same month, the BMW 7 Series became  
available across the dealer organisation following an  
extensive model revision. In summer, the extended-  
wheelbase version of the 3 Series Sedan went on sale  
in China. In autumn, BMW launched successor models  
With 136  
,
173 units delivered during the twelve-month  
sions informa- period, BMW M GmbH achieved the best result to date in  
2
tion are available  
2
its almost 50-year history (2018  
:
103  
,
580ꢀ units; +31  
.5  
%),  
on page 70.  
ensuring it a leading market position among the pro-  
viders in its competitive field.  
The addition of the new X3 M and X4 M as well as the  
first two M8 models significantly extends the range  
of vehicles offered by the BMW Group subsidiary. All  
new models are now immediately available at market  
launch as competition models with more powerful  
engines. In addition to the X models (X3 M, X4 M,  
X5 M and X6 M), the BMW M2 CS and – within the  
for the  
3 Series Touring and the 1 Series. The new  
BMW 8 Series Gran Coupé also became available in  
autumn 2019.  
luxury class – the M  
8 Coupé, M8 Convertible and  
M
8
Gran Coupé all made their débuts during the year  
under report. 2019 thus saw the launch of the largest  
number of BMW M models to date.  
6
7
1
MINI down on previous year  
mark again (98,845 units; 2018: 99,594ꢀ units; –ꢀ0.8%).  
In 2019, due to external factors, the MINI brand was  
not quite able to match the high level of deliveries  
achieved one year earlier. In particular, Brexit-driven  
uncertainty and intense competition in the small and  
compact car segment played a significant role. Never-  
theless, thanks to its underlying strength in numerous  
markets, the MINI brand managed to grow its overall  
share in the highly competitive premium segment.  
However, partly due to the decisive contribution made  
by the popular plug-in hybrid model, it nevertheless  
remained a cornerstone for the MINI brand. The  
MINI Hatch (  
177,560 units (2018: 184,008ꢀ units; –3.5%).  
3
- and  
5
-door) achieved a volume of  
1
The revised model of the MINI Clubman was also  
launched during the year under report. The MINI  
Convertible remains the world’s best-selling vehicle of  
its kind. The John Cooper Works brand also continues  
to enjoy strong demand.  
At 347  
,
474 units, MINI brand deliveries worldwide were  
1
slightly down year-on-year (2018  
:
364,135ꢀ units; –  
4.6  
%).  
The MINI Countryman nearly reached the 100  
,
000 unit  
1
Deliveries of MINI vehicles by model variantꢀ  
•
46  
Proportion of  
MINI sales volume  
in units  
2019  
2018  
Change in %  
2019 in %  
MINIꢀHatchꢀ(3-ꢀandꢀ5-door)  
MINIꢀConvertible  
MINIꢀClubman  
177,560  
30,384  
40,685  
98,845  
347,474  
184,008  
32,738  
– 3.5  
– 7.2  
–14.9  
– 0.8  
– 4.6  
51.2  
8.7  
47,795  
11.7  
28.4  
100.0  
MINIꢀCountrymanꢀ  
MINI total  
99,594  
364,135  
Rolls-Royce looks back on successful year  
In 2019, Rolls-Royce Motor Cars surpassed the 5,000  
threshold for the first time in over 100 years of cor  
The product range also includes Black Badge variants  
of the Dawn, Ghost, Wraith and Cullinan models.  
In addition to bespoke equipment options, the  
Black Badge vehicles also offer more powerful engine  
performance.  
-
porate history, also setting a new record with  
5
,
100  
1
deliveries worldwide (2018: 4,194ꢀ units; + 21.6 %).  
2
The new Rolls-Royce Cullinanꢀ , which has been  
available to customers since the end of 2018, made a  
major contribution to this performance (2,508 units;  
Deliveries of Rolls-Royce vehicles  
1
1
2
018: 544ꢀ units).  
by model variantꢀ  
•
47  
One of the key factors for the success of Rolls-Royce  
Motor Cars is its bespoke range. At Rolls-Royce, the  
term bespoke refers to equipment configurations  
with which the vehicles are highly individualised  
in accordance with customer requirements. The  
result is the creation of unique vehicles that secure  
Rolls-Royce Motor Cars an outstanding position in  
the luxury segment.  
in units  
2019  
2018  
Change in %  
Phantomꢀ2  
Ghost  
604  
662  
831  
1,003  
1,816  
544  
– 27.3  
– 34.0  
– 27.0  
–
Wraithꢀ/ꢀDawn  
Cullinan2  
Rolls-Royce total  
1
1,326  
2,508  
5,100  
4,194  
21.6  
ꢀ
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015.ꢀTheꢀbasisꢀforꢀtheꢀ  
adjustmentsꢀisꢀaꢀreviewꢀofꢀsalesꢀdataꢀinꢀpriorꢀperiodsꢀforꢀtheꢀBMWꢀGroup’sꢀmostꢀimportantꢀ  
marketsꢀ(China,ꢀUSA,ꢀGermany,ꢀUK,ꢀItalyꢀandꢀJapan).ꢀTheꢀretrospectiveꢀadjustmentꢀen-  
ablesꢀbetterꢀcomparability.ꢀAdditionalꢀinformationꢀcanꢀbeꢀfoundꢀinꢀtheꢀsectionꢀ“Comparisonꢀ  
ofꢀForecastsꢀforꢀ2019ꢀwithꢀActualꢀResultsꢀinꢀ2019”.  
2
2
Fuel consumption and CO emissions information are available on page 70.  
6
8
2
Greater choice of electrified vehicles  
Combined  
Management  
Report  
Deliveries of electrified automobiles up on  
previous year  
Duringthecurrentfinancialyear,BMWwilllaunchthree  
further models featuring hybrid technology, namely  
the BMW X1, the X2 and the BMW 3 Series Touring.  
Two additional all-electric models will be added with the  
MINI Cooper SE and the BMWiX3. The BMW Group is  
consciously focusing on battery electric vehicles (BEV  
and plug-in hybrid technologies (PHEV). Flexible  
platforms are being used to cover varying regional  
customer requirements, enabling buyers to select  
the drivetrain system best suited to their mobility  
requirements.  
At the end of the year under report, the BMW Group’s  
vehicle portfolio included 11 all-electric or electri-  
fied models in various segments. These models are  
sold on more than 70 markets around the world,  
underlining the BMW Group’s leading position world-  
wide in terms of combined deliveries of all-electric  
and plug-in hybrid vehicles as well as being market  
leader in Germany.  
Report on  
Economic Position  
Review of Operations  
Automotive Segment  
)
Worldwide deliveries of electrified BMW and MINI  
brand vehicles in 2019 totalled 146  
,
160 units (2018  
:
1
1
42,385ꢀ units; +2.7%). The number of BMW plug-in  
The BMW Vision iNEXT was showcased in 2019 with  
the aim of providing a preview of tomorrow’s mobil-  
ity. The vehicle embodies the fusion of electric and  
autonomous driving as well as next-level connectivity.  
hybrid vehicles delivered was influenced by the  
Series and X5 model changes as well as by the  
launch of the X3 in autumn 2019. The total of 86,947  
BMW hybrid drive vehicles delivered to customers  
during the period under report was down on the  
3
very high figure achieved one year earlier (2018  
:
Segment revenues at record level, earnings  
negatively impacted by provision  
1
9
1,759ꢀ units; –5.2%). The new models helped gener-  
ate a positive trend in the fourth quarter of 2019, as  
sales of hybrid-drive BMW vehicles during the final  
The Automotive segment recorded a solid year-on-  
year increase in revenues. Alongside positive currency  
effects, the main influencing factor was the product  
mix effect generated by increased deliveries of the  
X7 and the BMW 8 Series, which were launched in  
2019, the X4, the X5, and the Rolls-Royce Cullinan,  
all of which were available for the full twelve-month  
period in 2019. Growth in after-sales business due to  
the increased size of the global vehicle fleet also had a  
positive impact on revenues. In the previous year, rev-  
enues were also negatively impacted by the high level  
of competition caused by the reaction of competitors  
to the early implementation of WLTP regulations as  
well as the tougher market situation triggered by trade  
conflicts. The rejuvenation of the product portfolio  
has also helped the segment to achieve higher prices.  
three months of the year increased significantly by  
1
1
6.1% to 33,250 units (2018: 28,649ꢀ units). Over the  
twelve-month period, the BMWi3 recorded a 14.1%  
increase in worldwide deliveries to 39  
,
501 units (2018  
:
1
2
3
4
,
623ꢀ units). The electrified MINI Countrymanꢀ also  
benefited from strong demand, with 16,964 units  
delivered to customers during the period under report  
1
(
2018: 13,279ꢀ units; +27.8%).  
1
Deliveries of electrified modelsꢀ  
•
48  
in units  
2019  
2018  
Change in %  
BMWꢀi  
BMWꢀe  
MINIꢀElectric  
Total  
42,249  
86,947  
16,964  
146,160  
37,347  
91,759  
13,279  
13.1  
– 5.2  
27.8  
2.7  
Segment cost of sales increased moderately compared  
to the previous year. This was mainly due to higher  
manufacturing costs driven by stricter regulatory  
requirements (especially in relation to the reduction of  
fleet emissions), negative currency effects and higher  
raw material prices (particularly for palladium and  
rhodium). The increase in research and development  
expenses described above also had a negative impact.  
Warranty expenses increased mainly as a result of  
allocations to provisions in light of local changes to  
legislation as well as additional allocations to provi-  
sions in individual markets.  
142,385  
1
ꢀ
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015.ꢀTheꢀbasisꢀforꢀtheꢀ  
adjustmentsꢀisꢀaꢀreviewꢀofꢀsalesꢀdataꢀinꢀpriorꢀperiodsꢀforꢀtheꢀBMWꢀGroup’sꢀmostꢀimportantꢀ  
marketsꢀ(China,ꢀUSA,ꢀGermany,ꢀUK,ꢀItalyꢀandꢀJapan).ꢀTheꢀretrospectiveꢀadjustmentꢀen-  
ablesꢀbetterꢀcomparability.ꢀAdditionalꢀinformationꢀcanꢀbeꢀfoundꢀinꢀtheꢀsectionꢀ“Comparisonꢀ  
ofꢀForecastsꢀforꢀ2019ꢀwithꢀActualꢀResultsꢀinꢀ2019”.  
2
2
Fuel consumption and CO emissions information are available on page 70.  
6
9
The net amount of other operating income and expenses  
deteriorated from a positive amount of €ꢀ134 million  
to negative €ꢀ1,359 million year-on-year, mainly due  
to the provision recognised for the EU Commission’s  
antitrust proceedings referred to above. Further infor-  
mation is provided in note 10 to the Group Financial  
Statements.  
on the other (the latter excluding the revaluation  
losses recognised on interest rate hedges), in both  
cases described above in the analysis of the Group’s  
results of operations. Profit before tax for the year was  
significantly lower than one year earlier.  
see  
note 10  
The Automotive segment’s RoCE in 2019 fell signifi-  
cantly to 29.0% (2018: 49.8%; –20.8 percentage points),  
The EBIT margin came in at  
4
.
9
% (2018  
:
7
.
2
%; –  
2
.
3
per-  
mainly due to the lower EBIT. Other factors with a  
negative impact on RoCE were the increase in capital  
employed due to the first-time recognition of right-of-  
use assets in accordance with IFRS 16 and the higher  
level of capital expenditure, particularly in conjunction  
with the development of the product portfolio.  
centage points). As forecast in the Quarterly Statement  
to 30 September 2019 the EBIT margin was within the  
target range of 4.5 to 6.5% and therefore in line with  
revised expectations. In the Annual Report 2018, the  
segment EBIT margin was forecast to be within the  
target range of 6 to 8%.  
The long-term target RoCE of at least 26% for the Auto-  
motive segment was slightly exceeded. As forecast in  
the outlook for the financial year 2019, RoCE decreased  
The Automotive segment’s financial result finished  
at a net negative amount of €ꢀ32 million, significantly  
down on the previous year (2018: net positive amount  
significantly and was therefore in line with expectations.  
€
ꢀ795 million). The deterioration mainly reflected the  
negative impact of the result from equity-accounted  
investments on the one hand and other financial result  
Free cash flow for the Automotive segment was as  
follows:  
Free cash flow Automotive segment  
•
49  
in € million  
2019  
2018  
Change  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀoperatingꢀactivities  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀinvestingꢀactivities  
Adjustmentꢀforꢀnetꢀinvestmentꢀinꢀmarketableꢀsecuritiesꢀandꢀinvestmentꢀfunds  
Free cash flow Automotive segment  
9,690  
– 7,165  
42  
9,352  
– 6,769  
130  
338  
– 396  
– 88  
2,567  
2,713  
–146  
The change in working capital included in the cash  
inflow from operating activities resulted mainly from  
the higher level of inventories and was offset by a  
decrease in trade payables. Following the adoption  
of IFRS 16, lease payments are included in cash flows  
from financing activities, giving rise to a positive  
effect of €ꢀ470 million. The increase in cash outflow  
from investing activities mainly reflected the changes  
described in the Group Cash Flow Statement with  
respect to investments in property, plant and equip-  
ment and intangible assets, financial assets and divi-  
dends received. The liquidation of a Group company  
in the previous financial year also had a negative effect.  
7
0
Combined  
Management  
Report  
In the Automotive segment, net financial assets com-  
prised the following:  
Report on  
Economic Position  
Review of Operations  
Automotive Segment  
Net financial assets Automotive segment  
•
50  
Motorcycles  
Segment  
in € million  
2019  
2018  
Change  
Cash and cash equivalents  
9,077  
4,470  
8,631  
4,321  
446  
149  
90  
Marketable securities and investment funds  
Intragroupꢀnetꢀfinancialꢀassets  
Financial assets  
7,784  
7,694  
21,331  
20,646  
685  
Less:ꢀexternalꢀfinancialꢀliabilities*  
– 3,754  
17,577  
–1,158  
– 2,596  
Net financial assets Automotive segment  
19,488  
–1,911  
*
ꢀExcludingꢀderivativeꢀfinancialꢀinstruments.  
The increase in external financial liabilities was main-  
ly attributable to the recognition of lease liabilities  
according to IFRS 16 amounting to €ꢀ2.8 billion. Fur-  
ther information is provided in note  
Financial Statements.  
6
to the Group  
see  
note 6  
BMW Group fuel consumption and CO emissions information  
2
•
51  
Electric power  
consumption  
in kWh / 100 km  
(combined)  
Fuel consumption  
in l / 100 km  
CO2 emissions  
in g / km  
(combined)  
Model  
(combined)  
BmW Group electriFied models  
BMWꢀiX3  
0
1.9  
0
43  
< 201  
13.8  
BMWꢀX1ꢀxDrive25e  
BMWꢀX2ꢀxDrive25e  
2.1–1.9  
2.1–1.7  
2.5 – 2.0  
2.1–1.9  
0
47 – 43  
48 – 39  
56 – 46  
47– 43  
0
14.2 –13.72  
19.4 –15.72  
22.3 –17.82  
13.9 –13.5  
16.8 –14.8  
BMWꢀ330eꢀTouringꢀ  
BMWꢀ330eꢀxDriveꢀTouring  
MINIꢀCooperꢀSEꢀCountrymanꢀALL4  
MINIꢀCooperꢀSEꢀ  
BmW  
BMWꢀX3ꢀM  
10.5  
10.6 –10.5  
13  
239  
240 – 239  
296  
BMWꢀX4ꢀM  
BMWꢀX5ꢀM  
BMWꢀX6ꢀMꢀCompetition  
BMWꢀM8ꢀCompetitionꢀCoupé  
BMWꢀM8ꢀCompetitionꢀConvertible  
BMWꢀM8ꢀCompetitionꢀGranꢀCoupé  
BMWꢀM2ꢀCS  
12.7  
289  
10.6  
242  
10.8  
246  
10.7  
244  
10.4 – 9.6  
238 – 219  
rolls-royce  
Cullinan  
14.5  
330 – 328  
1
ꢀ
ꢀ
ProvisionaryꢀdataꢀbasedꢀonꢀWLTP.  
Provisionaryꢀdata.  
2
7
1
MotorcyclesꢀSegment  
Numerous other new models and concept studies  
were also presented during the year under report.  
The Concept R18 was unveiled at the Concorso  
d’Eleganza Villa d’Este – a new interpretation of  
BMW Motorrad classics. The special limited edition  
Solid increase in motorcycle deliveries  
With the delivery of 175,162 units in 2019, the Motor-  
cycles segment exceeded the previous year’s figure by  
of the R nine Tꢀ/ꢀ5 model was presented during the  
5
.
8
%, marking a new record for the ninth consecutive  
BMW Motorrad Days event. At the International  
Motorcycle Fair in Milan (EICMA), customers had  
the opportunity to familiarise themselves with the  
new models F 900 R (Roadster segment), F 900 XR  
and S 1000 XR (Adventure segment) and the Concept  
Study R18ꢀ/ꢀ2, a modern interpretation of a dynamic,  
high-performance cruiser.  
year (2018: 165,566 units).  
As anticipated in the outlook for the financial year  
2
019, the Motorcycles segment achieved a solid  
increase in deliveries and was therefore in line with  
expectations.  
Deliveries up in nearly all markets  
The number of motorcycles sold in Europe rose by  
BMW Group deliveries of motorcycles  
• 52  
7
.0% to 104,994 units (2018: 98,144 units). Deliveries  
in Germany increased by 10 % to 26 292 units (2018  
824 units). Growth rates in Italy (15 580 units,  
018: 14,110 units; +ꢀ10.4 %) and Spain (12,607 units,  
018 11 124 units; +ꢀ13 %) were also up on a dou-  
in 1,000 units  
.
4
,
:
2
2
2
3
,
,
175.2  
1
9
0
80  
164.2 165.6  
:
,
.
3
145.0  
137.0  
ble-digit scale year-on-year. In France, motorcycle  
deliveries grew slightly by 4.1 % to 17,300 units  
(
2018: 16,615 units). The only year-on-year decline  
0
occurred in the USA, where – within a declining  
market – BMW Motorrad saw deliveries fall slightly to  
1
3
,
379 units (2018  
:
13  
,842 units; –3.3%). A particularly  
sharp rise of 36  
.
7
% was recorded for Brazil, where,  
for the first time, more than 10,000 BMW motor-  
cycles were sold in a single year (10,064 units; 2018:  
2
015  
2016  
2017  
2018  
2019  
7
,361 units).  
Model range further rejuvenated  
BMW Group – key motorcycle markets 2019  
BMW Motorrad introduced four new and two revised  
models during the period under report. In Febru-  
ary 2019, it launched three new models – the F 850 GS  
Adventure (Adventure segment) and the C 400 X and  
the C 400 GT (Urban Mobility segment). These were  
followed by the revised R 1250 R (Roadster segment) in  
April and the new S 1000 RR (Sport segment) in July.  
The revised version of the R 1250 RS (Sport segment)  
has been available to customers since September.  
• 53  
as a percentage of sales volume  
15.0 Germany  
9
.9 France  
Other 45.7  
8
.9 Italy  
7.6ꢀ USA  
7.2ꢀ Spain  
Brazil 5.7  
7
2
Combined  
Management  
Report  
Strong segment performance  
The Motorcycles segment also recorded solid year-on-  
year revenue growth. In addition to the higher number  
of units delivered, product mix and currency effects  
Report on  
Economic Position  
Review of Operations  
also had a positive impact on the performance in 2019  
.
Motorcycles  
Segment  
Financial Services  
Segment  
The segment EBIT margin edged up to 8.2% (2018:  
%; + percentage points) and therefore within the  
8
.
1
0.1  
range of 8 to 10% forecast in the Annual Report 2018.  
Profit before tax for the twelve-month period was  
significantly higher than one year earlier.  
The return on capital employed (RoCE) for the Motor-  
cycles segment in 2019 increased slightly to 29.4%  
2018: 28.4%; +ꢀ1.0 percentage points), mainly due to  
(
the higher level of EBIT. In the most recent outlook  
provided in the Quarterly Statement to 30 Septem-  
ber 2019, a solid increase was still being forecast.  
The deviation in this case was due to the higher  
amount of capital employed. The long-term target  
RoCE of 26% for the Motorcycles segment continued  
to be surpassed.  
7
3
FinancialꢀServicesꢀSegment  
The proportion of new BMW Group vehicles either  
leased or financed by the Financial Services segment  
2
in the financial year 2019 amounted to 52  
.
2
%
ꢀ
,
2
.
1
per-  
Successful financial year for the  
Financial Services segment  
centage points up on the previous year (2018: 50.1%),  
mainly due to growth in China and the USA.  
The Financial Services segment performed strongly  
in 2019 within a challenging, volatile environment.  
The total portfolio of financing and leasing contracts  
with retail customers again developed positively in  
Segment profit before tax rose by  
level of €ꢀ2,272 million (2018ꢀ : €ꢀ2,143 million).  
6
.
0
% to a record  
1
2019, growing  
contracts were in place with retail customers at  
31 December 2019 2018 235 207 contracts). The  
4.8% year-on-year. In total, 5,486,319  
In balance sheet terms, business volume grew by  
to stand at €ꢀ142,834 million (2018ꢀ : €ꢀ133,147 mil-  
7
.
3
%
(
:
5
,
,
1
China region continued to record the fastest growth  
rate of all regions, significantly enlarging its contract  
portfolio by 19.8% compared to one year earlier. The  
lion). The contract portfolio under management at  
3
1
December 2019 comprised  
therefore growing slightly by  
,708,032 contracts).  
5
,
973,682 contracts,  
4
.
7
% year-on-year (2018  
:
Europeꢀ/ꢀMiddle Eastꢀ/ꢀAfrica region (+  
EU Bankꢀ (+4.0%) grew year-on-year, while the total  
5
.
6
%) and the  
3
5
contract portfolio in the Americas region (+0.7%) hov-  
ered around the previous year’s level. The Asiaꢀ/ꢀPacific  
region saw a slight decrease in the volume of its con-  
tract portfolio (–2.5%).  
More than two million new contracts concluded  
Thanks to its strong performance, the Financial Ser-  
vices segment surpassed the threshold of two million  
new customer contracts in a single year for the first  
time. In total, 2,003,782 credit financing and leasing  
contracts were concluded with retail customers dur-  
Contract portfolio of  
Financial Services segment  
•
54  
ing the period under report, a solid 5.0 % year-on-  
year increase (2018 908 640 contracts). The biggest  
growth markets were China and the USA. While the  
number of new contracts grew slightly by % in  
:
1
,
,
in 1,000 units  
3.4  
5
,974  
5
,708  
the credit financing line of business, the correspond-  
ing increase for leasing business was 8.2%. Overall,  
leasing accounted for 34.1% and credit financing for  
6
3
0
,000  
,000  
5
,381  
5
,115  
4
,719  
6
5.9% of new business.  
In the pre-owned financing and leasing business for  
BMW and MINI brand vehicles, 398 144 new contracts  
were signed during the twelve-month period (2018  
96,610 contracts; +0.4%).  
,
:
3
2
015  
2016  
2017  
2018  
2019  
The total volume of new credit financing and leasing  
contracts concluded with retail customers amounted  
to €ꢀ61,353 million, representing a solid year-on-year  
increase (2018: €ꢀ55,817 million; +9.9%). Adjusted for  
currency factors, the increase was 7.9%.  
1
2
3
ꢀ
Priorꢀyear’sꢀfiguresꢀadjustedꢀdueꢀtoꢀaꢀchangeꢀinꢀaccountingꢀpolicyꢀinꢀconnectionꢀwithꢀtheꢀ  
adoptionꢀofꢀIFRSꢀ16;ꢀseeꢀnoteꢀ6ꢀtoꢀtheꢀGroupꢀFinancialꢀStatements.ꢀ  
ꢀTheꢀcalculationꢀonlyꢀincludesꢀ aꢀ utomobileꢀmarketsꢀinꢀwhichꢀtheꢀFinancialꢀServicesꢀsegmentꢀ  
is represented by a consolidated entity.  
ꢀWithꢀeffectꢀfromꢀtheꢀbeginningꢀofꢀtheꢀfourthꢀquarterꢀofꢀ2019,ꢀtheꢀEUꢀBankꢀcomprisesꢀ  
BMWꢀBankꢀGmbHꢀandꢀitsꢀbranchesꢀinꢀItaly,ꢀSpainꢀandꢀPortugal.ꢀTheꢀformerꢀsubsidiaryꢀinꢀ  
FranceꢀwasꢀtransferredꢀforꢀorganisationalꢀpurposesꢀtoꢀtheꢀEurope ꢀ/ ꢀM iddleꢀEast ꢀ/ ꢀA fricaꢀ  
region in conjunction with strategic realignments.  
ꢀI nꢀaddition,ꢀfiguresꢀforꢀtheꢀpriorꢀyearꢀhaveꢀbeenꢀadjustedꢀdueꢀtoꢀchangesꢀinꢀpresentationꢀofꢀ  
selected items, which are not material overall.  
7
4
Combined  
Management  
Report  
BMW Group new vehicles financed or  
Slight growth in fleet business  
1,2  
leased by Financial Services segmentꢀ  
The BMW Group is one of Europe’s foremost leasing  
and full-service providers. Under the brand name  
Alphabet, the Financial Services segment’s fleet  
management business offers leasing and financing  
arrangements as well as specific services to commer-  
cial customers. The number of fleet contracts rose by  
•
55  
Report on  
Economic Position  
in %  
Review of Operations  
Financial Services  
Segment  
6
3
0
0
5
2.2  
4
9.9  
50.1  
2
.5% during the financial year 2019. Included in the  
4
6.1  
46.7  
total contract portfolio with retail customers referred  
to above, the segment was thus managing a portfolio  
of 717,353 fleet contracts at the end of the reporting  
period (2018: 700,080 contracts).  
2
2
2.3  
2
1.2  
2
2.4  
2
0.7  
Leasing 22.0  
28.9  
9.9  
2
7.5  
26.0  
Financing 24.1  
Dealership financing slightly up on previous year  
The total volume of dealership financing continued  
growing during the financial year 2019 to stand at  
0
2
015  
2016  
2017  
2018  
2019  
1
€ꢀ21,227 million at the end of the reporting period  
2018: €ꢀ20,438 million; +3.9%).  
Until 2015 excluding Rolls-Royce.  
Deliveryꢀfiguresꢀhaveꢀbeenꢀadjustedꢀretrospectivelyꢀgoingꢀbackꢀtoꢀ2015,ꢀasꢀdescribedꢀinꢀ  
the section “Comparison of forecasts for 2019 with actual outcomes in 2019”.  
2
ꢀ
(
Financial Services segment posts record earnings  
The Financial Services segment achieved a solid  
increase in revenues during the period under report  
on the back of portfolio growth, higher revenues from  
the sale of returned leasing vehicles, and favourable  
currency factors.  
Contract portfolio retail customer financing  
of Financial Services segment 2019  
•
56  
in % per region  
Cost of sales relating to Financial Services business  
increased by €ꢀ1,849 million (2018: €ꢀ24,089 million).  
Consistent with the development of revenues, the  
main factors for the increase were expenses associated  
with the sale of returned leasing vehicles as well as  
risk provisioning expenses driven by portfolio growth.  
Asiaꢀ/ꢀPacificꢀ 8.1  
3
5.5 Europe /  
Middle East /  
Africaꢀ  
China 12.2  
EU Bank3 18.5  
Profit before tax in the Financial Services segment rose  
by 6.0%, representing a solid year-on-year increase.  
As predicted in the Annual Report 2018, the 15.0%  
return on equity generated by the Financial Services  
segment in 2019 was at a similar level to the previ-  
2
5.7ꢀ America  
3
ous year (2018: 14.8%; +0.2 percentage points) and  
exceeded the RoE target of at least 14%.  
ꢀ
Withꢀeffectꢀfromꢀtheꢀbeginningꢀofꢀtheꢀfourthꢀquarterꢀofꢀ2019,ꢀtheꢀEUꢀBankꢀcomprisesꢀ  
BMWꢀBankꢀGmbHꢀandꢀitsꢀbranchesꢀinꢀItaly,ꢀSpainꢀandꢀPortugal.ꢀTheꢀformerꢀsubsidiaryꢀinꢀ  
FranceꢀwasꢀtransferredꢀforꢀorganisationalꢀpurposesꢀtoꢀtheꢀEurope ꢀ/ ꢀM iddleꢀEast ꢀ/ ꢀA fricaꢀ  
region in conjunction with strategic realignments.  
7
5
Net cash inflows and outflows for the Financial Ser-  
vices segment were as follows:  
Net cash flows for the Financial Services segment  
•
57  
in € million  
2019  
2018  
Change  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀoperatingꢀactivities  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀinvestingꢀactivities  
Cashꢀinflowꢀ(+)ꢀ/ꢀoutflowꢀ(–)ꢀfromꢀfinancingꢀactivities  
Net  
– 5,345  
129  
– 6,790  
130  
1,445  
–1  
5,300  
84  
6,793  
133  
–1,493  
– 49  
The decrease in cash outflow from the Financial Ser-  
vices segment’s operating activities was mainly due  
to the higher profit before tax and the lower increase  
in receivables from sales financing compared to the  
previous year. Cash inflow from financing activities  
was mainly driven by the increase in asset-backed  
securities financing and the repayment of loans.  
Development of credit loss ratio  
• 58  
in %  
0
0
0
.5  
0
.37  
0
.34  
0
.32  
0
.25  
0.26  
Risk profile  
.25  
Despite ongoing political and economic uncertainties,  
such as Brexit and trade disputes, the risk profile  
across the Financial Services segment’s total portfolio  
remained stable at a low level.  
2
015  
2016  
2017  
2018  
2019  
The risk profile of the segment’s credit financing port-  
folio also remained stable at a low level. The credit  
loss ratio on the total credit portfolio amounted to  
0
.26% at 31 December 2019 and was therefore nearly  
unchanged compared to one year earlier (2018 25%).  
This figure comprises a credit loss ratio for leasing  
business of 15% (2018 14%) and a credit loss ratio  
for financing business with retail customers of 0.41%  
2018: 0.38%).  
: 0.  
0
.
:
0
.
OtherꢀEntitiesꢀSegmentꢀ/ꢀEliminationsꢀ  
(
Profit before tax recorded for the Other Entities  
segment and eliminations fell by €ꢀ146 million. The  
significant drop was due in particular to revaluation  
losses (included in other financial result) arising  
on interest rate and currency hedges in connection  
with the refinancing of the Financial Services busi-  
ness. In addition, a sharp rise in the number of new  
operating lease contracts had a negative impact due  
to the elimination of margins relating to the leased  
products concerned.  
Further information on the risk situation is provided  
in the section Risks and Opportunities.  
7
6
Combined  
Management  
Report  
COMMENTS ON FINANCIAL  
STATEMENTS OF BMW AG  
Differences in accounting treatments based on HGB  
used for the Company Financial Statements) and  
(
IFRS (used for the Group Financial Statements) are  
mainly to be found in connection with the capitali-  
sation of intangible assets, the creation of valuation  
units, the recognition and measurement of financial  
instruments and provisions as well as the recognition  
of deferred tax assets. Differences also arise in the  
presentation of assets and liabilities and of items in  
the income statement.  
Report on  
Economic Position  
Comments on  
Financial Statements  
of BMW AG  
BayerischeMotorenWerkeAktiengesellschaft(BMWAG),  
based in Munich, Germany, is the parent Company of  
the BMW Group. The comments on the BMW Group  
and Automotive segment provided in earlier sections  
apply to BMWAG, unless presented differently in the  
following section. The Financial Statements of BMWAG  
are drawn up in accordance with the provisions of the  
German Commercial Code (HGB) and the relevant  
supplementary provisions contained in the German  
Stock Corporation Act (AktG).  
Business environment and review of operations  
The general and sector-specific environment of BMWAG  
is essentially the same as that of the BMW Group and  
is described in the Report on Economic Position sec-  
tion of the Combined Management Report.  
On10 March 2020, theFinancialStatementsofBMWAG  
were drawn up by the Board of Management. Based on  
current developments regarding the spread of corona-  
virus, the Board of Management on 16 March 2020  
adjusted the original outlook for the BMW Group, the  
assumptions regarding the development of the global  
economy and the economic risks and opportunities for  
the financial year 2020 in the Combined Management  
Report, as well as the statement regarding the Events  
after the end of the reporting period. On the same day,  
the Financial Statements of BMWAG were drawn up  
anew by the Board of Management.  
BMW AG develops, manufactures and sells auto-  
mobiles and motorcycles as well as spare parts  
and accessories manufactured in-house, by foreign  
subsidiaries and by external suppliers, and performs  
services related to these products. Sales activities are  
carried out primarily through branches, subsidiaries,  
independent dealerships and importers. In the  
financial year 2019  
deliveries by 35,898 units to 2,555,795 units. This  
figure includes 534 638 units relating to series sets  
supplied to the joint venture BMW Brilliance Auto-  
, BMWAG increased automobile  
,
motive Ltd., Shenyang, an increase of 44,056 units  
over the previous year.  
The key financial performance indicator for BMWAG  
is the dividend payout ratio (unappropriated profit of  
BMWAG in accordance with HGB in relation to the net  
profit for the year of BMW Group in accordance with  
IFRS). The key non-financial performance indicators  
are essentially identical and concurrent with those of  
the BMW Group. These are described in detail in the  
Report on Economic Position section of the Combined  
Management Report.  
At 31 December 2019  
,
BMWAG employed a workforce  
89 842 people).  
of 88 303 people (31 December 2018  
,
:
,
7
7
Results of operations  
BMW AG Income Statement  
•
59  
in € million  
2019  
2018  
Revenues  
84,691  
– 70,178  
14,513  
78,355  
– 63,841  
14,514  
Cost of sales  
Gross profit  
Sellingꢀexpenses  
– 3,979  
– 2,776  
– 5,528  
1,295  
– 2,526  
1,858  
39  
– 4,078  
– 2,803  
– 5,859  
2,184  
Administrativeꢀexpenses  
Research and development expenses  
Other operating income*  
Other operating expenses*  
Result on investments  
Financial result  
– 1,158  
2,344  
–1,452  
– 872  
Income taxes  
– 767  
Profit after income tax  
2,129  
2,820  
Other taxes  
– 22  
–19  
Net profit  
2,107  
2,801  
Transfer to revenue reserves  
– 461  
1,646  
– 498  
Unappropriated profit available for distribution  
2,303  
*
ꢀSeparateꢀpresentationꢀofꢀotherꢀoperatingꢀincomeꢀandꢀexpensesꢀfromꢀtheꢀfinancialꢀyearꢀ2019.ꢀPriorꢀyear’sꢀfiguresꢀwillꢀbeꢀpresentedꢀanalogously.  
Revenues increased by €ꢀ  
6
,
336 million year-on-year,  
Cost of sales increased by  
9
.
9
% to €ꢀ70  
,
178 million,  
primarily reflecting growth in the volume of deliveries  
to customers. In geographical terms, the increase re-  
lated mainly to China and the USA. Revenues totalled  
mostly due to the higher number of deliveries and  
the rise in cost of materials. Gross profit decreased  
by €ꢀ1 million to €ꢀ14,513 million.  
€
ꢀ84,691 million (2018: €ꢀ78,355 million), of which  
Group internal revenues accounted for €ꢀ57 412 million  
2018: €ꢀ58,707 million) or 67.8% (2018: 74.9%).  
,
Selling and administrative expenses were slightly  
lower than in the previous year.  
(
7
8
Combined  
Management  
Report  
Research and development expenses related mainly to  
new vehicle models (including the new 1 Series, the  
The expense for income taxes relates primarily to  
current tax for the financial year 2019.  
2
Series Gran Coupé and the X6), expenditure on the  
Report on  
Economic Position  
development of reference architectures, powertrain  
systems and automated driving, as well as higher  
expenditure on vehicle electrification. Compared to  
the previous year, research and development expenses  
decreased by 5.6%.  
After deducting the expense for taxes, the Company  
reports a net profit of €ꢀ2,107 million, compared to  
€ꢀ2,801 million in the previous year.  
Comments on  
Financial Statements  
of BMW AG  
Subject to the shareholders’ approval of the appro-  
priation of results at the Annual General Meeting,  
the unappropriated profit available for distribution  
amounts to €ꢀ1,646 million (2018: €ꢀ2,303 million).  
As a percentage of Group net profit, the dividend  
Other operating income fell to €ꢀ1,295 million (2018:  
€
ꢀ2,184 million), whereby the change was mainly  
attributable to a positive prior-year effect resulting  
from the change in method for measuring provisions  
for statutory and non-statutory warranties and prod-  
uct guarantees.  
corresponds to a payout ratio of 32.8 % (2018: 32.0 %).  
Other operating expenses totalling €ꢀ2,526 million  
2018: €ꢀ1,158 million) were impacted mainly by the  
(
recognition of the provision recognised in connection  
with ongoing EU Commission antitrust proceedings.  
Income from profit transfer agreements with Group  
companies, reported in the line item Result on invest-  
ments, decreased year-on-year. By contrast, financial  
result improved by €ꢀ1,491 million, mainly due to  
higher income from designated plan assets offset  
against pension obligations. The lower impairment  
loss of €ꢀ30 million (2018: €ꢀ119 million) recognised on  
the investment in SGL Carbon SE, Wiesbaden, also  
had the effect of keeping down the deterioration in  
earnings for the year.  
7
9
Financial and net assets position  
BMW AG Balance Sheet at 31 December  
•
60  
in € million  
2019  
2018  
Assets  
Intangible assets  
405  
12,473  
3,762  
252  
11,976  
3,559  
Property,ꢀplantꢀandꢀequipment  
Investments  
Tangible, intangible and investment assets  
16,640  
15,787  
Inventories  
5,994  
964  
4,811  
947  
Trade receivables  
Receivables from subsidiaries  
Other receivables and other assets  
Marketable securities  
Cash and cash equivalents  
Current assets  
16,698  
3,513  
4,109  
6,757  
38,035  
8,570  
3,595  
4,080  
6,542  
28,545  
Prepaid expenses  
58  
1,086  
535  
668  
Surplus of pension and similar plan assets over liabilities  
Total assets  
55,819  
45,535  
equity And liABilities  
Subscribedꢀcapital  
659  
2,210  
658  
2,177  
Capital reserves  
Revenue reserves  
10,564  
1,646  
10,103  
2,303  
Unappropriatedꢀprofitꢀavailableꢀforꢀdistribution  
Equity  
15,079  
15,241  
Registered profit-sharing certificates  
28  
28  
Pensionꢀprovisions  
Other provisions  
Provisions  
205  
8,784  
8,989  
214  
7,824  
8,038  
Liabilitiesꢀtoꢀbanks  
Trade payables  
511  
5,751  
21,777  
187  
545  
5,560  
12,670  
285  
Liabilitiesꢀtoꢀsubsidiaries  
Other liabilities  
Liabilities  
28,226  
19,060  
Deferred income  
3,497  
3,168  
Total equity and liabilities  
55,819  
45,535  
Capital expenditure on intangible assets and prop-  
erty, plant and equipment in the year under report  
totalled €ꢀ3,233 million (2018: €ꢀ2,975 million), up by  
The carrying amount of investments rose to €ꢀ  
lion (2018: €ꢀ3,559 million), mainly due to additions to  
investments in subsidiaries amounting to €ꢀ257 million.  
The impairment loss recognised on the investment in  
SGL Carbon SE, Wiesbaden, amounting to €ꢀ30 million  
(2018: €ꢀ119 million) had an offsetting effect.  
3
,
762 mil-  
8
.
7
% compared to the previous year. Depreciation  
and amortisation amounted to €ꢀ2,573 million (2018:  
ꢀ2,470 million).  
€
8
0
Combined  
Management  
Report  
Inventories increased to €ꢀ5,994 million (2018:  
ꢀ4,811 million), mainly due to the build-up of raw  
materials, supplies and goods for resale and the  
first-time inclusion in inventories of prepayments  
on orders.  
Other provisions increased year-on-year, mainly due  
to the provision recognised in connection with  
EU Commission antitrust proceedings.  
€
Report on  
Economic Position  
Comments on  
Financial Statements  
of BMW AG  
Liabilities to banks decreased by €ꢀ34 million, mainly  
as a result of the repayment of project-related loans.  
Receivables from subsidiaries, most of which relate  
to intragroup financing receivables, increased to  
Liabilities to subsidiaries amounting to €ꢀ21,777 mil-  
lion (2018: €ꢀ12,670 million) comprised mainly  
financial liabilities. In addition to higher intragroup  
financing liabilities, the increase was primarily due  
to the change in the exercise of the option to offset  
receivables from and payables to subsidiaries with  
effect from the financial year 2019.  
€
ꢀ16,698 million (2018: €ꢀ8,570 million), primarily due  
to the change in the exercise of the option to offset  
receivables from and payables to subsidiaries with  
effect from the financial year 2019.  
The decrease in other receivables and other assets  
to €ꢀ3,513 million (2018: €ꢀ3,595 million) was mainly  
attributable to lower receivables from companies with  
which an investment relationship exists. The increase  
in tax receivables had an offsetting effect.  
Deferred income increased by €ꢀ329 million to  
€ꢀ3,497 million and included mainly amounts for  
services still to be performed relating to service and  
maintenance contracts.  
As a result of the lower unappropriated profit com-  
pared with the dividend paid for the previous financial  
Liquidity within the BMW Group is ensured by means  
of a liquidity concept applied uniformly across the  
Group. This involves concentrating a significant part  
of the Group’s liquidity at the level of BMWAG. An  
important instrument in this context is the cash pool  
based at BMWAG. The liquidity position reported  
by BMWAG therefore reflects the global activities of  
BMWAG and other Group companies.  
year, equity decreased by €ꢀ162 million to €ꢀ15,079 mil-  
lion. The equity ratio fell from 33 % to 27 %, mainly  
due to the higher balance sheet total.  
.
5
.0  
In order to secure pension obligations, cash funds to-  
talling €ꢀ497 million were transferred to BMW Trust e.ꢀV.,  
Munich, in conjunction with a Contractual Trust  
Arrangement (CTA), to be invested in plan assets.  
Plan assets are offset against the related guaranteed  
obligations. The resulting surplus of assets over liabil-  
ities is reported in the BMWAG balance sheet on the  
line item Surplus of pension and similar plan assets  
over liabilities.  
Cash and cash equivalents increased by €ꢀ215 million  
to €ꢀ6,757 million, mainly as a result of net positive  
cash inflows from operating activities. Investments  
in long-lived assets and the payment of the dividend  
for the previous financial year had an offsetting effect.  
Provisions for pensions went down from €ꢀ214 million  
to €ꢀ205 million, after offsetting pension plan assets  
against pension obligations.  
8
1
Risks and opportunities  
Events after the end of the reporting period  
BMWAG’s performance is essentially dependent on  
the same set of risks and opportunities that affect the  
BMW Group and which are described in detail in the  
Report on Outlook, Risks and Opportunities section  
of the Combined Management Report. As a general  
rule, BMWAG participates in the risks entered into  
by Group companies in proportion to the respective  
shareholding percentage. At the same time, the result  
in investments has a significant impact on the earn-  
ings of BMWAG.  
On 30 January 2020, the World Health Organisation  
(
WHO) declared an international health emergency  
due to the outbreak of coronavirus. Since 11 March  
the WHO has characterised the spread of the corona-  
virus as a pandemic.  
The continuing spread of the coronavirus and the  
impact on the business development of BMW AG is  
being continually monitored. Based on current devel-  
opments, BMWAG expects that the increasing spread  
of the coronavirus and the necessary containment  
measures will have a negative impact on BMW AG  
vehicle deliveries in all key sales markets. Risks  
also exist for upstream and downstream processes,  
for example, through possible bottlenecks due to  
supply shortages.  
BMWAG is integrated in the Group-wide risk man-  
agement system and internal control system of the  
BMW Group. Further information is provided in the  
section Internal Control System Relevant for Account  
-
ing and Financial Reporting Processes within the  
Combined Management Report.  
Current assessments and assumptions for the financial  
year 2020, to the extent already known to BMWAG,  
have been taken into account and described in the  
outlook report. Apart from these assessments, no  
further significant negative effects are known or can  
be estimated at the present time. However, further  
negative effects could arise in the course of the year.  
Outlook  
For the financial year 2020, BMWAG forecasts a divi-  
dend payout ratio (unappropriated profit of BMWAG  
in accordance with HGB in relation to the BMW Group  
net profit for the year in accordance with IFRS) within  
a range of between 30 and 40% (2019: 32.8%).  
No other events have occurred since the end of the  
financial year that could have a major impact on the  
results of operations, financial position and net assets  
of BMWAG.  
Due to its significance in the Group and its close ties  
with Group companies, expectations for BMW AG  
with respect to its non-financial performance indica-  
tors correspond largely to the BMW Group’s outlook.  
This is described in detail in the Report on Outlook,  
Risks and Opportunities section of the Combined  
Management Report.  
PricewaterhouseCoopers GmbH Wirtschaftsprüfungs  
-
gesellschaft, Frankfurt am Main, Munich branch, has  
issued an unqualified audit opinion on the financial  
statements of BMWAG, of which the balance sheet  
and the income statement are presented here. The  
BMWAG financial statements for the financial year  
2
019 will be submitted to the operator of the electronic  
version of the German Federal Gazette and can be  
obtained via the Company Register website. These  
financial statements are available on the homepage  
of the BMW Group under  
www.bmwgroup.com/ir.  
8
2
Combined  
Management  
Report  
OUTLOOK  
REPORT ON OUT-  
LOOK, RISKS AND  
OPPORTUNITIES  
Report on Outlook,  
Risks and  
Opportunities  
Outlook  
Thereportonoutlook, risksandopportunitiesdescribes  
the expected development of the BMW Group in 2020  
including the significant risks and opportunities, from  
a Group management perspective. In line with the  
Group’s internal management system, the outlook  
covers a period of one year. Risks and opportunities  
are managed on the basis of a two-year assessment.  
The report on risks and opportunities therefore  
addresses a period of two years.  
,
Economic development significantly  
slowed by spread of coronavirus  
Automobile markets in decline  
as consequence worldwide  
BMW Group outlook for 2020 signifi-  
cantly impacted by coronavirus  
The report on outlook, risks and opportunities con-  
tains forward-looking statements that are based on  
the BMW Group’s expectations and assessments and  
which can be influenced by unforeseeable events. As  
a result, actual outcomes can deviate either positively  
or negatively from the expectations described below –  
for example on account of political and economic  
developments. Further information is provided in  
the section Risks and Opportunities.  
Its continuous forecasting process ensures the  
BMW Group’s ability to exploit opportunities quickly  
and systematically as they arise and react in a similar  
way to unexpected risks. The principal risks and  
opportunities are described in detail in the section  
Risks and Opportunities. The matters discussed  
therein are relevant for all of the BMW Group’s key  
performance indicators and could result in variances  
between the outlook and actual outcomes.  
8
3
Assumptions used in the outlook  
Economic outlook  
The following outlook relates to a forecast period of one  
year and is based on the composition of the BMW Group  
during that time. The outlook takes account of all  
information available at the time of reporting and  
any which could have an effect on the overall perfor-  
mance of the Group. The expectations contained in  
the outlook are based on the BMW Group’s forecasts  
for 2020 and reflect its most recent status. The basis  
for the preparation of and the principal assumptions  
used in the forecasts – which consider the consensual  
opinions of leading organisations, such as economic  
research institutes and banks – are set out below. The  
BMW Group’s outlook is drawn up on the basis of  
these assumptions.  
The global economy will be significantly impacted by  
the knock-on consequences of coronavirus. Despite  
the fact that wide-ranging monetary and fiscal policy  
measures have already been initiated in many coun-  
tries, global growth is likely to be significantly lower  
than in the previous year. Although the provisional  
agreement in the trade dispute between the USA and  
China as well as the reduced level of concern regarding  
a potentially disorderly withdrawal of the UK from the  
EU gave rise to some optimism at the beginning of the  
year, the positive impact in these two areas is likely to  
be far outweighed by the knock-on consequences of  
coronavirus. At present, it is not possible to provide an  
exact assessment of the situation. Further information  
on political and global economic risks is also provided  
in the section Risks and Opportunities.  
The high degree of uncertainty surrounding the global  
spread and resulting consequences of coronavirus  
makes it difficult to provide an accurate forecast of  
the BMW Group’s business performance for the finan-  
cial year 2020. Based on the latest developments, the  
BMW Group expects the spread of coronavirus and  
the required containment measures to have a negative  
impact on delivery volumes in all major markets over  
the year 2020 as a whole. This assessment is based on  
the assumption that deliveries across all markets will  
return to normal after a few weeks. Any potential  
longer-term effects on deliveries due to the spread of  
coronavirus and the associated volatility on financial  
markets cannot be assessed at present and are there-  
fore not included in the outlook.  
GDP in the eurozone is likely to grow significantly  
more sluggishly in 2020 than the predicted rate of 1.0%.  
The growth rate in Germany is likely to be even slower.  
Similarly, prospects for the economies of other member  
states in the eurozone are also on the gloomy side.  
France and Spain will grow only marginally at most,  
while Italy, the first country in Europe to be affected  
by coronavirus, is likely to go in recession.  
In the UK, apart from the impact of coronavirus, eco-  
nomic performance in 2020 will also depend on the  
progress of negotiations with the EU regarding a free  
trade agreement. Overall, GDP growth in 2020 is likely  
to be significantly below the most recently predicted  
level of 1.0%.  
In the UK, in addition to the consequences of corona-  
virus, uncertainties relating to EU exit negotiations on  
a trade agreement are having the effect of impairing  
the reliability of forecasts drawn up by businesses.  
Irrespective of these matters, the BMW Group is  
working on the basis that an agreement between the  
In the USA, growth is expected to continue slowing  
down in 2020. The spread of coronavirus and the  
resulting containment measures are likely to reduce  
economic momentum to a level considerably lower than  
EU and UK will be finalised by 31 December 2020  
.
the most recently predicted 1.7%, despite developments  
Furthermore, the BMW Group anticipates that trade  
tensions between the USA and China will continue  
to be a source of uncertainty, but that the current  
tariffs will not see a further increase. The Group also  
assumes that trade between the EU and the USA will  
not be subject to additional tariffs.  
on the labour and property markets remaining positive.  
The US Federal Reserve has already responded to the  
spread of coronavirus with interest rate cuts and will  
likely adopt further measures to support the economy.  
Even without the impact of coronavirus, the ongoing  
normalisation of the Chinese economy would have  
caused the country’s growth rate to continue falling in  
2020. However, the extent of the slowdown will now be  
much greater and certainly be below the most recently  
predicted rate of 5.6%.  
From the beginning of the financial year 2020, the key  
performance indicator for the workforce size will be  
based solely on the number of core and temporary  
employees. This change is in line with the reorgan-  
isation of internal management, which focuses on  
these employee groups. Employee groups such as  
apprentices, students gaining work experience and  
doctoral candidates primarily serve to secure the next  
generation of employees and promote the training of  
young people, and are therefore excluded from an  
internal management perspective. For this reason,  
they will no longer be included in the key performance  
indicator for the workforce size.  
Rather than growing slightly, the Japanese economy  
is likely to contract due to coronavirus, particularly  
in view of the fact that the value added tax hike in  
October 2019 is bound to exert downward pressure  
on private consumption for some time to come. As an  
export-oriented country, Japan is likely to be hit harder  
by a decline in world trade than China, for example.  
8
4
Combined  
Management  
Report  
Currency markets  
International motorcycle markets  
Currencies of particular importance for the interna-  
tional operations of the BMW Group are the Chinese  
renminbi, the British pound, the Japanese yen and  
the US dollar. All of these major currencies are again  
expected to be subject to a high degree of fluctuation  
in 2020.  
Prior to the outbreak of coronavirus, the BMW Group  
had predicted that the global motorcycle markets in  
the 250 cc plus class would grow slightly in 2020. For  
instance, the upward trend seen on major European  
markets such as France and Spain was expected to con-  
tinue. In Germany and Italy, the markets were forecast  
to remain stable. By contrast, the USA was predicted to  
see a further slight decline in motorcycle registrations  
in 2020, whereas Brazil was expected to see a slight  
increase. However, due to the spread of coronavirus,  
global motorcycle markets in the 250 cc plus class are  
now expected to decline slightly year-on-year.  
Report on Outlook,  
Risks and  
Opportunities  
Outlook  
The US dollar could benefit from its function as a  
“
safe haven” in 2020 due to the spread of coronavirus.  
Overall, therefore, the US dollar is more likely to move  
sideways against the euro.  
In the case of the Chinese renminbi, the close eco-  
nomic links between the USA and China suggest that  
the currencies of these two countries will develop  
relatively synchronously. The renminbi is likely to  
depreciate marginally against the euro in 2020.  
International interest rate environment  
Protectionism and the ongoing trade dispute between  
the USA and China are casting a shadow over global  
growth prospects for 2020. The new coronavirus,  
which is spreading worldwide, poses an additional  
risk for the global economy. Various central banks  
and governments have already taken action to coun-  
teract the economic impact of the virus with a raft of  
monetary policy measures.  
The value of the British pound is currently being  
largely determined by the progress of the Brexit  
negotiations. Accordingly, the most likely scenario  
is a volatile sideways movement of the pound against  
the euro.  
The Japanese central bank’s highly expansionary  
monetary policy is unlikely to change in 2020. The  
euroꢀ/ꢀyen exchange rate is therefore likely to follow a  
sideways trend.  
In view of the developments regarding coronavirus,  
the US Federal Reserve lowered its benchmark interest  
rates by 0.5 percentage points on 3 March 2020 and by  
1 percentage point on 15 March 2020. In connection  
with the latest developments, further reductions  
appear to be likely over the course of the year.  
The currencies of numerous emerging economies  
could come under further downward pressure against  
the US dollar and the euro, particularly in countries  
such as Russia, Brazil and India.  
Further central banks are expected to take measures  
to mitigate the negative impact on the global economy  
and to ensure liquidity on the markets.  
International automobile markets  
According to the original forecasts, new registrations  
worldwide were expected to decrease slightly in 2020  
Apart from the consequences of the spread of corona-  
virus and other global developments, the progress of  
negotiations on a trade agreement between the EU  
and the UK are likely to have a considerable impact on  
the UK economy. The Bank of England is also expected  
to adopt measures to counter the negative economic  
impact of coronavirus and to stabilise the economy.  
(
83.1 million units; –0.5 %). However, due to the  
worldwide spread of coronavirus, new registrations  
are now expected to drop significantly.  
8
5
The economic consequences of the coronavirus and  
the trade war with the USA are likely to continue  
having an adverse impact on the Chinese economy in  
Direct effects of coronavirus on the BMW Group  
Prior to the outbreak of coronavirus, the BMW Group’s  
original forecast for the Automotive segment envis-  
aged a slight increase in deliveries to customers and  
an EBIT margin of between 6 and 8%. Group profit  
before tax was expected to increase significantly.  
2
020. A mixture of reforms as well as monetary and  
fiscal policy measures is intended to counteract any  
sharp slowdown in economic growth.  
Despite the government’s economic measures against  
the negative effects of the tax increase, the economy  
in Japan is likely to be impacted negatively by the  
coronavirus. It is expected that the Japanese central  
bank will continue its extremely low interest rate poli-  
cies, in order to reach the target of 2% price stability.  
The spread of coronavirus has slowed down the  
growth of the BMW Group’s deliveries in China. In  
light of the sharp increase in corona infections in other  
regions of the world, currently particularly in Europe  
and North America, the BMW Group now expects  
worldwide deliveries to customers to be significantly  
down on the previous year.  
Expected consequences for the BMW Group  
Due to the lower volume of deliveries in China com-  
pared to the original forecast, the necessary contain-  
ment measures and a similar trend already emerging  
in other regions of the world, including Europe and  
North America, earnings of the Automotive segment  
are likely to be negatively impacted, particularly in  
the first half of the year. The negative effect on the  
EBIT margin of the Automotive segment over the full  
twelve-month period is currently expected to be in  
the region of four percentage points. Based on the  
latest forecast, the EBIT margin for the Automotive  
segment is therefore expected to be within the range  
of 2 and 4%.  
Future developments on international automobile  
markets also have a direct impact on the BMW Group.  
Challenges in the competitive environment will have a  
significant effect on sales volumes in some countries.  
Due to its global business model, the BMW Group is  
well placed at all times to capitalise on any opportu-  
nities that present themselves, even at short notice.  
Coordination between the Group’s sales and produc-  
tion networks also enables it to balance out the impact  
of unforeseeable developments in the various regions.  
Investments in markets important for the future also  
form a basis for further growth, while simultaneously  
strengthening the global presence of the BMW Group.  
In the Financial Services segment, the number of new  
contracts is expected to decrease and the risk provi-  
sioning expense to increase. As a result, the return on  
equity is forecast to drop slightly year-on-year.  
In view of the increasingly unpredictable consequences  
of economic and political conditions around the  
world, actual economic growth in some regions may  
deviate from expected trends and outcomes. Areas  
affected in this context include trade and customs  
policies, security and potential additional international  
trade conflicts.  
Taking into account the effects described above, Group  
profit before tax is expected to be significantly lower  
than in 2019.  
Furthermore, risks also exist for upstream processes,  
including possible bottlenecks due to supply shortages.  
The BMW Group continues to observe developments  
closely and is ready to take all necessary measures.  
8
6
Combined  
Management  
Report  
Outlook for the BMW Group  
The Motorcycles segment is now expected to record a  
slight decrease of deliveries to customers, down on the  
previous forecast of a solid increase. The EBIT margin  
is expected to lie within a target range of 6 and 8%,  
while the RoCE is likely to be slightly under the pre-  
vious year’s level.  
Overall assessment by Group management  
Within a volatile environment, now overshadowed  
by the global spread of coronavirus, business is ex-  
pected to develop negatively during the financial year  
Report on Outlook,  
Risks and  
Opportunities  
Outlook  
2
020. While numerous new automobile and motor-  
cycle models as well as individual mobility-related  
services will generate additional momentum, the  
various factors described above are likely to have a  
major offsetting impact. Research and development  
expenses will remain at a high level in connection  
with future-oriented projects. In light of the impact  
of the global spread of coronavirus, profit before tax  
during the period covered by the outlook is likely to  
decrease significantly.  
The targets are to be achieved with a workforce size  
which – based on the new method of calculation  
described above – will be at a similar level to the  
previous year (workforce size at the end of 2019  
based on the new definition: 126,016 employees;  
workforce size based on the previous definition:  
133,778 employees).  
The prevailing high level of uncertainty – particularly  
in connection with the further spread of corona-  
virus, economic and political developments such as  
the negotiations between the EU and the UK on a  
trade agreement by 31 December 2020, as well as  
international trade and customs policies – may cause  
economic developments in many regions to deviate  
markedly from expected trends and outcomes. Any  
such deviations could have a significant impact on  
the business performance of the BMW Group.  
For the same reason, Automotive segment deliv-  
eries to customers are likely to be well down on  
the previous year. At the same time, fleet carbon  
dioxide emissions are forecast to drop considerably.  
Influenced by the negative factors described above,  
the Automotive segment’s EBIT margin in 2020 is  
expected to lie within a target range of 2 and 4 %. The  
latest prediction is that the RoCE in this segment is  
likely to be significantly lower than one year earlier.  
The RoE in the Financial Services segment is expected  
to decrease slightly, mainly due to the higher risk  
provisioning expense.  
Furthermore, the actual business performance of the  
BMW Group may also differ from current expectations  
as a result of the risks and opportunities described  
below in the Report on Risks and Opportunities.  
8
7
BMW Group key performance indicators  
•
61  
2
019  
2019  
adjusted  
2020  
Outlook  
1
reported  
Group  
Profitꢀbeforeꢀtax  
€ million  
7,118  
–
significantꢀdecrease  
in line with last  
Workforceꢀatꢀyear-end  
133,778  
126,016  
year’sꢀlevel  
Automotive seGment  
Deliveriesꢀtoꢀcustomersꢀ2  
Fleet emissions3  
units  
2,538,367  
127  
–
–
–
–
significantꢀdecrease  
significantꢀdecrease  
between 2 and 4  
g CO  
2
/ km  
%
EBIT margin  
4.9  
Return on capital employed  
%
29.0  
significantꢀdecrease  
motorcycles seGment  
Deliveriesꢀtoꢀcustomers  
EBIT margin  
units  
%
175,162  
8.2  
–
–
–
slight decrease  
between 6 and 8  
slight decrease  
Return on capital employed  
%
29.4  
FinAnciAl services seGment  
Return on equity  
%
15.0  
–
slight decrease  
1
ꢀ
ꢀ
Basedꢀonꢀadjustedꢀfigures.  
IncludingꢀtheꢀjointꢀventureꢀBMWꢀBrillianceꢀAutomotiveꢀLtd.,ꢀ Sꢀ henyangꢀ(2019:ꢀ538,612ꢀunits).  
EU-28.  
2
3
8
8
Combined  
Management  
Report  
RISKS AND  
OPPORTUNITIES  
As part of the risk management process, all individual  
and cumulative risks that represent a threat to the suc-  
cess of the business are monitored and managed. Any  
risks capable of posing a threat to the going-concern  
status of the BMW Group are strictly avoided. Where  
no specific reference is made, opportunities and risks  
relate to the Automotive segment. The scope of entities  
consolidated in the Report on Risks and Opportuni-  
ties corresponds to the scope of consolidated entities  
included in the BMW Group Financial Statements.  
Report on Outlook,  
Risks and  
Opportunities  
Risks and  
Opportunities  
As a worldwide-leading provider of premium cars,  
motorcycles and mobility services, as well as related  
financial services, the BMW Group is exposed to  
numerous uncertainties and change. Making full  
use of the opportunities arising out of change is a  
fundamental basis of the Group’s corporate success.  
In order to achieve growth, profitability, efficiency  
and continued sustainable activities going forward,  
the BMW Group must consciously assume risks.  
Risk management system  
The objective of the risk management system, and the  
main function of risk reporting, is to identify, mea-  
sure and, where possible, actively manage internal or  
external risks that could threaten the attainment of the  
Group’s corporate targets. According to Group-wide  
rules, every employee and manager has a duty to report  
risks through the relevant reporting channels. The key  
elements of a good risk culture are rooted in the core  
values of the BMW Group, its risk management manual  
and in the principles of its risk management strategy.  
Management of opportunities and risks is essential  
for the Group to react appropriately to changes in  
political, economic, technical or legal conditions.  
Opportunities and risks which are likely to materialise  
are taken into account in the Outlook Report. The  
following sections focus on potential future devel-  
opments or events, which could result in a positive  
(
opportunity) or a negative (risk) deviation from the  
The risk management system is organised formally as  
a decentralised, Company-wide network and is steered  
by a centralised risk management function. Every  
BMW Group division is represented within the risk  
management organisation by Network Representatives.  
BMW Group’s outlook. The earnings impact of risks  
and opportunities is assessed separately without  
offsetting. Opportunities and risks are assessed with  
respect to a medium-term period of two years.  
Risk management in the BMW Group  
•
62  
Group-wide  
risk management  
Analysisꢀandꢀ  
Measurement  
Identification  
Effectiveness  
Supervisory  
Board  
Risk  
Compliance  
Committee  
Practicability  
Management  
Steering  
Committee  
Reporting /  
Monitoring  
Controlling  
Board of  
Management  
Completeness  
Group  
Audit  
Measures  
Internal Control System  
8
9
This formal structure reinforces the network’s visibility  
and underlines the importance of risk management  
within the BMW Group. Responsibilities and tasks  
of the centralised risk management function and the  
Network Representatives are clearly documented and  
accepted. In view of the dynamic growth of business  
and the increasingly volatile environment in which it  
operates, the BMW Group’s Corporate Audit reviews  
its risk management system for effectiveness and  
appropriateness on an annual basis.  
The risk-bearing capacity is regularly monitored by  
means of an integrated limit system for individual  
risk categories.  
The risk management system is regularly examined  
by Group Internal Audit. The incorporation of  
new insights and requirements ensures continual  
improvement to the system. Training programmes  
and information events are regularly conducted  
across the BMW Group, particularly within the risk  
management network. These measures are essential  
ways of preparing those involved in the process for  
new or additional demands.  
Other functions such as compliance (see the section  
Corporate Governance) and the internal control sys-  
tem (see the section Internal Control System) form  
key interfaces with the risk management system.  
As an independent part of the organisation, Group  
Internal Audit also ensures the appropriateness and  
effectiveness of these functions.  
Alongside comprehensive risk management, sustain-  
able business practice also constitutes a core strategic  
principle for the BMW Group. Sustainability-related  
risks are therefore also integrated in the Group-wide  
risk network. In accordance with the CSR Directive  
Implementation Act, risks that can have an impact on  
the non-financial aspects referred to in the law were  
reviewed as part of the reporting process. Significant  
risks in this context are defined as risks from business  
activities, business relationships and productsꢀ/ꢀser-  
vices of the BMW Group that are highly likely to  
have a serious adverse impact. No significant risks  
were identified during the review. The Group’s Non-  
Financial Declaration is provided in the Sustainable  
Value Report 2019, which is available on the Internet  
During 2019, the risk management system was fur-  
ther enhanced by focusing on the concept of simula-  
tion-based risk aggregation and by looking at risks not  
only from the perspective of areas of responsibility, but  
also from a process-oriented perspective, with a view to  
improving the informative value of risk-bearing capac-  
ity and in order to gain a better insight into the chains  
of effects between individual risks. For this purpose,  
individual risks from different areas of responsibil-  
ity were allocated to the relevant process steps and  
dependencies between individual risks mapped out.  
at  
www.bmwgroup.com/svr.  
In the Financial Services segment risk management also  
Risk management process  
addresses regulatory requirements, such as Basel III  
Internal methods to identify, measure, manage and  
monitor risks within the Financial Services segment  
comply with national and international standards.  
Risk management within the Financial Services busi-  
ness is built on the prevailing risk culture, the defined  
risk strategy, the internal capital adequacy assessment  
process framework and a set of rules comprising prin-  
ciples and guidelines. The risk management process  
is ensured in organisational terms by means of a clear  
division between front- and back-office activities and  
a comprehensive internal control system. The main  
tool used to manage risks within the Financial Services  
segment is ensuring the segment’s risk-bearing capac-  
ity. Risks – in the sense of unexpected losses – must  
be covered at all times. This is achieved by means of  
risk-covering assets (asset cushions) in the form of  
equity capital derived from the entity’s risk appetite.  
Unexpected losses are measured according to various  
value-at-risk models, which are validated at regular  
intervals. Risks are also aggregated after taking  
account of correlation effects. In addition to assessing  
the Group’s ability to bear risk, stress scenarios are  
also examined. The segment’s risk-bearing capacity  
is also regularly monitored by means of an integrated  
limit system for the various risk categories.  
.
The risk management process covers the entire Group  
and comprises the early identification of risks, detailed  
analysis and risk assessment, the coordinated use of  
relevant management tools as well as monitoring and  
evaluation of measures taken.  
Significant risks reported from within the network are  
firstly presented for review to the Risk Management  
Steering Committee, chaired by Group Controlling.  
After review, the risks are reported to the Board of  
Management and the Supervisory Board. All risks  
are assessed using a loss distribution approach,  
thereby enabling better comparability of risks for  
both internal and external reporting purposes. Risks  
are classified according to the extent of their average  
earnings impact, taking into account the probability of  
occurrence (risk amount) or the risk-bearing capacity  
(
potential worst-case earnings impact).  
Risk assessment for the BMW Group is performed in  
conjunction with the calculation of risk-bearing capac-  
ity. For this purpose, risks measured on a worst-case  
basis are aggregated using a value-at-risk model  
(
99% confidence level) with correlation effects taken  
into account, and compared with the asset cushion.  
9
0
Combined  
Management  
Report  
Risk measurement  
Opportunities management system and  
opportunity identification  
Based on their significance with respect to the results  
of operations, financial position and net assets of the  
BMW Group, risks are classified as high, medium or  
low. The impact of risks is measured and reported net  
of risk mitigation measures that are already taking  
effect (net basis).  
A dynamic market environment also gives rise to  
opportunities. The BMW Group continually monitors  
macroeconomic trends as well as developments within  
the sector and overall environment. This includes  
external regulations, suppliers, customers and com-  
petitors. Identifying opportunities is an integral part of  
the strategic planning process of the BMW Group. The  
Group’s product and service portfolio is continually  
reviewed on the basis of these analyses. This results,  
for example, in new product projects being presented  
to the Board of Management for consideration. Prob-  
able measures aimed at increasing profitability are  
already incorporated in the outlook.  
Report on Outlook,  
Risks and  
Opportunities  
Risks and  
Opportunities  
In the following sections, “earnings impact” is used  
consistently to cover the overall impact on results of  
operations, financial position and net assets.  
The potential earnings impact arising on the occur-  
rence of a risk, measured on the basis of a worst-case  
scenario over the two-year assessment period, is  
classified as follows:  
Continuous monitoring of major business processes  
and strict cost controls are essential for ensuring  
strong profitability and return on capital employed.  
In order to be able to compete successfully in the long  
term and at the same time help advance the move  
towards climate neutrality that is being demanded by  
politicians and society alike, it is the BMW Group’s  
policy to design flexible platforms for rear- and front-  
wheel drive vehicles, enabling it to produce different  
drivetrain systems on the back of a single architecture  
and therefore optimise plant structures.  
Potential earnings impact  
in a worst case scenario  
Class  
Low  
> €0 – 500 million  
> €500 – 2,000 million  
> €2,000 million  
Medium  
High  
The risk amount, which indicates the significance of  
risks for the BMW Group, corresponds to the average  
earnings impact, taking into account probability of  
occurrence and risk mitigation measures that are  
already taking effect.  
The implementation of identified opportunities is  
undertaken on a decentralised basis within the rele-  
vant functions. The significance of opportunities for  
the BMW Group is classified on a qualitative basis in  
the categories “significant” and “insignificant”.  
The following criteria apply for the purposes of clas-  
sifying the risk amount:  
Class  
Risk amount  
Low  
> €0 – 50 million  
> €50 – 400 million  
> €400 million  
Medium  
High  
9
1
Risks and opportunities  
threaten the continued existence of the BMW Group  
were identified either at the balance sheet date or at  
the date on which the Group Financial Statements  
were drawn up.  
The following table provides an overview of all risks  
and opportunities and indicates their significance  
for the BMW Group. Overall, no risks which could  
Risks  
Opportunities  
Change compared  
Classification of Change compared  
risk amount  
to prior year  
Classification  
to prior year  
risks And opportunities  
Macroeconomic risks and opportunities  
Strategic and sector risks and opportunities  
Changes in legislation and regulatory requirements  
Market developments  
ꢃ
High  
Stable  
Insignificant  
Stable  
High  
High  
Stable  
Stable  
Insignificant  
Insignificant  
Stable  
Stable  
Risks and opportunities relating to operations  
Productionꢀandꢀtechnology  
Purchasing  
Highꢀ  
Medium  
Low  
Increased  
Decreased  
Stable  
Insignificant  
Insignificant  
Insignificant  
Insignificant  
Stable  
Stable  
Stable  
Stable  
Salesꢀnetwork  
Information, data protection and IT  
Financial risks and opportunities  
Foreign currencies  
High  
Stable  
Medium  
Medium  
Low  
Decreased  
Stable  
Significant  
Significant  
–
Stable  
Stable  
–
Raw materials  
Liquidity  
Stable  
Pensionꢀobligations  
High  
Stable  
Significant  
Stable  
Risks and opportunities relating to the provision of financial services  
Credit risk  
Medium  
High  
Stable  
Stable  
Stable  
Stable  
Stable  
Insignificant  
Decreased  
Residual value  
Significant  
Stable  
Interest rate changes  
Medium  
Medium  
Medium  
Significant  
Stable  
Operational risks  
–
–
–
–
Legal risks  
Macroeconomic risks and opportunities  
possible economic agendas by parties within the EU  
that are critical of globalisation and could therefore  
jeopardise stability could lead to more restrictive trade  
practices in the coming years.  
Economic conditions influence business performance  
and hence the results of operations, financial posi-  
tion and net assets of the BMW Group. Unforeseen  
disruptions in global economic relations can have  
highly unpredictable effects. Economic risks can  
result in lower purchasing power in the countries  
and regions affected and cause reduced demand for  
the products and services offered by the BMW Group,  
while at the same time having a negative impact on  
production. Macroeconomic risks could – due to sales  
volume fluctuations – have a high earnings impact  
over the two-year assessment period. Overall, the  
risk amounts attached to macroeconomic risks are  
classified as high.  
A possible introduction of further trade barriers,  
including anti-dumping customs duties and duties  
aimed at protecting national security by the  
US administration, could have a significantly adverse  
impact on the BMW Group’s operations through  
less favourable conditions for importing vehicles.  
Moreover, countermeasures by the USA’s trading  
partners could slow down global economic growth  
and have a sustained adverse impact on the export  
of vehicles produced in the USA. The BMW Group’s  
“
production follows the market” strategy involves  
local production both in the USA and with other  
important trade partners. Local production reduces  
the existing risk of trade barriers. Nevertheless, any  
increase in trade barriers would have an adverse  
impact on the BMW Group.  
In view of the political events of recent years, global  
economic developments continue to be subject to a  
high degree of uncertainty, in particular with respect  
to potential barriers to global trade. A reorientation  
of US economic policy, changes within the EU and  
9
2
Combined  
Management  
Report  
The withdrawal of the UK from the EU could have  
a long-term adverse impact on the BMW Group,  
particularly as a result of increased trade barriers in  
the form of customs duties in relation to the Euro-  
pean single market. Any such trade barriers could  
have a negative impact on volumes and costs both  
for vehicles and components produced in the EU  
for the UK as well as those produced in the UK for  
the European market. In extreme cases, this could  
result in production losses due to delays in customs  
clearance. In addition, it cannot be ruled out that  
Brexit could lead to reduced customer spending in the  
wake of weaker economic performance, particularly  
in the UK, but also in parts of the EU. In the short and  
medium term, uncertainty regarding the outcome of  
the negotiations with the EU on a trade agreement by  
either their duration or negative impact. The Group  
is observing the situation closely and is taking appro-  
priate measures.  
Report on Outlook,  
Risks and  
Opportunities  
Should the global economy develop significantly  
better than presented in the outlook, opportunities  
could arise for the BMW Group’s revenues and earn-  
ings. Significantly stronger GDP growth in China,  
demand-oriented reforms within the eurozone, the  
intensification of trade relations between the EU and  
the UK, de-escalation of the trade dispute between  
the USA and its trading partners or more robust  
consumer spending in emerging markets due to ris-  
ing raw material prices could result in significantly  
stronger sales volume growth, reduced competitive  
Risks and  
Opportunities  
pressures and corresponding improvement in pric  
-
3
1
December 2020 is likely to exacerbate these factors  
ing. The planned expansion of production capacities  
will enable emerging opportunities to be exploited.  
Macroeconomic opportunities that could generate  
a sustainable impact on earnings are currently clas-  
sified by the BMW Group as insignificant.  
and cause further unfavourable currency effects. A  
possible further economic downturn in countries of  
the EU could also potentially reduce growth prospects  
for the BMW Group. European integration with a  
unified economic and currency area is an important  
pillar of economic stability in Europe.  
Strategic and sector risks and opportunities  
The transition in China from an investment-driven to  
a consumer-driven economy is associated with slower  
growth rates and, potentially, greater instability in  
the short to medium term on financial markets. If  
the Chinese economy were to grow at a significantly  
slower pace than expected, the consequence would  
be not only a decline in automobile sales, but also,  
potentially, lower demand for raw materials, which  
would have a negative impact above all on emerging  
economies such as Brazil, Russia or South Africa.  
A drop in raw material prices could result for the  
BMW Group in lower demand from these countries,  
while at the same time bringing down raw material  
procurement costs for the BMW Group. Turmoil on  
the Chinese property, stock and banking markets  
as well as the pursuit of overly restrictive monetary  
policies by the US Federal Reserve could pose consid-  
erable risks for global financial market stability, such  
as increased currency fluctuations and unfavourable  
consequences for emerging markets in particular.  
Changes in legislation and regulatory requirements  
The sudden introduction of more stringent legis-  
lation and regulations, particularly with regard to  
emissions, safety and consumer protection as well  
as regional vehicle-related purchase and usage taxes,  
represents a significant risk for the automobile indus-  
try. Country- and sector-specific trade barriers may  
also change at short notice. A sudden tightening  
of regulations in any of these areas may necessi-  
tate significantly higher investments and ongoing  
expenses or influence customer behaviour. If the risk  
of market disruptions as a result of unforeseeable  
short-term changes in legislation and regulations  
were to materialise, this could have a high negative  
impact on earnings over the two-year assessment  
period and beyond. The risk amount attached to  
these risks is classified as high.  
At present, the BMW Group can observe a continu-  
ous trend towards more stringent vehicle emissions  
regulations, particularly in relation to conventional  
drivetrain systems. The BMW Group is addressing this  
risk on the one hand through its ongoing systematic  
development of highly efficient combustion engines,  
with the aim of further reducing fuel consumption and  
emissions. At the same time, it is pressing ahead with  
its plan for electrified vehicles across all brands and  
model series. A main focus area of the BMW Group is  
the systematic electrification of all brands and model  
series. By the end of 2021, the BMW Group aims to  
have more than one million electrified vehicles on  
the roads.  
Furthermore, increasing political unrest, military con-  
flicts, terrorist activities, natural disasters or pandemics  
could have a lasting negative impact on the global  
economy and international capital markets.  
The enormous uncertainty currently regarding the  
global spread and impact of the coronavirus makes  
it difficult to make an accurate forecast of vehicle  
deliveries. If the sales situation across all markets  
does not normalise after a few weeks, further effects  
on the BMW Group’s vehicle deliveries to customers  
as well as on upstream and downstream processes  
may materialise that cannot be assessed in terms of  
9
3
Further risks can result from the tightening of existing  
import and export regulations. These lead primarily  
to additional expenses, but can also restrict imports  
and exports of vehicles or parts.  
have been, or are being, introduced, including entry  
restrictions, congestion charges or, in some situations,  
highly restrictive registration rules. These may impact  
local demand for the BMW Group vehicles affected  
and hence have a negative impact on sales, margins  
and, possibly, the residual values of these vehicles.  
The BMW Group is addressing this risk, for example,  
by broadening its range of electrified vehicles.  
An established regulatory framework for innovative  
mobility solutions as well as government incentives  
are important prerequisites for introducing product  
innovations, such as automated driving, and for  
scaling up the range of electric mobility offerings.  
In the case of BMW Group electrified vehicles, a  
faster expansion of charging infrastructure could  
increase acceptance and help boost sales of planned  
or recently introduced product innovations com-  
pared to forecast. This includes implementation of  
New opportunities are being sought to create added  
value for customers, and thereby to realise significant  
opportunities with respect to sales growth and pric-  
ing. Further development of the product and mobil-  
ity portfolio and expansion in growth regions offer  
the most important medium- to long-term growth  
opportunities for the BMW Group. Continued growth  
depends above all on the ability to develop innovative  
products and services and bring them to market. If the  
negative impact of the current competitive situation  
is reduced more quickly than expected, additional  
opportunities will arise for the BMW Group. Com-  
pared to the assumptions made in the outlook, the  
BMW Group expects these opportunities to have no  
significant earnings impact over the two-year assess-  
ment period.  
the 360° ELECTRIC portfolio in the field of electric  
mobility and collaboration with Toyota on hydrogen  
fuel cell technology.  
The BMW Group’s earnings could also be positively  
affected in the short to medium term by changes in  
trade policies. A possible reduction in tariff barri-  
ers, import restrictions or direct excise duties could  
lower the cost of materials or enable products and  
services to be offered to customers at lower prices.  
Further opportunities for the earnings performance  
of the BMW Group from changes in legislation and  
regulatory requirements compared to the outlook are  
classified as insignificant.  
Risks and opportunities relating to operations  
Risks and opportunities relating to production  
and technologies  
Market development  
Risks relating to production processes and technology  
fields can lead to unplanned interruptions in produc-  
tion or additional costs due to vehicle recall actions.  
If risks arising from production processes and tech-  
nologies were to materialise, they could have a high  
earnings impact over the two-year assessment period.  
The corresponding risk amounts are classified as high.  
During the process of expanding the division-based  
perspective by a process-oriented perspective, the  
individual risks were combined to create an overall  
view of the development and production process. As  
a result, the risk assessment was increased compared  
to the previous year.  
In addition to economic factors and sector-specific  
political conditions, increasingly fierce competition  
among established manufacturers and the emergence  
of new competitors could also have effects which are  
difficult to predict. Unforeseen consumer preferences  
and changes in brand perceptions can give rise to  
opportunities and risks. If market risks were to mate-  
rialise, they could have a high earnings impact over  
the two-year assessment period. The risk amount is  
classified as high.  
A potential further intensification in competition  
could put pressure on sales volumes, selling prices and  
margins. For instance, the planned introduction of the  
RDE II standard could result in market distortions –  
similar to those which arose on the conversion to the  
new WLTP test procedure in 2018 – even though the  
BMW Group is compliant with the new requirements.  
Changes in customer behaviour can also be brought  
about by changes in attitudes, values, environmental  
factors and fuel or energy prices. The BMW Group’s  
flexible sales and production processes enable risks to  
be reduced and newly arising opportunities in market  
and product segments to be taken.  
Potential causes of production downtimes include fire,  
machine and tooling breakdowns, IT malfunctions,  
temporary disruption in utility supply or transporta-  
tion and logistical disruptions. All production units  
have a variety of measures in place to deal with  
potential production interruptions and downtimes,  
some of which are integrated into the planning  
process and can be implemented operationally with  
a high degree of flexibility. These measures are highly  
relevant in terms of both the amount of damage and  
the probability of occurrence of risks. Examples  
include the interchangeability of production facilities,  
preventive maintenance of production facilities, the  
maintenance of adequate safety stock levels and the  
management of spare parts across the plant network.  
Local restrictions affecting product usage in specific  
sectors may limit BMW Group sales in individual mar  
kets. In some urban areas, for instance, local measures  
-
9
4
Combined  
Management  
Report  
Risk is also reduced through flexible working hour  
models and working time accounts as well as the  
ability to build individual vehicle models or engine  
types with a high degree of flexibility – either addi-  
tionally or alternatively – at other sites, depending on  
requirements. The focus is on ensuring that customers  
can take delivery of their vehicle, both on time and  
in the premium quality expected.  
The BMW Group sees opportunities in production  
processes and technology fields primarily through  
the competitive edge gained from mastering new  
and complex technologies. Digitalisation within the  
production area is being driven by technological and  
IT innovations. Lean processes will remain the basis  
for efficient production systems in the future. Digital  
solutions invariably offer added value if they add to  
the efficiency of serial processes. A good example of  
this in the field of production logistics is the use of  
smart transport robots, which help optimise processes  
relating to parts handling and order picking.  
Report on Outlook,  
Risks and  
Opportunities  
Risks and  
Opportunities  
Technical fire protection systems, rapid response by  
on-site fire brigades and appropriate employee train-  
ing represent the three key strategies for preventing  
or reducing potential damage from fires. Furthermore,  
policies are in place with insurance companies of high  
credit standing for fire-related events that lead to  
significant production interruptions at the Group’s  
or at suppliers’ premises. Measures undertaken in  
conjunction with the latest challenges posed by Brexit  
include appropriate increases in levels of safety stocks,  
Given the long lead times in developing new prod  
ucts and processes, additional opportunities are not  
expected to have a significant impact on earnings  
during the outlook period.  
-
Risks and opportunities relating to purchasing  
Purchasing risks relate primarily to supply risks caused  
by the failure of a supplier as well as to threats to  
BMW Group-relevant know-how within the supplier  
network. Production problems at the level of suppliers  
could lead to consequences from increased expendi-  
ture for the BMW Group to production interruptions  
and a corresponding reduction in sales volume.  
The increasing complexity of the supplier network,  
especially at the level of lower tier suppliers, whose  
operations can only be influenced indirectly by the  
BMW Group, is a further potential cause of down-  
times at supplier locations. Moreover, the increased  
threat of cyberattacks along the value chain affects  
supply security maintenance and the protection of  
BMW Group-relevant know-how. In order to ensure  
a uniform level of information security for all parties  
concerned along the value chain, the BMW Group  
impresses on suppliers the importance of obtaining  
appropriate IT security certification. The BMW Group  
employs a comprehensive set of monitoring and  
proactive control measures to ensure that supply  
industry participants are able to rise to the current  
challenges facing them.  
enhancing flexibility along the supply chain and estab  
-
lishing specific IT solutions to handle related financial  
and logistics processing issues. In addition, in order  
to counter the risk of limited availability of products,  
particularly at the start of production for new vehicle  
projects, appropriate quality management processes  
are in place to monitor and secure their success.  
Targeted cyberattacks could cause damage to pro-  
duction facilities, resulting in long downtimes and,  
consequently, substantial losses. This threat is being  
countered by the rollout of new detection, analysis  
and response measures.  
Vehicles may be damaged or destroyed due to natural  
hazards or other risks during transport from produc-  
tion plants to the sales regions. As a consequence  
of the growing number of major claims, deductible  
amounts included in transport insurance policies have  
already risen significantly. In fact, as more and more  
insurance companies withdraw from this market seg-  
ment, there is a risk that it could become economically  
unviable to take out insurance, as a result of which the  
BMW Group would be required to bear the losses itself.  
If purchasing risks were to materialise, they could have  
a high earnings impact over the two-year assessment  
period. The level of risk attached to purchasing risks  
is classified as medium. Through an intensified imple-  
mentation of measures regarding fire protection and  
protection from cyberattacks at the level of suppliers,  
the risk has decreased compared to the previous year.  
The BMW Group recognises appropriate provisions  
for statutory and non-statutory warranty obligations.  
It cannot be ruled out, however, that additional costs  
could arise in connection with vehicle recall actions  
that are either not covered or not fully covered by pro-  
visions. Despite thorough quality assurance processes,  
such risks can always arise if materials andꢀ/ꢀor  
processing procedures used prove insufficient, in  
some cases years after the launch of a product. Further  
information on risks relating to provisions for statutory  
and non-statutory warranty obligations is provided in  
note 33 of the Group Financial Statements.  
Close cooperation between carmakers and suppliers in  
the development and production of vehicles and the  
provision of services generates economic benefits, but  
also raises levels of dependency. Potential reasons for  
the failure of individual suppliers include in particular  
IT-related risks, non-compliance with sustainability or  
see  
note 33  
9
5
quality standards, insufficient financial strength of a  
supplier, the occurrence of natural hazards, fires and  
insufficient supply of raw materials.  
Risks and opportunities relating to the sales network  
Inordertosellitsproductsandservices, theBMWGroup  
employs a global sales network, comprising primarily  
independent dealerships, branches, subsidiaries and  
importers. In addition, a pilot project for direct sales  
will be launched in South Africa in 2020. Any threat  
to the continued activities of parts of the sales network  
would entail risks for the BMW Group. The occur-  
rence of sales and marketing risks is associated with  
a low earnings impact over the two-year assessment  
period. The risk amount is classified as low.  
As part of supplier preselection, the BMW Group  
checks for compliance with the sustainability standards  
for the supplier network. This includes consideration of  
and compliance with internationally recognised human  
rights and applicable labour and social standards.  
In addition, the technical and financial capabilities  
of suppliers are monitored, especially where mod-  
ular-based production is concerned. Supplier sites  
are assessed for exposure to natural hazards, such as  
floods or earthquakes, in order to identify supply risks  
regarding parts and materials at an early stage and  
implement appropriate precautions. Fire risks at series  
suppliers are evaluated by means of questionnaires,  
compliance with a defined set of criteria and selective  
site inspections. The risks associated with the supply  
of raw materials are countered by reducing the use  
of raw materials or substituting them with alternative  
raw materials.  
New developments in the field of digital commu-  
nication and connectivity in particular offer new  
opportunities for the BMW Group’s brands. Based  
on data from the vehicle, customers can elect to use a  
specified service, at which stage they will be required to  
consent to the transfer of the relevant telematics data.  
Service providers that are requested to perform the  
work receive the necessary data via the BMW Group’s  
secure back-end. This information provides the basis  
for customised, data-based and innovative service  
options. Additional opportunities could arise if new  
sales channels contribute to greater brand reach to  
customer groups than currently envisaged in the  
outlook. Compared to the assumptions made in the  
outlook, the BMW Group expects these opportunities  
to have no significant earnings impact over the two-  
year assessment period.  
By monitoring and developing global supplier markets,  
the BMW Group continuously strives to optimise its  
competitiveness by working together with the world’s  
best product and service providers.  
Within the Purchasing and Supplier Network, oppor  
-
tunities arise above all in the area of global sourcing  
and associated efficiency improvements. Making  
good use of suppliers’ innovations is an important  
prerequisite for developing future-oriented mobility  
products and services. Similarly, favourable loca-  
tion-specific cost factors, in particular those arising  
in connection with local supplier structures in close  
proximity to new and existing BMW Group produc-  
tion plants as well as the introduction of innovative  
production technologies, could lead to lower cost  
of materials for the BMW Group. One goal of the  
BMW Group is to have battery cells manufactured  
in Europe. A key prerequisite for this is the further  
development of battery cell technology and exper-  
tise of the processes for cell production. Contracts  
have been concluded with various suppliers as part  
of the electrification strategy. Integration of previ-  
ously unidentified innovations from the supplier  
market in the Group’s product range could provide  
a further source of opportunities. The BMW Group  
offers innovative suppliers numerous possibilities for  
creating specific contractual arrangements which are  
attractive for those developing innovative solutions.  
Compared to the assumptions made in the outlook,  
the BMW Group does not expect such additional  
opportunities to have a significant earnings impact  
over the two-year assessment period.  
Information, data protection and IT  
Increasing digitalisation across all areas of business  
places considerable demands on the confidentiality,  
integrity and availability of electronically processed  
data and the associated use of information technology  
(
IT). In addition to the increased threat of cybercrime,  
regulations covering the handling of personal data are  
becoming more stringent, for example as a result of  
the EU General Data Protection Regulation. If risks  
relating to information security, data protection and  
IT were to materialise, they could have a high earnings  
impact over the two-year assessment period. Despite  
extensive security measures and constant efforts to  
ensure compliance with applicable data protection  
legislation, the risks in this area are classified as high.  
In addition to cyberattacks and direct physical inter-  
vention, lack of knowledge or misconduct on the  
part of employees may also represent a danger to the  
confidentiality, integrity and availability of informa-  
tion, data and systems. Direct consequences include  
expenditure required to limit the immediate damage  
and to restore systems promptly. Negative impacts on  
revenue due to the non-availability of products and  
services or disruptions in the production of compo-  
nents or vehicles are also possible. A further indirect  
result could be reputational damage.  
9
6
Combined  
Management  
Report  
Great importance is attached to the protection of the  
confidentiality, integrity and availability of business  
information as well as employee and customer data,  
for instance as a result of unauthorised access or mis-  
use. Data security is an integral component of all busi-  
ness processes and is aligned with the International  
Standard ISOꢀ/ꢀIEC 27001. As part of risk management,  
information security, data protection and IT risks are  
systematically documented, allocated appropriate  
measures by the departments concerned and contin-  
uously monitored with regard to threat level and risk  
mitigation. Regular analyses and controls as well as  
rigorous security management ensure an appropri-  
ate level of security. Despite continuous testing and  
preventative security measures, it is impossible to  
eliminate risks completely in this area. All employees  
are required to treat with care information such as  
confidential business, customer and employee data,  
to use information systems securely and to handle  
risks with transparency. Group-wide requirements  
are documented in a comprehensive set of principles,  
guidelines and instructions, such as, for example, the  
Privacy Corporate Rules for handling personal data.  
Regular communication and awareness-raising mea-  
sures create a high level of security and risk awareness.  
With regard to cooperation agreements and business  
partnerships, the BMW Group protects its intellec-  
tual property as well as customer and employee data  
through clear instructions on information security  
and data protection and the use of information  
technology. Information pertaining to key areas of  
expertise as well as sensitive personal data are subject  
to particularly stringent security measures. Technical  
data protection incorporates industry-wide standards  
and good practices. Responsibility for information  
security and data protection lies for each Group  
entity with the Board of Management or relevant  
management team.  
Financial risks and risks relating to the use of  
financial instruments  
Currency risks and opportunities  
Report on Outlook,  
Risks and  
Opportunities  
As an internationally operating enterprise, the  
BMW Group conducts business in a variety of cur-  
rencies, thus giving rise to currency risks and oppor-  
tunities. A substantial portion of Group revenues,  
purchasing and funding occur outside the eurozone  
(particularly in China and the USA). Regularly up-  
dated cash-flow-at-risk models and scenario analyses  
are used to measure currency risks and opportunities.  
If currency risks were to materialise, they could be  
associated with a medium earnings impact over  
the two-year assessment period. The risk amount  
attached to currency risks is classified as medium.  
Significant opportunities can arise if currency devel-  
opments are favourable for the BMW Group.  
Risks and  
Opportunities  
Operational currency management is based on the  
results of currency risk analyses. The BMW Group  
manages currency risks at both strategic (medium and  
long term) and operational level (short and medium  
term). Medium- and long-term measures include  
increasing production volumes and purchase volumes  
in foreign currency regions (natural hedging). Currency  
risks are managed in the short to medium term and for  
operational purposes by means of hedging on financial  
markets. The principal objective is to increase planning  
reliability for the BMW Group. Hedging transactions  
are entered into only with financial partners of good  
credit standing. Opportunities are also secured through  
the use of options during specific market phases.  
Risks and opportunities relating to  
raw material prices  
As a large-scale manufacturing company, the  
BMW Group is exposed to purchase price risks, par-  
ticularly in relation to raw materials used in vehicle  
production. The analysis of raw material price risk  
is based on planned purchases of raw materials and  
components containing those raw materials. If risks  
relating to raw materials prices were to materialise,  
they could have a medium earnings impact over  
the two-year assessment period. The risk amount is  
classified as medium. Significant opportunities could  
arise if raw materials prices developed favourably for  
the BMW Group.  
With the advance of digitalisation, the BMW Group  
is improving the customer experience in its existing  
lines of business. At the same time, new business  
segments are emerging, which have only become  
feasible as a result of innovation in the area of  
information technology. The development and pro-  
vision of digital services for customers, increased  
vehicle connectivity and automated driving solu-  
tions are opening up new opportunities. Via BMW  
ConnectedDrive and BMW CarData, the range of  
services and apps on offer to customers is constantly  
Changes in commodity prices are monitored on the  
basis of a well-defined management process. The  
principal objective is to increase planning reliability  
for the BMW Group. Price fluctuations for precious  
metals (platinum, palladium, rhodium), non-ferrous  
metals (aluminium, copper, lead, nickel) and, to some  
extent, for steel and steel ingredients (iron ore, coking  
coal) and energy (gas, electricity) are hedged using  
financial derivatives and supply contracts with fixed  
pricing arrangements.  
being expanded and updated. Since March 2019  
,
the BMW Intelligent Personal Assistant enables  
customers to access functions and information by  
voice interaction with an intelligent, digital charac-  
ter. The BMW Group expects these opportunities  
to have no significant earnings impact over the  
assessment period as compared to the assumptions  
made in the outlook.  
9
7
ꢁ
iquidity risks  
Future pension payments are discounted on the basis  
of market yields on high-quality corporate bonds.  
These yields are subject to market fluctuation and  
therefore influence the level of pension obligations.  
Changes in other parameters, such as rises in infla-  
tion and longer life expectancy, also impact pension  
obligations and payments.  
The major part of the Financial Services segment’s  
credit financing and leasing business is refinanced on  
capital markets. Liquidity risks can arise in the form  
of rising refinancing costs or from restricted access to  
funds as a consequence of the general market situation.  
If liquidity risks were to materialise, they would be  
likely to have a low earnings impact over the two-year  
assessment period. The risk amount associated with  
liquidity risk, including the risk of the BMW Group’s  
rating being downgraded, is classified as low.  
Regulatory requirements can influence the amount  
of pension obligations. The BMW Group’s pension  
obligations are mainly held in external pension funds  
or trust arrangements and the related assets legally  
separated from those of the Group. The amount of  
funds required to finance pension payments out  
of operations in the future is substantially reduced  
by the fact that the Group’s pension obligations  
are mainly settled out of pension fund assets. The  
pension assets of the BMW Group comprise inter-  
est-bearing securities, equities, real estate and other  
investment classes. Assets held by pension funds and  
trust arrangements are monitored continuously and  
managed on a risk-and-return basis. Diversification  
of investments also helps to mitigate risk. In order  
to reduce fluctuations in pension funding shortfalls,  
investments are structured to match the timing of  
pension payments and the expected development of  
pension obligations. Remeasurements on the liability  
and fund asset sides are recognised net of deferred  
taxes in other comprehensive income and hence  
directly in equity (within revenue reserves).  
Based on the experience of the financial crisis, a  
liquidity concept has been drawn up, which is rigor-  
ously adhered to and continuously developed. Use  
of the “matched funding principle” to finance the  
Financial Services segment’s operations generally  
eliminates liquidity risks. Solvency is assured at all  
times throughout the BMW Group by maintaining a  
liquidity reserve and by the broad diversification of  
refinancing sources. Regular measurement and mon-  
itoring ensure that cash inflows and outflows for the  
various maturities and currencies offset each other.  
This approach is incorporated in the BMW Group’s  
liquidity concept. The liquidity position is monitored  
continuously and managed through Group-wide  
planning of financial requirements and funding. A  
diversified refinancing strategy reduces dependency  
on any specific type of instrument. Moreover, the  
BMW Group’s solid financial and earnings position  
results in high credit ratings from internationally  
recognised rating agencies.  
Further information on risks in conjunction with  
see pension provisions is provided in note 32 of the  
note 32  
Further information on risks in conjunction with  
financial instruments is provided in note 39 to the  
Group Financial Statements.  
Group Financial Statements.  
see  
note 39  
Risks and opportunities relating to the  
Financial Services segment  
Risks and opportunities relating to  
pension obligations  
The categories of risk relating to financial services  
comprise credit and counterparty risk, residual value  
risk, interest rate risk, operational risks and liquidity  
risk. Evaluation of liquidity risk for the Financial  
Services segment is included in the liquidity risk  
category for the Group as a whole.  
Pension obligations are influenced in particular by  
fluctuations of market yields on corporate bonds, as  
well as by other economic and demographic para-  
meters. Opportunities and risks arise depending  
on changes in these parameters. If risks relating to  
pension obligations materialised, they could have a  
high earnings impact over the two-year assessment  
period. Despite the high level of external funding,  
the risk amounts relating to pension obligations are  
classified as high. Within a favourable capital mar-  
ket environment, the return generated by growth-  
oriented pension assets may exceed expectations and  
reduce the deficit of the relevant pension plans. This  
could have a significantly favourable impact on the  
net asset position of the BMW Group.  
The segment’s total risk exposure was covered at all  
times during the 2019 financial year by the avail-  
able risk-covering assets. As a result, the Financial  
Services segment’s risk-bearing capacity was assured  
at all times.  
9
8
Combined  
Management  
Report  
Credit and counterparty risks and opportunities  
relating to the Financial Services segment  
Credit and counterparty default risk arises within the  
Financial Services segment if a contractual partner  
Automotive segments. The risk amount is classified  
as high for the Group as a whole. Opportunities can  
arise out of a positive deviation between the actual  
market value and the original residual value forecast.  
The BMW Group classifies potential residual value  
opportunities as significant.  
Report on Outlook,  
Risks and  
Opportunities  
(
e.ꢀg. a customer or dealer) either becomes unable or  
Risks and  
Opportunities  
only partially able to fulfil its contractual obligations,  
so that lower income is generated or losses incurred.  
If credit and counterparty risks were to materialise,  
they could have a medium earnings impact over the  
two-year assessment period. The risk amount is clas-  
sified as medium. The BMW Group classifies potential  
opportunities in this area as insignificant.  
Each vehicle’s estimated residual value is calculated  
on the basis of historical external and internal data.  
This estimation provides the expected market value  
of the vehicle at the end of the contractual period.  
Developments on pre-owned car markets represents  
an important factor for the BMW Group. In 2019, the  
electrification of vehicles also played a major role in  
the public debate. Prices in pre-owned vehicle markets  
in the premium segment remained within the normal  
range. As part of the management of residual value  
risks, the net present value of risk costs is calculated  
at contract inception. Market developments are  
observed throughout the contractual period and the  
risk assessment updated.  
Initial and continuous creditworthiness testing is  
an important aspect of the BMW Group’s credit risk  
management. For this reason, every borrower’s credit-  
worthiness is tested for all credit financing and leasing  
contracts entered into by the BMW Group. Opportu-  
nities may arise if the managed portfolio performs  
better over time than estimated when the credits were  
granted. Intensive management of purchasing pro-  
cesses and collateral assessment as well as favourable  
macroeconomic developments could boost these  
opportunities. In the case of retail customer financing,  
creditworthiness is assessed using validated scoring  
systems integrated into the purchasing process. In  
the area of dealership financing, creditworthiness is  
assessed by means of ongoing credit monitoring and  
an internal rating system that takes account not only  
of the material credit standing of the borrower, but  
also of qualitative factors such as past reliability in  
business relations. Changes in the creditworthiness of  
customers arising during the credit term are covered  
by risk provisioning procedures. The credit risk of the  
individual customers is quantified on a monthly basis  
and, depending on the outcome, taken into account  
within the risk provisioning system. Macroeconomic  
developments are currently subject to a higher degree  
of volatility. If developments are more favourable than  
assumed in the outlook, credit losses may be reduced,  
leading to a positive earnings impact.  
Interest rate risks and opportunities relating to the  
Financial Services segment  
Interest rate risks in the Financial Services segment  
relate to potential losses caused by changes in market  
interest rates. These can arise when fixed interest rate  
periods do not match for assets and liabilities recog-  
nised in the balance sheet. If interest rate risks were  
to materialise, they could have a medium earnings  
impact over the two-year assessment period. The risk  
amount is classified as medium. Favourable interest  
rate developments compared to the outlook represent  
opportunities which the BMW Group classifies as  
significant. Interest rate risks in the Financial Services  
business are managed by matching maturities for  
refinancing and by employing interest-rate deriva-  
tives. If the relevant recognition criteria are fulfilled,  
derivatives used by the BMW Group are accounted for  
as hedging instruments. Further information on risks  
in conjunction with financial instruments is provided  
see in note 39 to the Group Financial Statements.  
note 39  
Residual value risks and opportunities relating to the  
Financial Services segment  
Risks and opportunities arise in conjunction with  
leasing contracts if the market value of a leased vehicle  
at the end of the contractual term of a lease differs  
from the residual value estimated at the inception  
of the lease and factored into the lease payments. A  
residual value risk exists if the expected market value  
of the vehicle at the end of the contractual term is  
lower than its estimated residual value at the date  
the contract is entered into. If residual value risks  
were to materialise, they could have a high earnings  
impact from the Group’s perspective over the two-year  
assessment period. A high earnings impact would  
then arise for the affected Financial Services and  
9
9
Operational risks relating to the  
Financial Services segment  
Operational risks are defined in the Financial Services  
segment as the risk of losses arising as a consequence  
of unsuitability or failure of internal procedures  
typical for the sector or may result as a consequence  
of realigning product or purchasing strategies to  
changed market conditions. Particularly in the US  
market, class action lawsuits and product liability  
risks can have substantial financial consequences  
and cause damage to the Group’s public image.  
More rigorous application or interpretation of exist-  
ing regulations could result in a greater number of  
recalls. The high quality of the Group’s products,  
which is ensured by regular quality audits and ongo-  
ing improvement measures, helps reduce this risk.  
(
process risks), people (personnel-related risks), sys-  
tems (infrastructure and IT risks) and external events  
external risks). The recording and measurement of  
(
risk scenarios, loss events and countermeasures in  
the operational risk management system provide the  
basis for a systematic analysis and management of  
potential or materialised operational risks. Annual  
self-assessments are also carried out. If operational  
risks were to materialise, they would be likely to have  
a low earnings impact over the two-year assessment  
period. The risk amount is classified as medium.  
Compared with the risk situation presented in the  
Group Management Report 2018, the assessment  
of legal risks in conjunction with antitrust allega-  
tions made against five German car manufacturers  
has become more concrete following receipt of the  
Statement of Objections from the EU Commission.  
The EU Commission alleges that the manufacturers  
colluded with the aim of restricting innovation and  
competition with regard to certain exhaust treatment  
systems for diesel- and petrol-driven passenger vehi-  
cles. The current investigations are solely concerned  
with possible infringements of competition law. The  
EU Commission is not alleging that the BMW Group  
conducted a deliberate and unlawful manipulation  
of the emissions control system. The Statement of  
Objections leads the BMW Group to believe that it  
Legal risks  
The BMW Group is exposed to various legal risks, not  
least as a result of its global operations. Legal risks may  
result from non-compliance with laws or other legal  
requirements or from legal disputes with business  
partners or other market participants. If legal risks  
were to materialise, they could have a high earnings  
impact over the two-year assessment period. The risk  
amount attached to significant identified legal risks  
is classified as medium. However, it cannot be ruled  
out that new legal risks, as yet unforeseen, could  
materialise that could have a high earnings impact  
for the BMW Group.  
is probable (“more likely than not”) that the Com  
-
mission will issue a significant fine. The BMW Group  
will contest the Commission’s allegations with all  
legal means at its disposal if necessary. A provision  
of approximately €ꢀ1.4 billion was recognised in  
accordance with International Financial Reporting  
Standards for negative financial impacts that cannot  
yet be definitively assessed.  
The increasing globalisation of the BMW Group’s  
operations and of business interdependencies in  
general, combined with the variety and complexity  
of legal provisions, including, increasingly, import  
and export regulations, give rise to an increased risk  
of non-compliance with applicable law. A Compliance  
Management System is in place at BMW Group to  
ensure that the representative bodies, managers  
and staff across the globe consistently act in a lawful  
manner. In 2019 the system was further enhanced,  
particularly with a focus on the characteristics of  
the roles and responsibilities in the Group-wide  
Compliance Management as well as the monitoring  
of compliance trainings and additional preventative  
activities. Further information on the BMW Group’s  
Compliance Management System can be found in the  
section Corporate Governance.  
The BMW Group has reviewed the objections and  
the case information from the EU Commission.  
In December 2019 the BMW Group submitted a  
detailed reply to the objections of the Commission.  
The EU Commission will examine the response and,  
on the basis of that, determine the next procedural  
steps. Therefore, the financial impacts cannot yet be  
definitively assessed.  
Like all entities with international operations, the  
BMW Group is confronted with legal disputes, alleged  
claims (particularly relating to warranties and product  
liability or rights infringements) and proceedings  
initiated by government agencies. Any of these could,  
amongst other consequences, have an adverse impact  
on the Group’s reputation. Such proceedings are  
1
00  
Combined  
Management  
Report  
The BMW Group recognises appropriate levels of  
provision for lawsuits. In addition, a part of these  
risks is insured where this makes business sense. Any  
additional risks from legal proceedings are reported  
as other contingent liabilities. It cannot be ruled out,  
however, that damages could arise that are either not  
covered or not fully covered by insurance policies  
or provisions or reported as contingent liabilities.  
In accordance with IAS 37 (Provisions, Contingent  
Liabilities and Contingent Assets), the required infor-  
mation is not provided if the BMW Group concludes  
that disclosure of the information could seriously  
prejudice the outcome of the relevant legal proceed-  
ings. Further information on contingent liabilities  
is provided in note 38 to the Group Financial  
Statements.  
Report on Outlook,  
Risks and  
Opportunities  
Risks and  
Opportunities  
Internal Control  
System Relevant for  
Accounting and  
Financial Reporting  
Processes  
see  
note 38  
Overall assessment of the risk and opportunities  
situation  
The assessment of overall risk situation is based on a  
consolidated view of all significant individual risks.  
The overall risk situation for the BMW Group remains  
unchanged compared to the previous year. Similarly,  
there has also been no significant change in the  
opportunities situation.  
In addition to the risk categories described above,  
unforeseen events could have a negative impact on  
business operations and hence on the BMW Group’s  
results of operations, financial position and net assets  
as well as on its reputation. A comprehensive risk  
management system is in place to ensure that the  
BMW Group successfully manages these risks.  
Management of the BMW Group does not see any  
threat to the BMW Group’s status as a going concern.  
As in the previous year, identified risks are considered  
to be manageable. Were they to materialise, however,  
they could – like the opportunities – have an impact  
on the underlying key performance indicators, which  
could therefore result in deviations from the outlook.  
The BMW Group’s financial position is stable, with  
liquidity requirements currently covered by available  
liquidity and credit lines.  
1
01  
INTERNAL CONTROL  
SYSTEM RELEVANT FOR  
ACCOUNTING AND  
FINANCIAL REPORTING  
PROCESSES  
Controls are integrated into accounting and financial  
reporting processes at both individual entity and  
Group level, taking account of the principle of the  
separation of duties. Important accounting-related  
IT systems incorporate controls which, among others,  
prevent business transactions from being recorded  
incorrectly and ensure that business transactions are  
recorded completely and in good time and measured  
properly in accordance with applicable requirements.  
Controls are also in place to test the appropriateness  
of consolidation procedures.  
*
ꢀDisclosuresꢀ  
pursuant to § 289  
andꢀ§ꢀ315ꢀHGB.  
*
The internal control system relevant for accounting  
and financial reporting processes has the task of  
ensuring that accounting and financial reporting by  
the BMW Group is both accurate and reliable. Inter-  
nationally recognised standards for internal control  
systems have been taken into account in the design  
of the components of the BMW Group’s internal  
control system. The system comprises:  
As part of the ongoing development of IT systems for  
accounting and financial reporting processes, whether  
at individual entity or Group level, such controls are  
adapted to take account of new requirements and  
opportunities arising with advances in information  
technology. In addition, the BMW Group uses data  
analysis tools to identify and subsequently eliminate  
any control weaknesses.  
— Group-wide mandatory accounting guidelines,  
Responsibilities for ensuring the effectiveness of  
the internal control system in relation to individual  
entity and Group accounting and financial reporting  
processes are clearly defined and allocated to the rele-  
vant line and process managers. These report annually  
on their assessment of the effectiveness of the internal  
control system for accounting and financial reporting.  
The assessment also includes the results of internal  
and external audits as well as of ongoing data analysis.  
In this context, the Group’s units confirm the effec-  
tiveness of the internal control system for accounting  
and financial reporting. The results of the assessment  
are gathered and documented with the aid of appro-  
priate tools. Weaknesses in the control system are  
eliminated, taking into account their potential impact  
on accounting processes. The Board of Management  
and Audit Committee are briefed annually on the  
assessment of the effectiveness of the internal control  
system for accounting and financial reporting. The  
Board of Management and, where appropriate, the  
Supervisory Board are informed immediately in the  
event of any significant changes in the effectiveness  
of the internal control system.  
controls integrated into processes and  
IT systems,  
—
organisational measures incorporating the  
principle of the separation of duties, and  
—
— process-independent monitoring measures.  
The internal control system is subject to continuous  
improvement, with system effectiveness assessed  
regularly on the basis of centralised and decentralised  
process analyses, analyses of data within the various  
financial systems and audit procedures. The principal  
features of the internal control system, as far as they  
relate to individual entity and Group accounting and  
financial reporting processes, are described below.  
Guidelines for recognising, measuring and allocating  
items to accounts are available to all employees via  
the intranet. New accounting standards are assessed  
for their impact on the BMW Group’s accounting  
and financial reporting. Accounting guidelines and  
processes are reviewed continuously and revised at  
least once a year or more frequently, if necessary.  
1
02  
Combined  
Management  
Report  
DISCLOSURES RELEVANT  
FOR TAKEOVERS AND  
EXPLANATORY COMMENTS  
The Company’s shares of preferred stock are shares  
within the meaning of §139 ff. AktG, which carry a  
cumulative preferential right in terms of the allocation  
of profit and for which voting rights are excluded.  
These shares confer voting rights only in exceptional  
cases stipulated by law, in particular when the prefer-  
ence amount has not been paid or has not been fully  
paid in one year and the arrears are not paid in the  
subsequent year alongside the full preference amount  
due for that year. With the exception of voting rights,  
holders of shares of preferred stock are entitled to  
the same rights as holders of shares of common stock.  
Article 24 of the Articles of Incorporation confers  
preferential treatment to the non-voting shares of  
preferred stock with regard to the appropriation of the  
Company’s unappropriated profit. Accordingly, the  
unappropriated profit is required to be appropriated  
in the following order:  
*
ꢀDisclosuresꢀ  
pursuant to  
*
§
289a and  
Disclosures Relevant  
for Takeovers  
and Explanatory  
Comments  
§
ꢀ315aꢀHGB.  
Composition of subscribed capital  
The subscribed capital (share capital) of BMW AG  
amounted to €ꢀ658,862,500 at 31 December 2019  
(
2018: €ꢀ658  
no. 1 of the Articles of Incorporation is sub-divided  
into 601 995 196 shares of common stock (91 37 %)  
2018 601 995 196 91 47 %) and 56 867 304 shares of  
non-voting preferred stock ( 63%) (2018 56 126 904  
.53 %), each with a par value of €ꢀ1. The Company’s  
shares are issued to bearer.  
,122,100) and, in accordance with Article 4  
,
,
.
(
:
,
,
;
.
,
,
8
.
:
,
,
;
8
(
a) subsequent payment of any arrears on dividends  
on non-voting shares of preferred stock in the  
order of accruement  
The rights and duties of shareholders derive from the  
German Stock Corporation Act (AktG) in conjunction  
with the Company’s Articles of Incorporation, the  
full text of which is available at  
www.bmwgroup.com. The  
(b) payment of an additional dividend of €ꢀ0.02 per  
€ꢀ1 par value on non-voting preferred shares  
right of shareholders to have their shares evidenced  
is excluded in accordance with the Articles of Incor-  
poration. The voting power attached to each share  
corresponds to its par value. Each €ꢀ1 of par value  
of share capital represented in a vote entitles the  
holder to one vote (Article 18 no.1 of the Articles of  
Incorporation).  
(c) uniform payment of any other dividends on  
shares of common and preferred stock, provided  
the shareholders do not resolve otherwise at  
the Annual General Meeting  
Restrictions affecting voting rights or the transfer  
of shares  
As well as shares of common stock, the Company  
has also issued non-voting shares of preferred stock.  
Further information can be found in the section  
“
Composition of subscribed capital”.  
When the Company issues non-voting shares of  
preferred stock to employees in conjunction with its  
Employee Share Programme, these shares are gener-  
ally subject to a Company-imposed blocking period  
of four years, calculated from the beginning of the  
calendar year in which the shares are issued.  
Contractual holding period arrangements also apply to  
shares of common stock acquired by Board of Manage-  
ment members and certain senior department heads  
in conjunction with the share-based remuneration  
programmes (Compensation Report of the Corporate  
see Governance section; note 41 to the Group Financial  
note 41  
Statements).  
1
03  
Direct or indirect investments in capital exceeding  
the following direct or indirect holdings exceeding  
10% of the voting rights at the end of the reporting  
period were held at the stated reporting date:  
1
0% of voting rights  
1
Based on the information available to the Company,  
Direct share of  
voting rights  
Indirect share of  
voting rights  
in %  
StefanꢀQuandt,ꢀGermanyꢀ  
0.2  
9.0  
25.62  
16.63  
16.64  
AQTONꢀSE,ꢀBadꢀHomburgꢀv.ꢀd.ꢀHöhe,ꢀGermany  
AQTONꢀVerwaltungꢀGmbH,ꢀBadꢀHomburgꢀv.ꢀd.ꢀHöhe,ꢀGermany  
AQTONꢀGmbHꢀ&ꢀCo.ꢀKGꢀfürꢀAutomobilwerte,ꢀBadꢀHomburgꢀv.ꢀd.ꢀHöhe,ꢀGermany  
SusanneꢀKlatten,ꢀGermany  
16.6  
0.2  
20.75  
SusanneꢀKlattenꢀBeteiligungsꢀGmbH,ꢀBadꢀHomburgꢀv.ꢀd.ꢀHöhe,ꢀGermany  
1
20.7  
ꢀ
ꢀ
ꢀ
ꢀ
ꢀ
Basedꢀonꢀvoluntaryꢀnotificationsꢀprovidedꢀbyꢀtheꢀlistedꢀshareholdersꢀasꢀatꢀ31ꢀDecemberꢀ2018.  
2
3
4
5
Controlledꢀentities,ꢀofꢀwhichꢀ3ꢀ%ꢀorꢀmoreꢀareꢀattributed:ꢀAQTONꢀSE,ꢀAQTONꢀVerwaltungꢀGmbH,ꢀAQTONꢀGmbHꢀ&ꢀCo.ꢀKGꢀfürꢀAutomobilwerte.  
Controlledꢀentities,ꢀofꢀwhichꢀ3ꢀ%ꢀorꢀmoreꢀareꢀattributed:ꢀAQTONꢀVerwaltungꢀGmbH,ꢀAQTONꢀGmbHꢀ&ꢀCo.ꢀKGꢀfürꢀAutomobilwerte.  
Controlledꢀentities,ꢀofꢀwhichꢀ3ꢀ%ꢀorꢀmoreꢀareꢀattributed:ꢀAQTONꢀGmbHꢀ&ꢀCo.ꢀKGꢀfürꢀAutomobilwerte.  
Controlledꢀentities,ꢀofꢀwhichꢀ3ꢀ%ꢀorꢀmoreꢀareꢀattributed:ꢀSusanneꢀKlattenꢀBeteiligungsꢀGmbH.  
The voting percentages disclosed above may have  
changed subsequent to the stated date if these changes  
were not required to be reported to the Company.  
As the Company’s shares are issued to bearer, the  
Company is generally aware of changes in sharehold-  
ings only if such changes are subject to mandatory  
notification rules.  
Amendments to the Articles of Incorporation must  
comply with §179 ff. AktG. Amendments must be  
decided upon by the shareholders at the Annual  
General Meeting (§119 (1) no.5, §179 (1) AktG). The  
Supervisory Board is authorised to approve amend  
ments to the Articles of Incorporation which only affect  
its wording (Article 14 no.3 of the Articles of Incorpo-  
ration). Resolutions are passed at the Annual General  
Meeting by simple majority of votes exercised unless  
otherwise explicitly required by binding provisions  
of law or, when a majority of share capital is required,  
by simple majority of shares represented in the vote  
(Article 20 no.1 of the Articles of Incorporation).  
-
Shares with special rights which confer  
control rights  
There are no shares with special rights which confer  
control rights.  
Control of voting rights when employees  
participate in capital and do not exercise their  
control rights directly  
Authorisations of the Board of Management in  
particular with respect to the issuing or buying  
back of shares  
Like all other shareholders, employees exercise their  
control rights pertaining to shares they have acquired  
in conjunction with the Employee Share Programme  
andꢀ/ꢀor the share-based remuneration programme  
directly on the basis of relevant legal provisions and  
the Company’s Articles of Incorporation.  
The Board of Management is authorised to buy back  
shares and sell repurchased shares in situations spec-  
ified in §71 AktG, for example to avert serious and  
imminent damage to the Company andꢀ/ꢀor to offer  
shares to persons employed or previously employed  
by BMWAG or one of its affiliated companies.  
In accordance with Article  
4 no.5 of the Articles of  
Statutory regulations and Articles of Incorporation  
provisions with regard to the appointment and  
removal of members of the Board of Management  
and changes to the Articles of Incorporation  
The appointment or removal of members of the Board  
of Management is based on the rules contained in  
Incorporation, the Board of Management is authorised,  
with the approval of the Supervisory Board, to increase  
for cash contributions BMWAG’s share capital during  
the period until 15 May 2024 by up to €ꢀ4,259,600 for  
the purposes of an Employee Share Programme by  
issuing new non-voting shares of preferred stock,  
which carry the same rights as existing non-voting  
preferred stock (Authorised Capital 2019). Subscrip-  
tion rights of existing shareholders are excluded. No  
conditional capital is in place at the reporting date.  
§
84f. AktG in conjunction with §31 of the German  
Co-Determination Act (MitbestG).  
1
04  
Combined  
Management  
Report  
Significant agreements of the Company taking  
effect in the event of a change in control following  
a takeover bid  
BMWAG is party to the following major agreements,  
which contain provisions that would apply in the event  
of a change in control or the acquisition of control as a  
result of a takeover bid:  
Framework agreements are in place with finan-  
cial institutions and banks (ISDA Master Agree-  
ments) with respect to trading activities with  
derivative financial instruments. These agree-  
ments include an extraordinary right of termina-  
tion which triggers actions in the event that the  
creditworthiness of the party involved is signifi-  
cantly weaker following a direct or indirect acqui-  
sition of beneficially owned equity capital that  
confers the power to elect a majority of the Super-  
visory Board of a contractual party or any other  
ownership interest that enables the acquirer to  
exercise control over a contractual party or which  
constitutes a merger or a transfer of net assets.  
—
—
Disclosures Relevant  
for Takeovers  
and Explanatory  
Comments  
An agreement concluded with an international  
—
consortium of banks relating to a syndicated  
credit line, which was not being utilised at the  
balance sheet date, entitles the lending banks  
to give extraordinary notice to terminate the credit  
line, such that all outstanding amounts, including  
interest, would fall due immediately if one or more  
parties jointly acquire direct or indirect control  
of BMWꢁAG. The term control is defined as the  
acquisition of more than 50ꢁ% of the share capital  
of BMWꢁAG, the right to receive more than 50ꢁ% of  
the dividend or the right to direct the affairs of  
the Company or appoint the majority of mem-  
bers of the Supervisory Board.  
Financing agreements in place with the European  
Investment Bank (EIB) entitle the EIB to request  
early repayment of the loans in the event of an  
imminent or actual change in control of BMWꢁAG,  
if the EIB has reason to assume – after the change  
in control has taken place or 30 days after it has  
made a request to discuss the situation – that the  
change in control could have a significantly  
adverse impact, or if the borrower refuses to hold  
any such discussions. A change in control of  
BMWꢁAG arises if one or more individuals take  
over or lose control of BMWꢁAG, with control  
being defined in the above-mentioned financ-  
ing agreements as (i) holding or having control  
over more than 50ꢁ% of the voting rights, (ii) the  
right to appoint the majority of the members of  
the Board of Management or Supervisory Board,  
(iii) the right to receive more than 50ꢁ% of divi-  
dends payable or (iv) any other comparable con-  
trolling influence over BMWꢁAG.  
A cooperation agreement concluded with  
—
Peugeot SA relating to small (1- to 1.6-litre)  
petrol engines entitles each of the cooperation  
partners to give extraordinary notification of  
termination in the event of a competitor acquiring  
control over the other contractual party and if  
any concerns of the other contractual party re-  
garding the impact of the change of control on  
the cooperation arrangements are not resolved  
during the subsequent discussion process.  
BMWꢁAG acts as guarantor for all obligations aris-  
—
ing from the joint venture agreement relating  
to BMW Brilliance Automotive Ltd. in China. This  
agreement grants an extraordinary right of termi-  
nation to either joint venture partner in the event  
that – either directly or indirectly – more than 25ꢁ%  
of the shares of the other party are acquired by a  
third party or the other party is merged with  
another legal entity. The termination of the joint  
venture agreement may result in the sale of the  
shares to the other joint venture partner or in the  
liquidation of the joint venture entity.  
BMWꢁAG and Daimler AG have entered into a  
Joint Venture Agreement relating to mobility  
services in the areas of car sharing, ride hailing,  
parking, charging and multimodality, which  
entitles both Daimler AG and BMWꢁAG (here-  
after principals) to initiate a bidding procedure  
in the event that (i) the other principal receives  
notice in accordance with §ꢁ33 of the German  
Securities Trading Act (WpHG) that – including  
shares attributed pursuant to §ꢁ34 WpHG – a  
shareholding of more than 50ꢁ% has been attained  
or, in accordance with §ꢁ20 AktG of the German  
Stock Corporation Act (AktG) that a sharehold-  
ing of more than 50ꢁ% has been attained or (ii)  
a shareholder or a third party – including shares  
attributed pursuant to §ꢁ30 WpHG – holds more  
than 50ꢁ% of the voting rights or shares in the  
other principal, or (iii) the other principal has  
concluded a control agreement as dependent  
company. The outcome of such a bidding pro-  
cedure is that the joint venture will go to the  
principal making the highest bid.  
—
1
05  
Several supply and development contracts between  
BMWꢁAG and various industrial customers, all  
relating to the sale of components for drivetrain  
systems, grant an extraordinary right of ter-  
mination to the relevant industrial customer in  
specified cases of a change in control at BMWꢁAG  
The collaboration agreement between BMWꢁAG  
and Mercedes-Benz AG relating to the develop-  
ment of technologies for second-generation auto-  
mated driving (from 2024) may be terminated by  
either party if a third party – directly or indirectly –  
acquires at least 30ꢁ% of the voting rights in one  
of the contractual parties (§ꢁ29 (2) and §ꢁ30 of the  
German Securities Acquisition and Takeover  
Act (WpÜG)).  
—
—
—
—
(
for example BMWꢁAG merges with a third party  
or is taken over by a third party; an automobile  
manufacturer acquires more than 50ꢁ% of the voting  
rights or share capital of BMWꢁAG).  
BMWꢁAG has agreed with Great Wall Motor  
Company Limited to establish the joint venture  
Spotlight Automotive Ltd. in China. The agree-  
ment grants an extraordinary right of termina-  
tion to either joint venture partner in the event  
that – either directly or indirectly – more than  
25ꢁ% of the shares of the other party are acquired  
by a third party or the other party is merged  
with another legal entity. The termination of the  
joint venture agreement may result in the sale  
of the shares to the other joint venture partner  
or in the liquidation of the joint venture entity.  
BMWꢁAG is party to the shareholder agreement  
relating to There Holding B.ꢀV., which is the  
majority shareholder of the HERE Group. In  
accordance with the shareholder agreement,  
each contractual party is required to offer its  
directly or indirectly held shares in There  
Holding B.ꢀV. for sale to the other shareholders  
in the event of a change in control. A change  
in control of BMWꢁAG arises if a person or entity  
takes over or loses control of BMWꢁAG, with  
control defined as (i) holding or having control  
over more than 50ꢁ% of the voting rights, (ii)  
the possibility to control more than 50ꢁ% of vot-  
ing rights exercisable at Annual General Meet-  
ings on all or nearly all matters, or (iii) the right  
to determine the majority of members of the  
Board of Management or the Supervisory Board.  
Furthermore, a change in control occurs if com-  
petitors of the HERE Group or certain potential  
competitors of the HERE Group from the tech-  
nology sector acquire at least 25ꢁ% of BMWꢁAG.  
If none of the other shareholders acquire these  
shares, the other shareholders are entitled to  
resolve that There Holding B.ꢀV. be dissolved.  
The development collaboration agreement betwee  
BMWꢁAG, Intel Corporation and Mobileye Vision  
n
—
—
Technologies Ltd., relating to the development of  
technologies used in highly and fully automated  
vehicles, may be terminated by any of the con-  
tractual parties if a competitor of one of the  
parties acquires and subsequently holds at least  
3
0ꢁ% of the voting shares of one of the contrac-  
tual parties.  
The development collaboration agreement between  
BMWꢁAG, FCA US LLC and FCA Italy S.ꢀp.ꢀA.,  
relating to the development of technologies used  
in automated vehicles, may be terminated by  
any of the contractual parties if certain competi-  
tors in the technology sector acquire and sub-  
sequently hold at least 30ꢁ% of the voting shares  
of the other contractual party.  
1
06  
Combined  
Management  
Report  
Compensation agreements with members of the  
Board of Management or with employees in the  
event of a takeover bid  
BMW AG has not concluded any compensation  
agreements with members of the Board of Manage-  
ment or with employees for situations involving a  
takeover offer.  
Disclosures Relevant  
for Takeovers  
and Explanatory  
Comments  
GROUP FINANCIAL  
STATEMENTS  
3
Statement of  
Comprehensive  
Income  
Group Financial  
Statements  
Income Statement  
Balance Sheet  
Page 108 Income Statement  
Cash Flow  
Statement  
Notes  
Page 108 Statement of Comprehensive Income  
Page 110 Balance Sheet  
Page 112 Cash Flow Statement  
Page 114 Statement of Changes in Equity  
Page 116 Notes to the Group Financial Statements  
Page 116 Accounting Principles and Policies  
Page 133 Notes to the Income Statement  
Page 141 Notes to the Statement of Comprehensive Income  
Page 142 Notes to the Balance Sheet  
Page 164 Other Disclosures  
Page 184 Segment Information  
Page 190 List of Investments at 31 December 2019  
1
08  
Group  
Financial  
Statements  
BMW GROUP  
INCOME STATEMENT  
BMW Group  
Income Statement  
STATEMENT OF COMPREHENSIVE INCOME  
Statement of Com-  
prehensive Income  
Income Statement for Group and Segments  
•
63  
Automotive  
unaudited supplementary  
information)  
Motorcycles  
(unaudited supplementary  
information)  
(
Group  
2019  
1
in € million  
Note  
2018  
2019  
2018  
2019  
2018  
Revenues  
7
8
104,210  
– 86,147  
18,063  
– 9,367  
1,031  
– 2,316  
7,411  
136  
96,855  
– 78,477  
18,378  
– 9,568  
774  
91,682  
– 78,062  
13,620  
– 7,762  
976  
85,846  
– 71,918  
13,928  
– 7,880  
810  
2,368  
–1,911  
457  
– 264  
2
2,173  
–1,738  
435  
– 263  
4
Cost of sales  
Gross profit  
Selling and administrative expenses  
Other operating income  
9
10  
10  
Other operating expenses  
– 651  
8,933  
632  
– 2,335  
4,499  
136  
– 676  
6,182  
632  
–1  
–1  
Profit / loss before financial result  
Result from equity accounted investments  
Interest and similar income  
Interest and similar expenses  
Other financial result  
194  
–
175  
–
24  
11  
11  
12  
179  
397  
420  
567  
1
–
– 499  
–109  
– 293  
7,118  
– 2,140  
4,978  
44  
– 386  
51  
– 737  
149  
– 533  
129  
– 8  
– 6  
–
–
Financial result  
694  
– 32  
795  
– 7  
– 6  
Profit / loss before tax  
9,627  
– 2,530  
7,097  
– 33  
4,467  
–1,354  
3,113  
44  
6,977  
–1,853  
5,124  
– 33  
187  
– 56  
131  
–
169  
– 45  
124  
–
Income taxes  
13  
Profit / loss from continuing operations  
Profit / loss from discontinued operations  
Net profit / loss  
5,022  
107  
7,064  
90  
3,157  
30  
5,091  
30  
131  
–
124  
–
Attributable to minority interest  
Attributable to shareholders of BMW AG  
Basic earnings per share of common stock in €  
Basic earnings per share of preferred stock in €  
Dilutive effects  
31  
14  
14  
4,915  
7.47  
6,974  
10.60  
10.62  
–
3,127  
5,061  
131  
124  
7.49  
–
Diluted earnings per share of common stock in €  
14  
14  
7.47  
10.60  
10.62  
Diluted earnings per share of preferred stock in €  
7.49  
1
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6 to the Group Financial Statements.  
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.  
Statement of Comprehensive Income for Group  
•
64  
2
in € million  
Note  
2019  
2018  
Net profit  
5,022  
–1,254  
387  
7,064  
935  
Remeasurement of the net defined benefit liability for pension plans  
Deferred taxes  
32  
– 217  
718  
Items not expected to be reclassified to the income statement in the future  
Marketable securities (at fair value through other comprehensive income)  
Derivative financial instruments  
– 867  
42  
– 30  
– 706  
125  
–1,381  
– 620  
–157  
674  
Costs of hedging  
Other comprehensive income from equity accounted investments  
Deferred taxes  
– 3  
171  
Currency translation foreign operations  
544  
192  
Items that can be reclassified to the income statement in the future  
Other comprehensive income for the period after tax  
Total comprehensive income  
173  
–1,322  
– 604  
6,460  
90  
19  
31  
– 694  
4,328  
107  
Total comprehensive income attributable to minority interests  
Total comprehensive income attributable to shareholders of BMW AG  
4,221  
6,370  
2
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6 to the Group Financial Statements.  
1
09  
Financial Services  
unaudited supplementary  
information)  
Other Entities  
(unaudited supplementary  
information)  
Eliminations  
(unaudited supplementary  
information)  
(
1
1
2018  
2
019  
2018  
2019  
2018  
2019  
2
9,598  
25,938  
,660  
1,341  
27,705  
– 24,089  
3,616  
–1,362  
42  
5
–
6
–
–19,443  
19,764  
321  
24  
–18,875  
19,268  
393  
16  
Revenues  
Cost of sales  
–
3
5
6
Gross profit  
–
– 24  
173  
–125  
29  
– 79  
126  
– 80  
– 27  
–
Selling and administrative expenses  
Other operating income  
7
3
–193  
225  
377  
–
– 208  
230  
431  
–
–
80  
–124  
2,172  
–
Other operating expenses  
2
,312  
Profit / loss before financial result  
Result from equity accounted investments  
Interest and similar income  
–
4
–
12  
1,515  
–1,419  
– 221  
–125  
– 96  
29  
1,178  
–1,145  
– 51  
–18  
– 45  
– 36  
– 81  
–
–1,761  
1,672  
–
–1,360  
1,312  
–
–
7
–14  
Interest and similar expenses  
Other financial result  
–
–
37  
40  
– 27  
– 29  
– 89  
288  
– 87  
201  
–
– 48  
383  
– 94  
289  
–
Financial result  
2
1
1
1
,272  
2,143  
– 502  
1,641  
–
Profit / loss before tax  
–
672  
,600  
–
Income taxes  
– 67  
–
Profit / loss from continuing operations  
Profit / loss from discontinued operations  
Net profit / loss  
,600  
1,641  
60  
– 67  
–
– 81  
–
201  
–
289  
–
7
7
Attributable to minority interest  
Attributable to shareholders of BMW AG  
Basic earnings per share of common stock in €  
Basic earnings per share of preferred stock in €  
Dilutive effects  
,523  
1,581  
– 67  
– 81  
201  
289  
Diluted earnings per share of common stock in €  
Diluted earnings per share of preferred stock in €  
1
10  
Group  
Financial  
Statements  
BMW GROUP  
BALANCE SHEET AT 31 DECEMBER 2019  
BMW Group  
Balance Sheet  
at 31 December 2019  
Automotive  
unaudited supplementary  
information)  
Motorcycles  
(unaudited supplementary  
information)  
(
Group  
1
2
in € million  
Note  
2019  
1. 1. 2019  
31.12. 2018  
2019  
2018  
2019  
2018  
ASSꢀꢁS  
Intangible assets  
21  
22  
23  
24  
11,729  
23,245  
42,609  
3,199  
10,971  
22,163  
38,259  
2,624  
10,971  
19,801  
38,259  
2,624  
11,212  
22,749  
–
10,472  
19,372  
–
127  
407  
–
95  
399  
–
Property, plant and equipment  
Leased products  
Investments accounted for using the equity method  
Other investments  
3,199  
5,144  
–
2,624  
4,843  
–
–
–
703  
739  
739  
–
–
Receivables from sales financing  
Financial assets  
25  
26  
13  
28  
51,030  
1,370  
48,313  
1,010  
48,313  
1,010  
–
–
131  
216  
–
–
Deferred tax  
2,194  
1,640  
1,638  
3,451  
2,203  
48,089  
3,043  
4,633  
45,203  
–
–
Other assets  
1,325  
847  
847  
36  
570  
33  
527  
Non-current assets  
137,404  
126,566  
124,202  
Inventories  
29  
30  
25  
26  
27  
28  
15,891  
2,518  
41,407  
5,955  
1,209  
11,614  
12,036  
–
14,248  
2,546  
38,700  
6,675  
1,378  
9,749  
10,979  
463  
14,248  
2,546  
38,700  
6,675  
1,378  
9,749  
10,979  
461  
14,404  
2,228  
–
13,071  
2,287  
–
679  
186  
–
568  
167  
–
Trade receivables  
Receivables from sales financing  
Financial assets  
4,772  
1,000  
33,492  
9,077  
–
4,988  
618  
–
–
Current tax  
–
–
Other assets  
21,859  
8,631  
461  
1
2
Cash and cash equivalents  
Assets held for sale  
Current assets  
11  
–
12  
–
90,630  
84,738  
84,736  
64,973  
51,915  
877  
749  
Total assets  
228,034  
211,304  
208,938  
113,062  
97,118  
1,447  
1,276  
ꢀ
qꢂIꢁy Aꢃꢄ lIAbIlIꢁIꢀS  
Subscribed capital  
31  
31  
31  
31  
31  
659  
2,161  
658  
2,118  
658  
2,118  
Capital reserves  
Revenue reserves  
57,667  
–1,163  
59,324  
55,830  
–1,338  
57,268  
55,862  
–1,338  
57,300  
Accumulated other equity  
Equity attributable to shareholders of BMW AG  
Minority interest  
583  
529  
529  
Equity  
59,907  
57,797  
57,829  
40,174  
39,778  
–
–
Pension provisions  
Other provisions  
32  
33  
13  
35  
36  
3,335  
5,788  
632  
2,330  
5,530  
2,330  
5,530  
2,820  
5,605  
543  
2,089  
5,354  
96  
81  
–
64  
70  
Deferred tax  
1,762  
1,773  
1,016  
–
Financial liabilities  
Other liabilities  
70,647  
5,100  
85,502  
66,744  
5,293  
64,772  
5,293  
2,680  
7,929  
19,577  
1,017  
–
–
7,558  
569  
746  
506  
640  
Non-current provisions and liabilities  
81,659  
79,698  
17,034  
Other provisions  
33  
34  
35  
37  
36  
7,421  
963  
5,871  
1,158  
39,260  
9,669  
15,826  
64  
5,871  
1,158  
38,825  
9,669  
15,826  
62  
6,962  
704  
5,433  
933  
105  
–
101  
–
Current tax  
Financial liabilities  
46,093  
10,182  
17,966  
–
1,929  
8,814  
34,902  
–
879  
–
–
Trade payables  
8,360  
24,639  
62  
413  
183  
–
348  
187  
–
Other liabilities  
Liabilities in conjunction with assets held for sale  
Current provisions and liabilities  
82,625  
71,848  
71,411  
53,311  
40,306  
701  
636  
Total equity and liabilities  
228,034  
211,304  
208,938  
113,062  
97,118  
1,447  
1,276  
1
The figures to 1 January 2019 have been adjusted, based on the first-time application of IFRS 16, see note 6 to the Group Financial Statements.  
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6 to the Group Financial Statements.  
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.  
2
1
11  
Financial Services  
unaudited supplementary  
information)  
Other Entities  
(unaudited supplementary  
information)  
Eliminations  
(unaudited supplementary  
information)  
(
2
2
2018  
2
019  
2018  
2019  
2018  
2019  
ASSꢀꢁS  
Intangible assets  
3
89  
403  
30  
1
1
–
–
–
–
8
9
–
–
–
–
Property, plant and equipment  
Leased products  
5
5
0,348  
46,114  
–
– 7,739  
–
– 7,855  
–
–
1
–
–
Investments accounted for using the equity method  
Other investments  
1
6,847  
–
6,660  
–
–11,289  
– 49  
–10,765  
– 20  
1,079  
48,333  
138  
Receivables from sales financing  
Financial assets  
1
5
39  
12  
1,168  
84  
695  
28  
– 68  
– 39  
485  
–1,853  
– 43,184  
– 64,182  
–1,918  
– 40,610  
– 61,207  
Deferred tax  
3
,351  
2,835  
98,339  
38,919  
47,019  
33,956  
41,340  
Other assets  
1
05,908  
Non-current assets  
8
1
08  
03  
609  
91  
–
1
–
1
–
–
Inventories  
Trade receivables  
–
–
4
5
1,407  
38,700  
1,325  
91  
–
–
–
–
Receivables from sales financing  
Financial assets  
1
,009  
187  
125  
64,692  
873  
–
460  
669  
48,775  
351  
–
–13  
– 98  
8
4
–
– 91,677  
–
–
– 65,968  
–
Current tax  
5
2
,106  
,075  
–
5,081  
1,985  
–
Other assets  
Cash and cash equivalents  
Assets held for sale  
Current assets  
–
–
0,592  
47,882  
65,878  
50,256  
– 91,690  
– 66,066  
1
56,500  
146,221  
112,897  
91,596  
–155,872  
–127,273  
Total assets  
ꢀ
qꢂIꢁy Aꢃꢄ lIAbIlIꢁIꢀS  
Subscribed capital  
Capital reserves  
Revenue reserves  
Accumulated other equity  
Equity attributable to shareholders of BMW AG  
Minority interest  
1
5,545  
14,806  
21,972  
20,683  
–17,784  
–17,438  
Equity  
4
7
49  
106  
372  
–
128  
–
–
–
–
–
Pension provisions  
Other provisions  
1
02  
3
,804  
4,576  
34  
22  
– 3,749  
– 68  
– 3,841  
– 39  
Deferred tax  
1
3
6
8,170  
9,639  
1,762  
19,170  
36,333  
60,234  
49,865  
102  
44,624  
1,168  
45,942  
Financial liabilities  
– 43,139  
– 46,956  
– 40,272  
– 44,152  
Other liabilities  
50,373  
Non-current provisions and liabilities  
2
1
99  
84  
328  
208  
55  
75  
9
17  
–
–
Other provisions  
Current tax  
–
–13  
–
– 98  
2
5
7
6,938  
43  
25,705  
950  
17,239  
12  
12,339  
11  
Financial liabilities  
9
–
–
Trade payables  
0,829  
–
43,990  
–
23,171  
–
12,595  
–
– 91,119  
–
– 65,585  
–
Other liabilities  
Liabilities in conjunction with assets held for sale  
Current provisions and liabilities  
9,193  
71,181  
40,552  
24,971  
– 91,132  
– 65,683  
1
56,500  
146,221  
112,897  
91,596  
–155,872  
–127,273  
Total equity and liabilities  
1
12  
Group  
Financial  
Statements  
BMW GROUP  
CASH FLOW STATEMENT  
BMW Group  
Cash Flow Statement  
Group  
2019  
1
in € million  
2018  
Net profit  
5,022  
– 44  
7,064  
33  
Profit / loss from discontinued operations  
Current tax expense  
3,316  
– 3,389  
91  
2,218  
–1,972  
170  
Income taxes paid  
Interest received2  
Other interest and similar income / expenses2  
Depreciation and amortisation of tangible, intangible and investment assets  
Other non-cash income and expense items  
Result from equity accounted investments  
Gain / loss on disposal of tangible and intangible assets and marketable securities  
Change in deferred taxes  
51  
–199  
5,113  
111  
6,017  
– 200  
–136  
4
– 632  
– 34  
–1,176  
– 3,825  
– 3,560  
–1,117  
–1,560  
14  
312  
Change in leased products  
–1,642  
– 5,724  
– 619  
– 403  
112  
Change in receivables from sales financing  
Changes in working capital  
Change in inventories  
Change in trade receivables  
Change in trade payables  
429  
– 328  
– 88  
Change in provisions  
1,512  
1,096  
3,662  
Change in other operating assets and liabilities  
Cash inflow /outflow from operating activities  
940  
5,051  
Total investment in intangible assets and property, plant and equipment  
Proceeds from subsidies for intangible assets and property, plant and equipment  
Proceeds from the disposal of intangible assets and property, plant and equipment  
Expenditure for investment assets  
– 6,902  
50  
– 7,777  
21  
32  
107  
–1,598  
–
–164  
– 209  
623  
Acquisitions of subsidiaries and other business units  
Proceeds from the disposal of investment assets and other business units3  
Investments in marketable securities and investment funds  
Proceeds from the sale of marketable securities and investment funds  
Cash inflow /outflow from investing activities  
1,087  
– 775  
822  
– 3,725  
3,761  
– 7,363  
– 7,284  
Payments into equity  
33  
– 2,366  
–
25  
– 2,630  
–
Payment of dividend for the previous year  
Intragroup financing and equity transactions  
Interest paid2  
–199  
–136  
Proceeds from non-current financial liabilities4  
Repayment of non-current financial liabilities4  
Change in other financial liabilities  
Cash inflow /outflow from financing activities  
150,517  
–143,500  
305  
30,762  
– 22,564  
–1,161  
4,296  
4,790  
Effect of exchange rate on cash and cash equivalents  
Effect of changes in composition of Group on cash and cash equivalents  
Change in cash and cash equivalents  
– 28  
– 83  
–19  
– 25  
1,057  
1,940  
Cash and cash equivalents as at 1 January  
10,979  
12,036  
9,039  
Cash and cash equivalents as at 31 December  
10,979  
1
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6 to the Group Financial Statements.  
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.  
With the exception of interest from lease liabilities, interest relating to financial services business is classified as revenues / cost of sales.  
Includes dividends received from investment assets amounting to €643 million (2018: €384 million).  
Gross cash flows presented, which were presented as net amounts in the prior year.  
2
3
4
1
13  
Automotive  
unaudited supplementary  
information)  
Financial Services  
(unaudited supplementary  
information)  
(
1
1
2018  
2
019  
2018  
2019  
3
1
,157  
44  
,638  
5,091  
33  
1,600  
–
1,641  
–
Net profit  
Profit / loss from discontinued operations  
Current tax expense  
–
1,886  
–1,751  
170  
1,602  
– 345  
–
308  
– 299  
–
–
1,984  
Income taxes paid  
Interest received2  
9
6
1
1
–165  
4,982  
83  
3
1
Other interest and similar income / expenses2  
Depreciation and amortisation of tangible, intangible and investment assets  
Other non-cash income and expense items  
Result from equity accounted investments  
Gain / loss on disposal of tangible and intangible assets and marketable securities  
Change in deferred taxes  
5
,853  
54  
34  
–
262  
136  
3
23  
33  
–
– 632  
– 35  
– 71  
–
–
–
–
1
–
–
284  
–
– 930  
– 3,600  
– 3,589  
– 222  
–193  
–11  
24  
–1,732  
– 5,726  
130  
– 39  
60  
Change in leased products  
–
–
Change in receivables from sales financing  
Changes in working capital  
831  
– 758  
– 390  
59  
–
1,255  
Change in inventories  
4
3
Change in trade receivables  
3
81  
,745  
83  
,690  
– 427  
332  
–18  
109  
– 7  
Change in trade payables  
1
– 59  
118  
– 5,345  
Change in provisions  
6
187  
–1,198  
– 6,790  
Change in other operating assets and liabilities  
Cash inflow /outflow from operating activities  
9
9,352  
–
–
6,734  
– 7,618  
18  
–19  
2
–13  
3
Total investment in intangible assets and property, plant and equipment  
Proceeds from subsidies for intangible assets and property, plant and equipment  
Proceeds from the disposal of intangible assets and property, plant and equipment  
Expenditure for investment assets  
5
3
0
1
105  
1
2
1,557  
–
–145  
– 209  
1,210  
– 3,692  
3,562  
– 6,769  
–
–
–
–
Acquisitions of subsidiaries and other business units  
Proceeds from the disposal of investment assets and other business units3  
1
,087  
507  
65  
7,165  
57  
2
–
– 268  
356  
129  
– 63  
199  
130  
Investments in marketable securities and investment funds  
4
Proceeds from the sale of marketable securities and investment funds  
Cash inflow /outflow from investing activities  
–
–
3
3
25  
– 2,630  
2,099  
–136  
1
–
–
–
–
Payments into equity  
Payment of dividend for the previous year  
Intragroup financing and equity transactions  
Interest paid2  
Proceeds from non-current financial liabilities4  
Repayment of non-current financial liabilities4  
Change in other financial liabilities  
2,366  
77  
197  
73  
8
5,491  
–1  
5,097  
–
–
–
1
132,408  
–133,089  
491  
12,940  
–12,071  
827  
605  
–
– 410  
– 2  
–
2,085  
–1,053  
5,300  
6,793  
Cash inflow /outflow from financing activities  
–
22  
– 31  
– 25  
6
–
– 4  
–
Effect of exchange rate on cash and cash equivalents  
Effect of changes in composition of Group on cash and cash equivalents  
Change in cash and cash equivalents  
2
8
4
46  
1,474  
90  
129  
8
9
,631  
,077  
7,157  
1,985  
2,075  
1,856  
Cash and cash equivalents as at 1 January  
8,631  
1,985  
Cash and cash equivalents as at 31 December  
The reconciliation of liabilities from financing activities is presented in note 35.  
1
14  
Group  
Financial  
Statements  
BMW GROUP  
STATEMENT OF CHANGES IN EQUITY  
BMW Group  
Statement of  
Changes in Equity  
Subscribed  
capital  
Capital  
reserves  
Revenue  
reserves  
in € million  
Note  
3
1 December 2018 (as originally reported)  
Effects of accounting policy change*  
1 December 2018 (as adjusted  
31  
658  
2,118  
56,121  
–
–
– 259  
3
due to accounting policy change)  
658  
2,118  
55,862  
Effects from the first-time application of IFRS 16  
–
–
– 32  
1
January 2019 (adjusted according to IFRS 16)  
658  
2,118  
55,830  
Net profit  
–
–
–
–
–
–
4,915  
– 867  
4,048  
Other comprehensive income for the period after tax  
Comprehensive income at 31 December 2019  
Dividend payments  
–
1
–
–
– 2,303  
–
Subscribed share capital increase  
out of Authorised Capital  
Premium arising on capital increase  
relating to preferred stock  
–
–
43  
–
–
92  
Other changes  
3
1 December 2019  
31  
659  
2,161  
57,667  
Subscribed  
capital  
Capital  
reserves  
Revenue  
reserves  
in € million  
Note  
1
January 2018 (as originally reported)  
31  
658  
2,084  
50,993  
Effects of accounting policy change*  
–
–
–116  
1
January 2018 (as adjusted  
due to accounting policy change)  
658  
2,084  
50,877  
Net profit*  
–
–
–
–
–
–
6,974  
718  
Other comprehensive income for the period after tax  
Comprehensive income at 31 December 2018*  
7,692  
Dividend payments  
–
–
–
–
– 2,630  
–
Subscribed share capital increase  
out of Authorised Capital  
Premium arising on capital increase  
relating to preferred stock  
–
–
34  
–
–
– 77  
Other changes  
3
1 December 2018*  
31  
658  
2,118  
55,862  
*
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6 to the Group Financial Statements.  
1
15  
Accumulated other equity  
Equity  
attributable to  
shareholders  
of BMW AG  
Derivative  
financial  
instruments  
Translation  
differences  
Costs of  
hedging  
Minority  
interest  
Securities  
Total  
–
–
–
1,326  
–1  
558  
– 569  
57,559  
529  
58,088  
31 December 2018 (as originally reported)  
–
–
–
–
– 259  
–
– 259  
Effects of accounting policy change*  
3
1 December 2018 (as adjusted  
1,326  
–1  
558  
– 569  
57,300  
529  
57,829  
due to accounting policy change)  
–
–
–
–
– 32  
–
– 32  
Effects from the first-time application of IFRS 16  
1,326  
–1  
558  
– 569  
57,268  
529  
57,797  
1 January 2019 (adjusted according to IFRS 16)  
–
–
30  
30  
–
– 551  
– 551  
–
128  
128  
4,915  
– 694  
4,221  
107  
–
5,022  
– 694  
4,328  
Net profit  
Other comprehensive income for the period after tax  
Comprehensive income at 31 December 2019  
5
66  
5
66  
107  
–
–
–
–
–
–
–
–
– 2,303  
1
– 63  
–
– 2,366  
1
Dividend payments  
Subscribed share capital increase  
out of Authorised Capital  
Premium arising on capital increase  
relating to preferred stock  
–
–
–
–
–
8
–
– 6  
43  
94  
–
10  
43  
104  
Other changes  
–
760  
29  
15  
– 447  
59,324  
583  
59,907  
31 December 2019  
Accumulated other equity  
Equity  
attributable to  
shareholders  
of BMW AG  
Derivative  
financial  
instruments  
Translation  
differences  
Costs of  
hedging  
Minority  
interest  
Securities  
Total  
–
–
1,494  
11  
1,515  
5
53,772  
436  
54,208  
1 January 2018 (as originally reported)  
–
–
–
–
–116  
–
–116  
Effects of accounting policy change*  
1
January 2018 (as adjusted  
1,494  
11  
1,515  
5
53,656  
436  
54,092  
due to accounting policy change)  
–
–
–12  
–12  
–
– 906  
– 906  
–
– 572  
– 572  
6,974  
– 604  
6,370  
90  
–
7,064  
– 604  
6,460  
Net profit*  
Other comprehensive income for the period after tax  
Comprehensive income at 31 December 2018*  
1
68  
1
68  
90  
–
–
–
–
–
–
–
–
– 2,630  
–
–
–
– 2,630  
–
Dividend payments  
Subscribed share capital increase  
out of Authorised Capital  
Premium arising on capital increase  
relating to preferred stock  
–
–
–
–
–
– 51  
558  
–
– 2  
34  
–130  
–
3
34  
–127  
Other changes  
–
1,326  
–1  
– 569  
57,300  
529  
57,829  
31 December 2018*  
1
16  
Group  
Financial  
Statements  
ACCOUNTING PRINCIPLES  
AND POLICIES  
NOTES TO  
Notes to the Group  
Financial Statements THE GROUP  
Accounting  
Principles and  
Policies  
FINANCIAL  
STATEMENTS  
01  
Basis of preparation  
The consolidated financial statements of Bayerische  
Motoren Werke Aktiengesellschaft (BMW Group  
Financial Statements or Group Financial Statements)  
at 31 December 2019 were drawn up in accordance  
with International Financial Reporting Standards  
(
IFRS), as endorsed by the European Union (EU), and  
the supplementary requirements of §315e (1) of the  
German Commercial Code (HGB). The Group Finan-  
cial Statements and Combined Management Report  
will be submitted to the operator of the electronic  
version of the German Federal Gazette and can be  
obtained via the Company Register website. Bayerische  
Motoren Werke Aktiengesellschaft, which has its  
seat at Petuelring 130, Munich, is registered in the  
Commercial Register of the District Court of Munich  
under the number HRB 42243.  
The Group currency is the euro. All amounts are dis-  
closed in millions of euros (€ million) unless stated  
otherwise.  
Key figures presented in the report have been rounded  
in accordance with standard commercial practise. In  
certain cases, this may mean that values do not add  
up exactly to the stated total and that percentages  
cannot be derived from the values shown.  
The income statement for the BMW Group and seg-  
ments is presented using the cost of sales method.  
In order to provide a better insight into the results of  
operations, financial position and net assets of the  
BMW Group, and going beyond the requirements of  
IFRS 8 (Operating Segments), the Group Financial  
Statements also include an income statement and a  
balance sheet for the Automotive, Motorcycles, Finan-  
cial Services and Other Entities segments. The Group  
Cash Flow Statement is supplemented by a statement  
of cash flows for the Automotive and Financial Services  
segments. Inter-segment transactions relate primarily  
to internal sales of products, the provision of funds for  
Group companies and the related interest. A description  
of the nature of the business and the major operating  
activities of the BMW Group’s segments is provided in  
note 45 (“Explanatory notes to segment information”).  
see  
note 45  
On 10 March 2020, the Board of Management granted  
approval for publication of the Group Financial State-  
ments. Based on current developments regarding the  
1
17  
spread of the coronavirus, the Board of Management  
on 16 March 2020 adjusted the original outlook for  
the BMW Group, the assumptions regarding the  
development of the global economy and the economic  
risks and opportunities for the financial year 2020  
in the Combined Management Report, as well as the  
statement regarding the Events after the end of the  
reporting period and once again gave approval for  
the publication of the Group Financial Statements.  
If indications exist of a change in the judgement of  
(joint) control, the BMW Group undertakes a new  
assessment.  
An entity is deemed to be controlled if BMWAG  
either directly or indirectly – has power over it, is  
exposed or has rights to variable returns from it and  
has the ability to influence those returns.  
–
An entity is classified as an associated company if  
BMW AG – either directly or indirectly – has the abil-  
ity to exercise significant influence over the entity’s  
operating and financial policies. As a general rule,  
the Group is assumed to have significant influence  
if it holds 20 % or more of the entity’s voting power.  
The presentation of selected items (such as the reclas-  
sification of vehicles held for sale in the financial  
services business) has been changed in the financial  
year 2019. The items affected are not significant  
overall. The changes in presentation are explained  
in the notes relating to the relevant balance sheet and  
income statement line items. Prior year figures have  
been adjusted accordingly.  
Joint operations and joint ventures are forms of joint  
arrangements. Such an arrangement exists when a  
BMW Group entity jointly carries out activities with  
a third party on the basis of a contractual agreement.  
0
2
In the case of a joint operation, the parties that have  
joint control of the arrangement have rights to the  
assets, and obligations for the liabilities, relating  
to the arrangement. Assets, liabilities, revenues  
and expenses of a joint operation are recognised  
proportionately in the Group Financial Statements  
on the basis of the BMW Group entity’s rights and  
obligations (proportionate consolidation).  
Group reporting entity and  
consolidation principles  
The BMW Group Financial Statements include BMWAG  
and all material subsidiaries over which BMWAG  
either directly or indirectly – exercises control. This  
also includes 56 structured entities, consisting of asset-  
backed securities entities and special-purpose funds.  
–
In relation to fully consolidated companies, the follow-  
ing changes took place in the Group reporting entity  
in the financial year 2019:  
The following three major arrangements are accounted  
for as joint operations:  
The BMW Group is party to a cooperation  
with Toyota Motor Corporation, Toyota City,  
which developed a sports car.  
—
Germany  
Foreign  
Total  
Included at  
1 December 2018  
The BMW Group and Daimler AG are working  
together on a long-term strategic cooperation in  
the field of highly automated driving systems.  
3
23  
–
194  
16  
217  
16  
—
Included for the  
first time in 2019  
No longer included  
in 2019  
2
24  
26  
The BMW Group has also signed an agreement  
—
Included at  
with the Chinese automobile manufacturer  
Great Wall Motor Company Limited (Great Wall)  
for the joint development and production of  
electric vehicles in China. Vehicle development  
and production will be carried out by the  
jointly controlled company Spotlight Automotive  
Limited (Spotlight). Spotlight was founded on  
27 December 2019 following approval by the  
Chinese authorities. The BMW Group and  
Great Wall each hold 50ꢀ% of the joint operation’s  
equity. In addition to electric MINI vehicles,  
Spotlight will also develop and produce electric  
vehicles for Great Wall. At 31 December 2019,  
the joint development and production arrange-  
ments with Spotlight are included in the Group  
Financial Statements on a proportionate basis.  
3
1 December 2019  
21  
186  
207  
All consolidated subsidiaries have the same year-end as  
BMWAG with the exception of BMW India Private Ltd.  
and BMW India Financial Services Private Ltd., whose  
year-ends are 31 March in accordance with local legal  
requirements.  
When assessing whether an investment gives rise to  
a controlled entity, an associated company, a joint  
operation or a joint venture, the BMW Group con-  
siders contractual arrangements and other circum-  
stances, as well as the structure and legal form of the  
entity. Discretionary decisions may also be required.  
1
18  
Group  
Financial  
Statements  
In the case of a joint venture, the parties which have  
joint control only have rights to the net assets of the  
arrangement.  
Since 1 February 2019, the joint ventures are accounted  
for in the BMW Group Financial Statements using the  
equity method. The BMW Group’s share of the loss  
recorded for the YOUR NOW companies during the  
financial year 2019 amounted to €ꢁ662 million. This  
figure includes impairment losses totalling €ꢁ277 million.  
Revised business expectations gave rise to an indication  
of impairment, thereby triggering an impairment test.  
As part of this process, impairment losses totalling  
€ꢁ240 million were recognised in the BMW Group Finan-  
cial Statements on the carrying amount of individual  
YOUR NOW companies. These impairment losses are  
included in the line item “Result on investments”.  
The amounts recognised as impairment losses partly  
reflect decisions taken at the level of ShareNow and  
ReachNow not to serve certain markets in the future.  
In this context, the result from equity accounted  
investment also includes expenses arising from the  
recognition of provisions and impairment losses.  
Notes to the Group  
Financial Statements  
Accounting  
Principles and  
Policies  
Associated companies and joint ventures are accounted  
for using the equity method, with measurement on  
initial recognition based on acquisition cost.  
On 28 March 2018, the BMW Group signed an agree-  
ment with the Daimler Group regarding the merger of  
certain business units that provide mobility services.  
Following approval by the relevant antitrust author-  
ities, the transaction was closed on 31 January 2019.  
Existing on-demand mobility offerings in the areas of  
car sharing, ride-hailing, parking, charging and multi-  
modality have been combined with future strategic  
expansion in mind. As a result of the business com-  
bination, following the final signing of contracts,  
the BMW Group and the Daimler Group each held  
equal shares in Car2Go Deutschland GmbH, Berlin  
(
ShareNow), Blitz 18  
-
353 GmbH, Munich (FreeNow),  
The work on opening balance sheets at the merger  
date and the calculation of the final purchase prices  
have not yet been finalised. For this reason, the final  
purchase prices cannot yet be determined definitively.  
Similarly, purchase price allocations have not yet  
been finalised.  
Parkmobile Group Holding B.ꢁV., Amsterdam  
(
(
(
ParkNow), Digital Charging Solutions GmbH, Berlin  
ChargeNow) and Moovel Group GmbH, Berlin  
ReachNow). The joint ventures are combined under  
the name YOUR NOW.  
As a result of the merger, the investments in the com-  
panies previously held by the BMW Group were remea-  
The YOUR NOW companies were contributed into a  
holding company with effect from 31 December 2019  
.
sured to their fair value. DriveNow GmbH & Co. KG  
,
As a result of the contribution, the BMW Group and  
the Daimler Group each held equal shares in Blitz  
18-353 GmbH (renamed YOUR NOW Holding GmbH  
in January 2020), Munich. The contribution was  
accounted for as an exchange transaction without  
economic substance and executed on the basis of  
carrying amounts.  
Munich, including its subsidiaries and DriveNow  
Verwaltungs GmbH, Munich (DriveNow), are part  
of the agreement. These entities were contributed  
in kind to Car2Go Deutschland GmbH, Berlin, on a  
fully realised profit basis, in return for shares in that  
company. Up to 31 January 2019, DriveNow was  
accounted for as a discontinued operation. Profit  
after tax amounted to €ꢁ44 million and resulted pri-  
The other changes to the Group reporting entity do  
not have a material impact on the results of operations,  
financial position and net assets of the Group.  
marily from the contribution of DriveNow to Car2Go  
Deutschland GmbH. This amount is reported in the  
income statement as part of the result from discon-  
tinued operations. The remaining BMW companies  
included in the agreement were not previously fully  
consolidated on the grounds of immateriality. The  
transaction gave rise to a preliminary positive impact  
of €ꢁ329 million which is included in the result on  
investments. This amount comprises sale proceeds  
of €ꢁ232 million and revaluation gains of €ꢁ97 million  
arising on the remaining shares. The transaction  
resulted in a total cash outflow of €ꢁ890 million, com-  
prising an inflow of €ꢁ295 million and an outflow of  
03  
Foreign currency translation and measurement  
The financial statements of consolidated companies  
which are presented in a foreign currency are trans-  
lated using the modified closing rate method. Under  
this method, assets and liabilities are translated at the  
closing exchange rate, whilst income and expenses are  
translated at the average exchange rate. Differences  
arising on foreign currency translation are presented  
in “Accumulated other equity“.  
€ꢁ1,185 million. The items described above relating  
to YOUR NOW also have an impact on the Group’s  
and Automotive segment’s cash flows from investing  
activities.  
1
19  
In the single entity accounts of BMWAG and its sub-  
sidiaries, foreign currency receivables and payables  
are measured on initial recognition using the exchange  
rate prevailing at the date of first-time recognition.  
At the end of the reporting period, foreign currency  
receivables and payables are measured using the clos-  
ing exchange rate. The resulting unrealised gains and  
losses, as well as realised gains and losses arising on  
settlement, are recognised in the income statement.  
Non-monetary balance sheet items denominated in  
foreign currencies are rolled forward on the basis of  
historical exchange rates.  
The exchange rates of currencies which have a material  
impact on the Group Financial Statements were as  
follows:  
Closing rate  
31.12. 2019  
Average rate  
2019  
1
Euro =  
31.12. 2018  
2018  
British Pound  
Chinese Renminbi  
Japanese Yen  
Korean Won  
Russian Rubel  
Thai Baht  
0.85  
7.82  
0.89  
7.87  
0.88  
7.73  
0.88  
7.81  
121.81  
1,297.79  
69.60  
125.77  
1,271.07  
79.72  
122.06  
130.36  
1,298.78  
74.07  
1,304.68  
72.43  
34.76  
1.12  
33.40  
37.01  
38.15  
US-Dollar  
1.12  
1.14  
1.18  
Argentina has fulfilled the definition of a hyperinfla-  
tionary economy since 1 July 2018. For this reason,  
IAS 29 (Financial Reporting in Hyperinflationary  
Economies) is being applied for the BMW subsidiary  
in Argentina. The price indices published by the  
Federación Argentina de Consejos Profesionales de  
Ciencias Económicas (FACPCE) are used to adjust  
non-monetary assets and liabilities and items in  
the income statement. The resulting effects are not  
material for the BMW Group.  
the beginning of a contract and is therefore deferred  
as a contract liability. The deferred amount is released  
over the service period and recognised as revenues in  
the income statement. As a rule, amounts are released  
on the basis of the expected expense trend, as this  
best reflects the performance of the service. If the  
sale of products includes a determinable amount for  
services (multiple-component contracts), the related  
revenues are deferred and recognised as income in the  
same way. Variable consideration components, such  
as bonuses, are measured at the expected value, and,  
in the case of multiple-component contracts allocated  
to all performance obligations unless directly attrib-  
utable to the sale of a vehicle.  
0
4
Accounting policies, assumptions, judgements  
and estimations  
Revenues from the sale of products, for which  
repurchase arrangements or rights of return are in  
place, are not recognised immediately in full. Instead,  
revenues are either recognised proportionately, or  
the difference between the sales and repurchase  
price is recognised in instalments over the term of the  
contract depending on the nature of the agreement.  
In the case of vehicles sold to a dealership that are  
expected to be repurchased in a subsequent period  
as part of leasing operations, revenues are not recog-  
nised at Group level at the time of the sale of the  
vehicle. Instead, assets and liabilities relating to the  
right of return vehicles are recognised.  
Revenues from contracts with customers include in  
particular revenues from the sale of products (primar-  
ily new and pre-owned vehicles and related products)  
as well as revenues from services. Revenue is recog-  
nised when control is transferred to the dealership  
or retail customer. In the case of sales of products,  
this is usually at the point in time when the risks and  
rewards of ownership are transferred. Revenues are  
stated net of settlement discount, bonuses and rebates  
as well as interest and residual value subsidies. The  
consideration arising from these sales usually falls  
due for payment immediately or within 30 days. In  
exceptional cases, a longer payment period may also  
be agreed. In the case of services, control is trans-  
ferred over time. Consideration for the rendering of  
services to customers usually falls due for payment at  
1
20  
Group  
Financial  
Statements  
Revenues from leases of own-manufactured vehicles  
are recognised at Group level in accordance with  
the requirements for manufacturer or dealer lessors.  
In the case of operating leases, revenues from lease  
payments are recognised on a straight-line basis  
over the lease term. In the case of finance leases,  
revenues are recognised at the lease commencement  
date at the amount of the fair value of the leased  
asset and reduced by any unguaranteed residual  
value of vehicles that are expected to be returned to  
the Group at the end of the lease term. Similarly, cost  
of sales is reduced for unguaranteed residual values.  
In addition, initial direct costs are recognised as cost  
of sales at the lease commencement date.  
Development costs are capitalised if all of the criteria  
specified by IAS 38 are met. They are measured on the  
basis of direct costs and directly attributable overhead  
costs. Project-related capitalised development costs  
are amortised on a straight-line basis following the  
start of production over the estimated product life  
cycle (usually eight to twelve years).  
Notes to the Group  
Financial Statements  
Accounting  
Principles and  
Policies  
Goodwill arises on first-time consolidation of an ac-  
quired business when the cost of acquisition exceeds  
the Group’s share of the net fair value of the assets,  
liabilities and contingent liabilities identified during  
the acquisition.  
If there is any indication of impairment of intangible  
assets, or if an annual impairment test is required  
(i.ꢁe. intangible assets with an indefinite useful life,  
intangible assets during the development phase and  
goodwill), an impairment test is performed. Each  
individual asset is tested separately unless the cash  
flows generated by the asset are not sufficiently inde-  
pendent from the cash flows generated by other assets  
or other groups of assets. In this case, impairment is  
tested at the level of a cash-generating unit.  
Revenues also include interest income from financial  
services. Interest income arising on finance leases as  
well as on retail customer and dealership financing  
is recognised using the effective interest method  
and reported as interest income on credit financing  
within revenues.  
Public sector grants are not recognised until there is  
reasonable assurance that the conditions attaching to  
them have been complied with and the grants will be  
received. The resulting income is recognised in cost  
of sales over the periods in which the costs occur that  
they are intended to compensate.  
For the purpose of the impairment test, the carrying  
amount of an asset (or a cash-generating unit) is com-  
pared with the recoverable amount. The first step of  
the impairment test is to determine the value in use.  
If the value in use is lower than the carrying amount,  
the next step is to determine the fair value less costs  
to sell and compare the amount so determined with  
the asset’s carrying amount. If the fair value is lower  
than the carrying amount, an impairment loss is  
recognised, reducing the carrying amount to the  
higher of the asset’s value in use or fair value less  
costs to sell.  
Earnings per share are calculated as follows: Basic  
earnings per share are calculated for common and  
preferred stock by dividing the net profit for the year  
after minority interests and attributable to each cate-  
gory of stock, by the average number of outstanding  
shares. Net profit for the year is accordingly allocated  
to the different categories of stock. The portion of the  
net profit that is not being distributed is allocated  
to each category of stock based on the number of  
outstanding shares. Profits available for distribution  
are determined directly on the basis of the dividend  
resolutions passed for common and preferred stock.  
Diluted earnings per share are calculated and sepa-  
rately disclosed in accordance with IAS 33.  
If the reason for a previously recognised impairment  
loss no longer exists, the impairment loss is reversed  
up to the level of the recoverable amount, but no  
higher than the amortised acquisition or manu-  
facturing cost. Impairment losses on goodwill are  
not reversed.  
Intangible assets are measured at acquisition or manu-  
facturing cost. Intangible assets with finite useful lives  
are amortised on a straight-line basis over their useful  
lives of between three and 20 years. Impairment losses  
are recognised where necessary. Intangible assets with  
indefinite useful lives are tested annually for impair-  
ment. Internally generated intangible assets mainly  
comprise development costs for vehicle, module and  
architecture projects.  
As part of the process of assessing recoverability, it is  
generally necessary to apply estimations and assump-  
tions – in particular regarding future cash inflows and  
outflows and the length of the forecast period – which  
could differ from actual amounts. Actual amounts  
may differ from the assumptions and estimations  
used if business conditions develop differently to  
expectations.  
1
21  
The BMW Group determines the value in use on the  
basis of a present value computation. Cash flows  
used for this calculation are derived from long-term  
forecasts approved by management. These long-term  
forecasts are based on detailed forecasts drawn up  
at an operational level, covering a planning period  
of six years. For the purposes of calculating cash  
flows beyond the planning period, a residual value  
is assumed which does not take growth into account.  
Forecasting assumptions are continually adjusted to  
current information and regularly compared with  
external sources. The assumptions used take account  
in particular of expectations of the profitability of the  
product portfolio, future market share development,  
macroeconomic developments (such as currency,  
interest rate and raw materials prices) as well as the  
legal environment and past experience.  
In order to determine a target internal rate of return,  
risk-adjusted cost of capital rates are averaged for the  
recent past. For the purposes of long-term product and  
investment decisions, the following target internal  
rates of return are used:  
in %  
2019  
2018  
Automotive  
12.0  
12.0  
13.4  
12.0  
12.0  
13.4  
Motorcycles  
Financial Services  
All items of property, plant and equipment are measured  
at acquisition or manufacturing cost less accumulated  
depreciation and accumulated impairment losses. The  
cost of internally constructed plant and equipment  
comprises all costs which are directly attributable  
to the manufacturing process as well as an appro-  
priate proportion of production-related overheads.  
This includes production-related depreciation and  
amortisation as well as an appropriate proportion  
of administrative and social costs. Financing costs  
are not included in acquisition or manufacturing  
cost unless they are directly attributable to the asset.  
The carrying amount of items of depreciable property,  
plant and equipment is written down according to  
scheduled usage-based depreciation – as a general  
rule on a straight-line basis – over the useful lives of  
the assets. Depreciation is recorded as an expense  
in the income statement.  
Amounts are discounted on the basis of a market-  
related cost of capital rate. Impairment tests are  
performed for accounting and financial reporting pur-  
poses for the Automotive and Motorcycles cash-gener-  
ating units using a risk-adjusted pre-tax cost of capital  
(
WACC) that is updated annually. In the case of the  
Financial Services cash-generating unit, a pre-tax cost  
of equity capital is used, as is customary in the sector.  
The following discount factors were applied:  
in %  
2019  
2018  
Automotive  
10.9  
10.9  
11.5  
12.0  
12.0  
13.4  
Motorcycles  
Financial Services  
The following useful lives are applied throughout the  
BMW Group:  
The risk-adjusted discount rate, calculated using a  
CAPM model, also takes into account specific peer-  
group information relating to beta-factors, capital  
structure data and borrowing costs. In conjunction  
with the impairment tests for cash-generating units,  
sensitivity analyses are performed for the main  
assumptions in order to rule out that possible changes  
to the assumptions used to determine the recoverable  
amount would result in the requirement to recognise  
an impairment loss.  
in years  
Factory and office buildings, residential buildings, fixed  
installations in buildings and outside facilities  
8 to 50  
3 to 21  
Plant and machinery  
Other equipment, factory and office equipment  
2 to 25  
For machinery used in multiple-shift operations,  
depreciation rates are increased to account for the  
additional utilisation. If there is any indication of  
impairment of property, plant and equipment, an  
impairment test is performed as described above for  
intangible assets.  
1
22  
Group  
Financial  
Statements  
In the case of leased items of property, plant and equip-  
ment, a right-of-use asset and a liability for the out-  
standing lease payments are recognised with effect  
from the date on which the leased asset becomes  
available for use by the BMW Group. The acquisition  
cost for the right-of-use asset is calculated as the sum  
of the present value of the future lease payments, any  
lease payments made at or before the commencement  
date, any initial direct costs incurred by the lessee  
and the estimated costs of dismantling, removing or  
restoring the leased asset. Lease incentives granted  
by the lessor are deducted. Right-of-use assets are  
depreciated on a straight-line basis over the shorter  
of the useful life of the leased asset and the expected  
lease term. If ownership of the leased asset is auto-  
matically transferred at the end of the lease term or  
the exercise of a purchase option is reflected in the  
lease payments, the right-of-use asset is amortised  
on a straight-line basis over the expected useful life  
of the leased asset. Right-of-use assets are reported  
in the balance sheet within the relevant line items  
for property, plant and equipment. The amortisation  
expense on right-of-use assets is reported in the  
income statement in cost of sales as well as in selling  
and administrative expenses.  
IFRS 16 requires that lease payments are discounted  
as a general rule using the interest rate implicit in  
the lease. However, since the interest rate in leases  
entered into by the BMW Group cannot readily be  
determined, amounts are discounted on the basis  
of the incremental borrowing rate, comprising the  
risk-free interest rate in the relevant currency for  
matching maturities plus a premium for the credit  
risk. Specific risks attached to an asset are generally  
not taken into account, given that collateral received  
in the context of alternative financing arrangements  
is not relevant within the BMW Group.  
Notes to the Group  
Financial Statements  
Accounting  
Principles and  
Policies  
Determining which items are to be counted as lease  
payments – including the issue of the lease term  
underlying those payments – and which discount rate  
to apply involves using estimates and assumptions  
that may differ from actual outcomes.  
As lessee, the BMW Group makes use of the applica-  
tion exemptions available for short-term leases and  
leases of low-value assets.  
Group products recognised by BMW Group entities as  
leased products under operating leases are measured at  
manufacturing cost, including any initial direct costs.  
All other leased products are measured at acquisition  
cost. All leased products are depreciated over the  
period of the lease using the straight-line method  
down to their expected residual value. Where the  
recoverable amount of a lease exceeds the asset’s car-  
rying amount, changes in residual value expectations  
are recognised by adjusting scheduled depreciation  
prospectively over the remaining term of the lease.  
If the recoverable amount is lower than the asset’s  
carrying amount, an impairment loss is recognised for  
the shortfall. A test is carried out at each balance sheet  
date to determine whether an impairment loss recog-  
nised in prior years no longer exists or has decreased.  
In such cases, the carrying amount of the asset is  
increased to the recoverable amount, at a maximum  
up to the amount of the asset’s amortised cost.  
The lease liability is measured on initial recognition at  
the present value of the future lease payments. Sub-  
sequent to initial recognition, the carrying amount of  
the lease liability is increased to reflect interest on the  
lease liability and reduced, without income statement  
impact, by the lease payments made. Lease liabilities  
are reported within financial liabilities, while interest  
expense is reported as part of net interest result. In  
the cash flow statement, both the repayment portion  
and the interest portion of lease payments are shown  
as cash outflows from financing activities.  
The lease payments to be taken into account to  
measure the right-of-use asset and the lease liability  
comprise fixed payments, variable lease payments  
that depend on an index or an interest rate as well  
as amounts expected to be payable under residual  
value guarantees. If it is reasonably certain that a  
purchase or lease extension option will be exercised,  
the relevant payments are also included. Payments  
for periods for which the lessee has an option to  
terminate a lease unilaterally are only included in  
the lease payments if it is reasonably certain that  
the termination option will not be exercised. For the  
purposes of assessing options, the BMW Group takes  
account of all facts and circumstances that create  
an economic incentive to exercise or not to exercise  
the option.  
Assumptions and estimations are required regard-  
ing future residual values, since these represent  
a significant part of future cash inflows. Relevant  
factors to be considered include the trend in market  
prices and demand on the pre-owned vehicle market.  
The assumptions are based on internally available  
historical data and current market data as well as  
on forecasts of external institutions. Furthermore,  
assumptions are regularly validated by comparison  
with external data.  
1
23  
Investments accounted for using the equity method are  
measured – provided no impairment has been recog-  
nised – at cost of investment adjusted for the Group’s  
share of earnings and changes in equity capital. If  
there is any indication that an investment is impaired,  
an impairment test is performed on the basis of a  
discounted cash flow method. An indication exists, for  
example, in the event of a serious shortfall compared  
to budget, the loss of an active market or if funds are  
required to avoid insolvency.  
With the exception of receivables from operating  
leases and trade receivables, the BMW Group applies  
the general approach described in IFRS 9 to deter-  
mine impairment of financial assets. Under the general  
approach, loss allowances are measured on initial  
recognition on the basis of the expected 12-month  
credit loss (stage 1). If the credit loss risk at the end  
of the reporting period has increased significantly  
since initial recognition, the impairment allowance  
is measured on the basis of lifetime expected credit  
losses (stage 2 – general approach). The BMW Group  
applies the simplified approach described in IFRS 9  
to operating lease and trade receivables, whereby the  
amount of the loss allowance is measured subsequent  
to the initial recognition of the receivable on the basis  
The Group’s financial assets include in particular other  
investments, receivables from sales financing, mar-  
ketable securities and investment funds, derivative  
financial assets, trade receivables and cash and cash  
equivalents. As a general rule, non-derivative finan-  
cial assets are accounted for on the settlement date.  
of lifetime expected credit losses (stage 2 – simplified  
approach). For the purposes of allocating an item to  
stage 2, it is irrelevant whether the credit risk of the  
assets concerned has increased significantly since  
initial recognition. In the case of credit-impaired assets  
which had not been credit-impaired at the time they  
were acquired or originated, an impairment allowance  
is recognised at an amount equal to lifetime expected  
Depending on the business model and the structure of  
contractual cash flows, financial assets are classified  
as measured at amortised cost, at fair value through  
other comprehensive income or at fair value through  
profit or loss. The category “at fair value through other  
comprehensive income” at the BMW Group comprises  
mainly marketable securities and investment funds  
used for liquidity management purposes. Selected  
marketable securities and investment funds, money  
market funds within cash and cash equivalents as  
well as convertible bonds are recognised at fair value  
through profit or loss, as their contractual cash flows  
do not solely represent payments of principal and  
interest. The BMW Group does not make use of the  
option to measure equity instruments at fair value  
through other comprehensive income or debt instru-  
ments at fair value through profit or loss.  
credit losses (stage 3). This is the case regardless of  
whether the general or simplified approach is applied.  
As a general rule, the BMW Group assumes that a  
receivable is in default if it is more than 90 days  
overdue or if there are objective indications of insol-  
vency. Credit-impaired assets are identified as such  
on the basis of this definition of default. In the case  
of stage 3 assets, interest income is calculated on the  
asset’s carrying amount less any impairment loss.  
Loss allowances on receivables from sales financing  
are determined primarily on the basis of past expe-  
rience with credit losses, current data on overdue  
receivables, rating classes and scoring information.  
Forward-looking information (for instance forecasts of  
key performance indicators) is also taken into account  
if, based on past experience, such indicators show a  
substantive correlation to actual credit losses.  
The market values of financial instruments measured  
at fair value are determined on the basis of market  
information available at the balance sheet date, such as  
quoted prices or using appropriate measurement meth-  
ods, in particular the discounted cash flow method.  
The measurement of the change in default risk is based  
on a comparison of the default risk at the date of initial  
recognition and at the end of the reporting period.  
The default risk at the end of each reporting period is  
determined on the basis of credit checks, current key  
performance indicators and any overdue payments.  
Loss allowances on trade receivables are determined  
primarily on the basis of information relating to over-  
due amounts. In the case of marketable securities and  
investment funds, the BMW Group usually applies  
the option not to allocate financial assets with a low  
default risk to different stages. Accordingly, assets  
with an investment grade rating are always allocated to  
Items reported under other investments within the scope  
of IFRS 9 are measured at fair value through profit or  
loss. Investments in subsidiaries, joint arrangements  
and associated companies that are not material to the  
BMW Group and which do not fall within the scope of  
IFRS 9 are also included in other investments.  
Receivables from sales financing are measured at amor-  
tised cost using the effective interest rate method. This  
also includes receivables from vehicle finance leases  
which are measured at an amount equal to the net  
investment in the lease.  
stage 1. The loss allowance on these assets is calculated  
using the input factors available on the market, such  
as ratings and default probabilities.  
1
24  
Group  
Financial  
Statements  
The BMW Group writes off financial assets when it has  
no reasonable expectation of recovering the amounts  
concerned. This may be the case, for instance, if the  
debtor is deemed not to have sufficient assets or other  
sources of income to service the debt.  
The time values of option transactions and the interest  
component – including the currency basis – of forward  
currency contracts are not designated as part of the  
hedging relationship in the case of currency hedges  
accounted for as cash flow hedges. Changes in the  
market value of such components are recorded as  
costs of hedging on a separate line within accumulated  
other equity. Amounts recorded in accumulated other  
equity from currency hedges are reclassified to cost  
of sales when the related hedged item is recognised  
in profit or loss. Ineffectiveness is recognised directly  
in cost of sales.  
Notes to the Group  
Financial Statements  
Accounting  
Principles and  
Policies  
Derivative financial instruments are used within the  
BMW Group for hedging purposes in order to reduce  
currency, interest rate, fair value and market price  
risks. Derivative financial instruments are recognised  
as of the trade date, measured at their fair value. Fair  
values are determined on the basis of valuation models.  
Observable market price, tenor and currency basis  
spreads are taken into account in the measurement  
of derivative financial instruments. Furthermore, the  
Group’s own credit risk and that of counterparties is  
taken into account on the basis of credit default swap  
values for market contracts with matching terms.  
In the case of raw materials hedges that are accounted  
for as cash flow hedges, the hedging instruments are  
designated in full as part of the hedging relationship.  
As an exception to this general rule, the interest  
component of raw materials derivative instruments  
redesignated in conjunction with the first-time  
application IFRS 9 was not designated as part of  
the hedging relationship. Changes in the fair value  
of this component are recorded as costs of hedging  
on a separate line within accumulated other equity.  
Amounts recorded in accumulated other equity are  
included in the carrying amount of inventories on  
initial recognition.  
The BMW Group applies the option to recognise the  
credit risks arising from the fair values of a group of  
derivative financial assets and liabilities on the basis  
of their total net amount. Portfolio-based valuation  
adjustments (credit valuation adjustments and debit  
valuation adjustments) to the individual derivative  
financial assets and financial liabilities are allocated  
using the relative fair value approach (net method).  
Deferred income taxes are recognised for all temporary  
differences between the tax and accounting bases of  
assets and liabilities, including differences arising on  
consolidation procedures, as well as on unused tax  
losses and unused tax credits. Deferred tax assets  
and liabilities are measured at the tax rates that are  
expected to apply to the period when the asset is  
realised or the liability settled, based on tax rates  
and tax laws that have been enacted or substantively  
enacted by the balance sheet date.  
Where hedge accounting is applied, changes in fair  
value of derivate financial instruments are presented  
as part of other financial result in the income state-  
ment or within other comprehensive income as a  
component of accumulated other equity, depending  
on whether the hedging relationship is classified as  
a fair value hedge or a cash flow hedge. Fair value  
hedges are mainly used to hedge interest rate risks  
relating to bonds, other financial liabilities and receiv-  
ables from sales financing. For selected fixed-interest  
assets, part of the interest rate risk is hedged on a  
portfolio basis in accordance with IAS 39. In this case,  
swaps are used as the hedging instrument. Hedge  
relationships are terminated and redesignated on a  
monthly basis at the end of each reporting period,  
thereby taking account of the constantly changing  
content of each portfolio. The currency basis is not  
designated as part of the hedging relationship in the  
case of interest rate hedges accounted for as fair value  
hedges. Accordingly, changes in the market value of  
such instruments are recorded as costs of hedging  
within accumulated other equity. Amounts accumu-  
lated in equity are reclassified to other financial result  
within income statement over the term of the hedging  
relationship. Ineffectiveness of hedging relationships  
is also recognised in other financial result.  
The recoverability of deferred tax assets is assessed at  
each balance sheet date on the basis of planned tax-  
able income in future financial years. If with a proba-  
bility of more than 50 percent future tax benefits will  
not be realised, either in part or in total, a valuation  
allowance is recognised on the deferred tax assets. The  
calculation of deferred tax assets requires assumptions  
to be made with regard to the level of future taxable  
income and the timing of recovery of deferred tax  
assets. These assumptions take account of forecast  
operating results and the impact on earnings of the  
reversal of taxable temporary differences. Since future  
business developments cannot be predicted with cer-  
tainty and to some extent cannot be influenced by the  
BMW Group, the measurement of deferred tax assets  
is subject to uncertainty.  
1
25  
Deferred tax liabilities on taxable temporary differences  
arising from investments in subsidiaries, branches and  
associated companies and interests in joint arrange-  
ments are not recognised if the Group is able to control  
the timing of the reversal and it is probable that the  
temporary difference will not reverse in the foreseeable  
future. This is particularly the case if it is intended that  
profits will not be distributed, but rather will be used  
to maintain the substance and expand the volume of  
business of the entities concerned.  
Financial liabilities, with the exception of lease liabil-  
ities, are measured on first-time recognition at their  
fair value. For these purposes, transaction costs are  
taken into account except in the case of financial  
liabilities allocated to the category “measured at fair  
value through profit or loss”. Subsequent to initial  
recognition, liabilities are – with the exception of  
derivative financial instruments – measured at amor-  
tised cost using the effective interest method.  
Provisions for pensions are measured using the pro-  
jected unit credit method. Under this method, not  
only obligations relating to known vested benefits  
at the reporting date are recognised, but also the  
effect of future expected increases in pensions and  
salaries. The calculation is based on independent  
actuarial valuations which take into account the  
relevant biometric factors.  
Current income taxes are calculated within the  
BMW Group on the basis of tax legislation applicable  
in the relevant countries. To the extent that judgement  
was necessary to determine the treatment and amount  
of tax items presented in the financial statements,  
there is in principle a possibility that local tax author-  
ities may take a different position.  
As a general rule, each income tax treatment is consid-  
ered independently when accounting for uncertainties  
in income taxes. If it is not considered probable that an  
income tax treatment will be accepted by the local  
tax authorities, the BMW Group uses the most likely  
amount of the tax treatment when determining tax-  
able profit and the tax base.  
In the case of funded plans, the pension obligation is  
offset against plan assets measured at their fair value.  
If the plan assets exceed the pension obligation, the  
surplus is tested for recoverability. In the event that  
the BMW Group has a right of reimbursement or a  
right to reduce future contributions, it reports an asset  
(within Other financial assets), measured on the basis  
of the present value of the future economic benefits  
attached to the plan assets. For funded plans, in cases  
where the obligation exceeds plan assets, a liability is  
recognised under pension provisions.  
Inventories of raw materials, supplies and goods for  
resale are stated at the lower of average acquisition  
cost and net realisable value.  
Work in progress and finished goods, as well as vehi-  
cles held for sale in the financial services business,  
are stated at the lower of manufacturing cost and net  
realisable value. Manufacturing cost comprises all  
costs which are directly attributable to the manufac-  
turing process as well as an appropriate proportion  
of production-related overheads. This includes  
production-related depreciation and amortisation  
and an appropriate proportion of administrative and  
social costs. Financing costs are not included in the  
acquisition or manufacturing cost of inventories.  
The calculation of the amount of the provision requires  
assumptions to be made with regard to discount rates,  
salary trends, employee fluctuation and the life ex-  
pectancy of employees. Discount rates are determined  
by reference to market yields at the end of the report-  
ing period on high quality fixed-interest corporate  
bonds. The salary trend relates to the expected future  
rate of salary increase which is estimated annually  
based on inflation and the career development of  
employees within the Group.  
Net interest expense on the net defined benefit lia-  
bility and net interest income on net defined benefit  
assets are presented separately within the financial  
result. All other costs relating to allocations to pension  
provisions are allocated to costs by function in the  
income statement.  
Cash and cash equivalents comprise mainly cash on  
hand and cash at bank with an original term of up to  
three months. With the exception of money market  
funds, cash and cash equivalents are measured at  
amortised cost.  
1
26  
Group  
Financial  
Statements  
Past service cost arises where a BMW Group com-  
pany introduces a defined benefit plan or changes  
the benefits payable under an existing plan. This cost  
is recognised immediately in the income statement.  
Similarly, gains and losses arising on the settlement  
of a defined benefit plan are recognised immediately  
in the income statement.  
legal dispute. The assumptions made, especially the  
assumption about the outcome of legal proceedings,  
are subject to a high degree of uncertainty. The appro-  
priateness of assumptions is regularly reviewed, based  
on assessments undertaken both by management  
and external experts, such as lawyers. If new devel-  
opments arise in the future that result in a different  
assessment, provisions are adjusted accordingly.  
Notes to the Group  
Financial Statements  
Accounting  
Principles and  
Policies  
Remeasurement of the net liability can result from  
changes in the present value of the defined benefit  
obligation, the fair value of the plan assets or the  
asset ceiling. Remeasurement can result, amongst  
others, from changes in financial and demographic  
parameters, as well as changes following the portfolio  
development. Remeasurements are recognised imme-  
diately in other comprehensive income and hence  
directly in equity (within revenue reserves).  
If the recognition and measurement criteria relevant  
for provisions are not fulfilled and the outflow of  
resources on fulfilment is not unlikely, the potential  
obligation is disclosed as a contingent liability.  
Related party disclosures comprise information on  
associated companies, joint ventures and non-con-  
solidated subsidiaries as well as individuals which  
have the ability to exercise a controlling or significant  
influence over the financial and operating policies  
of the BMW Group. This includes all persons in key  
positions of the Company, as well as close members  
of their families or intermediary entities. In the case  
of the BMW Group, this also applies to members of  
the Board of Management and the Supervisory Board.  
Details relating to these individuals and entities are  
see provided in note 40 and in the list of investments  
Other provisions are recognised when the BMW Group  
has a present legal or constructive obligation towards  
a third party arising from past events, the settlement  
of which is probable, and when the amount of the  
obligation can be reliably estimated. Provisions with a  
remaining period of more than one year are measured  
at their net present value.  
notes 40 and 46  
The measurement of provisions for statutory and  
disclosed in note 46.  
non-statutory warranty obligations (statutory, contrac  
-
tual and voluntary) involves estimations. In addition  
to manufacturer warranties prescribed by law, the  
BMW Group offers various further standard (assur-  
ance-type) warranties depending on the product  
and sales market. No provisions are recognised for  
additionally offered service packages that are treated  
as separate performance obligations.  
Share-based remuneration programmes which are ex-  
pected to be settled in shares are measured at their fair  
value at grant date. The related expense is recognised  
as personnel expense in the income statement over  
the vesting period and offset against capital reserves.  
Share-based remuneration programmes expected to  
be settled in cash are revalued to their fair value at  
each balance sheet date between the grant date and  
the settlement date and on the settlement date itself.  
The expense is recognised as personnel expense in  
the income statement over the vesting period and  
presented in the balance sheet as a provision.  
Provisions for statutory and non-statutory warranties  
are recognised at the point in time when control over  
the goods is transferred to the dealership or retail  
customer or when it is decided to introduce new  
warranty measures. With respect to the level of the  
provision, estimations are made in particular based  
on past experience of damage claims and processes.  
Future potential repair costs and price increases  
per product and market are also taken into account.  
Provisions for warranties for all companies of the  
BMW Group are adjusted regularly to take account  
of new information, with the impact of any changes  
recognised in the income statement. Further infor-  
mation is provided in note 33. Similar estimates  
are also made in conjunction with the measurement  
of expected reimbursement claims.  
The share-based remuneration programme for Board  
of Management members and senior heads of depart-  
ment entitles BMWAG to elect whether to settle its  
commitments in cash or with shares of BMWAG  
common stock. Based on the decision to settle in cash,  
the share-based remuneration programmes for Board  
of Management members and senior heads of depart-  
ment are accounted for as cash-settled, share-based  
remuneration programmes. Further information on  
share-based remuneration programmes is provided  
see in note 41.  
see  
note 33  
note 41  
The recognition and measurements of provisions  
for litigation and liability risks necessitates making  
assumptions in order to determine the probability of  
liability, the amount of claim and the duration of the  
1
27  
0
5
Financial reporting rules  
Standards and Revised Standards significant for the  
BMW Group applied for the first time in the finan-  
ciaꢅ ꢆear 2019:  
Date of  
mandatory  
application  
IASB  
Date of  
mandatory  
application  
EU  
Date of  
issue by  
IASB  
Standard / Interpretation  
IFRS 16  
Leases  
13.1. 2016  
26. 9. 2019  
1.1. 2019  
1.1. 2020  
1.1. 2019  
1.1. 2020  
IFRS 9, IAS 39, Interest Rate Benchmark Reform  
IFRS 7  
(Amendments to IFRS 9, IAS 39, IFRS 7)  
IFRIC 23  
Uncertainty Over Income Tax Treatments  
7. 6. 2017  
1.1. 2019  
1.1. 2019  
Changes due to the new accounting standard IFRS 16  
are described in note 6.  
IFRIC 23 clarifies the accounting for uncertainties  
regarding income tax issues and transactions. Due  
to accounting practises previously followed, based on  
the consistent application of IAS 12, the BMW Group  
is not affected by IFRIC 23.  
see  
note 6  
The amendments to IFRS 9, IAS 39 and IFRS 7 pro-  
vide relief with regard to the expected impact of the  
interest rate benchmark reform on hedge accounting  
and are being applied early by the BMW Group. The  
amendments provide temporary relief from applying  
specific hedge accounting requirements in the case of  
hedging relationships directly affected by the interest  
rate benchmark reform. Accordingly, hedge account-  
ing requirements must be applied as if the benchmark  
interest rate, on which the hedged cash flows and cash  
flows from the hedging instrument are based, were  
not changed by the benchmark interest rate reform.  
Consequently, the amendments to IFRS 9 and IAS 39  
ensure that hedge accounting is not required to be  
discontinued specifically as a result of the bench-  
mark interest rate reform. The relief is applied to all  
BMW Group hedging relationships affected by the  
uncertainties arising from the benchmark interest  
rate reform.  
Other accounting rules required to be applied for  
the first time in the financial year 2019 did not have  
any significant impact on the BMW Group Financial  
Statements.  
Other financial reporting standards issued by the  
IASB and not yet applied are not expected to have  
any significant impact on the BMW Group Financial  
Statements. With the exception of the benchmark  
interest rate reform, the BMW Group has not applied  
any other new accounting rules before their manda-  
tory date.  
1
28  
Group  
Financial  
Statements  
06  
The new Standard has been applied with effect from  
1 January 2019 using the modified retrospective  
method. On transition to the new Standard, the  
BMW Group applied the following practical expe-  
dients permitted for lessees by IFRS 16:  
Changes in accounting policy for leases  
(
a) First-time appꢅication of IFRS 16 – Accounting  
for ꢅeases as ꢅessee  
Notes to the Group  
Financial Statements  
Accounting  
Principles and  
Policies  
Up to 31 December 2018, the accounting treatment of  
a lease was determined in accordance with IAS 17 on  
the basis of the extent to which the risks and rewards  
attached to the leased item were transferred to the  
lessee. Leased items of property, plant and equip-  
ment whose economic ownership was attributed to  
the BMW Group (finance leases) were measured on  
initial recognition at their fair value or, if lower, at the  
net present value of minimum lease payments. The  
assets were depreciated using the straight-line method  
over their estimated useful lives or, if shorter, over the  
contractual lease period. Obligations for future lease  
payments were recognised at their net present value  
in other financial liabilities. In the case of leases that  
did not transfer substantially all the risks and rewards  
incidental to ownership from the Group to the lessee  
no reassessment was made at the date of initial  
—
application as to whether or not existing con-  
tracts constituted a lease based on IFRS 16.  
Instead, the previous assessment made under  
IAS 17 and IFRIC 4 was retained.  
An impairment review of individual right-of-  
—
use assets was not performed. Instead, the  
assessment of the existence of onerous leases in  
accordance with IAS 37 (Provisions, Contin-  
gent Liabilities and Contingent Assets) is used  
as a practical expedient. No provisions for  
onerous leases were recognised at 31 Decem-  
ber 2018.  
(
operating leases), lease payments were previously  
recognised in the income statement on a straight-line  
basis over the lease term.  
Leases expiring no later than 31 December 2019  
are accounted for as short-term leases regardless  
of the original lease term.  
—
The new Standard IFRS 16 (Leases) requires a new  
approach to accounting for leases by lessees. In prin-  
ciple, every lease is now required to be accounted for  
at the level of the lessee as a financing transaction,  
reflecting the fact that the distinction between ope-  
rating and finance leases has been eliminated.  
Initial direct costs were not taken into account  
when measuring right-of-use assets at the time  
of initial application.  
—
Current information is taken into account when  
determining the lease term if the contract con-  
tains options to extend or terminate the lease.  
—
At the date of initial application, the balance sheet  
total increased by €ꢁ2,407 million as a result of leases  
previously classified as operating leases. The reclas-  
sification resulted in a slight decline in the equity  
ratio. For a small number of real estate contracts,  
the carrying amount of right-of-use assets has been  
determined as if IFRS 16 had been applied from the  
commencement of the lease. After offsetting deferred  
tax effects amounting to €ꢁ13 million, this resulted in  
a reduction of approximately €ꢁ32 million in Group  
revenue reserves at  
profit before financial result for the financial year  
019 benefited from a positive effect of €ꢁ27 million.  
1 January 2019. The BMW Group’s  
2
Furthermore, cash flows from operating activities  
increased and cash flows from financing activities  
decreased by €ꢁ494 million.  
1
29  
Starting with financial obligations for operating leases  
at 31 December 2018, lease liabilities can be reconciled  
to the opening balance at 1 January 2019 as follows:  
Reconciꢅiation of opening ꢇaꢅance  
•
65  
in € million  
Financial obligations for operating leases at 31 December 2018  
Application of practical expedients for leases of low-value assets and short-term leases  
Change in assessment of leases  
2,694  
– 102  
69  
Other  
4
Gross lease liabilities for former operating leases at 1 January 2019  
Discounting impact  
2,665  
– 258  
2,407  
105  
Lease liabilities for former operating leases at 1 January 2019  
Present value of finance lease liabilities at 31 December 2018  
Total lease liabilities at 1 January 2019  
2,512  
Lease liabilities were discounted using a weighted  
average incremental interest rate of 1.94% at 1 Jan-  
uary 2019.  
The BMW Group is also required to account for  
finance leases concluded with retail customers via the  
Financial Services segment in accordance with the  
requirements applicable to manufacturers or dealers.  
For this reason, revenues and cost of sales arising on  
the sale of vehicles which will subsequently be leased  
to customers under finance lease arrangements are  
now recognised at a later date. Revenues and cost of  
sales relating to vehicle sales are no longer recognised  
at the time of sale, but rather at the commencement  
of the lease. Revenues are recognised on the basis of  
the leased asset’s fair value, reduced by any unguar-  
anteed residual value of vehicles that are expected  
to be returned to the Group. Similarly, cost of sales  
is reduced for unguaranteed residual values. In addi-  
tion, initial direct costs incurred by the Financial  
Services segment are recognised at Group level as  
cost of sales. Overall, this resulted in a retrospective  
(
ꢇ) Changes in methods used to account  
for ꢅeases as ꢅessor  
In conjunction with the adoption of IFRS 16, the meth-  
ods used to account for leases as a lessor have also  
been reviewed, resulting in a change of accounting  
policy as described below with effect from the finan-  
cial year 2019. The change in accounting policy has  
been applied retrospectively in accordance with IAS 8  
,
with comparative figures adjusted. In this context, the  
opening balance sheet at 1 January 2018 and figures  
for the financial year 2018 have been adjusted.  
As a result of the revised definition of initial direct  
costs contained in IFRS 16, the BMW Group has  
changed the timing of income statement recognition  
for volume-dependent bonuses relating to Financial  
Services segment sales promotions. Rather than being  
spread over the term of the underlying lease, these  
costs are now recognised as an expense in full in the  
period in which the entitlement to the bonus arises.  
This resulted in a retrospective decrease in Group  
revenue reserves at 1 January 2018 of €ꢁ101 million,  
after offset of deferred tax amounting to €ꢁ44 million  
decrease in Group revenue reserves at 1 January 2018  
of €ꢁ15 million, after offset of deferred tax amounting  
to €ꢁ million (31 December 2018: decrease of revenue  
4
reserves of €ꢁ146 million, after offset of deferred tax  
amounting to €ꢁ44 million). The adoption of these  
requirements did not have any significant impact  
on the accounting in the Automotive and Financial  
Services segments.  
(
€
31 December 2018: reduction of revenue reserves of  
ꢁ113 million, after offset of deferred tax amounting  
to €ꢁ49 million).  
1
30  
Group  
Financial  
Statements  
The tables below show the impact of accounting pol-  
icy changes on the balance sheets at 1 January 2018  
and 31 December 2018, as well as on the income  
statement, statement of comprehensive income and  
cash flow statement for the financial year 2018.  
Notes to the Group  
Financial Statements  
Accounting  
Principles and  
Policies  
bMW Group change in presentation of ꢇaꢅance sheet at 1 Januarꢆ 2018  
•
66  
Impact of  
accounting  
policy changes  
As originally  
reported  
in € million  
As amended  
ASSꢀꢁS  
Total non-current assets  
thereof receivables from sales financing  
thereof deferred tax  
122,090  
48,475  
1,965  
–105  
–18  
6
121,985  
48,457  
1,971  
thereof other assets  
Total current assets  
thereof current tax  
1,630  
– 93  
– 34  
11  
1,537  
73,496  
1,566  
73,462  
1,577  
thereof other assets  
7,485  
– 45  
7,440  
Total assets  
195,586  
–139  
195,447  
ꢀ
qꢂIꢁy Aꢃꢄ lIAbIlIꢁIꢀS  
Total equity  
thereof equity attributable to shareholders of BMW AG  
54,208  
53,772  
50,993  
69,616  
5,632  
–116  
–116  
–116  
– 31  
–
54,092  
53,656  
50,877  
69,585  
5,632  
thereof revenue reserves  
Total non-current provisions and liabilities  
thereof other provisions  
thereof deferred tax  
2,166  
– 31  
–
2,135  
thereof other liabilities  
5,045  
5,045  
Total current provisions and liabilities  
thereof other provisions  
71,762  
6,367  
8
71,770  
6,367  
–
thereof other liabilities  
13,443  
8
13,451  
Total equity and liabilities  
195,586  
–139  
195,447  
1
31  
bMW Group change in presentation of ꢇaꢅance sheet at 31 ꢄecemꢇer 2018  
•
67  
Impact of  
accounting  
policy changes  
As originally  
reported  
in € million  
As amended  
ASSꢀꢁS  
Total non-current assets  
thereof receivables from sales financing  
thereof deferred tax  
125,442  
48,109  
1,590  
– 80  
– 20  
48  
125,362  
48,089  
1,638  
thereof other assets  
Total current assets  
thereof current tax  
2,026  
–108  
479  
12  
1,918  
83,538  
1,366  
84,017  
1,378  
thereof other assets  
9,790  
467  
10,257  
Total assets  
208,980  
399  
209,379  
ꢀ
qꢂIꢁy Aꢃꢄ lIAbIlIꢁIꢀS  
Total equity  
thereof equity attributable to shareholders of BMW AG  
58,088  
57,559  
56,121  
79,983  
5,776  
– 259  
– 259  
– 259  
– 48  
–9  
57,829  
57,300  
55,862  
79,935  
5,767  
thereof revenue reserves  
Total non-current provisions and liabilities  
thereof other provisions  
thereof deferred tax  
1,806  
– 33  
– 6  
1,773  
thereof other liabilities  
5,299  
5,293  
Total current provisions and liabilities  
thereof other provisions  
70,909  
6,078  
706  
– 3  
71,615  
6,075  
thereof other liabilities  
15,117  
709  
15,826  
Total equity and liabilities  
208,980  
399  
209,379  
bMW Group change in presentation of income statement  
for the period from 1 Januarꢆ to 31 ꢄecemꢇer 2018  
•
68  
Impact of  
accounting  
policy changes  
As originally  
reported  
in € million  
As amended  
Revenues  
97,480  
– 78,924  
18,556  
– 9,558  
9,121  
–165  
–13  
97,315  
– 78,937  
18,378  
– 9,568  
8,933  
Cost of sales  
Gross profit  
–178  
–10  
Selling and administrative expenses  
Profit / loss before financial result  
Profit / loss before tax  
–188  
–188  
45  
9,815  
9,627  
Income taxes  
– 2,575  
7,207  
– 2,530  
7,064  
Net profit / loss  
–143  
–143  
– 0.22  
– 0.22  
– 0.22  
– 0.22  
Attributable to shareholders of BMW AG  
Basic earnings per share of common stock in €  
Basic earnings per share of preferred stock in €  
Diluted earnings per share of common stock in €  
Diluted earnings per share of preferred stock in €  
7,117  
6,974  
10.82  
10.60  
10.84  
10.62  
10.82  
10.60  
10.84  
10.62  
1
32  
Group  
Financial  
Statements  
bMW Group change in presentation of statement of comprehensive income  
for the period from 1 Januarꢆ to 31 ꢄecemꢇer 2018  
•
69  
Notes to the Group  
Financial Statements  
Impact of  
accounting  
policy changes  
Accounting  
Principles and  
Policies  
As originally  
reported  
in € million  
As amended  
Notes to the  
Income Statement  
Net profit  
7,207  
6,603  
6,513  
–143  
–143  
–143  
7,064  
6,460  
6,370  
Total comprehensive income  
Total comprehensive income attributable to shareholders of BMW AG  
BMW Group change in presentation of cash flow statement  
for the period from 1 Januarꢆ to 31 ꢄecemꢇer 2018  
•
70  
Impact of  
accounting  
policy changes  
As originally  
reported  
in € million  
As amended  
Cash inflow/outflow from operating activities  
thereof net profit  
5,051  
7,207  
355  
–
–143  
– 45  
20  
5,051  
7,064  
310  
thereof change in deferred taxes  
thereof change in receivables from sales financing  
thereof change in provisions  
– 5,670  
– 82  
– 5,650  
– 94  
–12  
180  
thereof change in other operating assets and liabilities  
697  
877  
1
33  
NOTES TO THE INCOME  
STATEMENT  
Interest income on loan financing and finance leases  
includes interest calculated on the basis of the effec-  
tive interest method totalling €ꢁ3,687 million (2018:  
ꢁ3,423 million). This interest income is not reported  
€
separately in the income statement as it is not signif-  
icant compared to total Group revenues.  
Comparative figures for the previous financial year  
have been adjusted to reflect the change in accounting  
0
7
Revenues  
see policy for manufacturer lessors (see note 6) and  
note 6  
Revenues by activity comprise the following:  
the change in the presentation of amortisation of  
initial direct costs for finance leases and receivables  
originated. These were previously recorded as cost  
of sales and are now reported as reductions of rev-  
enues (amount adjusted for the financial year 2018:  
in € million  
2019  
2018*  
Sales of products and related goods  
73,433  
68,029  
€
ꢁ460 million).  
Sales of products previously  
leased to customers  
11,020  
10,746  
10,163  
9,995  
Income from lease instalments  
Interest income on loan financing  
and finance leases  
0
8
3,996  
3,728  
Cost of sales  
Cost of sales comprises:  
Revenues from service contracts,  
telematics and roadside assistance  
2,820  
2,195  
2,784  
2,156  
Other income  
Revenues  
104,210  
96,855  
in € million  
2019  
2018*  
*
Prior year’s figures adjusted.  
Manufacturing costs  
48,690  
23,623  
44,558  
22,042  
Cost of sales relating to financial services  
business  
Revenues recognised from contracts with customers  
in accordance with IFRS 15 totalled €ꢁ89 610 million  
2018: €ꢁ81,871 million).  
thereof: interest expense relating  
to financial services business  
,
2,288  
2,035  
5,320  
(
Research and development expenses  
5,952  
Expenses for service contracts, telematics  
and roadside assistance  
An analysis of revenues by segment is shown in the  
explanatory comments on segment information  
provided in note 45. Revenues from the sale of  
products and related goods are generated primarily in  
the Automotive segment and, to a lesser extent, in the  
Motorcycles segment. Revenues from sales of products  
previously leased to customers, income from lease  
instalments and interest income on loan financing and  
finance leases are allocated to the Financial Services  
segment. Other income relates mainly to the Auto-  
motive segment and the Financial Services segment.  
1,641  
2,566  
1,844  
1,717  
Warranty expenditure  
Other cost of sales  
Cost of sales  
see  
note 45  
3,675  
2,996  
86,147  
78,477  
*
Prior year’s figures adjusted.  
Cost of sales is reduced by public-sector subsidies  
in the form of reduced taxes on assets and reduced  
consumption-based taxes amounting to €ꢁ105 million  
(
2018: €ꢁ88 million).  
The major part of revenues expected to arise from the  
Group’s order book at the end of the reporting period  
relates to the sale of vehicles. Revenues resulting from  
those sales will be recognised in the short term. The  
services included in vehicle sale contracts that will be  
recognised as revenues in subsequent years represent  
only an insignificant portion of expected revenues.  
Accordingly, use has been made of the practical  
expedient contained in IFRS 15, permitting an entity  
not to disclose information on a quantitative basis  
due to the short-term nature of items and the lack of  
informational value of such disclosures.  
Expenses for impairment losses on receivables from  
sales financing recognised in the income statement  
for the financial year 2019 amounted to €ꢁ219 million  
(2018: €ꢁ142 million). Because the impairments are of  
minor importance compared to total Group cost of  
sales, a separate disclosure has not been provided in  
the income statement.  
1
34  
Group  
Financial  
Statements  
Comparative figures for the previous financial year  
have been adjusted to reflect the change in accounting  
policy for volume-dependent bonuses and for manu-  
facturer lessors (see note 6) as well as the change in  
the presentation of amortisation of initial direct costs  
for finance leases and receivables originated. These  
were previously recorded as cost of sales and are now  
reported as reductions of revenues (amount adjusted  
for the financial year 2018: €ꢁ460 million).  
10  
Other operating income and expenses  
Other operating income and expenses comprise the  
following items:  
Notes to the Group  
Financial Statements  
see  
note 6  
Accounting  
Principles and  
Policies  
in € million  
2019  
2018  
Notes to the  
Income Statement  
Exchange gains  
148  
433  
185  
216  
Income from the reversal of provisions  
Income from the reversal of impairment  
losses and write-downs  
Research and development expenditure was as follows:  
8
41  
15  
96  
Gains on the disposal of assets  
Sundry operating income  
Other operating income  
in € million  
2019  
2018  
401  
262  
774  
1,031  
Research and development expenses  
Amortisation  
5,952  
5,320  
–1,667  
–1,414  
Exchange losses  
–181  
–135  
–193  
New expenditure for capitalised  
Expense for additions to provisions  
–1,732  
development costs  
2,134  
6,419  
2,984  
Expense for impairment losses and  
write-downs  
Total research and development  
expenditure  
–173  
– 230  
– 48  
– 275  
– 651  
6,890  
Sundry operating expenses  
Other operating expenses  
– 2,316  
Other operating income and expenses  
–1,285  
123  
0
9
Selling and administrative expenses  
Selling and administrative expenses relate mainly to  
expenses for marketing, personnel and IT.  
Income from the reversal of and expenses for the  
recognition of impairment allowances and write-  
downs relate mainly to impairment allowances on  
receivables.  
in € million  
2019  
2018*  
Selling expenses  
5,656  
3,711  
5,848  
3,720  
Impairment losses recognised on receivables from  
contracts with customers amounted to €ꢁ48 million  
Administrative expenses  
Total selling and administrative  
expenses  
(
2018: €ꢁ47 million).  
9,367  
9,568  
*
Prior year’s figures adjusted.  
The expense for additions to provisions includes  
litigation and other legal risks. Income from the  
reversal of provisions includes income arising on  
the reassessment of risks from legal disputes.  
The previous year’s figure has been adjusted due to  
the change in accounting policy for volume-dependent  
bonuses (see note 6).  
see  
note 6  
In an ad hoc announcement dated 5 April 2019,  
the BMW Group reported that the EU Commission  
had informed it of a “Statement of Objections” in  
conjunction with ongoing antitrust proceedings.  
The EU Commission alleges that the manufacturers  
colluded with the aim of restricting innovation and  
competition with regard to certain exhaust treat-  
ment systems for diesel- and petrol-driven passenger  
vehicles. The allegation concerns selective catalytic  
reduction (SCR) systems and the use of petrol par-  
ticulate filters (OPF). The Commission’s preliminary  
view is that the conduct objected to may be in breach  
of EU competition rules. The Statement of Objections  
leads the BMW Group to conclude that it is probable  
(
“more likely than not”) that the EU Commission will  
issue a significant fine. The resulting requirement  
to recognise a provision increased other operating  
expenses by approximately €ꢁ1.4 billion in 2019.  
1
35  
The BMW Group has examined the objections and  
gained access to the documents in the EU Commission’s  
investigation file. In December 2019, the BMW Group  
submitted a detailed response to the EU Commission,  
which the latter will now examine before determining  
the next steps in the proceedings. Consequently, it  
is not yet possible to assess the ultimate financial  
impact definitively.  
12  
Other financial result  
in € million  
2019  
2018  
Income from investments in subsidiaries  
and participations  
387  
278  
9
thereof from subsidiaries:  
13  
Expenses from investments in subsidiaries  
and participations  
– 307  
80  
–122  
Result on investments  
156  
1
1
Net interest result  
Income (+) and expenses (–) from  
financial instruments  
–189  
–189  
–105  
Sundry other financial result  
Other financial result  
–105  
in € million  
2019  
2018  
–109  
51  
Other interest and similar income  
thereof from subsidiaries:  
179  
9
397  
8
Interest and similar income  
179  
397  
The result on investments includes revaluation effects  
relating to YOUR NOW. Further information is pro-  
Expense relating to interest impact  
on other long-term provisions  
see vided in note  
2 to the Group Financial Statements.  
– 226  
– 91  
note 2  
The figure reported for the previous year included  
a positive valuation effect relating to the DriveNow  
companies amounting to €ꢁ209 million.  
Net interest expense on the net defined  
benefit liability for pension plans  
– 41  
– 232  
– 4  
– 62  
– 233  
– 2  
Other interest and similar expenses  
thereof subsidiaries:  
Sundry other financial result comprises mainly in-  
come and expenses arising on the measurement of  
stand-alone derivatives and fair value hedge rela-  
tionships, as well as income and expenses from the  
measurement and sale of marketable securities and  
shares in investment funds.  
Interest and similar expenses  
– 499  
– 386  
Net interest result  
– 320  
11  
1
3
Income taxes  
Taxes on income of the BMW Group comprise the  
following:  
in € million  
2019  
2018*  
Current tax expense  
3,316  
–1,176  
–1,439  
2,218  
312  
Deferred tax expense (+) /  
deferred tax income (–)  
thereof relating to temporary  
differences  
596  
thereof relating to tax loss  
carryforwards and tax credits  
263  
– 284  
Income taxes  
2,140  
2,530  
*
Prior year’s figures adjusted.  
The previous year’s figures have been adjusted due to  
the change in accounting policy for volume-dependent  
see bonuses and for manufacturer lessors (see note 6).  
note 6  
1
36  
Group  
Financial  
Statements  
The tax expense was reduced by €ꢁ30 million (2018:  
ꢁ41 million) as a result of utilising tax loss carry-  
forwards, for which deferred tax assets had not  
previously been recognised and in conjunction with  
previously unrecognised tax credits and temporary  
differences.  
The difference between the expected tax expense  
based on the underlying tax rate for Germany and  
actual tax expense is explained in the following  
reconciliation:  
€
Notes to the Group  
Financial Statements  
Notes to the  
Income Statement  
in € million  
2019  
2018*  
The tax expense resulting from the change in the  
valuation allowance on deferred tax assets relating  
to tax losses available for carryforward and temporary  
Profit before tax  
7,118  
30.8 %  
2,192  
9,627  
30.8 %  
2,965  
Tax rate applicable in Germany  
Expected tax expense  
differences amounted to €ꢁ7 million (2018: €ꢁ24 million).  
Variances due to different tax rates  
Tax increases (+) / tax reductions (–) due to:  
Tax-exempt income  
– 373  
– 436  
Deferred taxes are determined on the basis of tax  
rates which are currently applicable or expected to  
apply in the relevant national jurisdictions when the  
amounts are recovered. After taking account of an  
average municipal trade tax multiplier rate (Hebesatz)  
– 314  
909  
5
–173  
314  
Non-deductible expenses  
Equity accounted  
–158  
of 428  
.
0
(
2018  
:
428  
.
0
), the underlying income tax rate  
Tax expense (+) / benefits (–)  
for prior years  
–162  
–17  
–16  
90  
for Germany was as follows:  
Effects from tax rate changes  
Other variances  
–100  
– 56  
in %  
2019  
2018  
Actual tax expense  
Effective tax rate  
2,140  
30.1 %  
2,530  
26.3 %  
Corporate tax rate  
15.0  
5.5  
15.0  
5.5  
*
Prior year’s figures adjusted.  
Solidarity surcharge  
Corporate tax rate including solidarity  
surcharge  
15.8  
15.0  
30.8  
15.8  
15.0  
30.8  
Municipal trade tax rate  
Tax increases as a result of non-deductible expenses  
and tax reductions due to tax-exempt income increased  
compared to one year earlier. The tax increases were  
due to provisions and impairment losses on invest-  
ments that are non-deductible for tax purposes as well  
as to non-deductible withholding tax.  
German income tax rate  
Deferred taxes for non-German entities are calculated  
on the basis of the relevant country-specific tax rates.  
These ranged in the financial year 2019 between 9.0%  
and 40.0% (2018: between 9.0% and 45.0%).  
Tax income relating to prior years resulted primarily  
from adjustments to income tax receivables and pro-  
visions for prior years, which were largely attributable  
to the successful conclusion of intergovernmental tax  
treaties covering the topic of transfer pricing.  
Other variances include various reconciling items.  
1
37  
The allocation of deferred tax assets and liabilities to  
balance sheet line items at 31 December is shown in  
the following table:  
Deferred tax assets  
Deferred tax liabilities  
in € million  
2019  
2018*  
2019  
2018*  
Intangible assets  
Property, plant and equipment  
Leased products  
Other investments  
Sundry other assets  
Tax loss carryforwards  
Capital Losses  
17  
53  
22  
171  
3,186  
780  
3,077  
359  
5,175  
20  
324  
489  
4,085  
22  
3
3
1,125  
306  
1,185  
578  
3,454  
–
3,254  
–
329  
313  
–
–
Provisions  
6,239  
3,544  
3,883  
5,323  
2,570  
3,226  
13,880  
42  
29  
Liabilities  
647  
620  
983  
13,517  
Eliminations  
1,539  
13,755  
1
5,823  
Valuation allowances on tax loss carryforwards  
–177  
– 329  
–185  
– 313  
–11,744  
1,638  
–
–
–
–
–
Valuation allowances on capital losses  
Netting  
–13,123  
2,194  
–13,123  
–11,744  
1,773  
135  
Deferred taxes  
Net  
632  
–
1,562  
*
Prior year’s figures adjusted.  
Tax loss carryforwards – all relating to foreign opera-  
tions – amounted to €ꢁ954 million (2018: €ꢁ2,045 mil-  
lion). This includes one tax loss carryforward  
amounting to €ꢁ519 million (2018: €ꢁ542 million), on  
Tax loss carryforwards amounting to €ꢁ553 million  
(2018: €ꢁ1,551 million) can be used indefinitely, while  
€ꢁ401 million (2018: €ꢁ494 million) expire after more  
than 3 years.  
which a valuation allowance of €ꢁ177 million (2018  
:
€
ꢁ
185 million) was recognised on the related deferred  
Capital losses available for carryforward in the United  
tax asset. The decrease in tax losses available for  
carryforward was mainly attributable to tax reform  
in the USA. For entities with tax losses available for  
carryforward, a net surplus of deferred tax assets  
over deferred tax liabilities is reported amounting  
to €ꢁ292 million (2018: €ꢁ234 million). Deferred tax  
assets are recognised on the basis of management’s  
assessment that there is material evidence that the  
entities will generate future taxable profits, against  
which deductible temporary differences can be offset.  
It is expected for instance that tax-allowable start-up  
losses incurred for the plant opened in 2019 in San  
Luis Potosí, Mexico, can be utilised against future  
planned income.  
Kingdom which do not relate to ongoing operations  
increased to €ꢁ1,938 million (2018: €ꢁ1,841 million) due  
to currency factors. As in previous years, deferred tax  
assets recognised on these tax losses – amounting to  
€ꢁ329 million (2018: €ꢁ313 million) – were fully written  
down since they can only be utilised against future  
capital gains.  
The deferred tax amount reported in the position  
eliminations relates mostly to the balance sheet line  
item Leased products.  
Deferred tax assets and deferred tax liabilities are  
netted for each relevant tax entity if they relate to the  
same tax authorities.  
1
38  
Group  
Financial  
Statements  
Deferred taxes recognised directly in equity amounted  
to €ꢁ2,015 million (2018: €ꢁ1,457 million).  
Notes to the Group  
Financial Statements  
1
in € million  
2019  
2018  
Notes to the  
Income Statement  
Deferred taxes at 1 January (assets (–) / liabilities (+))2  
122  
–1,176  
– 558  
–170  
– 376  
–12  
164  
312  
Deferred tax expense (+) / income (–) recognised through income statement  
Change in deferred taxes recognised directly in equity  
– 457  
– 677  
222  
thereof relating to fair value gains and losses on financial instruments and marketable securities recognised directly in equity  
thereof relating to the remeasurements of net liabilities for defined benefit pension plans  
thereof from currency translation  
– 2  
Exchange rate impact and other changes  
50  
116  
Deferred taxes at 31 December (assets (–) / liabilities (+))  
–1,562  
135  
1
Prior year’s figures adjusted.  
The figures to 1 January 2019 have been adjusted, based on the first-time application of IFRS 16, see note 6.  
2
Taxable temporary differences relating to invest-  
ments in subsidiaries, associated companies and  
joint ventures amount to €ꢁ21,215 million (2018:  
of income taxes on the grounds of proportionality.  
Deferred tax liabilities on expected dividends amount  
to €ꢁ64 million and relate primarily to dividends from  
foreign subsidiaries and joint ventures.  
€ꢁ17,051 million). No deferred taxes are recognised  
on these taxable temporary differences because the  
BMW Group is able to determine the timing of the  
reversal of the temporary differences and it is prob-  
able that the temporary differences will not reverse  
in the foreseeable future, in particular in view of  
the fact that there is no intention to distribute the  
profits, but rather to use them to maintain their  
substance and reinvest in the companies concerned.  
No computation was made of the potential impact  
The tax returns of BMW Group entities are checked  
regularly by German and foreign tax authorities.  
Taking account of numerous factors – including  
interpretations, commentaries and legal decisions  
relating to the various tax jurisdictions as well as  
past experience – adequate provision has been made,  
to the extent identifiable and probable, for potential  
future tax obligations.  
1
4
Earnings per share  
1
2
019  
2018  
Net profit attributable to the shareholders of BMW AG  
€ million  
4,914.5  
6,974.4  
Profit attributable to common stock  
Profit attributable to preferred stock  
€ million  
€ million  
4,494.4  
420.1  
6,383.6  
590.8  
Average number of common stock shares in circulation  
Average number of preferred stock shares in circulation  
number  
number  
601,995,196  
56,122,857  
601,995,196  
55,605,380  
Basic /diluted earnings per share of common stock  
Basic /diluted earnings per share of preferred stock  
€
€
7.47  
7.49  
10.60  
10.62  
Dividend per share of common stock  
Dividend per share of preferred stock  
€
€
2.502  
2.522  
3.50  
3.52  
1
Prior year’s figures adjusted.  
Proposal by management.  
2
1
39  
Earnings per share of preferred stock are computed  
on the basis of the number of preferred stock shares  
entitled to receive a dividend in each of the relevant  
financial years. As in the previous year, diluted earn-  
ings per share correspond to basic earnings per share.  
16  
Leases  
(a) As ꢅessee  
In terms of accounting for leases as a lessee, the fol-  
lowing amounts are included in the income statement  
for the financial year 2019:  
Basicꢁ/ꢁdiluted earnings per share from continuing  
operations amounted to €ꢁ7.40 per share of common  
stock and €ꢁ7.42 per share of preferred stock.  
in € million  
2019  
Expenses for leases of low-value assets and  
short-term leases  
– 94  
– 3  
The previous year’s figures have been adjusted due to  
the change in accounting policy for volume-dependent  
bonuses and for manufacturer lessors (see note 6).  
Expenses relating to variable lease payments  
not included in the measurement of lease liabilities  
see  
note 6  
Interest expenses arising on the measurement of  
lease liabilities  
– 54  
1
5
Most of the expenses for leases for low-value assets  
and short-term leases relate to low-value assets.  
Personnel expenses  
The income statement includes personnel expenses  
as follows:  
The BMW Group is party to leases at the end of the  
reporting period which have not yet commenced.  
These leases could give rise to future cash outflows  
amounting to €ꢁ42 million.  
in € million  
2019  
2018  
Wages and salaries  
10,370  
1,133  
948  
10,249  
1,387  
843  
Total cash outflows for leases in 2019 amount to  
Pension and welfare expenses  
Social insurance expenses  
Personnel expenses  
€
ꢁ591 million.  
12,451  
12,479  
Information on right-of-use assets and lease liabilities  
and further explanatory comments are provided in  
see  
notes 4, 6, 20,  
2 and 35  
note 4 (Accounting policies, assumptions, judgments  
Personnel expenses include €ꢁ72 million (2018:  
45 million) of costs relating to workforce measures.  
The total pension expense for defined contribution  
and estimates), note 6 (Changes in accounting policy  
for leases), note 20 (Analysis of changes in Group  
tangible, intangible and investment assets in 2019),  
note 22 (Property, plant and equipment (including  
right-of-use assets arising from leases) and note 35  
(Financial liabilities).  
2
€
ꢁ
plans of the BMW Group amounted to €ꢁ148 million  
(
2018: €ꢁ122 million). Employer contributions paid to  
state pension insurance schemes totalled €ꢁ667 mil-  
lion (2018: €ꢁ645 million).  
(
ꢇ) As ꢅessor  
The average number of employees during the year was:  
in € million  
2019  
2
019  
2018  
Income from variable lease payments for operating leases  
Income from variable lease payments for finance leases  
Financial income on the net investment in finance leases  
171  
19  
Employees  
125,893  
123,337  
885  
Apprentices and students gaining work  
experience  
7,389  
8,228  
Selling profit or loss on the sale of vehicles previously  
leased to retail customers under finance leases  
1,389  
Average number of employees  
133,282  
131,565  
Variable lease payments are based on distance driven.  
The agreements have, in part, extension and purchase  
options.  
The number of employees at the end of the reporting  
period is disclosed in the Combined Management  
Report.  
1
40  
Group  
Financial  
Statements  
17  
and the PwC network of audit firms amounted to  
€ꢁ19 million (2018: €ꢁ24 million, KPMG International)  
and consists of the following:  
Fee expense for the Group auditor  
The fee expense pursuant to §314 (1) no.9 HGB recog-  
nised in the financial year 2019 for the Group auditor  
Notes to the Group  
Financial Statements  
Notes to the  
Income Statement  
Notes to the  
Statement of  
Comprehensive  
Income  
PwC International  
2018: KPMG International)  
thereof: PwC GmbH  
(2018: KPMG AG)  
(
in € million  
2019  
2018  
2019  
2018  
Audit of financial statements  
Other attestation services  
Tax advisory services  
Other services  
14  
1
17  
3
4
1
–
2
7
5
2
–
–
7
1
2
3
2
Fee expense  
19  
24  
Services provided during the financial year 2019 by  
the Group auditor PricewaterhouseCoopers GmbH  
Wirtschaftsprüfungsgesellschaft, Frankfurt am Main,  
Munich branch, on behalf of BMW AG and sub-  
sidiaries under its control relate to the audit of the  
financial statements, other attestation services, tax  
advisory services and other services.  
18  
Government grants and government assistance  
Income from asset-related and performance-related  
grants, amounting to €ꢁ41 million (2018: €ꢁ29 million)  
and €ꢁ199 million (2018: €ꢁ83 million) respectively, was  
recognised in the income statement in 2019.  
These amounts relate mainly to public sector grants  
aimed at the promotion of regional structures as well  
as to subsidies received for plant expansions.  
The audit of financial statements comprises mainly  
the audit of the Group Financial Statements and the  
separate financial statements of BMW AG and its  
subsidiaries, and, in accordance with current require-  
ments, all work related thereto, including the review  
of the Interim Group Financial Statements.  
Other attestation services include mainly project-  
related audits, comfort letters and statutorily  
prescribed, contractually agreed or voluntarily com-  
missioned attestation work.  
Other services mainly include consulting services  
relating to production processes.  
1
41  
NOTES TO THE STATEMENT  
OF COMPREHENSIVE  
INCOME  
1
9
Disclosures relating to the statement of  
comprehensive income  
Other comprehensive income for the period after tax  
comprises the following:  
in € million  
2019  
2018  
Remeasurement of the net defined benefit liability for pension plans  
Deferred taxes  
–1,254  
387  
935  
– 217  
718  
Items not expected to be reclassified to the income statement in the future  
– 867  
Marketable securities (at fair value through other comprehensive income)  
thereof gains / losses arising in the period under report  
thereof reclassifications to the income statement  
Derivative financial instruments  
42  
59  
– 30  
–1  
–17  
– 29  
– 706  
– 229  
– 477  
125  
– 611  
736  
–1,381  
– 333  
–1,048  
– 620  
– 973  
353  
thereof gains / losses arising in the period under report  
thereof reclassifications to the income statement  
Costs of hedging  
thereof gains / losses arising in the period under report  
thereof reclassifications to the income statement  
Other comprehensive income from equity accounted investments  
Deferred taxes  
– 3  
–157  
674  
171  
544  
173  
Currency translation foreign operations  
192  
Items that can be reclassified to the income statement in the future  
–1,322  
Other comprehensive income for the period after tax  
– 694  
– 604  
Deferred taxes on components of other comprehen-  
sive income are as follows:  
2
019  
2018  
Deferred  
Before  
Deferred  
After  
Before  
After  
in € million  
tax  
taxes  
tax  
tax  
taxes  
tax  
Remeasurement of the net defined benefit liability for pension plans  
Marketable securities (at fair value through other comprehensive income)  
Derivative financial instruments  
–1,254  
42  
387  
–12  
211  
– 34  
6
– 867  
30  
935  
– 30  
– 217  
18  
718  
–12  
– 706  
125  
– 495  
91  
–1,381  
– 620  
–157  
436  
187  
33  
– 945  
– 433  
–124  
192  
Costs of hedging  
Other comprehensive income from equity accounted investments  
Currency translation foreign operations  
– 3  
3
544  
–
544  
– 694  
192  
–
Other comprehensive income  
–1,252  
558  
–1,061  
457  
– 604  
Other comprehensive income relating to equity ac-  
counted investments is reported in the Group  
Statement of Changes in Equity within currency trans-  
lation differences with a positive amount of €ꢁ22 mil-  
lion (2018: negative amount of €ꢁ24 million), within  
derivative financial instruments with a negative amount  
of €ꢁ56 million (2018: positive amount of €ꢁ39 million)  
and costs of hedging with a positive amount of €ꢁ37 mil-  
lion (2018: negative amount of €ꢁ139 million).  
1
42  
Group  
Financial  
Statements  
NOTES TO THE BALANCE SHEET  
Notes to the Group  
Financial Statements  
Notes to the  
Balance Sheet  
2
0
Analysis of changes in Group tangible,  
intangible and investment assets 2019  
Acquisition and manufacturing cost  
Reclassi-  
Translation  
differences  
in € million  
1. 1. 2019  
Additions  
fications  
Disposals  
31.12. 2019  
Development costs  
Goodwill  
14,990  
385  
–
–
2,134  
–
–
–
–
–
1,733  
–
15,391  
385  
Other intangible assets  
Intangible assets  
1,798  
17,173  
11  
11  
448  
182  
2,075  
17,851  
2,582  
1,915  
Land, titles to land, buildings, including  
buildings on third party land  
14,023  
115  
1,013  
397  
99  
15,449  
thereof right-of-use assets  
from leases  
2,387  
22  
751  
– 8  
45  
3,107  
Plant and machinery  
38,190  
224  
2,581  
1,253  
2,187  
40,061  
thereof right-of-use assets  
from leases  
1
–
75  
6
–
82  
Other facilities, factory and office equipment  
3,061  
23  
311  
63  
286  
3,172  
thereof right-of-use assets  
from leases  
71  
1
33  
1
2
104  
Advance payments made and  
construction in progress  
2,392  
18  
1,297  
–1,713  
3
1,991  
Property, plant and equipment  
57,666  
380  
5,202  
–
2,575  
60,673  
Leased products  
45,851  
2,624  
619  
–
20,513  
2,876  
–
–
17,041  
2,061  
49,942  
3,439  
Investments accounted for using  
the equity method  
Investments in non-consolidated  
subsidiaries  
444  
938  
2
4
–
6
139  
86  
–
–
–
–
293  
28  
292  
1,000  
–
Participations  
Non-current marketable securities  
Other investments  
28  
–
28  
1,410  
225  
349  
1,292  
1
Including €71 million recognised through the income statement.  
Carrying amounts at 1.1.2019 (from the first-time application of IFRS 16).  
Including assets under construction of €1,555 million.  
2
3
1
43  
Depreciation and amortisation  
Reclassi-  
Carrying amount  
Translation  
differences  
Value  
1
1
. 1. 2019  
Current year  
fications  
adjustments  
Disposals  
31.12. 2019  
31.12. 2019  
31. 12. 2018  
5
1
,014  
5
–
–
4
4
1,667  
–
–
–
–
–
–
–
–
–
1,733  
–
4,948  
5
10,443  
380  
9,976  
380  
Development costs  
Goodwill  
,183  
148  
166  
1,169  
6,122  
906  
615  
Other intangible assets  
Intangible assets  
6
,202  
1,815  
1,899  
11,729  
10,971  
Land, titles to land, buildings, including  
buildings on third party land  
5
,310  
–
44  
794  
2
–
46  
6,104  
9,345  
6,420  
thereof right-of-use assets  
1
430  
–
–
–
5
426  
2,681  
2,3872  
10,078  
from leases  
2
8,111  
158  
3,086  
– 6  
2,172  
29,177  
10,884  
Plant and machinery  
thereof right-of-use assets  
–
–
6
–
4
–
–
–
6
76  
12  
from leases  
2
,082  
–
14  
322  
275  
2,147  
1,025  
908 Other facilities, factory and office equipment  
thereof right-of-use assets  
–
31  
–
–
–
31  
73  
712  
from leases  
Advance payments made and  
construction in progress  
–
–
–
–
–
–
–
1,9913  
23,245  
2,395  
3
5,503  
216  
4,202  
–
–
2,493  
37,428  
19,801  
38,259  
Property, plant and equipment  
7
,592  
–
95  
–
4,732  
–
–
–
–
5,086  
–
7,333  
240  
42,609  
3,199  
Leased products  
Investments accounted for using  
the equity method  
240  
2,624  
Investments in non-consolidated  
1
4
91  
80  
–
–
–1  
–
–
–
–
–
–
–
–
–
– 322  
11  
– 219  
–11  
–
88  
501  
–
204  
499  
–
253  
458  
28  
subsidiaries  
Participations  
Non-current marketable securities  
Other investments  
–
6
71  
–1  
– 311  
– 230  
589  
703  
739  
1
44  
Group  
Financial  
Statements  
Analysis of changes in Group tangible, intangible  
and investment assets 2018  
Acquisition and manufacturing cost  
Reclassi-  
Notes to the Group  
Financial Statements  
Translation  
differences  
Notes to the  
in € million  
1. 1. 2018  
Additions  
fications  
Disposals  
31.12. 2018  
Balance Sheet  
Development costs  
Goodwill  
12,965  
385  
–
–
2,984  
–
–
–
–
–
959  
–
14,990  
385  
Other intangible assets  
Intangible assets  
1,750  
15,100  
12  
12  
161  
125  
1,798  
17,173  
3,145  
1,084  
Land, titles to land, buildings, including  
buildings on third party land  
11,088  
36,833  
2,799  
75  
201  
20  
277  
2,888  
294  
372  
1,119  
60  
82  
2,852  
183  
11,730  
38,189  
2,990  
Plant and machinery  
Other facilities, factory and office equipment  
Advance payments made and  
construction in progress  
2,525  
18  
1,409  
–1,551  
6
2,395  
Property, plant and equipment  
53,245  
314  
4,868  
–
3,123  
55,304  
Leased products2  
43,634  
2,769  
735  
–
18,580  
547  
–
–
17,098  
692  
45,851  
2,624  
Investments accounted for using  
the equity method  
Investments in non-consolidated  
subsidiaries  
438  
820  
3
9
8
115  
–
–
–
–
–
5
6
444  
938  
Participations  
Non-current marketable securities  
Other investments  
28  
–
–
28  
1,286  
12  
123  
11  
1,410  
1
Including €74 million recognised through the income statement.  
Prior year’s figures adjusted due to the change in the presentation of vehicles coming out of leases, as well as initial direct costs.  
Including assets under construction of €2,017 million.  
2
3
1
45  
Depreciation and amortisation  
Reclassi-  
Carrying amount  
Translation  
differences  
Value  
1
1
. 1. 2018  
Current year  
fications  
adjustments  
Disposals  
31.12. 2018  
31.12. 2018  
31. 12. 2017  
4
1
,556  
5
–
–
5
5
1,414  
–
–
–
–
–
–
–
–
–
956  
–
5,014  
5
9,976  
380  
8,409  
380  
Development costs  
Goodwill  
,075  
195  
92  
1,183  
6,202  
615  
675  
Other intangible assets  
Intangible assets  
5
,636  
1,609  
1,048  
10,971  
9,464  
Land, titles to land, buildings, including  
buildings on third party land  
4
,966  
29  
154  
17  
348  
2,886  
270  
–
–
–
–
–
–
33  
2,767  
175  
5,310  
28,111  
2,082  
6,420  
10,078  
908  
6,122  
8,995  
2
7,838  
Plant and machinery  
1
,970  
–
829 Other facilities, factory and office equipment  
Advance payments made and  
–
–
–
–
–
–
2,3953  
19,801  
2,525  
construction in progress  
3
4,774  
200  
3,504  
–
–
2,975  
35,503  
18,471  
Property, plant and equipment  
7
,697  
–
114  
–
3,488  
–
–
–
–
–
3,707  
–
7,592  
–
38,259  
2,624  
36,257  
Leased products2  
Investments accounted for using  
the equity method  
2,769  
Investments in non-consolidated  
1
4
89  
08  
2
–1  
–
–
–
–
–
–
–
–
–
–
73  
1
–
–
–
–
191  
480  
–
253  
458  
28  
249  
412  
29  
subsidiaries  
Participations  
Non-current marketable securities  
Other investments  
–
1
5
96  
1
74  
671  
739  
690  
1
46  
Group  
Financial  
Statements  
21  
23  
Intangible assets  
Leased products  
Intangible assets mainly comprise capitalised devel-  
opment costs on vehicle, module and architecture  
projects as well as subsidies for tool costs, licences,  
purchased development projects, software and pur-  
chased customer lists.  
Minimum lease payments of non-cancellable oper-  
ating leases amounting to €ꢁ20,894 million (2018:  
€ꢁ18,880 million) fall due as follows:  
Notes to the Group  
Financial Statements  
Notes to the  
Balance Sheet  
in € million  
31.12. 2019  
31.12. 2018  
Other intangible assets include a brand-name right  
amounting to €ꢁ43 million (2018: €ꢁ41 million) which  
is allocated to the Automotive segment and is not  
subject to scheduled amortisation since its useful life  
is deemed to be indefinite. The asset is subject to a  
limited right of ownership. The €ꢁ2 million increase  
in the carrying amount is entirely due to currency  
factors. Intangible assets also include goodwill of  
within one year  
9,804  
6,489  
3,278  
1,073  
225  
8,980  
between one and two years  
between two and three years  
between three and four years  
between four and five years  
between one and five years  
later than five years  
–
–
–
–
–
9,863  
37  
25  
€
ꢁ33 million (2018: €ꢁ33 million) allocated to the Auto-  
motive cash-generating unit (CGU) and goodwill of  
ꢁ347 million (2018: €ꢁ347 million) allocated to the  
Minimum lease payments  
20,894  
18,880  
€
Financial Services CGU.  
Impairment losses amounting to €ꢁ198 million (2018:  
ꢁ235 million) were recognised on leased products in  
€
As in the previous year, there was no requirement to  
recognise impairment losses or reversals of impair-  
ment losses on intangible assets in 2019.  
2019 as a consequence of changes in residual value  
expectations. Income from the reversal of impairment  
losses amounted to €ꢁ74 million (2018: €ꢁ92 million).  
As in the previous year, no financing costs were recog-  
The carrying amount of leased products was adjusted  
due to changes in presentation of initial direct costs  
nised as a cost component of intangible assets in 2019  
.
(
previously reported as other assets) and vehicles com-  
ing out of leases (now reported as part of inventories)  
adjustment effect at 31 December 2018: decrease of  
€ꢁ313 million).  
(
2
2
Property, plant and equipment  
including right-of-use assets arising from leases)  
(
No impairment losses were recognised in 2019, as in  
the previous year.  
As in the previous year, no financing costs were  
recognised as a cost component of property, plant  
and equipment in 2019.  
Right-of-use assets arising from leases of land and  
buildings relate primarily to logistics and office  
premises and, to a lesser extent, to selling and pro-  
duction premises. In order to secure these premises  
and, in the interests of flexibility, the property rental  
agreements concerned often contain extension and  
termination options.  
1
47  
2
4
Together with Audi AG, Daimler AG and other com-  
panies, the BMW Group holds shares in THERE.  
HERE International B.ꢁV. (HERE) is an associated  
company of THERE. HERE’s digital maps are laying  
the foundations for the next generation of mobility  
and location-based services, providing the basis for  
new assistance systems and, ultimately, fully auto-  
mated driving.  
Investments accounted for using the equity method  
Investments accounted for using the equity method  
comprise the joint venture BMW Brilliance Automotive  
Ltd. (BMW Brilliance), the YOUR NOW companies,  
the joint venture IONITY Holding GmbH & Co.KG  
(
IONITY) and the interest in the associated company  
THERE Holding B.ꢁV. (THERE).  
BMW Brilliance produces BMW brand models for the  
Chinese market and also has engine manufacturing  
facilities, which supply the joint venture’s two plants  
with petrol engines.  
Capital increases were made at the level of THERE  
in January 2019, with BMWAG participating with an  
amount of €ꢁ69 million. Since then, BMWAG’s stake  
in THERE amounts to 29.7%.  
The BMW Group intends to increase its stake in  
the BMW Brilliance joint venture from 50% to 75%.  
On 11 October 2018, the BMW Group signed an  
agreement with its joint venture partner, a wholly  
owned subsidiary of Brilliance China Automotive  
In December 2019, it was announced that Mitsubishi  
Corporation (MC) and Nippon Telegraph and Tele-  
phone Corporation (NTT) will jointly acquire a 30 %  
stake in HERE. The transaction is subject to the  
approval of the antitrust authorities and is expected  
to be closed during the first half of 2020.  
Holdings Ltd. (CBA), to acquire an additional 25  
shareholding in BMW Brilliance. The two partners  
agreed on a purchase price of an equivalent of €ꢁ bil-  
%
3
.
6
lion. The contractual term of the joint venture, which  
would currently expire in 2028, is to be extended to  
2
040 as part of the agreement. The prerequisite for  
the extension is the acquisition of the additional  
shares as agreed. The agreement was approved at  
the CBA shareholders’ meeting on 18 January 2019  
and remains subject to the approval of the relevant  
authorities. The transaction is scheduled to be closed  
in 2022. The closing will result in BMW Brilliance  
being fully consolidated in the BMW Group Financial  
Statements and is expected to result in the recognition  
of a significant valuation gain in the financial year in  
which the transaction closes.  
With effect from 31 January 2019, the BMW Group  
completed the merger of several mobility services  
companies under the name YOUR NOW. Further  
information is provided in note  
Financial Statements.  
2
to the Group  
see  
note 2  
Together with Daimler AG, Stuttgart (Daimler AG),  
the Ford Motor Company and the Volkswagen Group,  
the BMW Group operates the joint venture IONITY  
Holding GmbH & Co. KG, whereby each of the par-  
ties has an equal shareholding. IONITY’s business  
model envisages the construction and operation of  
high-performance charging stations for battery electric  
vehicles in Europe.  
1
48  
Group  
Financial  
Statements  
Financial information relating to equity accounted  
investments is summarised in the following tables:  
Notes to the Group  
Financial Statements  
BMW Brilliance  
THERE  
2019  
YOUR NOW  
2019  
DriveNow  
2019  
IONITY  
2019  
Notes to the  
Balance Sheet  
in € million  
2019  
2018  
2018  
2018  
2018  
2018  
ꢄISClꢈSꢂRꢀS RꢀlAꢁIꢃG ꢁꢈ  
ꢁ
ꢉꢀ bAlAꢃCꢀ Sꢉꢀꢀꢁ  
Non-current assets  
7,248  
7,381  
2,937  
5,293  
87  
6,714  
6,570  
2,937  
5,926  
71  
1,131  
1,763  
1,643  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
175  
70  
50  
205  
–
48  
110  
102  
149  
–
Current assets  
467  
2
1,116  
818  
thereof cash and cash equivalents  
Equity  
1
2
1,597  
1,764  
2,106  
112  
184  
469  
39  
Non-current financial liabilities  
Non-current provisions and liabilities  
Current provisions and liabilities  
thereof current financial liabilities  
–
–
1
–
–
–
1
–
1,271  
7,978  
887  
1,193  
6,094  
81  
5
3
30  
–
6
–
RꢀCꢈꢃCIlIAꢁIꢈꢃ ꢈF  
AGGRꢀGAꢁꢀꢄ FIꢃAꢃCIAl  
IꢃFꢈRMAꢁIꢈꢃ  
Assets  
14,629  
9,337  
5,292  
2,646  
– 960  
13,284  
7,358  
5,926  
2,963  
– 898  
2,065  
1,598  
1
1,765  
1
2,759  
653  
2,106  
987  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
245  
40  
205  
51  
–
158  
9
Provisions and liabilities  
Net assets  
1,597  
475  
–
1,764  
522  
–
149  
37  
–
Group’s interest in net assets  
Eliminations  
Carrying amount  
1,686  
475  
522  
987  
51  
37  
BMW Brilliance  
THERE  
YOUR NOW  
DriveNow  
IONITY  
in € million  
2019  
2018  
2019  
2018  
2019  
2018  
2019  
2018  
2019  
2018  
ꢄISClꢈSꢂRꢀS RꢀlAꢁIꢃG ꢁꢈ  
ꢁ
ꢉꢀ IꢃCꢈMꢀ SꢁAꢁꢀMꢀꢃꢁ  
Revenues  
21,910  
651  
17,766  
636  
–
–
–
424  
150  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
14  
–
1
–
–
1
Scheduled depreciation  
Profit / loss before financial result  
Interest income  
–
2,374  
84  
1,922  
62  
–1  
–1  
–1,349  
–
– 6  
–
– 29  
–
–18  
–
–
–
–
Interest expense  
5
–
–
23  
–
1
–
Income taxes  
654  
535  
–
–
28  
–
5
3
Profit / loss after tax  
1,947  
1,947  
–14  
1,561  
1,561  
– 250  
1,311  
384  
– 383  
– 383  
1
– 337  
– 337  
– 7  
– 344  
–
–1,805  
–1,805  
–
– 6  
–
– 24  
– 24  
–
–15  
–
thereof from continuing operations  
Other comprehensive income  
Total comprehensive income  
Group dividend income*  
–
–
1,933  
1,284  
– 382  
–
–1,805  
–
– 6  
–
– 24  
–
–15  
–
*
Including dividends received in the amount of €643 million (2018: €384 million).  
1
49  
2
5
The figures for the previous financial year have been  
restated for the change in accounting policy for  
see manufacturer lessors (see note 6), as well as for  
Receivables from sales financing  
Receivables from sales financing comprise the fol-  
lowing:  
note 6  
the change in the presentation of initial direct costs  
previously reported within other assets (adjustment  
effect at December 31, 2018: increase of €ꢁ700 mil-  
in € million  
31.12. 2019  
31.12. 2018*  
lion) and of residual value risk provisions, previously  
reported within other provisions (adjustment effect at  
Credit financing for retail customers  
and dealerships  
3
1 December 2018: decrease of €ꢁ441 million).  
71,104  
21,333  
66,959  
20,054  
Finance lease receivables  
Impairment allowances on receivables from sales  
financing in accordance with IFRS 9, which only arise  
within the Financial Services segment, developed  
as follows:  
Receivables from  
sales financing  
92,437  
87,013  
*
Prior year’s figures adjusted.  
Stage 1  
Stage 2  
General  
Stage 3  
in € million  
Simplified  
Total  
Impairment allowances at 1 January 2019  
Reclassification to Stage 1  
Reclassification to Stage 2  
Reclassification to Stage 3  
Derecognition and origination of receivables  
Write-off of receivables  
363  
2
175  
–13  
107  
– 24  
– 26  
–17  
31  
12  
–
482  
–1  
1,032  
–12  
74  
–17  
– 6  
17  
–
–16  
175  
–15  
–1  
1
144  
– 23  
–152  
– 8  
– 2  
– 40  
44  
–
–133  
1
Changes in risk parameters  
Other changes  
–
– 24  
209  
–
24  
44  
Impairment allowances at 31 December 2019  
361  
12  
517  
1,099  
Stage 1  
Stage 2  
Stage 3  
in € million  
General  
Simplified  
Total  
Impairment allowances at 1 January 2018  
Reclassification to Stage 1  
365  
3
192  
– 20  
79  
12  
–
450  
– 4  
1,019  
– 21  
51  
Reclassification to Stage 2  
– 7  
– 4  
59  
–
– 21  
138  
–17  
–105  
26  
Reclassification to Stage 3  
– 23  
–10  
– 20  
1
–1  
1
110  
33  
Derecognition and origination of receivables  
Write-off of receivables  
– 3  
4
–1  
–1  
2
–129  
30  
Changes in risk parameters  
Other changes  
– 54  
363  
– 24  
175  
15  
– 61  
1,032  
Impairment allowances at 31 December 2018  
12  
482  
Impairment allowances include €ꢁ74 million (2018:  
ꢁ113 million) on credit-impaired receivables relating  
€
to finance leases.  
The estimated fair value of vehicles held as collateral  
for credit-impaired receivables at the end of the report  
ing period totalled €ꢁ541 million (2018: €ꢁ506 million).  
The carrying amount of assets held as collateral and  
reclaimed as a result of payment default amounted to  
-
€
ꢁ39 million (2018: €ꢁ42 million).  
1
50  
Group  
Financial  
Statements  
Finance leases are analysed as follows:  
Allowances for impairment and credit risk  
The carrying amounts of receivables relating to the  
credit card business comprises the following:  
Notes to the Group  
Financial Statements  
in € million  
31.12. 2019  
31.12. 2018  
Notes to the  
Balance Sheet  
Gross investment in finance leases  
due within one year  
in € million  
31.12. 2019  
31.12. 2018  
6,991  
6,811  
5,462  
3,775  
529  
6,811  
Gross carrying amount  
Allowance for impairment  
Net carrying amount  
–
–
–
262  
–18  
244  
due between one and two years  
due between two and three years  
due between three and four years  
due between four and five years  
due between one and five years  
due later than five years  
–
–
–
–
–
15,480  
24  
32  
2
7
2
3,600  
22,315  
Income tax assets  
Net investment in finance leases  
due within one year  
Income tax assets totalling €ꢁ  
see €ꢁ1,378 million, adjusted see note 6  
1
,
209 million (2018:  
) include claims  
6,256  
6,225  
4,968  
3,421  
433  
6,123  
note 6  
amounting to €ꢁ186 million (2018: €ꢁ222 million),  
which are expected to be settled after more than one  
year. Claims may be settled earlier than this depend-  
ing on the timing of the underlying proceedings.  
due between one and two years  
due between two and three years  
due between three and four years  
due between four and five years  
due between one and five years  
due later than five years  
–
–
–
–
–
13,908  
23  
30  
2
1,333  
20,054  
2
8
Other assets  
Other assets comprise:  
Unrealised interest income  
2,267  
2,261  
in € million  
31.12. 2019  
4,807  
31.12. 2018*  
The carrying amount of the net investment in finance  
leases remained largely unchanged over the reporting  
period.  
Return right assets for future  
leased products  
3,779  
Receivables from companies in which  
an investment is held  
2,641  
1,935  
1,086  
413  
1,916  
1,747  
933  
Other taxes  
2
6
Expected reimbursement claims  
Collateral assets  
Financial assets  
293  
Financial assets comprise:  
Prepaid expenses  
396  
460  
Receivables from subsidiaries  
Sundry other assets  
Other assets  
308  
295  
in € million  
31.12. 2019  
31.12. 2018  
1,353  
12,939  
1,173  
10,596  
Marketable securities and  
investment funds  
5,391  
1,620  
54  
5,316  
1,977  
20  
thereof non-current  
1,325  
847  
Derivative instruments  
Loans to third parties  
Credit card receivables  
Other  
thereof current  
11,614  
9,749  
*
Prior year’s figures adjusted.  
–
244  
260  
7,325  
128  
Financial assets  
7,685  
From the financial year 2019 onward, certain advance  
payments to suppliers for raw materials, supplies and  
finished goods amounting to €ꢁ536 million, which were  
previously reported within other assets (line item  
Prepaid expenses) have now been reclassified to inven-  
tories. The previous year’s figures have been adjusted  
accordingly (adjustment effect at 31 December 2018:  
decrease of €ꢁ609 million). Furthermore, the compar-  
ative figures for the previous financial year have been  
thereof non-current  
1,370  
5,955  
1,010  
6,675  
thereof current  
In June 2019, the Financial Services segment sold a  
credit card portfolio based in the USA and amounting  
to €ꢁ216 million for strategic reasons.  
1
51  
adjusted to reflect the change in accounting policy  
for volume-dependent bonuses and for manufacturer  
lessors (see note 6) as well as the change in the pre-  
sentation of deferred initial direct costs for operating  
and finance leases and receivables originated. These  
items are now reported within leased products and  
receivables from sales financing (adjustment effect at  
In addition, the previous year’s figures have been  
adjusted due to the change in the presentation of  
vehicles coming out of leases that were previously  
reported within leased products (adjustment effect  
at 31 December 2018: increase of €ꢁ592 million).  
see  
note 6  
3
1 December 2018: decrease of €ꢁ939 million).  
3
0
Collateral assets comprise mainly customary collat-  
eral (banking deposits) in connection with the sale  
of receivables.  
Trade receivables  
Trade receivables comprise the following:  
in € million  
31.12. 2019  
2,590  
31.12. 2018  
Gross carrying amount  
2,600  
2
9
Allowances for impairment of stage 2 –  
simplified procedure  
Inventories  
– 26  
– 46  
– 20  
– 34  
Inventories comprise the following:  
Allowances for impairment of stage 3  
Net carrying amount  
2,518  
2,546  
in € million  
31.12. 2019  
31.12. 2018*  
Finished goods and goods for resale  
Work in progress, unbilled contracts  
Raw materials and supplies  
11,491  
1,286  
1,674  
10,548  
1,208  
1,247  
Impairment allowances on trade receivables in accor-  
dance with IFRS 9 developed as follows:  
Vehicles held for sale in the  
financial services business  
808  
632  
609  
636  
in € million  
2019  
2018  
Advance payments to suppliers  
Inventories  
15,891  
14,248  
Balance at 1 January  
Allocated (+)  
54  
30  
– 7  
– 7  
2
60  
21  
*
Prior year’s figures adjusted.  
Reversed (–)  
– 26  
–1  
–
Utilised  
Exchange rate impact and other changes  
Balance at 31 December  
Out of the total amount of recognised for inventories  
at 31 December 2019, inventories measured at net  
realisable value amounted to €ꢁ973 million (2018:  
72  
54  
€
ꢁ
680 million). Write-downs to net realisable value  
in the financial year 2019 amounted to €ꢁ126 million  
2018: €ꢁ54 million), while reversals of write-downs  
In the case of trade receivables, collateral is generally  
held in the form of vehicle documents and bank guar-  
antees so that the risk of bad debt loss is very limited.  
(
amounted to €ꢁ22 million (2018: €ꢁ22 million).  
The expense recorded in conjunction with inven-  
tories during the financial year 2019 amounted to  
€ꢁ62,633 million (2018: €ꢁ58,079 million). At 31 Decem-  
ber 2019, the carrying amounts of inventories expected  
to be realised after more than twelve months amount  
to €ꢁ445 million (2018: €ꢁ452 million).  
Expenses for impairment losses and income from the  
reversal of impairment losses is not significant and  
is therefore not reported separately in the income  
statement.  
From the financial year 2019 onward, certain advance  
payments to suppliers for raw materials, supplies and  
finished goods amounting to €ꢁ536 million, which were  
previously reported within other assets, have been  
reclassified to inventories. The previous year’s figures  
have been adjusted accordingly (adjustment effect at  
3
1 December 2018: increase of €ꢁ609 million).  
1
52  
Group  
Financial  
Statements  
31  
Equity  
ꢃumꢇer of shares issued  
Notes to the Group  
Financial Statements  
Preferred stock  
019  
Common stock  
2019  
Notes to the  
Balance Sheet  
2
2018  
2018  
Shares issued / in circulation at 1 January  
56,126,904  
744,447  
55,605,404  
521,524  
24  
601,995,196  
601,995,196  
Shares issued in conjunction with Employee Share Programme  
Less: shares repurchased and re-issued  
–
–
–
–
4,047  
Shares issued / in circulation at 31 December  
56,867,304  
56,126,904  
601,995,196  
601,995,196  
All Company stock is issued to bearer and each share  
has a par value of €ꢁ1.00. Preferred stock, to which no  
voting rights are attached, bear an additional dividend  
of €ꢁ0.02 per share.  
Capitaꢅ reserves  
Capital reserves include premiums arising from the  
issue of shares and totalled €ꢁ2,161 million (2018:  
€ꢁ2,118 million). The change amounting to €ꢁ43 million  
related to the share capital increase in conjunction  
with the issue of shares of preferred stock to employees.  
In 2019, a total of 744,447 shares of preferred stock  
was sold to employees at a reduced price of €ꢁ46.10 per  
share in conjunction with the Company’s Employee  
Share Programme. These shares are entitled to receive  
dividends for the first time with effect from the finan-  
cial year 2020.  
Revenue reserves  
Revenue reserves comprise the non-distributed earn-  
ings of companies consolidated in the Group Financial  
Statements. In addition, remeasurements of the net  
defined benefit obligation for pension plans are also  
presented in revenue reserves.  
Issued share capital increased by €ꢁ  
result of the issue to employees of 740  
of non-voting preferred stock. BMWAG is authorised  
up to 15 May 2024 to issue million shares of non-  
voting preferred stock amounting to nominal €ꢁ mil-  
lion. At the end of the reporting period, 4.3 million  
0
.
7
million as a  
,
400 new shares  
It is proposed that the unappropriated profit of  
BMW AG for the financial year 2019 amounting to  
€ꢁ1,646 million be utilised as follows:  
5
5.0  
of these amounting to nominal €ꢁ  
available for issue.  
4
.
3
million remained  
Distribution of a dividend of €ꢁ2.52 per share of  
preferred stock (€ꢁ141 million)  
—
In addition,  
4
,
047 previously issued shares of pre-  
Distribution of a dividend of €ꢁ2.50 per share of  
common stock (€ꢁ1,505 million)  
—
ferred stock were acquired and re-issued to employees  
in conjunction with the Employee Share Programme.  
The proposed distribution was not recognised as a  
liability in the Group Financial Statements.  
1
53  
Accumuꢅated other eꢊuitꢆ  
The capital structure at the end of the reporting period  
was as follows:  
Accumulated other equity comprises amounts recog-  
nised directly in equity resulting from the translation  
of the financial statements of foreign subsidiaries,  
changes in the fair value of derivative financial instru-  
ments and marketable securities, costs of hedging  
recognised directly in equity as well the related  
deferred taxes.  
in € million  
31.12. 2019  
31.12. 2018*  
Equity attributable to shareholders  
of BMW AG  
59,324  
33.7 %  
57,300  
35.6 %  
Proportion of total capital  
Further information regarding the transition effects  
recognised directly in equity on the initial application  
of IFRS 16 is provided in note 6.  
Non-current financial liabilities  
Current financial liabilities  
Total financial liabilities  
Proportion of total capital  
Total capital  
70,647  
46,093  
64,772  
38,825  
see  
note 6  
116,740  
66.3 %  
103,597  
64.4 %  
Capitaꢅ management discꢅosures  
176,064  
160,897  
The BMW Group’s objectives with regard to capital  
management are to safeguard over the long-term the  
Group’s ability to continue as a going concern and to  
provide an adequate return to shareholders.  
*
Prior year’s figures adjusted.  
Equity attributable to shareholders of BMWAG in-  
creased during the financial year by 3.5% primarily  
reflecting the increase in revenue reserves.  
The capital structure is managed in order to meet  
needs arising from changes in economic conditions  
and the risks of the underlying assets.  
The previous year’s figures have been adjusted due to  
the change in accounting policy for volume-dependent  
see bonuses and for manufacturer lessors (see note 6).  
The BMW Group is not subject to any unified external  
minimum equity capital requirements. Within the  
Financial Services segment, however, there are a  
number of individual entities which are subject to  
equity capital requirements of relevant regulatory  
banking authorities.  
note 6  
In order to manage its capital structure, the BMW Group  
uses various instruments, including the amount of  
dividends paid to shareholders and share buybacks.  
Moreover, the BMW Group actively manages debt  
capital, carrying out funding activities with a target  
debt structure in mind. A key aspect in the selection  
of financial instruments is the objective to achieve  
matching maturities for the Group’s financing require-  
ments. In order to reduce non-systematic risk, the  
BMW Group uses a variety of financial instruments  
available on the world’s capital markets to achieve  
diversification.  
1
54  
Group  
Financial  
Statements  
32  
most of the defined benefit plans have been closed  
to new entrants.  
Pension provisions  
In the case of defined benefit plans, the BMW Group  
is required to pay the benefits it has granted to  
present and past employees. Defined benefit plans  
may be covered by provisions or pension assets. In  
Germany, pension entitlements are mostly covered  
by assets transferred to BMW Trust e.ꢁV., Munich, in  
conjunction with a Contractual Trust Arrangement  
Notes to the Group  
Financial Statements  
The assumptions stated below, which depend on the  
economic situation in the relevant country, are used  
to measure the defined benefit obligation of each  
pension plan. In Germany, the so-called “pension  
entitlement trend” (Festbetragstrend) remained at  
2.0 %. The following weighted average values have  
been used for Germany, the UK and other countries:  
Notes to the  
Balance Sheet  
(
CTA). Funded plans also exist in the UK, the USA,  
Switzerland, Belgium and Japan. In the meantime,  
Germany  
31.12. 2019  
United Kingdom  
31.12. 2019 31.12. 2018  
Other  
31.12. 2019  
in %  
31.12. 2018  
31.12. 2018  
Discount rate  
1.00  
1.38  
21.3  
1.91  
1.62  
20.2  
1.92  
2.15  
19.2  
2.69  
2.25  
19.0  
2.42  
–
3.66  
–
Pension level trend  
Weighted duration of all pension obligations in years  
16.0  
17.2  
The following mortality tables are applied in countries,  
in which the BMW Group has significant defined  
benefit plans:  
Germany  
Mortality Table 2018 G issued by Prof. K. Heubeck (with invalidity rates reduced by 70 %)  
S2PA tables and S2PA light tables with weightings  
United Kingdom  
Based on the measurement principles contained in  
IAS 19, the following balance sheet carrying amounts  
apply to the Group’s pension plans:  
Germany  
United Kingdom  
31.12. 2019 31.12. 2018  
Other  
31.12. 2019  
Total  
31.12. 2019  
in € million  
31.12. 2019  
31.12. 2018  
31.12. 2018  
31.12. 2018  
Present value of defined benefit  
obligations  
14,022  
11,320  
11,542  
9,721  
9,503  
9,137  
8,277  
8,167  
1,127  
883  
1,428  
1,049  
24,652  
21,340  
21,247  
18,937  
Fair value of plan assets  
Effect of limiting net defined benefit  
asset to asset ceiling  
–
–
–
–
2
3
2
3
Carrying amounts at 31 December  
2,702  
1,821  
366  
110  
246  
382  
3,314  
2,313  
thereof pension provision  
thereof assets  
2,702  
–
1,823  
– 2  
371  
– 5  
125  
–15  
262  
–16  
382  
–
3,335  
– 21  
2,330  
–17  
1
55  
The most significant of the BMW Group’s pension  
plans are described below.  
ꢂnited Kingdom  
Defined benefit plans exist in the United Kingdom  
which are closed for all plan participants. Vested  
benefits remain in place. New benefits are covered  
by contributions made to a defined contribution plan.  
Germanꢆ  
Both employer- and employee-funded benefit plans  
exist in Germany. Benefits paid in conjunction with  
these plans comprise old-age retirement pensions as  
well as invalidity and surviving dependents’ benefits.  
The increase to current pension payments for inflation  
is carried out in accordance with §16 of the Company  
Pensions Act (Betriebsrentengesetz).  
The defined benefit pension plans are administered  
by BMW Pension Trustees Limited, Farnborough,  
and BMW (UK) Trustees Limited, Farnborough,  
both trustee companies which act independently  
of the BMW Group. BMW (UK) Trustees Limited,  
Farnborough, is represented by ten trustees and  
BMW Pension Trustees Limited, Farnborough, by five  
trustees. A minimum of one third of the trustees must  
be elected by plan participants. The trustees represent  
the interests of plan participants and decide on invest-  
ment strategies. Funding contributions to the funds  
are determined in agreement with the BMW Group.  
The defined benefit plans have been closed to new  
entrants since 2014. Defined contribution plans with  
a minimum rate of return, comprising employer- and  
employee-funded components, continue to exist. The  
fact that the plan involves a minimum rate of return  
means that the defined contribution entitlements are  
classified in accordance with IAS 19 as defined benefit  
plans. In the case of defined benefit plans involving  
the payment of a pension, the amount of benefits to  
be paid is determined by multiplying a fixed amount  
by the number of years of service.  
The assets of the German pension plans are invested  
by BMW Trust e.ꢁV., Munich, in accordance with a  
CTA. The representative bodies of this entity are  
the Board of Directors and the Members’ General  
Meeting. BMW Trust e.ꢁV., Munich, currently has  
seven members and three members of the Board of  
Directors elected by the Members’ General Meeting.  
The Board of Directors is responsible for investments,  
drawing up and deciding on investment guidelines as  
well as monitoring compliance with those guidelines.  
The members of the association can be employees,  
employee representatives, senior executives and  
members of the Board of Management of BMWAG  
.
An ordinary Members’ General Meeting takes place  
once every calendar year, and deals with a range  
of matters, including receiving and approving the  
association’s annual report, ratifying the activities of  
the Board of Directors and adopting changes to the  
association’s statutes.  
1
56  
Group  
Financial  
Statements  
The change in the net defined benefit liability for pension  
plans can be derived as follows:  
Notes to the Group  
Financial Statements  
Effect of limitation  
of the net defined  
benefit asset to the  
asset ceiling  
Defined  
benefit  
obligation  
Net defined  
benefit liability  
Notes to the  
Balance Sheet  
in € million  
Plan assets  
Total  
1
January 2019  
21,247  
–18,937  
2,310  
3
2,313  
ExꢀEꢁSEꢂ/ꢂꢃꢁꢄꢅME  
Current service cost  
473  
485  
–
– 444  
–
473  
41  
–
–
–
–
473  
41  
Interest expense (+) / income (–)  
Past service cost  
–191  
– 3  
–191  
– 3  
–191  
– 3  
Gains (–) or losses (+) arising from settlements  
–
RꢀMꢀASꢂRꢀMꢀꢃꢁS  
Gains (–) or losses (+) on plan assets, excluding amounts included  
in interest income  
–
3,201  
– 3  
– 2,002  
– 2,002  
3,201  
– 3  
–
–
–
–
– 2,002  
3,201  
– 3  
Gains (–) or losses (+) arising from changes in financial assumptions  
Gains (–) or losses (+) arising from changes in demographic assumptions  
Gains (–) or losses (+) arising from experience adjustments  
–
–
–
– 4  
– 4  
– 4  
Changes in the limitation of the net defined benefit asset to the  
asset ceiling  
–
–
–
–1  
–1  
Transfers to fund  
–
78  
– 527  
– 78  
– 527  
–
–
–
–
–
2
– 527  
–
Employee contributions  
Pensions and other benefits paid  
Translation differences and other changes  
–1,104  
473  
1,103  
–1  
–1  
– 455  
18  
18  
3
1 December 2019  
24,652  
– 21,340  
3,312  
3,314  
thereof pension provision  
thereof assets  
3,335  
– 21  
Effect of limitation  
of the net defined  
benefit asset to the  
asset ceiling  
Defined  
benefit  
obligation  
Net defined  
benefit liability  
in € million  
Plan assets  
Total  
1
January 2018  
22,710  
–19,477  
3,233  
3
3,236  
ExꢀEꢁSEꢆ/ꢆꢃꢁꢄꢅME  
Current service cost  
508  
475  
59  
–
– 413  
–
508  
62  
–
–
–
–
508  
62  
Interest expense (+) / income (–)  
Past service cost  
59  
59  
Gains (–) or losses (+) arising from settlements  
–
–10  
–10  
–10  
RꢀMꢀASꢂRꢀMꢀꢃꢁS  
Gains (–) or losses (+) on plan assets, excluding amounts included  
in interest income  
–
–1,274  
– 416  
999  
–
999  
–1,274  
– 416  
–
–
–
–
999  
–1,274  
– 416  
Gains (–) or losses (+) arising from changes in financial assumptions  
Gains (–) or losses (+) arising from changes in demographic assumptions  
Gains (–) or losses (+) arising from experience adjustments  
–
– 264  
–
– 264  
– 264  
Changes in the limitation of the net defined benefit asset to the  
asset ceiling  
–
–
–
–
–
Transfers to fund  
–
73  
– 658  
– 73  
– 658  
–
–
–
–
–
3
– 658  
–
Employee contributions  
Pensions and other benefits paid  
Translation differences and other changes  
– 632  
8
689  
57  
57  
6
14  
14  
3
1 December 2018  
21,247  
–18,937  
2,310  
2,313  
thereof pension provision  
thereof assets  
2,330  
–17  
1
57  
Since 1 July 2019, future entitlements relating to  
former members of two defined benefit plans in the  
USA are being accounted for via a defined contribu-  
tion plan. Past service cost resulted mainly from the  
complete closure of the defined benefit plans.  
Depending on the cash flow profile and risk struc-  
ture of the pension obligations involved, plan assets  
relating to defined benefit plans are invested in a  
diversified portfolio.  
Plan assets in Germany, the UK and other countries  
comprised the following:  
Germany  
United Kingdom  
2019  
Other  
2019  
Total  
2019  
in € million  
2019  
2018  
2018  
2018  
2018  
CꢈMꢋꢈꢃꢀꢃꢁS ꢈF ꢋlAꢃ ASSꢀꢁS  
Equity instruments  
2,031  
6,513  
4,275  
1,565  
5,604  
3,402  
584  
6,648  
5,891  
407  
5,774  
5,224  
91  
592  
585  
172  
552  
518  
2,705  
13,754  
10,752  
2,144  
11,930  
9,144  
Debt instruments  
thereof investment grade  
thereof mixed funds  
(
funds without a rating)  
–
2,238  
–
–
–
757  
–
–
550  
–
–
7
–
34  
93  
47  
–
–
3,002  
19  
–
2,786  
93  
thereof non-investment grade  
Real estate funds  
2,202  
–
19  
29  
–
Money market funds  
Absolute return funds  
Other  
–
–
74  
221  
–
103  
268  
–
–
–
–
–
–
109  
8,653  
–
–
15  
746  
15  
879  
124  
15  
Total with quoted market price  
7,169  
7,306  
6,402  
16,705  
14,450  
Debt instruments  
911  
1,009  
307  
256  
270  
–
1
1
–
1,168  
1,280  
307  
thereof investment grade  
316  
–
–
316  
thereof mixed funds  
(
funds without a rating)  
thereof non-investment grade  
Real estate  
595  
–
702  
–
256  
–
216  
54  
–
1
–
1
851  
1
918  
55  
394  
20  
325  
12  
716  
–
678  
–
–
36  
1
1,110  
21  
1,039  
13  
Cash and cash equivalents  
Absolute return funds  
Other  
1
632  
710  
2,667  
669  
537  
2,552  
640  
219  
1,831  
605  
212  
1,765  
31  
104  
137  
65  
67  
170  
1,303  
1,033  
4,635  
1,339  
816  
Total without quoted market price  
4,487  
3
1 December  
11,320  
9,721  
9,137  
8,167  
883  
1,049  
21,340  
18,937  
The expected change arising from benefit payments  
out of plan assets – which does not have an income  
statement impact – is predicted to exceed employer  
contributions to plan assets in the coming year by  
have an impact on pension obligations. In order to  
reduce currency exposures, a substantial portion of  
plan assets is either invested in the same currency as  
the underlying plan or hedged by means of currency  
derivatives. As part of the internal reporting proce-  
dures and for internal management purposes, finan-  
cial risks relating to the pension plans are reported  
using a value-at-risk approach by reference to the  
pension deficit. The investment strategy is also subject  
to regular review together with external consultants,  
with the aim of ensuring that investments are struc-  
tured to match the timing of pension payments and  
the expected development of pension obligations. In  
this way, fluctuations in pension funding shortfalls  
are reduced.  
€
ꢁ
65 million. Plan assets of the BMW Group include  
own transferable financial instruments amounting to  
ꢁ8 million (2018: €ꢁ5 million).  
€
The BMW Group is exposed to risks arising both from  
defined benefit plans and defined contribution plans  
with a minimum return guarantee. The discount rates  
used to calculate pension obligations are subject to  
market fluctuation and therefore influence the level of  
the obligations. Furthermore, changes in other actuar-  
ial parameters, such as expected rates of inflation, also  
1
58  
Group  
Financial  
Statements  
The defined benefit obligation relates to current  
employees, pensioners and former employees with  
vested benefits as follows:  
Notes to the Group  
Financial Statements  
Notes to the  
Balance Sheet  
Germany  
31.12. 2019  
United Kingdom  
31.12. 2019 31.12. 2018  
Other  
31.12. 2019  
in %  
31.12. 2018  
31.12. 2018  
Current employees  
67.6  
27.4  
5.0  
65.9  
29.3  
–
45.5  
–
48.5  
64.3  
29.0  
6.8  
77.3  
18.8  
Pensioners  
Former employees with vested benefits  
Defined benefit obligation  
4.8  
54.5  
51.5  
3.9  
100.0  
100.0  
100.0  
100.0  
100.0  
100.0  
The sensitivity analysis provided below shows the  
extent to which changes in individual factors – inde-  
pendently of each other – could influence the defined  
benefit obligation at the end of the reporting period.  
a non-linear pattern, estimates made on the basis  
of the specified sensitivities are only possible with  
this restriction. The calculation of sensitivities using  
ranges other than those specified could result in a dis-  
proportional change in the defined benefit obligation.  
It is only possible to aggregate sensitivities to a limi-  
ted extent. Since the change in obligation follows  
Change in defined benefit obligation  
3
1.12. 2019  
31.12. 2018  
in € million  
in € million  
in %  
in %  
increase of 0.75 %  
– 3,352  
4,290  
905  
–13.6  
17.4  
3.7  
– 2,652  
3,334  
597  
–12.5  
15.7  
2.8  
Discount rate  
decrease of 0.75 %  
increase of 0.25 %  
decrease of 0.25 %  
increase of 1 year  
decrease of 1 year  
increase of 0.25 %  
decrease of 0.25 %  
Pension level trend  
Average life expectancy  
Pension entitlement trend  
– 810  
1,155  
–1,097  
200  
– 3.3  
4.7  
– 567  
770  
– 2.7  
3.6  
– 4.4  
0.8  
– 779  
156  
– 3.7  
0.7  
–192  
– 0.8  
–147  
– 0.7  
In the UK, the sensitivity analysis for the pension  
level trend also takes account of restrictions due to  
caps and floors.  
1
59  
3
3
Other provisions  
Other provisions changed during the year as follows:  
Translation  
differences  
Reversal of  
discounting  
thereof due  
31.12. 2019 within one year  
in € million  
1.1. 2019*  
Additions  
Utilised  
Reversed  
Statutory and non-statutory warranty  
obligations, product guarantees  
5,147  
69  
2,831  
168  
– 2,561  
–104  
5,550  
1,617  
Obligations for personnel and  
social expenses  
2,819  
2,087  
6
1,448  
2,341  
3
–1,713  
– 440  
– 67  
2,496  
3,293  
1,495  
2,489  
Other obligations  
– 7  
10  
– 698  
Other obligations for ongoing  
operational expenses  
1,348  
25  
912  
–
– 377  
– 38  
1,870  
1,820  
7,421  
Other provisions  
11,401  
93  
7,532  
181  
– 5,091  
– 907  
13,209  
*
Prior year’s figures adjusted.  
Depending on when claims occur, it is possible that  
the BMW Group may be called upon to fulfil the  
warranty or guarantee obligations over the whole  
period of the warranty or guarantee. Expected reim-  
bursement claims at 31 December 2019 amounted to  
The figures for the previous financial year have been  
restated for the change in accounting policy for  
see manufacturer lessors (see note  
6
), as well as for the  
note 6  
changes in the presentation of residual value risk pro  
-
visions for finance leases and vehicle financing, which  
were previously reported in other provisions and  
have now been reclassified to receivables from sales  
€ꢁ1,086 million (2018: €ꢁ933 million) and are disclosed  
within other assets (see note 28).  
see  
note 28  
financing (adjustment effect at 31 December 2018  
:
Provisions for obligations for personnel and social  
expenses comprise mainly performance-related remu-  
neration components, early retirement part-time work-  
ing arrangements and employee long-service awards.  
decrease of €ꢁ441 million).  
3
4
The provisions for other obligations cover numerous  
identifiable specific risks and uncertain obligations, in  
particular for litigation and liability risks, including the  
provision recognised for the ongoing EU Commission’s  
antitrust proceedings. Further information is provided  
in note 10.  
Income tax liabilities  
Current income tax liabilities totalling €ꢁ963 million  
(2018: €ꢁ1,158 million) include €ꢁ89 million (2018:  
€ꢁ96 million) which are expected to be settled after  
more than twelve months. Liabilities may be settled  
earlier than this depending on the timing of the  
underlying proceedings.  
see  
note 10  
Other obligations for ongoing operational expenses  
include in particular expected payments for bonuses  
and other price deductions.  
1
60  
Group  
Financial  
Statements  
35  
Financial liabilities  
Financial liabilities of the BMW Group comprise the  
following:  
Notes to the Group  
Financial Statements  
Notes to the  
Balance Sheet  
3
1.12. 2019  
Maturity within  
one year  
Maturity between  
one and five years  
Maturity later  
than five years  
in € million  
Total  
Bonds  
14,077  
7,952  
11,216  
7,903  
544  
35,801  
11,597  
3,414  
2,204  
1,363  
–
12,287  
–
62,165  
19,549  
14,657  
11,436  
2,895  
Asset-backed financing transactions  
Liabilities from customer deposits (banking)  
Liabilities to banks  
27  
1,329  
988  
–
Lease liabilities  
Commercial paper  
2,615  
1,149  
637  
2,615  
Derivative instruments  
Other  
886  
61  
2,096  
271  
419  
15,111  
1,327  
Financial liabilities  
46,093  
55,536  
116,740  
3
1.12. 2018  
Maturity within  
one year  
Maturity between  
one and five years  
Maturity later  
than five years  
in € million  
Total  
Bonds  
9,762  
5,732  
10,961  
8,678  
9
32,592  
11,603  
3,289  
3,293  
49  
10,992  
–
53,346  
17,335  
14,359  
13,196  
105  
Asset-backed financing transactions  
Liabilities from customer deposits (banking)  
Liabilities to banks  
109  
1,225  
47  
Lease liabilities  
Commercial paper  
2,480  
646  
–
–
2,480  
Derivative instruments  
Other  
915  
114  
434  
12,921  
1,675  
557  
110  
1,101  
Financial liabilities  
38,825  
51,851  
103,597  
Planned future cash outflows from variable lease  
payments, which are not taken into account in the  
measurement of lease liabilities, are expected to  
amount to €ꢁ56 million.  
Similarly, potential future cash outflows amounting  
to €ꢁ1,393 million (undiscounted) have not been taken  
into account in the measurement of lease liabilities  
as it is not reasonably certain that the leases will be  
renewed (or not terminated). These cash outflows  
relate to periods of up to 59 years.  
1
61  
Liabilities related to financing activities can be recon-  
ciled as follows:  
Changes due to  
the acquisition Changes due to  
Cash inflows /  
outflows  
or disposal of  
companies  
exchange rate  
Changes in  
fair values Other changes  
in € million  
1.1. 2019  
factors  
31.12. 2019  
Bonds  
53,346  
17,335  
14,359  
13,196  
105  
7,342  
1,869  
202  
–
–
–
–
–
–
618  
345  
96  
859  
–
–
62,165  
19,549  
14,657  
11,436  
2,895  
Asset-backed financing transactions  
Liabilities from customer deposits (banking)  
Liabilities to banks  
–
–
–
–1,754  
– 440  
134  
– 43  
6
44  
–
– 7  
Lease liabilities  
3,224  
–
Commercial paper  
2,480  
1
–
2,615  
Financial liabilities towards companies in which an  
investment is held  
529  
626  
– 233  
202  
–
–
–
–
36  
–
–
–
–
296  
864  
Other (excluding interest payable)  
Liabilities relating to financing activities  
101,976  
7,322  
1,059  
903  
3,217  
114,477  
Changes due to  
the acquisition Changes due to  
Cash inflows /  
outflows  
or disposal of  
companies  
exchange rate  
Changes in  
fair values Other changes  
in € million  
1.1. 2018  
factors  
31.12. 2018  
Bonds  
44,880  
16,855  
13,572  
12,658  
114  
7,784  
288  
–
–
–
–
–
–
707  
192  
227  
–141  
–
– 33  
–
8
–
3
–
–
–
53,346  
17,335  
14,359  
13,196  
105  
Asset-backed financing transactions  
Liabilities from customer deposits (banking)  
Liabilities to banks  
557  
–
679  
–
Lease liabilities  
– 9  
–
Commercial paper  
4,461  
– 2,021  
40  
–
2,480  
Financial liabilities towards companies in which an  
investment is held  
739  
604  
– 210  
– 31  
–
–
–
–
38  
–
–
–
15  
26  
529  
626  
Other (excluding interest payable)  
Liabilities relating to financing activities  
93,883  
7,037  
1,063  
– 33  
101,976  
1
62  
Group  
Financial  
Statements  
Bonds comprise:  
Notes to the Group  
Financial Statements  
Issue volume  
in relevant currency  
(ISO-Code)  
Weighted average  
maturity period  
(in years)  
Weighted average  
nominal interest rate  
(in %)  
Notes to the  
Issuer  
Interest  
Balance Sheet  
BMW Finance N.V.  
variable  
variable  
variable  
variable  
fixed  
EUR 5,000 million  
SEK 1,500 million  
USD 700 million  
1.9  
4.0  
2.4  
3.0  
6.3  
5.8  
2.3  
4.8  
5.3  
5.0  
3.8  
5.8  
6.9  
1.0  
2.7  
6.2  
7.6  
5.0  
2.0  
3.4  
1.4  
3.0  
3.0  
3.0  
3.0  
4.3  
10.0  
6.8  
0.0  
0.7  
2.5  
2.4  
0.8  
0.4  
3.8  
2.3  
2.5  
1.8  
1.9  
1.5  
3.3  
4.0  
2.0  
3.0  
1.0  
3.0  
2.0  
2.2  
1.0  
0.8  
2.6  
4.8  
8.1  
1.5  
3.3  
0.5  
NOK 500 million  
EUR 25,900 million  
JPY 19,100 million  
CNY 11,500 million  
HKD 2,166 million  
USD 2,050 million  
SEK 1,750 million  
NOK 1,500 million  
GBP 1,150 million  
AUD 290 million  
fixed  
fixed  
fixed  
fixed  
fixed  
fixed  
fixed  
fixed  
fixed  
RON 240 million  
USD 3,658 million  
USD 13,655 million  
EUR 2,500 million  
AUD 30 million  
BMW US Capital, LLC  
variable  
fixed  
fixed  
fixed  
BMW Canada Inc.  
Other  
variable  
fixed  
CAD 200 million  
CAD 2,400 million  
GBP 940 million  
variable  
variable  
fixed  
SEK 500 million  
KRW 120,000 million  
CNY 6,000 million  
INR 4,000 million  
GBP 1,450 million  
NOK 1,000 million  
CHF 600 million  
fixed  
fixed  
fixed  
fixed  
fixed  
The following details apply to commercial paper:  
Issue volume  
in relevant currency  
(ISO-Code)  
Weighted average  
maturity period  
(in days)  
Weighted average  
nominal interest rate  
(in %)  
Issuer  
BMW US Capital, LLC  
USD 2,587 million  
EUR 300 million  
INR 1,100 million  
22  
31  
1.7  
– 0.4  
6.8  
BMW Finance N.V.  
BMW India Financial Services Private Ltd.  
297  
1
63  
3
6
Other liabilities  
Other liabilities comprise the following items:  
in Mio. €  
31.12. 2019  
31.12. 2018*  
Refund liabilities for future leased products  
Contract liabilities  
6,103  
5,038  
3,635  
2,971  
1,265  
815  
5,021  
4,976  
3,112  
2,940  
945  
Deferred income  
Bonuses and sales aides  
Other taxes  
Deposits received  
850  
Other advanced payments received for orders  
Payables to other companies in which an investment is held  
Payables to subsidiaries  
Social security  
585  
297  
519  
781  
192  
92  
109  
102  
Sundry  
1,834  
23,066  
2,003  
21,119  
Other liabilities  
*
Prior year’s figures adjusted.  
Contract liabilities relate to obligations for service and  
repair work as well as telematics services and roadside  
assistance agreed to be part of the sale of a vehicle  
37  
Trade payables  
As in the previous year, trade payables are due within  
one year.  
(
in some cases multi-component arrangements).  
An amount of €ꢁ 255 million (2018: €ꢁ 134 million)  
2
,
2,  
was released from contract liabilities in the financial  
year and recognised as revenues from contracts  
with customers.  
Deferred income includes down payments received  
on leases with customers as well as deferred grants.  
Grants comprise mainly public sector funds to  
promote regional structures and which have been  
invested in the production plants in Brazil, Mexico,  
Leipzig and Berlin. The grants are partly subject to  
holding periods for the assets concerned of up to five  
years andꢁ/ꢁor minimum employment figures. Grant  
income is recognised in the income statement over  
the useful lives of the assets to which it relates.  
The previous year’s figures have been adjusted for the  
change in accounting policy for manufacturer lessors  
(
see note 6).  
see  
note 6  
1
64  
Group  
Financial  
Statements  
OTHER DISCLOSURES  
The European Commission is currently conducting  
an investigation in connection with antitrust allega-  
tions against five German car manufacturers. The  
BMW Group has provided for the potential outcome  
of the investigation in the form of a provision mea-  
sured on the basis of the Statement of Objections, at  
see the best possible estimate (see also note 10). In con-  
Notes to the Group  
Financial Statements  
Other Disclosures  
3
8
note 10  
Contingent liabilities and other financial  
commitments  
nection with these allegations, numerous class action  
lawsuits have been brought in the USA and Canada  
as well as several private lawsuits in South Korea.  
The class action lawsuits in the USA were initially  
dismissed on the basis of the lack of conclusiveness.  
The applicants resubmitted their claims in mid-2019  
in an amended form. A decision on the five manufac-  
turers’ renewed claims for the dismissal of the class  
action lawsuits is still pending. Class action lawsuits  
in Canada and private lawsuits in South Korea are  
at an early stage. Further civil lawsuits based on the  
allegations are possible. In addition, the Chinese State  
Administration for Market Regulation (SAMR) opened  
Contingent ꢅiaꢇiꢅities  
The following contingent liabilities existed at the  
balance sheet date:  
in € million  
31.12. 2019  
31.12. 2018  
Investment subsidies  
Litigation  
284  
139  
275  
125  
14  
Guarantees  
46  
Other  
618  
351  
765  
Contingent liabilities  
1,087  
antitrust proceedings against BMWAG in March 2019  
.
These proceedings are still at an early stage. Possible  
risks for the BMW Group can neither be foreseen in  
detail nor quantified at present. Further disclosures  
Other contingent liabilities comprise mainly risks  
relating to taxes and customs duties.  
pursuant to IAS 37.86 cannot be provided at present.  
The BMW Group determines its best estimate of  
contingent liabilities on the basis of the information  
available at the date of preparation of the Group  
Financial Statements. This assessment may change  
over time and is adjusted regularly on the basis of new  
information and circumstances. A part of the risks is  
covered by insurance.  
1
65  
Regulatory authorities have ordered the BMW Group  
to recall various vehicle models in conjunction with  
airbags supplied by the Takata group of companies.  
Provision for the costs involved has been recognised  
within warranty provisions. In addition to the risks  
already covered by warranty provisions, it cannot be  
ruled out that further BMW Group vehicles will be  
affected by future recall actions. Further disclosures  
pursuant to IAS 37.86 cannot be provided at present.  
ꢅther financial obligations  
In addition to liabilities, provisions and contingent  
liabilities, the following commitments exist for the  
BMW Group at the end of the reporting period:  
in € million  
31.12. 2019  
31.12. 2018  
Purchase commitments for  
property, plant and equipment  
3,128  
2,146  
3,486  
1,554  
Purchase commitments for  
intangible assets  
In September 2019, the Japan Fair Trade Commission  
conducted a search at BMW Japan Corp. in connection  
with its market practises in relation to distributors.  
These investigations are ongoing. Possible risks for  
the BMW Group can neither be foreseen in detail nor  
quantified at present. Further disclosures pursuant to  
IAS 37.86 cannot be provided at present.  
BMW Group has been notified that the U.ꢁS. Securities  
and Exchange Commission (“SEC”) is conducting an  
investigation related to vehicle sales practices and  
reporting of delivery figures. The potential risks for  
BMW Group related to the SEC’s investigation cannot  
be quantified at the present time. Further disclosures  
pursuant to IAS 37.86 cannot be provided at present.  
1
66  
Group  
Financial  
Statements  
39  
Financial instruments  
The carrying amounts of financial instruments are  
assigned to IFRS 9 categories in the following table.  
Notes to the Group  
Financial Statements  
Other Disclosures  
3
1.12. 2019  
At fair value  
through other com-  
At fair value  
through profit Not assigned to an  
in € million  
At amortised cost prehensive income  
or loss  
IFRS 9 category  
ASSꢀꢁS  
Other investments  
–
–
–
461  
–
242  
Receivables from sales financing  
Financial assets  
70,625  
21,812  
Derivative instruments  
Cash flow hedges  
–
–
–
–
–
326  
Fair value hedges  
–
1,244  
Other derivative instruments  
Marketable securities and investment funds  
Loans to third parties  
–
–
50  
–
–
–
–
–
–
–
444  
40  
3,889  
1,058  
14  
–
–
–
–
–
Credit card receivables  
Other  
–
–
260  
11,574  
2,518  
–
Cash and cash equivalents  
Trade receivables  
462  
–
Other assets  
Receivables from subsidiaries  
Receivables from companies in which an investment is held  
Collateral assets  
308  
2,641  
413  
–
–
–
–
–
–
–
–
–
–
–
Remaining other assets  
1,519  
8,058  
Total  
90,342  
3,889  
2,045  
31,682  
lIAbIlIꢁIꢀS  
Financial liabilities  
Bonds  
62,165  
11,436  
14,657  
2,615  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
Asset-backed financing transactions  
Derivative instruments  
Cash flow hedges  
19,549  
–
–
–
–
–
–
–
–
805  
271  
–
Fair value hedges  
–
–
–
Other derivative instruments  
Lease liabilities  
1,020  
–
–
–
–
2,895  
–
Other  
1,327  
10,182  
Trade payables  
–
Other liabilities  
Payables to subsidiaries  
Payables to other companies in which an investment is held  
Remaining other liabilities  
192  
519  
–
–
–
–
–
–
–
–
4,749  
17,606  
Total  
127,391  
–
1,020  
21,577  
1
67  
3
1.12. 2018*  
At fair value  
through other com-  
At amortised cost prehensive income  
At fair value  
through profit  
or loss  
in € million  
ASSꢀꢁS  
Other investments  
–
–
–
429  
–
Receivables from sales financing  
Financial assets  
87,013  
Derivative instruments  
Cash flow hedges  
–
–
–
840  
654  
483  
970  
3
Fair value hedges  
–
Other derivative instruments  
Marketable securities and investment funds  
Loans to third parties  
–
–
675  
17  
3,671  
–
–
–
–
–
Credit card receivables  
Other  
244  
128  
10,094  
2,546  
–
–
Cash and cash equivalents  
Trade receivables  
885  
–
Other assets  
Receivables from subsidiaries  
Receivables from companies in which an investment is held  
Collateral assets  
295  
1,916  
293  
–
–
–
–
–
–
–
–
Remaining other assets  
1,444  
Total  
104,665  
3,671  
4,264  
lIAbIlIꢁIꢀS  
Financial liabilities  
Bonds  
53,346  
13,196  
14,359  
2,480  
–
–
–
–
–
–
–
–
–
–
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
Asset-backed financing transactions  
Derivative instruments  
Cash flow hedges  
17,335  
–
–
–
–
–
–
–
–
697  
556  
422  
–
Fair value hedges  
Other derivative instruments  
Lease liabilities  
–
105  
1,101  
9,669  
Other  
–
Trade payables  
–
Other liabilities  
Payables to subsidiaries  
Payables to other companies in which an investment is held  
Remaining other liabilities  
92  
781  
–
–
–
–
–
–
5,665  
Total  
118,129  
–
1,675  
*
Prior year’s figures adjusted – see note 25. The carrying amounts of cash flow hedges and fair value hedges are categorised as at fair value through profit or loss for the sake of clarity.  
Receivables from sales financing are shown including finance and operating leases.  
1
68  
Group  
Financial  
Statements  
The following table shows the fair values and carrying  
amounts of financial assets and liabilities that are  
measured at cost or amortised cost and whose carry-  
ing amounts differ from their fair value. Due to their  
predominantly short-term nature, the fair value of  
other financial assets and liabilities measured at amor-  
tised cost corresponds to the carrying amount. For  
this reason, these items are not disclosed separately.  
Notes to the Group  
Financial Statements  
Other Disclosures  
3
1.12. 2019  
31.12. 2018  
in € million  
Fair value  
Carrying amount  
Fair value  
Carrying amount*  
Receivables from sales financing  
Marketable securities and investment funds  
Bonds  
73,699  
446  
70,625  
444  
90,445  
680  
87,013  
675  
62,757  
19,659  
14,739  
12,071  
62,165  
19,549  
14,657  
11,436  
53,831  
17,443  
14,374  
13,277  
53,346  
17,335  
14,359  
13,196  
Asset-backed financing transactions  
Liabilities from customer deposits (banking)  
Liabilities to banks  
*
Prior year’s figures adjusted – see note 25.  
With effect from the financial year 2019, the fair  
value and carrying amounts of receivables from  
sales financing do not include receivables relating to  
finance and operating leases. The fair value of these  
receivables amounts to €ꢁ22,741 million (carrying  
amount: €ꢁ21,812 million) at the balance sheet date.  
are classified in the following table on the basis of  
their measurement levels in accordance with IFRS 13  
Where the fair value was required for a financial  
instrument for disclosure purposes, the discounted  
cash flow method was used, taking account of the  
BMW Group’s own default risk. The fair values of  
these items are allocated to Level 2 in accordance  
with IFRS 13.  
.
At 31 December 2019, financial assets and liabilities  
measured at fair value in accordance with IFRS 9  
3
1.12. 2019  
Level hierarchy in accordance with IFRS 13  
in € million  
Level 1  
Level 2  
Level 3  
Marketable securities, investment funds and collateral assets  
Other investments  
4,582  
106  
–
365  
–
–
355  
–
Cash equivalents  
462  
–
Loans to third parties  
–
14  
Derivative instruments (assets)  
Interest rate risks  
–
–
–
–
1,274  
74  
–
–
–
5
Currency risks  
Raw material market price risks  
Other risks  
267  
–
Derivative instruments (liabilities)  
Interest rate risks  
–
–
–
1,155  
723  
–
–
–
Currency risks  
Raw material market price risks  
218  
1
69  
3
1.12. 2018  
Level hierarchy in accordance with IFRS 13  
in € million  
Level 1  
Level 2  
Level 3  
Marketable securities, investment funds and collateral assets  
Other investments  
4,641  
164  
–
–
–
–
265  
–
Cash equivalents  
885  
–
Loans to third parties  
–
3
Derivative instruments (assets)  
Interest rate risks  
–
–
–
–
1,069  
713  
191  
–
–
–
–
4
Currency risks  
Raw material market price risks  
Other risks  
Derivative instruments (liabilities)  
Interest rate risks  
–
–
–
923  
409  
343  
–
–
–
Currency risks  
Raw material market price risks  
Any transfers between fair value hierarchy levels are  
made at the end of the relevant reporting period.  
Financial instruments recognised at fair value for  
which no market price is available are allocated to  
Level 3. Fair values are determined in accordance with  
With effect from 30 June 2019, marketable securities  
the following table:  
amounting to €ꢁ187 million were transferred from  
Level  
1 to Level 2 in view of the fact that their fair value  
is determined on the basis of observable market data.  
3
1.12. 2019  
Fair value  
in € million  
Valuation method  
Input Parameter  
Unquoted equity instruments  
355  
14  
5
Market-based approach  
Financial ratios  
Milestone analysis  
quantitative and qualitative factors)  
Technical  
company-specific ratios  
(
(
(
Liquidity-specific ratios  
Financial ratios  
Convertible bonds  
Market-based approach  
Milestone analysis  
quantitative and qualitative factors)  
Technical  
company-specific ratios  
Liquidity-specific ratios  
Financial ratios  
Options on unquoted equity instruments  
Market-based approach  
Milestone analysis  
quantitative and qualitative factors)  
Technical  
company-specific ratios  
Liquidity-specific ratios  
Exercise price  
1
70  
Group  
Financial  
Statements  
Financial instruments allocated to Level 3 relate  
mainly to investments in a private equity fund. For  
valuation purposes, the investment advisor provides  
the external fund manager with relevant, invest-  
ment-specific information on an ongoing basis (at  
least quarterly). The latter subsequently assesses the  
underlying individual companies in accordance with  
the guidelines for international private equity and  
venture capital valuations (IPEV).  
and patents held, the stage of technology development  
such as evidence of feasibility and prototypes, market  
entries, customer and user growth and appointments  
to key management positions. Key financial perfor-  
mance indicators used are revenues, EBITDA and the  
corresponding growth rate andꢁ/ꢁor development of  
specific contribution margins. Key liquidity-specific  
performance indicators are cash on hand, cash burn  
rates and prospects for future financing rounds.  
Notes to the Group  
Financial Statements  
Other Disclosures  
As part of the process of analysing valuations, the  
external fund manager reviews the investment-specific  
milestones, including an analysis of key financial,  
technical and liquidity-specific performance indica-  
tors. Based on this analysis, it is considered whether  
the price set at the most recent financing round is  
acceptable as a reasonable market valuation, in par-  
ticular for early-stage or growth-phase investments.  
Key performance indicators used for the purpose  
of milestone analysis are highly dependent on the  
business model underlying the investment; typical  
technical key performance indicators relate to licenses  
A detailed listing and quantification of potential sen-  
sitivities is not considered meaningful in view of the  
valuation methodology applied. A change of +ꢁ/ꢁ–ꢁ10%  
in the relevant input parameter (price of the last  
financing round) would normally also give rise to a  
similar change of +ꢁ/ꢁ–ꢁ10% in the valuation. Similarly,  
a significant reduction in growth rates or margins  
could result in impairment and therefore to a lower  
valuation of an investment.  
The balance sheet carrying amount of Level 3 financial  
instruments developed as follows:  
Options on  
Unquoted equity  
instruments Convertible bonds  
unquoted equity  
instruments  
Financial Instru-  
ments Level 3  
in € million  
1
January 2019  
265  
90  
3
14  
– 3  
–
4
–
–
–
1
–
5
272  
104  
– 41  
–
Additions  
Disposals  
– 38  
–
Gains (+) / losses (–) recognised in accumulated other equity  
Gains (+) / losses (–) recognised in the income statement  
Currency translation differences  
33  
–
34  
5
–
5
3
1 December 2019  
355  
14  
374  
Gains and losses recognised in the income state-  
ment in the financial year 2019 included unrealised  
gains and losses totalling a net positive amount of  
€
ꢁ32 million.  
Options on  
unquoted equity  
instruments  
Unquoted equity  
Financial Instru-  
ments Level 3  
in € million  
instruments Convertible bonds  
1
January 2018  
111  
103  
– 4  
–
2
3
2
–
–
–
2
–
4
115  
106  
– 6  
–
Additions  
Disposals  
– 2  
–
Gains (+) / losses (–) recognised in accumulated other equity  
Gains (+) / losses (–) recognised in the income statement  
Currency translation differences  
45  
–
47  
10  
–
10  
3
1 December 2018  
265  
3
272  
1
71  
ꢅffsetting of financial instruments  
payables relating to derivative financial instruments  
are not netted due to non-fulfilment of the stipulated  
criteria. Offsetting would have the following impact  
on the carrying amounts of derivatives:  
Derivative financial instruments of the BMW Group  
are subject to legally enforceable master netting agree-  
ments or similar contracts. However, receivables and  
3
1.12. 2019  
31.12. 2018  
Reported on Reported on equity  
assets side and liabilities side  
Reported on Reported on equity  
assets side and liabilities side  
in € million  
Balance sheet amounts as reported  
1,620  
– 833  
787  
2,096  
– 833  
1,263  
1,977  
– 913  
1,064  
1,675  
– 913  
762  
Gross amount of derivatives which can be offset in case of insolvency  
Net amount after offsetting  
Non-derivative financial assets and liabilities are only  
offset if a legally enforceable right currently exists and  
it is actually intended to offset the relevant amounts.  
No financial assets and liabilities have been netted  
in the BMW Group due to the fact that the necessary  
requirements for netting have not been met.  
Gains and losses on financial instruments  
The following table shows the net gains and losses  
arising on financial instruments in accordance with  
IFRS 9:  
in € million  
2019  
2018  
Financial instruments measured at fair value through profit or loss  
Financial assets measured at amortised cost  
–1,012  
160  
–150  
203  
Financial liabilities measured at amortised cost  
296  
155  
Net gains and losses of financial instruments measured  
at fair value through profit or loss mainly include gains  
and losses arising on the fair value measurement of  
stand-alone derivatives, on marketable securities and  
shares in investment funds, and on other investments.  
Net gains and losses arising on financial instruments  
measured at fair value through other comprehensive  
income relate to marketable securities and shares  
see in investment funds and are disclosed in note 19.  
note 19  
Interest income arising on financial assets measured  
at fair value through other comprehensive income  
amounted to €ꢁ49 million (2018: €ꢁ58 million) and  
interest expense to €ꢁ41 million (2018: €ꢁ47 million).  
Net gains and losses arising on financial assets mea-  
sured at amortised cost mainly include exchange  
rate gains and losses as well as expenses and income  
relating to impairment losses. Net gains and losses  
arising on financial liabilities measured at amortised  
cost mainly include exchange rate gains and losses.  
Interest income arising on financial assets measured  
at amortised cost mainly relates to the interest income  
earned on credit financing and reported within  
revenues. Interest expense for financial liabilities  
measured at amortised cost amounted to €ꢁ1.9 billion  
(
2018: €ꢁ1.8 billion).  
1
72  
Group  
Financial  
Statements  
ꢄredit risk  
Within the financial services business, items financed  
for retail customers and dealerships (such as vehi-  
cles, facilities and property) serve as first-ranking  
collateral with a recoverable value. Security is also  
put up by customers in the form of collateral asset  
pledges, asset assignment and first-ranking mortgages,  
supplemented where appropriate by warranties and  
guarantees. Items previously held as collateral that  
are subsequently acquired relate mainly to vehicles.  
As a rule, these assets can be converted into cash  
at short notice through the dealership organisation.  
Creditworthiness testing is an important aspect of  
the BMW Group’s credit risk management. Every  
borrower’s creditworthiness is tested for all credit  
financing and lease contracts entered into by the  
BMW Group. In the case of retail customer financing,  
creditworthiness is assessed using validated scoring  
systems integrated into the acquisition process. In  
the area of dealership financing, creditworthiness is  
assessed by means of ongoing credit monitoring and  
an internal rating system that takes account not only  
of the material credit standing of the borrower, but  
also of qualitative factors such as past reliability in  
business relations.  
The BMW Group is exposed to counterparty credit  
risks if contractual partners, for example a retail cus-  
tomer or a dealership, are unable or only partially able  
to meet their contractual obligations. Information on  
the management of credit risk for receivables from  
financial services is provided in the Combined Man-  
agement Report (see section Report on Outlook, Risks  
and Opportunities).  
Notes to the Group  
Financial Statements  
Other Disclosures  
Notwithstanding the existence of collateral accepted,  
the carrying amount of financial assets (with the  
exception of derivative financial instruments) gener-  
ally represents the maximum credit risk. In addition,  
the credit risk is increased by additional unutilised  
loan commitments in the dealership financing  
line of business. Total credit risk at the end of the  
reporting period amounted to €ꢁ31,943 million (2018:  
€
ꢁ29,403 million).  
In the case of all relationships underlying non-deriva-  
tive financial instruments, in order to minimise the  
credit risk and depending on the nature and amount  
of exposure, collateral is required, credit information  
and references obtained or historical data based on the  
existing business relationship, in particular payment  
behaviour, reviewed.  
The credit risk on trade receivables is assessed  
mainly on the basis of information relating to over-  
due amounts. The gross carrying amounts of these  
receivables are allocated in accordance with IFRS 9  
to overdue ranges used for management purposes  
as follows:  
In the case of trade receivables, customers are regularly  
assessed with regard to their credit risk. Depending  
on contractual status, necessary measures, such as  
dunning procedures, are initiated in good time.  
in € million  
31.12. 2019  
31.12. 2018  
The credit risk relating to cash deposits and derivative  
financial instruments is minimised by the fact that the  
Group only enters into such contracts with parties of  
first-class credit standing.  
Not overdue  
1,947  
369  
89  
2,066  
375  
34  
1
3
6
– 30 days overdue  
1 – 60 days overdue  
1 – 90 days overdue  
40  
29  
More than 90 days overdue  
145  
2,590  
96  
Total  
2,600  
1
73  
Receivables from sales financing are allocated to inter-  
nally defined rating categories based on credit risk.  
The classification into creditworthiness levels is based  
on default probabilities. The related gross carrying  
amounts in accordance with IFRS 9 are allocated as  
follows:  
3
1.12. 2019  
Stage 1  
Stage 2  
Stage 3  
Expected  
in € million  
General  
Simplified  
Total  
credit loss  
Gross carrying amount of financial assets  
with good credit ratings  
85,399  
4,102  
696  
378  
22  
–
–
86,473  
5,291  
272  
199  
Gross carrying amount of financial assets  
with medium credit ratings  
1,167  
Gross carrying amount of financial assets  
with poor credit ratings  
38  
704  
16  
1,014  
1,772  
628  
Total  
89,539  
2,567  
416  
1,014  
93,536  
1,099  
3
1.12. 2018  
Stage 1  
Stage 2  
Stage 3  
Expected  
credit loss  
in € million  
General  
Simplified  
Total*  
Gross carrying amount of financial assets  
with good credit ratings  
79,805  
4,393  
753  
421  
52  
–
–
80,979  
5,507  
269  
189  
Gross carrying amount of financial assets  
with medium credit ratings  
1,062  
Gross carrying amount of financial assets  
with poor credit ratings  
187  
607  
37  
990  
1,821  
592  
Total  
84,385  
2,422  
510  
990  
88,307  
1,050  
*
Prior year’s figures adjusted.  
Further disclosures relating to credit risk – in particu-  
lar with regard to the amounts of impairment losses  
recognised – are provided in the explanatory notes  
to the relevant categories of receivables in notes 25  
6 and 30.  
,
see  
notes 25,  
6 and 30  
2
2
1
74  
Group  
Financial  
Statements  
Liquidity risk  
The following table shows the maturity structure of  
expected contractual cash flows (undiscounted) for  
financial liabilities:  
Notes to the Group  
Financial Statements  
Other Disclosures  
3
1.12. 2019  
Maturity within  
one year  
Maturity between  
one and five years  
Maturity later  
than five years  
in € million  
Total  
ꢃꢈꢃ-ꢄꢀRIꢌAꢁIꢌꢀ FIꢃAꢃCIAl lIAbIlIꢁIꢀS  
Bonds  
14,977  
8,255  
8,751  
11,277  
10,182  
2,618  
750  
37,477  
12,090  
2,317  
3,505  
–
12,595  
65,049  
20,345  
12,446  
14,809  
10,182  
2,618  
Asset-backed financing transactions  
Liabilities to banks  
–
1,378  
27  
Liabilities from customer deposits (banking)  
Trade payables  
–
Commercial paper  
–
–
Other financial liabilities  
1,958  
1,686  
4,394  
ꢄꢀRIꢌAꢁIꢌꢀ FIꢃAꢃCIAl lIAbIlIꢁIꢀS  
With gross settlement  
Cash outflows  
1,524  
33,826  
– 32,302  
374  
758  
18,485  
–17,727  
338  
– 26  
598  
– 624  
23  
2,256  
52,909  
– 50,653  
735  
Cash inflows  
With net settlement  
Cash outflows  
374  
338  
23  
735  
Total financial liabilities  
58,708  
58,443  
15,683  
132,834  
3
1.12. 2018  
Maturity within  
one year  
Maturity between  
one and five years  
Maturity later  
than five years  
in € million  
Total  
ꢃꢈꢃ-ꢄꢀRIꢌAꢁIꢌꢀ FIꢃAꢃCIAl lIAbIlIꢁIꢀS  
Bonds  
10,789  
6,942  
9,848  
11,010  
9,669  
2,478  
20  
34,196  
11,710  
3,804  
3,368  
–
11,546  
–
56,531  
18,652  
14,552  
14,485  
9,669  
2,478  
792  
Asset-backed financing transactions  
Liabilities to banks  
900  
107  
–
Liabilities from customer deposits (banking)  
Trade payables  
Commercial paper  
–
–
Other financial liabilities  
318  
454  
ꢄꢀRIꢌAꢁIꢌꢀ FIꢃAꢃCIAl lIAbIlIꢁIꢀS  
With gross settlement  
Cash outflows  
731  
19,218  
–18,487  
245  
665  
11,639  
–10,974  
515  
–
213  
– 213  
81  
1,396  
31,070  
– 29,674  
841  
Cash inflows  
With net settlement  
Cash outflows  
245  
515  
81  
841  
Total financial liabilities  
51,732  
54,576  
13,088  
119,396  
The cash flows from non-derivative liabilities com-  
prise principal repayments and the related interest.  
The amounts disclosed for derivative instruments  
comprise only cash flows relating to derivatives that  
have a negative fair value at the balance sheet date.  
In the case of derivatives with a negative fair value,  
an overall positive cash flow can arise due to the  
various yield curves used. At 31 December 2019 credit  
commitments available at short notice to dealerships  
which had not been called upon at the end of the  
reporting period amounted to €ꢁ10,776 million (2018:  
€ꢁ9,010 million).  
1
75  
Solvency is assured at all times by managing and  
monitoring the liquidity situation on the basis of  
a rolling cash flow forecast. The resulting funding  
requirements are covered by a variety of instruments  
placed on the world’s financial markets, with the aim  
to minimise risk by matching maturities with financ-  
ing requirements and in alignment with a dynamic  
target debt structure.  
The BMW Group measures currency risk using a cash-  
flow-at-risk model. The analysis of currency risk is  
based on forecast foreign currency transactions which  
could result in exposures to surpluses of foreign cur-  
rency cash inflows and cash outflows. At the end of  
the reporting period, the overall currency exposure –  
in each case for the following year and determined by  
aggregating the individual currency exposures based  
on their absolute amount – was as follows:  
As a further reduction of risk, a syndicated credit line  
totalling €ꢁ8 billion (2018: €ꢁ8 billion) from a consortium  
in € million  
31.12. 2019  
33,950  
31.12. 2018  
of international banks is available to the BMW Group.  
Intragroup cash flow fluctuations are balanced out by  
the use of daily cash pooling arrangements.  
Currency exposure  
28,407  
Further information is provided in the Combined  
Management Report.  
This exposure is compared to all hedges that are in  
place. The net cash flow surplus represents an uncov-  
ered risk position. The cash-flow-at-risk approach  
involves showing the impact of potential exchange  
rate fluctuations on operating cash flows on the basis  
of probability distributions. Volatilities and correla-  
tions serve as the main input factors to determine the  
relevant probability distributions.  
Market risks  
The principal market risks to which the BMW Group  
is exposed are currency risk, interest rate risk and raw  
materials market price risk.  
Protection against such risks is provided in the first  
instance though natural hedging which arises when  
the values of non-derivative financial instruments  
have matching maturities and amounts (netting).  
Derivative financial instruments are used to reduce  
the risk remaining after netting.  
The potential negative impact on earnings is calcu-  
lated at the reporting date for each currency for the  
following financial year on the basis of current market  
prices and exposures with a confidence level of 95%.  
The risk mitigating effect of correlations between the  
various currencies is taken into account when the  
risks are aggregated.  
Currency, interest rate and raw materials market price  
risks of the BMW Group are managed at a corporate  
level.  
The following table shows the potential negative impact  
for the BMW Group for the following year resulting  
from unfavourable changes in exchange rates, mea-  
sured on the basis of the cash-flow-at-risk approach.  
Further information is provided in the “Report on  
Outlook, Risks and Opportunities” section of the  
Combined Management Report.  
ꢄurrency risk  
in € million  
31.12. 2019  
487  
31.12. 2018  
As an enterprise with worldwide operations, the  
BMW Group conducts business in a variety of cur-  
rencies, from which currency risks arise. In order to  
hedge currency risks, the BMW Group holds, as at  
Cash flow at risk  
431  
31 December 2019, derivative financial instruments  
mostly in the form of forward currency contracts and  
currency swaps.  
As part of the implementation of the risk management  
strategy, the extent to which risk exposures should be  
hedged is decided at regular intervals. The economic  
relationship between the hedged item and the hedging  
instrument is based essentially on the fact that they  
are denominated in the same currency and have the  
same maturities.  
1
76  
Group  
Financial  
Statements  
ꢃnterest rate risk  
The transition to the newly created andꢁ/ꢁor revised  
benchmark interest rates is being managed and moni-  
tored within the framework of a multidisciplinary  
project, the scope of which is likely to cover changes to  
systems, processes, risk and valuation models, as well  
as dealing with the related impact at an accounting  
and financial reporting level. The uncertainty arising  
from interest rate benchmark reform is expected to  
persist most likely until the end of 2021.  
Interest rate risks arise when funds are borrowed and  
invested with differing fixed-rate periods or differing  
terms. At the BMW Group, all items subject to, or  
bearing, interest are exposed to interest rate risk and  
can therefore affect both the assets and liabilities side  
of the balance sheet.  
Notes to the Group  
Financial Statements  
Other Disclosures  
The fair value of the Group’s interest rate portfolios  
was as follows at the end of the reporting period:  
The BMW Group applies a value-at-risk approach  
throughout the Group for internal reporting purposes  
and to manage interest rate risk. This approach is  
based on a historical simulation in which the potential  
future fair value losses of the interest rate portfo-  
lios are compared across the Group with expected  
amounts on the basis of a holding period of 250 days  
and a confidence level of 99.98%. The risk mitigating  
effect of correlations between the various portfolios  
is taken into account when the risks are aggregated.  
in € million  
31.12. 2019  
55,697  
31.12. 2018  
Fair values of interest rate portfolios  
60,356  
Interest rate risk is managed through the use of in-  
terest rate derivatives. As part of the implementation  
of the risk management strategy, interest rate risks  
are monitored and managed at regular intervals. The  
interest rate contracts used for hedging purposes  
comprise mainly swaps, which, if hedge accounting  
is applied, are accounted for as fair value hedges. The  
economic relationship between the hedged item and  
the hedging instrument is based on the fact that the  
main parameters of the hedged item and the related  
hedging instrument, such as start date, term and  
currency, are the same.  
The following table shows for interest-rate-sensitive  
exposures of the BMW Group the potential fair value  
fluctuation compared with the expected value, mea-  
sured on the basis of the value-at-risk approach:  
in € million  
31.12. 2019  
1,094  
31.12. 2018  
Value at risk  
1,123  
For selected fixed-interest assets, part of the interest  
rate risk is hedged on a portfolio basis. In this case,  
swaps are used as the hedging instrument. Hedge  
relationships are terminated and redesignated on a  
monthly basis at the end of each reporting period,  
thereby taking account of the constantly changing  
content of each portfolio.  
Raw materials price risk  
The BMW Group is exposed to market price risks on  
raw materials. In order to hedge these risks, the Group  
mainly used forward commodity contracts. As part of  
the implementation of the risk management strategy,  
the extent to which risk exposures should be hedged  
is decided at regular intervals and the corresponding  
hedging ratio defined.  
As a result of the ongoing reform and replacement  
of specific benchmark interest rates, uncertainty  
arises regarding the timing and exact nature of those  
changes. Overall, a considerable number of contracts  
within the BMW Group are directly affected by the  
reform of benchmark interest rates. Hedging rela-  
tionships within the BMW Group are based primarily  
on USD LIBOR and GBP LIBOR reference interest  
rates, whereby those rates are designated as the  
hedged risk in fair value hedges. In the case of these  
hedging relationships, uncertainty arises with respect  
to the identifiability of the designated benchmark  
interest rates.  
The economic relationship between the hedged item  
and the hedging instrument is based essentially on  
the fact that they have the same basis and term. The  
BMW Group designates only the commodity price  
index-linked raw material surcharge as a hedged item.  
Other price components contained in the contract are  
not designated as being part of the hedge relationship  
as no effective hedging instruments exist for these  
components.  
1
77  
The starting point for analysing raw materials price  
risk is to identify planned purchases of raw materials  
or components containing raw materials, the so-called  
The nominal amounts of hedging instruments were  
as follows:  
3
1.12. 2019  
“
exposure”. At each reporting date, the exposure for  
Maturity  
the following financial year amounted to:  
Maturity within  
one year  
between one  
and five years than five years  
Maturity later  
in € million  
in € million  
31.12. 2019  
4,382  
31.12. 2018  
Currency risks  
14,823  
6,672  
1,651  
9,020  
29,691  
1,920  
–
12,938  
–
Interest rate risks  
Raw material price risks  
Raw material price exposures  
4,174  
Nominal amounts of  
hedging intruments  
23,146  
40,631  
12,938  
This exposure is compared to all hedges that are in  
place. The net cash flow surplus represents an uncov-  
ered risk position. The cash-flow-at-risk approach  
involves showing the impact of potential raw materials  
market price fluctuations on operating cash flows  
on the basis of probability distributions. Volatilities  
and correlations serve as input factors to assess the  
relevant probability distributions.  
3
1.12. 2018  
Maturity  
between one  
Maturity within  
one year  
Maturity later  
in € million  
and five years than five years  
Currency risks  
17,159  
4,619  
1,526  
9,097  
24,295  
2,109  
–
12,027  
32  
Interest rate risks  
Raw material price risks  
The potential negative impact on earnings is calculated  
at the reporting date for each raw materials category  
for the following financial year on the basis of current  
market prices and exposure with a confidence level of  
Nominal amounts of  
hedging intruments  
23,304  
35,501  
12,059  
9
5
%. The risk mitigating effect of correlations between  
The following table shows the average hedging rates of  
hedging transactions used by the BMW Group.  
the various categories of raw materials is taken into  
account when the risks are aggregated.  
Average  
hedging rates  
The following table shows the potential negative impact  
for the BMW Group resulting from fluctuations in  
prices across all categories of raw materials, measured  
on the basis of the cash-flow-at-risk approach. The  
risk at each reporting date for the following financial  
year was as follows:  
Currency risks  
31.12. 2019  
31.12. 2018  
EUR / CNY  
EUR / USD  
EUR / GBP  
EUR / KRW  
EUR / JPY  
8.26  
1.16  
8.26  
1.17  
0.87  
0.79  
1,328.59  
124.92  
1,288.91  
125.29  
in € million  
31.12. 2019  
419  
31.12. 2018  
Cash flow at risk  
327  
Average  
hedging rates  
Raw material price risks  
31.12. 2019  
31.12. 2018  
ꢄiscꢅosures on hedging measures  
The following disclosures on hedging measures  
include derivatives of fully consolidated companies  
that have been designated as a hedging instrument.  
The amounts shown in the table are stated before  
deferred taxes and take account of additional effects  
arising from the application of the modified closing  
rate method.  
Aluminium (EUR / t)  
Lead (EUR / t)  
1,833  
1,815  
5,173  
1,022  
916  
1,797  
1,784  
5,279  
745  
Copper (EUR / t)  
Palladium (EUR / oz)  
Platinum (EUR / oz)  
945  
Information on average interest hedge rates is not  
provided, since interest rate derivatives designated  
as hedging instruments are used exclusively to hedge  
items in fair value hedges. The hedge rates therefore  
correspond in each case to current market interest rate  
level. Most of the hedges used in this context relate  
to variable yield curves relating to the euro, US dollar  
and British pound currency areas.  
1
78  
Group  
Financial  
Statements  
The following tables provides information on the nomi-  
nal amounts, carrying amounts and fair value changes  
of contracts designated as hedging instruments:  
Notes to the Group  
Financial Statements  
3
1.12. 2019  
Other Disclosures  
Carrying Amounts  
Change in fair value  
of designated  
in € million  
Nominal amounts  
Assets  
Liabilities  
components  
Cash Flow Hedges  
Currency risks  
23,843  
3,571  
60  
590  
215  
– 479  
250  
Raw material price risks  
Fair Value Hedges  
Interest rate risks  
266  
59,999  
1,244  
271  
758  
3
1.12. 2018  
Carrying Amounts  
Change in fair value  
of designated  
in € million  
Nominal amounts  
Assets  
Liabilities  
components  
Cash Flow Hedges  
Currency risks  
26,256  
3,667  
651  
189  
363  
334  
121  
Raw material price risks  
Fair Value Hedges  
Interest rate risks  
– 453  
52,580  
654  
556  
27  
The following tables show key information on hedged  
items for each risk category as well as the balances  
of designated components within accumulated other  
equity:  
3
1.12. 2019  
Carrying Amounts  
Assets  
Balances in accumulated other equity  
Continuing hedge Terminated hedge  
Change in value  
of hedged items  
in € million  
Liabilities  
relationships  
relationships  
Cash Flow Hedges  
Currency risks  
–
–
–
–
479  
– 23  
1
–
–
Raw material price risks  
Fair Value Hedges  
Interest rate risks  
– 250  
8,631  
58,723  
– 759  
–
–
3
1.12. 2018  
Carrying Amounts  
Assets  
Balances in accumulated other equity  
Continuing hedge Terminated hedge  
Change in value  
of hedged items  
in € million  
Liabilities  
relationships  
relationships  
Cash Flow Hedges  
Currency risks  
–
–
–
–
–119  
453  
941  
–1  
–
Raw material price risks  
Fair Value Hedges  
Interest rate risks  
– 262  
8,930  
49,846  
– 33  
–
–
1
79  
The accumulated amount of hedge-related fair value  
adjustments is €ꢁ million for assets (2018: €ꢁ15 million)  
Hedge relationships give rise to the following effects:  
8
and €ꢁ1,012 million (2018: €ꢁ243 million) for liabilities.  
2
019  
Change of  
designated com- Change in costs of  
Hedge  
ineffectiveness  
recognised in  
ponents in other  
comprehensive  
income  
hedging in other  
comprehensive  
in € million  
income income statement  
Cash Flow Hedges  
Currency risks  
– 961  
264  
117  
– 7  
–
–
Raw material price risks  
Fair Value Hedges  
Interest rate risks  
–
9
–1  
2
018  
Change of  
designated com- Change in costs of  
Hedge  
ineffectiveness  
recognised in  
ponents in other  
comprehensive  
income  
hedging in other  
comprehensive  
in € million  
income income statement  
Cash Flow Hedges  
Currency risks  
– 931  
– 497  
– 614  
12  
–
–
Raw material price risks  
Fair Value Hedges  
Interest rate risks  
–
–19  
– 6  
Designated components and costs of hedging within  
accumulated other equity changed as follows:  
Currency risks  
Designated  
Interest rate risk  
Raw material price risk  
Designated  
Costs  
Costs  
Costs  
in € million  
component  
of hedging  
of hedging  
component  
of hedging  
Opening balance at 1 January 2019  
Change in fair value during the reporting period  
Reclassification to profit or loss  
940  
– 614  
– 622  
–13  
13  
– 262  
250  
12  
–1  
– 480  
for continuing hedge relationships  
– 491  
9
716  
23  
– 4  
–
–
5
8
1
–
–
for terminated hedge relationships  
Reclassification to acquisition costs for inventories  
Closing balance at 31 December 2019  
–
–
–
– 6  
5
– 22  
– 497  
– 4  
Currency risks  
Interest rate risk  
Raw material price risk  
Designated  
Designated  
component  
Costs  
of hedging  
Costs  
of hedging  
Costs  
in € million  
component  
of hedging  
Opening balance at 1 January 2018  
Change in fair value during the reporting period  
Reclassification to profit or loss  
1,875  
120  
–
6
235  
–
– 966  
– 20  
– 453  
14  
for continuing hedge relationships  
– 987  
– 68  
–
319  
33  
1
–
–
7
–
–
for terminated hedge relationships  
Reclassification to acquisition costs for inventories  
Closing balance at 31 December 2018  
–
–
– 51  
– 262  
– 2  
12  
940  
– 614  
–13  
1
80  
Group  
Financial  
Statements  
The nominal amount of hedging instruments directly  
affected by the reform of benchmark interest rates is  
€ꢁ11,269 million (of which USD LIBOR €ꢁ 8,949 million,  
GBP LIBOR €ꢁ1,907 million).  
Notes to the Group  
Financial Statements  
Other Disclosures  
4
0
Related party relationships  
Transactions of Group entities with related parties  
were carried out without exception in the normal  
course of business with each of the parties concerned  
and at market conditions.  
A significant proportion of the BMW Group’s transac-  
tions with related parties relates to the joint venture  
BMW Brilliance Automotive Ltd.  
Supplies and services  
performed  
Supplies and services  
received  
Receivables  
at 31 December  
Payables  
at 31 December  
in € million  
2019  
2018  
2019  
2018  
2019  
2018  
2019  
496  
2018  
BMW Brilliance Automotive Ltd.  
9,227  
7,691  
107  
99  
2,639  
1,829  
772  
Business relationships of the BMW Group with other  
associated companies and joint ventures as well as  
with non-consolidated subsidiaries are small in scale.  
Susanne Klatten, Germany, is also the sole share-  
holder and Chairwoman of the Supervisory Board  
of UnternehmerTUM GmbH, Garching. In 2019,  
the BMW Group bought in services from Unterne-  
hmerTUM GmbH, Garching, mainly in the form of  
consultancy and workshop services.  
Stefan Quandt, Germany, is a shareholder and Deputy  
Chairman of the Supervisory Board of BMW AG.  
He is also the sole shareholder and Chairman of  
the Supervisory Boards of DELTON Health AG, Bad  
Homburg v.ꢁd.ꢁH., and DELTON Technology SE,  
Bad Homburg v.ꢁd.ꢁH., as well as the sole shareholder  
of DELTON Logistics S.à r.ꢁl., Grevenmacher, which  
via its subsidiaries, performed logistic-related services  
for the BMW Group during the financial year 2019.  
In addition, the Delton companies held by Stefan  
Quandt acquired vehicles from the BMW Group by  
way of leasing.  
In addition, Susanne Klatten, Germany, and Stefan  
Quandt, Germany, are indirectly sole shareholders of  
Entrust Datacard Corp., Shakopee, Minnesota. Stefan  
Quandt is also a member of the supervisory board of  
this entity. In 2019, Entrust Datacard Corp., Shakopee,  
Minnesota, acquired vehicles from the BMW Group  
by way of leasing.  
Stefan Quandt, Germany, is also the indirect major-  
ity shareholder of SOLARWATT GmbH, Dresden.  
Cooperation arrangements are in place between the  
BMW Group and SOLARWATT GmbH, Dresden,  
within the field of electric mobility. The focus of this  
cooperation is on the provision of complete photo-  
voltaic solutions for rooftop systems and carports  
to BMW i customers. In 2019 SOLARWATT GmbH,  
Dresden, acquired vehicles from the BMW Group  
by way of leasing.  
Susanne Klatten, Germany, is a shareholder and  
member of the Supervisory Board of BMW AG and  
also a shareholder and Deputy Chairwoman of the  
Supervisory Board of ALTANA AG, Wesel. In 2019,  
ALTANA AG, Wesel, acquired vehicles from the  
BMW Group, mainly by way of leasing.  
1
81  
Seen from the perspective of BMW Group entities,  
the volume of transactions with the above-mentioned  
entities was as follows:  
Supplies and services  
performed  
Supplies and services  
received  
Receivables  
at 31 December  
Payables  
at 31 December  
in € thousand  
2019  
2018  
2019  
2018  
2019  
2018  
2019  
2018  
DELTON Health AG (formerly DELTON AG)  
DELTON Logistics S.à r.l.  
DELTON Technology SE  
SOLARWATT GmbH  
2,065  
1,473  
6
3,536  
–
–
21,596  
–
23,386  
20  
14  
–
34  
–
–
–
–
1,871  
2,235  
–
–
1
–
–
–
–
–
453  
2,529  
104  
28  
358  
2,322  
58  
–
8
4
ALTANA AG  
462  
2,651  
107  
–
401  
1,527  
–
355  
27  
–
341  
–
65  
693  
–
5
UnternehmerTUM GmbH  
EnviroChemie GmbH  
367  
–
–
–
Entrust Datacard Corp.  
153  
103  
–
10  
2
–
–
Apart from vehicle sales, service loaners, leasing and  
financing contracts at customary conditions, compa-  
nies of the BMW Group concluded no further trans-  
actions with members of the Board of Management  
or Supervisory Board of BMWAG. This also applies  
to close members of the families of those persons.  
of issued shares). Participants in the programme  
were entitled in 2019 to acquire packages of 10, 17 or  
25 shares of preferred stock (2018: 7, 12 or 17) with  
a discount in each case of €ꢁ13.00 (2018: €ꢁ20.00) per  
share compared to the market price (average closing  
price in Xetra trading in the period from 5 November  
to November 2019: €ꢁ59 10). The programme was  
8
.
BMW Trust e.ꢁV., Munich, administers assets on a  
trustee basis to secure obligations relating to pensions  
in Germany and is therefore a related party of the  
BMW Group in accordance with IAS 24. This entity  
has no assets of its own. It had no income or expenses  
during the period under report. BMWAG bears ex-  
penses on an immaterial scale and performs services  
for BMW Trust e.ꢁV., Munich.  
open to employees who have been in an employment  
relationship with BMWAG or by a wholly-owned  
BMWAG subsidiary in Germany, provided that the  
management of the subsidiary concerned has decid-  
ed to participate in the programme. At the date of  
the announcement of the programme, there was a  
requirement for the employment relationship to have  
existed without interruption for at least one year and  
for it to continue until the transfer of the shares of  
preferred stock. Shares of preferred stock acquired  
in conjunction with the Employee Share Programme  
are subject to a vesting period of four years, starting  
from 1 January of the year in which the shares were  
acquired. In the financial year under report, 744,447  
For disclosures relating to the compensation of key  
management personnel, please see note 43 and the  
Compensation Report.  
see  
note 43  
(
2018: 521,524) shares of preferred stock were acquired  
4
1
by employees. This figure includes 740,400 (2018:  
521,500) shares out of Authorised Capital 2019, with  
the remainder bought back via the stock exchange.  
Every year the Board of Management of BMWAG  
decides whether the programme is to be continued.  
Share-based remuneration  
The BMW Group provides three share-based pro-  
grammes: one for eligible employees, one for senior  
heads of department and one for members of the  
Board of Management.  
In the financial year 2019, the BMW Group recorded  
a personnel expense of €ꢁ10 million (2018: €ꢁ10 million)  
for the Employee Share Programme, corresponding  
to the difference between the market price and the  
reduced price of the shares of preferred stock pur-  
chased by employees.  
ꢀ
mpꢅoꢆee Share ꢋrogramme  
In connection with the Employee Share Programme,  
non-voting shares of preferred stock in BMWAG were  
granted in 2019 to qualifying employees at favourable  
conditions (see note 31 for the number and price  
see  
note 31  
1
82  
Group  
Financial  
Statements  
ꢋrogramme for senior heads of department and  
memꢇers of the board of Management  
The members of the Board of Management in office at  
the end of the reporting period hold 36,921 shares of  
BMW common stock based on holding requirements  
arising from share-based remuneration for the finan-  
cial years 2015 to 2018 (2018: 65,960).  
The share-based remuneration programme for qualify-  
ing senior heads of department, introduced with effect  
for financial years beginning after 1 January 2012, is  
closely based on the programme for Board of Manage-  
ment members and is aimed at rewarding a long-term,  
entrepreneurial approach to running the business on a  
sustainable basis. Under the terms of the programme,  
participants give a commitment to invest an amount  
equivalent to 20% of their earnings-related bonus in  
shares of BMW common stock and to hold the shares  
so acquired for a minimum of four years. With effect  
from 1 July 2019, the share-based compensation pro-  
gramme was revised and the investment requirement  
increased to 26% of the earnings-related bonus. In  
return for the investment requirement, BMWAG pays  
Notes to the Group  
Financial Statements  
Other Disclosures  
The share-based remuneration component is measured  
at its fair value at each balance sheet date between  
grant and settlement date, and on the settlement date.  
The amounts are recognised as personnel expense  
on a straight-line basis over the vesting period and  
reported in the balance sheet as a provision.  
The cash-settlement obligation for the share-based  
remuneration component is measured at its fair  
value at the balance sheet date (based on the closing  
price of BMWAG common stock in Xetra trading at  
31 December 2019).  
1
00% of the investment amount as a net subsidy. Once  
the four-year holding period requirement has been  
fulfilled, the participants receive – for each three  
common stock shares held and at the Company’s  
option – one additional share of common stock or the  
cash equivalent, to be decided at BMWAG’s discretion.  
The total carrying amount of the provision for the  
share-based remuneration component of current  
and former Board of Management members and  
senior heads of department at 31 December 2019  
was €ꢁ5,851,703 million (2018: €ꢁ4,745,518 million).  
For financial years beginning after  
1 January 2011,  
BMW AG has added a share-based remuneration  
component to the existing compensation system for  
Board of Management members.  
The total expense recognised in 2019 for the share-  
based remuneration component of current and  
former Board of Management members and senior  
heads of department was €ꢁ1,979,477 million (2018:  
Members of the Board receive a cash compensation  
€ꢁ609,890 million).  
(
investment component) for the specific purpose of  
investment – after tax and deductions – in shares  
of common stock of BMWAG. For financial years  
from 2018 onwards, the investment component cor-  
responds to 45% of the gross bonus. The investment  
component is paid after the end of the Annual General  
Meeting, at which the separate financial statements  
of BMWAG for the relevant financial year are pre-  
sented. The shares of common stock are purchased  
immediately after the investment component has been  
paid out. Shares of common stock purchased in this  
way by Board members are required to be held for a  
period of four years. At the end of the holding period,  
Board members receive from BMWAG, for every three  
shares of common stock held, either one additional  
share of common stock or the cash equivalent, to be  
decided at BMWAG’s discretion. In the event of death  
or invalidity, special rules apply for early payment  
of share-based remuneration components based on  
the target amounts. Insofar the service contract is  
prematurely terminated and the Company has an  
extraordinary right of termination, or if the Board  
member resigns without the Company’s agreement,  
entitlements to amounts as yet unpaid relating to  
share-based remuneration are forfeited.  
The fair value of the programmes for Board of Manage-  
ment members and senior heads of department at the  
date of grant of the share-based remuneration com-  
ponents was €ꢁ  
based on a total of 19  
1
,
374  
,
798  
(
2018: €ꢁ  
1
,
919  
,
680 million),  
245 shares)  
,
983 shares (2018  
:
22  
,
of BMWAG common stock or a corresponding cash-  
based settlement measured at the relevant market  
share price prevailing on the grant date.  
Further details on the remuneration of the Manage-  
ment Board are provided in the Compensation Report,  
which is part of the Combined Management Report.  
42  
Declaration with respect to the Corporate  
Governance Code  
The Board of Management and the Supervisory Board  
of Bayerische Motoren Werke Aktiengesellschaft have  
issued the prescribed Declaration of Compliance  
pursuant to §161 of the German Stock Corporation  
Act. It is included in the Corporate Governance State-  
ment, which is available on the BMW Group website  
at  
www.bmwgroup.com/ir.  
1
83  
4
3
The compensation arrangements applicable for  
members of the Supervisory Board for the financial  
year 2019 do not include any stock options, value  
appreciation rights comparable to stock options or  
any other stock-based compensation components.  
Apart from vehicle sales, service loaners, vehicle lease  
and financing contracts at customary conditions, no  
advances or loans were granted to members of the  
Board of Management and the Supervisory Board of  
BMWAG or its subsidiaries, nor were any contingent  
liabilities entered into on their behalf.  
Compensation of members of the Board of  
Management and Supervisory Board  
The total compensation of the current members of  
the Board of Management and the Supervisory Board  
of BMWAG expensed for the financial year 2019 in  
accordance with IFRS comprised the following:  
in € million  
2019  
2018  
Compensation to members of the  
Board of Management  
30.0  
8.1  
28.8  
8.2  
Further details about the remuneration of current  
members of the Board of Management and the  
Supervisory Board can be found in the Compensa-  
tion Report, which is part of the Combined Manage-  
ment Report.  
Fixed remuneration  
Variable remuneration  
20.9  
8.3  
20.3  
5.3  
thereof Performance Cash Plan  
Share-based remuneration component  
1.0  
0.3  
Allocation to pension provisions  
2.9  
7.1  
3.4  
3.9  
Benefits in conjunction with the  
termination of board activity  
4
4
Compensation to members of the  
Supervisory Board  
Events after the end of the reporting period  
5.6  
2.0  
5.6  
2.0  
On 30 January 2020, the World Health Organisation  
(WHO) declared an international health emergency  
due to the outbreak of coronavirus. Since 11 March  
the WHO has characterised the spread of the corona-  
virus as a pandemic.  
Fixed compensation and attendance fees  
Variable compensation  
3.6  
3.6  
Total expense  
45.6  
41.7  
thereof due within one year  
28.6  
30.7  
The continuing spread of the coronavirus and  
the impact on the business development of the  
BMW Group is being continually monitored. Based  
on current developments, the BMW Group expects  
that the increasing spread of the coronavirus and the  
necessary containment measures will have a nega-  
tive impact on BMW Group vehicle deliveries in all  
key sales markets. Risks also exist for upstream  
and downstream processes, for example, through  
possible bottlenecks due to supply shortages. For  
the Financial Services segment, risk provisioning  
expense is expected to increase.  
Since the financial year 2018, variable cash com-  
pensation has been supplemented by a multi-year  
and future-oriented Performance Cash Plan (PCP).  
The PCP evaluation period comprises three years,  
the grant year and the two subsequent years. The  
PCP bonus is paid out after the end of the three-year  
evaluation period.  
The total remuneration of former members of the  
Board of Management and their dependants amounted  
to €ꢁ16.0 million (2018: €ꢁ9.2 million).  
Current assessments and assumptions for the finan-  
cial year 2020, to the extent already known to the  
BMW Group, have been taken into account and  
described in the outlook report. Apart from these  
assessments, no further significant negative effects  
are known or can be estimated at the present time.  
However, further negative effects could arise in the  
course of the year.  
Pension obligations to current members of the Board  
of Management are covered by provisions amounting  
to €ꢁ14.6 million (2018: €ꢁ19.7 million), determined  
in accordance with IAS 19. Pension obligations to  
former members of the Board of Management and  
their surviving dependants, also determined in  
accordance with IAS 19, amounted to €ꢁ113.1 million  
(
2018: €ꢁ91.0 million).  
No other events have occurred since the end of the  
financial year that could have a major impact on  
the results of operations, financial position and net  
assets of BMW AG and the BMW Group.  
1
84  
Group  
Financial  
Statements  
SEGMENT INFORMATION  
Automobile leasing, fleet business, multi-brand  
business, retail and dealership financing, customer  
deposit business and insurance activities are the main  
activities allocated to the Financial Services segment.  
Notes to the Group  
Financial Statements  
Segment Information  
Holding and Group financing companies are re-  
ported in the Other Entities segment. This segment  
also includes the operating companies BMW (UK)  
Investments Ltd. and Bavaria Lloyd Reisebüro GmbH,  
which are not allocated to one of the other segments.  
4
5
Explanatory notes to segment information  
Information on reportaꢇꢅe segments  
For the purposes of presenting segment information,  
the activities of the BMW Group are divided into  
operating segments in accordance with IFRS 8. The  
segmentation follows the internal management and  
reporting system and takes account of the organ-  
isational structure of the BMW Group based on  
the various products and services of the reportable  
segments.  
Internaꢅ management and reporting  
Segment information is prepared as a general rule  
in conformity with the accounting policies adopted  
for preparing and presenting the Group Financial  
Statements. Exceptions to this general principle  
include the treatment of inter-segment warranties,  
the earnings impact of which is allocated to the  
Automotive and Financial Services segments on  
the basis used internally to manage the business. In  
addition, intragroup repurchase agreements between  
the Automotive and Financial Services segments  
pursuant to IFRS 15, impairment allowances on  
intragroup receivables and changes in the value of  
consolidated other investments pursuant to IFRS 9  
are also excluded. Intragroup leasing arrangements  
are not reflected in the internal management and  
reporting system on a IFRS 16 basis and therefore,  
in accordance with IFRS 8, do not give rise to any  
changes in the presentation of segment information.  
Inter-segment receivables and payables, provisions,  
income, expenses and profits are eliminated upon  
consolidation. Inter-segment revenues are based on  
market prices. Centralised functions are included in  
the segments concerned. Expenses for centralised  
administrative functions allocated to the Financial  
Services segment are not settled in cash.  
The activities of the BMW Group are broken down  
into the operating segments Automotive, Motorcycles,  
Financial Services and Other Entities.  
Within the Automotive segment the BMW Group devel-  
ops, manufactures, assembles and sells automobiles  
and off-road vehicles, under the brands BMW, MINI  
and Rolls-Royce as well as spare parts, accessories  
and mobility services. BMW and MINI brand products  
are sold in Germany through branches of BMWAG  
and by independent, authorised dealerships. Sales  
outside Germany are handled primarily by subsidiary  
companies and by independent import companies in  
some markets. Rolls-Royce brand vehicles are sold in  
the USA as well as in China, Korea, Italy, Russia and  
Thailand via subsidiary companies and elsewhere by  
independent, authorised dealerships.  
Activities relating to the development, manufacture,  
assembly and sale of motorcycles as well as spare  
parts and accessories are reported in the Motorcycles  
segment.  
1
85  
The role of “chief operating decision maker” with  
respect to resource allocation and performance  
assessment of the reportable segment is embodied  
in the full Board of Management. For this purpose,  
different measures of segment performance as well as  
segment assets are taken into account in the operating  
segments.  
The Automotive and Motorcycles segments are  
managed on the basis of return on capital employed  
(
RoCE). The relevant measure of segment results  
used is therefore profit before financial result.  
Capital employed is the corresponding measure of  
segment assets used to determine how to allocate  
resources and comprises all current and non-current  
operational assets after deduction of liabilities used  
operationally which are generally not subject to  
interest (e.ꢁg. trade payables).  
The success of the Financial Services segment is mea-  
sured on the basis of return on equity (RoE). Profit  
before tax therefore represents the relevant measure  
of segment earnings. The measure of segment assets  
in the Financial Services segment corresponds to net  
assets, defined as total assets less total liabilities.  
The success of the Other Entities segment is assessed  
on the basis of profit or loss before tax. The corre-  
sponding measure of segment assets used to manage  
the Other Entities segment is total assets less asset-  
side income tax items and intragroup investments.  
1
86  
Group  
Financial  
Statements  
Segment information by operating segment is as  
follows:  
Notes to the Group  
Financial Statements  
Automotive  
2019  
Motorcycles  
2019  
Financial Services  
2019  
2018*  
Segment Information  
in € million  
2018*  
2018  
SꢀGMꢀꢃꢁ IꢃFꢈRMAꢁIꢈꢃ  
by ꢈꢋꢀRAꢁIꢃG SꢀGMꢀꢃꢁ  
External revenues  
Inter-segment revenues  
Total revenues  
73,624  
68,252  
17,594  
85,846  
2,374  
2,176  
– 3  
28,210  
1,388  
26,425  
1,280  
18,058  
91,682  
– 6  
2,368  
2,173  
29,598  
27,705  
Segment result  
4,499  
136  
6,182  
632  
194  
–
175  
–
2,272  
–
2,143  
–
Result from equity accounted investments  
Capital expenditure on non-current assets  
Depreciation and amortisation on non-current assets  
7,607  
5,853  
7,853  
4,982  
149  
110  
147  
97  
27,544  
11,142  
24,767  
10,122  
Automotive  
Motorcycles  
Financial Services  
31.12. 2019  
31.12. 2018*  
in € million  
31.12. 2019  
31.12. 2018  
31.12. 2019  
31.12. 2018  
Segment assets  
16,193  
3,199  
13,836  
2,624  
712  
–
618  
–
15,545  
–
14,806  
–
Investments accounted for using the equity method  
*
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6. In addition, figures for the prior year  
have been adjusted due to changes in presentation of selected items, which are not material overall.  
1
87  
Other Entities  
Reconciliation to Group figures  
Group  
2019  
2
019  
2018  
2019  
2018*  
2018*  
SꢀGMꢀꢃꢁ IꢃFꢈRMAꢁIꢈꢃ  
by ꢈꢋꢀRAꢁIꢃG SꢀGMꢀꢃꢁ  
2
3
5
2
4
6
–
–19,443  
–19,443  
–
–18,875  
–18,875  
104,210  
–
96,855  
–
External revenues  
Inter-segment revenues  
Total revenues  
104,210  
96,855  
–
96  
–
– 45  
–
249  
–
1,172  
–
7,118  
136  
9,627  
632  
Segment result  
Result from equity accounted investments  
–
–
– 7,003  
– 6,356  
– 6,174  
– 6,600  
28,297  
10,749  
26,593  
8,601  
Capital expenditure on non-current assets  
–
–
Depreciation and amortisation on non-current assets  
Other Entities  
Reconciliation to Group figures  
Group  
3
1.12. 2019  
31.12. 2018  
31.12. 2019  
31.12. 2018*  
31.12. 2019  
31.12. 2018*  
1
06,038  
–
84,512  
–
89,546  
–
95,166  
–
228,034  
3,199  
208,938  
2,624  
Segment assets  
Investments accounted for using the equity method  
1
88  
Group  
Financial  
Statements  
Write-downs on inventories to their net realisable  
value amounting to €ꢁ126 million (2018: €ꢁ54 million)  
were recognised by the Automotive segment in the  
financial year 2019. The reversal of impairment losses  
increased the segment result of the Automotive seg-  
ment by €ꢁ22 million (2018: €ꢁ22 million).  
The total of the segment figures can be reconciled to  
the corresponding Group figures as follows:  
Notes to the Group  
Financial Statements  
in € million  
2019  
2018*  
Segment Information  
Reconciliation of segment result  
Total for reportable segments  
6,869  
– 32  
– 7  
8,455  
795  
– 6  
The result of the Financial Services segment was  
negatively impacted by impairment losses totalling  
€ꢁ254 million (2018: €ꢁ302 million) recognised on leased  
products. Income from the reversal of impairment  
losses on leased products amounted to €ꢁ95 million  
Financial result of Automotive segment  
Financial result of Motorcycles segment  
Elimination of inter-segment items  
288  
383  
Group profit before tax from  
continuing operations  
7,118  
9,627  
(
2018: €ꢁ118 million).  
Reconciliation of capital expenditure  
on non-current assets  
The Other Entities’ segment result includes interest  
and similar income amounting to €ꢁ 515 million (2018:  
178 million) and interest and similar expenses  
amounting to €ꢁ1,419 million (2018: €ꢁ1,145 million).  
1
,
Total for reportable segments  
35,300  
– 7,003  
32,767  
– 6,174  
€ꢁ1,  
Elimination of inter-segment items  
Total Group capital expenditure  
on non-current assets  
28,297  
26,593  
The information disclosed for capital expenditure and  
depreciation and amortisation relates to non-current  
property, plant and equipment, intangible assets and  
leased products.  
Reconciliation of depreciation and  
amortisation on non-current assets  
Total for reportable segments  
17,105  
– 6,356  
15,201  
– 6,600  
Elimination of inter-segment items  
Total Group depreciation and  
amortisation on non-current assets  
10,749  
8,601  
in € million  
31.12. 2019  
31.12. 2018*  
Reconciliation of segment assets  
Total for reportable segments  
138,488  
58,612  
113,772  
48,639  
Non-operating assets – Automotive  
Liabilities of Automotive segment  
not subject to interest  
38,257  
47  
34,643  
45  
Non-operating assets – Motorcycles  
Liabilities of Motorcycles segment  
not subject to interest  
688  
613  
Total liabilities –  
Financial Services segment  
140,955  
131,415  
Non-operating assets –  
Other Entities segment  
6,859  
–155,872  
228,034  
7,084  
–127,273  
208,938  
Elimination of inter-segment items  
Total Group assets  
*
Prior year’s figures adjusted due to a change in accounting policy in connection with the  
adoption of IFRS 16; see note 6. In addition, figures for the prior year have been adjusted  
due to changes in presentation of selected items, which are not material overall.  
1
89  
The reconciliation of segment figures to the corre-  
sponding total Group figures shows the elimination  
of inter-segment items. Revenues with other segments  
result mainly from the sale of vehicles, for which the  
Financial Services segment has concluded a financing  
or lease contract. Eliminations of inter-segment items  
in the reconciliation to the Group profit before tax,  
capital expenditure and depreciation and amortisation  
mainly result from the sale of vehicles in the Automo-  
tive segment, which are subsequently accounted for  
as leased vehicles in the Financial Services segment.  
In the reconciliation of segment assets to Group assets,  
eliminations relate mainly to intragroup financing  
balances.  
In the information by region, external sales are based  
on the location of the customer. The information dis-  
closed for non-current assets relates to property, plant  
and equipment, intangible assets and leased products.  
Eliminations disclosed for non-current assets relate  
to leased products.  
External revenues  
Non-current assets  
2019  
Information by region  
in € million  
2019  
2018*  
2018*  
Germany  
13,428  
20,564  
19,720  
32,805  
11,344  
3,904  
13,556  
18,959  
15,979  
31,154  
10,975  
3,591  
2,641  
–
39,237  
199  
34,856  
90  
China  
USA  
22,470  
17,373  
1,756  
3,834  
453  
21,297  
15,284  
1,565  
3,406  
388  
Rest of Europe  
Rest of Asia  
Rest of the Americas  
Other regions  
Eliminations  
Group  
2,445  
–
– 7,739  
77,583  
– 7,855  
69,031  
104,210  
96,855  
*
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6. In addition, figures for the prior year have  
been adjusted due to changes in presentation of selected items, which are not material overall.  
1
90  
Group  
Financial  
Statements  
LIST OF INVESTMENTS AT  
1 DECEMBER 2019  
for equity and earnings and for investments are not  
made if they are of “minor significance” for the results  
of operations, financial position and net assets of  
BMWAG pursuant to §286 (3) sentence 1 no.1 HGB  
and §313 (3) sentence 4 HGB. It is also shown in the  
list which subsidiaries apply the exemptions available  
3
Notes to the Group  
Financial Statements  
List of Investments  
at 31 December 2019  
in §264 (3) and §264b HGB with regard to the publica-  
tion of annual financial statements and the drawing up  
of a management report andꢁ/ꢁor notes to the financial  
statements (footnotes 5 and 6). The Group Financial  
Statements of BMWAG serve as exempting consoli-  
dated financial statements for these companies.  
4
6
List of investments at 31 December 2019  
The List of investments of BMW AG pursuant to  
§
285 and §313 HGB is presented below. Disclosures  
Affiliated companies (subsidiaries) of BMW AG at 31 December 2019  
•
71  
Equity  
Profit / loss Capital invest-  
Companies  
in € million  
in € million  
ment in %  
DꢅMESTꢃꢄꢂ1, 12  
BMW Beteiligungs GmbH & Co. KG, Munich6  
BMW INTEC Beteiligungs GmbH, Munich3, 6  
BMW Bank GmbH, Munich3  
4,594  
– 6  
–
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
51  
3,558  
1,988  
–
BMW Finanz Verwaltungs GmbH, Munich  
BMW Verwaltungs GmbH, Munich3, 6  
327  
153  
–
1
–1  
–
Parkhaus Oberwiesenfeld GmbH, Munich  
BMW High Power Charging Beteiligungs GmbH, Munich4, 6  
Alphabet Fuhrparkmanagement GmbH, Munich4  
Alphabet International GmbH, Munich4, 5, 6  
BMW Hams Hall Motoren GmbH, Munich4, 5, 6  
BMW Vertriebszentren Verwaltungs GmbH, Munich  
BMW Fahrzeugtechnik GmbH, Eisenach3, 5, 6  
BMW Anlagen Verwaltungs GmbH, Munich3, 6  
Bavaria Wirtschaftsagentur GmbH, Munich3, 5, 6  
Rolls-Royce Motor Cars GmbH, Munich4, 5, 6  
BAVARIA-LLOYD Reisebüro GmbH, Munich  
BMW M GmbH Gesellschaft für individuelle Automobile, Munich3, 5, 6  
BMW Vermögensverwaltungs GmbH, Munich  
Bürohaus Petuelring GmbH, Munich  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100  
100  
100  
100  
–
–
–
–
LARGUS Grundstücks-Verwaltungsgesellschaft mbH, Munich  
–
–
FꢅREꢃGꢁꢇ2  
Europe12  
BMW Holding B.V., The Hague  
21,702  
9,111  
3,106  
1,431  
1,246  
1,125  
1,085  
1,020  
968  
3,941  
1,141  
791  
589  
7
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
BMW International Holding B.V., Rijswijk10  
BMW Österreich Holding GmbH, Steyr  
BMW (UK) Holdings Ltd., Farnborough  
BMW International Investment B.V., The Hague  
BMW España Finance S.L., Madrid  
BMW Financial Services (GB) Ltd., Farnborough  
BMW (Schweiz) AG, Dielsdorf  
55  
219  
95  
BMW Motoren GmbH, Steyr  
193  
97  
BMW (UK) Manufacturing Ltd., Farnborough  
BMW Finance S.N.C., Guyancourt  
BMW Italia S.p.A., San Donato Milanese  
578  
495  
44  
380  
43  
1
91  
BMW (UK) Ltd., Farnborough  
373  
291  
288  
277  
233  
228  
225  
211  
176  
165  
138  
129  
121  
100  
–
90  
189  
20  
58  
91  
34  
35  
2
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
BMW Russland Trading OOO, Moscow  
BMW i Ventures SCS SICAV-RAIF, Senningerberg  
ALPHABET (GB) Ltd., Farnborough  
Rolls-Royce Motor Cars Ltd., Farnborough  
BMW Iberica S.A., Madrid  
BMW France S.A.S., Montigny-le-Bretonneux  
BMW Finance N.V., The Hague  
BMW Austria Leasing GmbH, Salzburg  
BMW Financial Services Scandinavia AB, Sollentuna  
BMW Austria Bank GmbH, Salzburg  
22  
22  
11  
29  
30  
10  
–
Alphabet Nederland B.V., Breda10  
BMW Vertriebs GmbH, Salzburg  
Alphabet Belgium Long Term Rental NV, Aartselaar  
BMW Bank OOO, Moscow  
BMW Finanzdienstleistungen (Schweiz) AG, Dielsdorf  
Bavaria Reinsurance Malta Ltd., Floriana  
BMW Malta Ltd., Floriana  
–
–
–
–
–
–
BMW Financial Services Belgium S.A. / N.V., Bornem  
BMW Belgium Luxembourg S.A. / N.V., Bornem  
BMW Northern Europe AB, Stockholm  
BMW Financial Services B.V., Rijswijk10  
BMW Norge AS, Fornebu  
–
–
–
–
–
–
–
–
–
–
Alphabet Italia Fleet Management S.p.A., Rome  
Alphabet España Fleet Management S.A.U., Madrid  
Swindon Pressings Ltd., Farnborough  
BMW Financial Services Polska Sp. z o.o., Warsaw  
BMW Austria GmbH, Salzburg  
–
–
–
–
–
–
–
–
–
–
BMW Services Ltd., Farnborough  
–
–
Alphabet France Fleet Management S.N.C., Saint-Quentin-en-Yvelines  
Alphabet Austria Fuhrparkmanagement GmbH, Salzburg  
BMW Retail Nederland B.V., The Hague  
Alphabet Fuhrparkmanagement (Schweiz) AG, Dielsdorf  
BMW Portugal Lda., Porto Salvo  
–
–
–
–
–
–
–
–
–
–
BMW Financial Services (Ireland) DAC, Dublin  
BMW Financial Services Denmark A / S, Copenhagen  
BMW Hellas Trade of Cars A.E., Kifissia  
BMW Nederland B.V., Rijswijk  
–
–
–
–
–
–
–
–
Oy BMW Suomi AB, Helsinki  
–
–
BMW Distribution S.A.S., Vélizy-Villacoublay  
BMW Amsterdam B.V., Amsterdam  
–
–
–
–
Park Lane Ltd., Farnborough  
–
–
BMW Renting (Portugal) Lda., Porto Salvo  
BMW Romania S.R.L., Bucharest11  
–
–
–
–
BMW Italia Retail S.r.l., Rome  
–
–
BMW Automotive (Ireland) Ltd., Dublin  
Alphabet France S.A.S., Saint-Quentin-en-Yvelines  
BMW Danmark A / S, Copenhagen  
–
–
–
–
–
–
BMW Czech Republic s.r.o., Prague  
–
–
BMW Madrid S.L., Madrid  
–
–
BMW Slovenská republika s.r.o., Bratislava  
–
–
Alphabet UK Ltd., Glasgow  
–
–
BMW Slovenia distribucija motornih vozil d.o.o., Ljubljana11  
BMW Bulgaria EOOD, Sofia11  
–
–
–
–
1
92  
Alphabet Polska Fleet Management Sp. z o.o., Warsaw  
Société Nouvelle WATT Automobiles S.A.R.L., Saint-Quentin-en-Yvelines  
BMW (UK) Investments Ltd., Farnborough  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
0
Group  
Financial  
Statements  
Notes to the Group  
Financial Statements  
BiV Carry I SCS, Senningerberg  
List of Investments  
at 31 December 2019  
BMW (UK) Capital plc, Farnborough  
Alphabet Luxembourg S.A., Leudelange  
Riley Motors Ltd., Farnborough  
BMW Central Pension Trustees Ltd., Farnborough  
Triumph Motor Company Ltd., Farnborough  
BLMC Ltd., Farnborough  
Sutum ROM GmbH, Salzburg11, 14  
Bavarian Sky S.A., Compartment German Auto Loans 6, Luxembourg13  
Bavarian Sky S.A., Compartment German Auto Loans 7, Luxembourg13  
Bavarian Sky S.A., Compartment German Auto Loans 8, Luxembourg13  
Bavarian Sky S.A., Compartment German Auto Loans 9, Luxembourg13  
Bavarian Sky S.A., Compartment German Auto Leases 5, Luxembourg13  
Bavarian Sky S.A., Compartment A, Luxembourg13  
Bavarian Sky S.A., Compartment B, Luxembourg13  
Bavarian Sky Europe S.A. Compartment A, Luxembourg13  
Bavarian Sky FTC, Compartment French Auto Leases 3, Paris13  
Bavarian Sky UK 1 plc, London13  
0
0
0
0
0
0
0
0
0
Bavarian Sky UK 2 plc, London13  
0
Bavarian Sky UK A Ltd., London13  
0
Bavarian Sky UK B Ltd., London13  
0
Bavarian Sky UK C Ltd., London13  
0
The Americas  
BMW (US) Holding Corp., Wilmington, Delaware  
BMW Manufacturing Co. LLC, Wilmington, Delaware  
BMW Bank of North America Inc., Salt Lake City, Utah  
Financial Services Vehicle Trust, Wilmington, Delaware  
BMW Financial Services NA LLC, Wilmington, Delaware  
BMW Canada Inc., Richmond Hill, Ontario  
4,012  
52  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
2,281  
452  
1,480  
889  
692  
586  
493  
179  
140  
–
160  
– 670  
968  
174  
632  
9
BMW of North America LLC, Wilmington, Delaware  
BMW do Brasil Ltda., Araquari  
BMW US Capital LLC, Wilmington, Delaware  
BMW Financeira S.A. Credito, Financiamento e Investimento, São Paulo  
BMW SLP, S.A. de C.V., Villa de Reyes  
– 97  
–
–
–
BMW de Mexico S.A. de C.V., Mexico City  
–
–
BMW of Manhattan Inc., Wilmington, Delaware  
Rolls-Royce Motor Cars NA LLC, Wilmington, Delaware  
BMW Financial Services de Mexico S.A. de C.V. SOFOM, Mexico City  
BMW Leasing de Mexico S.A. de C.V., Mexico City  
BMW Insurance Agency Inc., Wilmington, Delaware  
BMW de Argentina S.A., Buenos Aires  
–
–
–
–
–
–
–
–
–
–
–
–
BMW Consolidation Services Co. LLC, Wilmington, Delaware  
BMW Leasing do Brasil S.A., São Paulo  
–
–
–
–
BMW Acquisitions Ltda., São Paulo  
–
–
BMW Manufacturing Indústria de Motos da Amazônia Ltda., Manaus  
SB Acquisitions LLC, Wilmington, Delaware  
–
–
–
–
BMW Auto Leasing LLC, Wilmington, Delaware  
BMW FS Securities LLC, Wilmington, Delaware  
BMW FS Funding Corp., Wilmington, Delaware  
BMW Facility Partners LLC, Wilmington, Delaware  
–
–
–
–
–
–
–
–
1
93  
BMW Manufacturing LP, Woodcliff Lake, New Jersey  
BMW FS Receivables Corp., Wilmington, Delaware  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100  
100  
100  
100  
100  
100  
0
BMW Receivables 1 Inc., Richmond Hill, Ontario  
BMW Receivables Ltd. Partnership, Richmond Hill, Ontario  
BMW Receivables 2 Inc., Richmond Hill, Ontario  
BMW Extended Service Corp., Wilmington, Delaware  
BMW Vehicle Lease Trust 2017-2, Wilmington, Delaware13  
BMW Vehicle Lease Trust 2018-1, Wilmington, Delaware13  
BMW Vehicle Lease Trust 2019-1, Wilmington, Delaware13  
BMW Vehicle Owner Trust 2016-A, Wilmington, Delaware13  
BMW Vehicle Owner Trust 2018-A, Wilmington, Delaware13  
BMW Vehicle Owner Trust 2019-A, Wilmington, Delaware13  
BMW Floorplan Master Owner Trust Series 2018-1, Wilmington, Delaware13  
BMW Canada 2018-A, Richmond Hill, Ontario13  
0
0
0
0
0
0
0
BMW Canada Auto Trust 2017-1, Richmond Hill, Ontario13  
BMW Canada Auto Trust 2018-1, Richmond Hill, Ontario13  
BMW Canada Auto Trust 2019-1, Richmond Hill, Ontario13  
0
0
0
Africa  
BMW (South Africa) (Pty) Ltd., Pretoria  
BMW Financial Services (South Africa) (Pty) Ltd., Midrand  
SuperDrive Investments (RF) Ltd., Cape Town13  
861  
167  
–
109  
11  
–
100  
100  
0
Asia  
BMW Automotive Finance (China) Co. Ltd., Beijing  
BMW Financial Services Korea Co. Ltd., Seoul  
BMW Japan Finance Corp., Tokyo  
2,441  
568  
541  
502  
232  
228  
205  
196  
174  
112  
107  
–
321  
49  
65  
456  
64  
29  
83  
32  
18  
1
58  
100  
100  
100  
100  
58  
BMW China Automotive Trading Ltd., Beijing  
BMW Japan Corp., Tokyo  
Herald International Financial Leasing Co. Ltd., Tianjin  
BMW (Thailand) Co. Ltd., Bangkok  
100  
100  
100  
100  
100  
51  
BMW Korea Co. Ltd., Seoul  
BMW Leasing (Thailand) Co. Ltd., Bangkok  
BMW India Financial Services Private Ltd., Gurgaon  
BMW Manufacturing (Thailand) Co. Ltd., Rayong  
BMW Malaysia Sdn Bhd, Kuala Lumpur  
BMW China Services Ltd., Beijing  
45  
–
–
–
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
0
BMW Asia Technology Centre Sdn Bhd, Kuala Lumpur  
PT BMW Indonesia, Jakarta  
–
–
–
–
BMW Holding Malaysia Sdn Bhd, Kuala Lumpur  
BMW Asia Pte. Ltd., Singapore  
–
–
–
–
BMW India Private Ltd., Gurgaon  
–
–
BMW Credit (Malaysia) Sdn Bhd, Kuala Lumpur  
BMW Asia Pacific Capital Pte Ltd., Singapore  
BMW Lease (Malaysia) Sdn Bhd, Kuala Lumpur  
BMW Tokio Corp., Tokyo  
–
–
–
–
–
–
–
–
2
2
2
2
2
2
2
2
015-2 ABL, Tokyo13  
016-1 ABL, Tokyo13  
016-2 ABL, Tokyo13  
017-1 ABL, Tokyo13  
017-2 ABL, Tokyo13  
017-3 ABL, Tokyo13  
018-1 ABL, Tokyo13  
018-2 ABL, Tokyo13  
–
–
–
–
0
–
–
0
–
–
0
–
–
0
–
–
0
–
–
0
–
–
0
1
94  
2
2
2
2
018-3 ABL, Tokyo13  
019-1 ABL, Tokyo13  
019-2 ABL, Tokyo13  
019-3 ABL, Tokyo13  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0
0
0
0
0
0
0
0
0
Group  
Financial  
Statements  
Notes to the Group  
Financial Statements  
Bavarian Sky China 2018-1, Beijing13  
Bavarian Sky China 2018-2, Beijing13  
Bavarian Sky China 2019-1, Beijing13  
Bavarian Sky China 2019-2, Beijing13  
Bavarian Sky China 2019-3, Beijing13  
List of Investments  
at 31 December 2019  
Oceania  
BMW Australia Finance Ltd., Mulgrave  
BMW Australia Ltd., Melbourne  
400  
169  
–
29  
12  
–
100  
100  
100  
100  
100  
100  
0
BMW Financial Services New Zealand Ltd., Auckland  
BMW New Zealand Ltd., Auckland  
BMW Sydney Pty. Ltd., Sydney  
–
–
–
–
BMW Melbourne Pty. Ltd., Melbourne  
BMW Australia Trust 2011-2, Mulgrave13  
Bavarian Sky Australia Trust A, Mulgrave13  
–
–
–
–
–
–
0
bMW AG’s non-consoꢅidated companies at 31 ꢄecemꢇer 2019  
•
72  
Equity  
Profit / loss Capital invest-  
Companies  
in € million  
in € million  
ment in %  
DꢅMESTꢃꢄꢇ7  
Alphabet Fleetservices GmbH, Munich4  
–
–
–
–
–
–
–
–
100  
100  
100  
100  
Automag GmbH, Munich  
BMW Car IT GmbH, Munich4  
BMW i Ventures GmbH, Munich  
FꢅREꢃGꢁꢇ7  
Europe  
Alphabet Insurance Services Polska Sp. z o.o., Warsaw  
BMW (GB) Ltd., Farnborough  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
90  
BMW (UK) Pensions Services Ltd., Hams Hall  
BMW Car Club Ltd., Farnborough  
BMW Drivers Club Ltd., Farnborough  
BMW Financial Services Czech Republic s.r.o., Prague  
BMW Group Benefit Trust Ltd., Farnborough  
BMW Hungary Korlátolt Felelősségű Társaság, Vecsés  
BMW i Ventures B.V., The Hague  
BMW Manufacturing Hungary Kft., Vecsés  
BMW Manufacturing Russland OOO, Kaliningrad  
BMW Mobility Development Center s.r.o., Prague  
BMW Motorsport Ltd., Farnborough  
BMW Russland Automotive OOO, Kaliningrad  
Cezwei HU GmbH, Salzburg  
Cezwei PL GmbH, Salzburg  
John Cooper Garages Ltd., Farnborough  
John Cooper Works Ltd., Farnborough  
OOO BMW Leasing, Moscow  
U.T.E. Alphabet España-Bujarkay, Sevilla  
1
95  
The Americas  
17-07 Northern Boulevard Corp., Wilmington, Delaware  
2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
100  
BMW Experience Centre Inc., Richmond Hill, Ontario  
BMW i Ventures Inc., Wilmington, Delaware  
BMW i Ventures LLC, Wilmington, Delaware  
BMW Leasing de Argentina S.A., Buenos Aires  
BMW Operations Corp., Wilmington, Delaware  
BMW Technology Corp., Wilmington, Delaware  
Designworks / USA Inc., Newbury Park, California  
MINI Business Innovation LLC, Wilmington, Delaware  
Mini Urban X Accelerator SPV LLC, Wilmington, Delaware  
Toluca Planta de Automoviles S.A. de C.V., Mexico City  
Africa  
BMW Automobile Distributors (Pty) Ltd., Midrand  
BPF Midrand Property Holdings (Pty) Ltd., Midrand  
Multisource Properties (Pty) Ltd., Midrand  
–
–
–
–
–
–
100  
100  
100  
Asia  
BMW China Investment Ltd., Beijing  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100  
100  
51  
BMW Finance (United Arab Emirates) Ltd., Dubai  
BMW Financial Services Hong Kong Ltd., Hong Kong  
BMW Financial Services Singapore Pte Ltd., Singapore  
BMW Hong Kong Services Ltd., Hong Kong  
BMW India Foundation, Gurgaon  
100  
100  
100  
100  
100  
100  
100  
70  
BMW India Leasing Private Ltd., Gurgaon  
BMW Insurance Services Korea Co. Ltd., Seoul  
BMW Middle East Retail Competency Centre DWC-LLC, Dubai  
BMW Mobility Services Ltd., Sichuan Tianfu New Area (Chengdu Section)  
BMW Philippines Corp., Manila  
BMW Technology Office Israel Ltd., Tel Aviv  
Herald Hezhong (Peking) Automotive Trading Co. Ltd., Beijing  
THEPSATRI Co. Ltd., Bangkok  
100  
100  
100  
1
96  
Group  
Financial  
Statements  
bMW AG’s associated companies, joint ventures  
and joint operations at 31 ꢄecemꢇer 2019  
•
73  
Notes to the Group  
Financial Statements  
List of Investments  
at 31 December 2019  
Equity  
in € million  
Profit / loss Capital invest-  
Companies  
in € million  
ment in %  
Joint ventures – equity accounted  
ꢄꢈMꢀSꢁIC  
IONITY Holding GmbH & Co. KG, Munich8  
Blitz 18-353 GmbH, Munich8, 11, 14  
205  
– 24  
25  
50  
2,106  
–1,805  
FꢈRꢀIGꢃ  
BMW Brilliance Automotive Ltd., Shenyang8  
5,293  
1,597  
218  
1,947  
– 383  
–
50  
29.7  
50  
Associated companies – equity accounted  
FꢈRꢀIGꢃ  
THERE Holding B.V., Amsterdam8  
Joint operations – proportionately consolidated entities  
FꢈRꢀIGꢃ  
Spotlight Automotive Ltd., Zhangjiagang8, 11  
Not equity accounted or proportionately consolidated entities  
DꢅMESTꢃꢄꢇ7  
Encory GmbH, Unterschleißheim  
–
–
–
–
–
–
–
–
50  
50  
50  
20  
Digital Energy Solutions GmbH & Co. KG, Munich  
The Retail Performance Company GmbH, Munich  
PDB – Partnership for Dummy Technology and Biomechanics GbR, Gaimersheim  
FꢅREꢃGꢁꢇ7  
Bavarian & Co Co. Ltd., Incheon  
BMW Albatha Finance PSC, Dubai  
BMW Albatha Leasing LLC, Dubai  
BMW AVTOTOR Holding B.V., Amsterdam  
Critical TW S.A., Porto  
–
–
–
–
–
–
–
–
–
–
20  
40  
40  
50  
51  
1
97  
bMW AG’s participations at 31 ꢄecemꢇer 2019  
•
74  
Equity  
Profit / loss Capital invest-  
Companies  
in € million  
in € million  
ment in %  
DꢅMESTꢃꢄꢇ7  
Deutsches Forschungszentrum für Künstliche Intelligenz GmbH, Kaiserslautern  
GSB Sonderabfall-Entsorgung Bayern GmbH, Baar-Ebenhausen  
Hubject GmbH, Berlin  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,6  
3,1  
15,6  
20,4  
9,8  
IVM Industrie-Verband Motorrad GmbH & Co. Dienstleistungs KG, Essen  
Joblinge gemeinnützige AG Berlin, Berlin  
Joblinge gemeinnützige AG Leipzig, Leipzig  
Joblinge gemeinnützige AG München, Munich  
Racer Benchmark Group GmbH, Landsberg am Lech  
SGL Carbon SE, Wiesbaden  
16,7  
6,2  
9,1  
18,3  
FꢅREꢃGꢁꢇ7  
SGL Composites LLC, Dover, Delaware  
–
–
49,0  
1
The amounts shown for the German subsidiaries correspond to the annual financial statements drawn up in accordance with German accounting requirements (HGB).  
The amounts shown for the foreign subsidiaries correspond to the annual financial statements drawn up in accordance with uniform IFRS rules. Equity and earnings not denominated in euro are translated  
into euro using the closing exchange rate at the balance sheet date.  
2
3
4
5
6
7
8
Profit and Loss Transfer Agreement with BMW AG.  
Profit and Loss Transfer Agreement with a subsidiary of BMW AG.  
Exemption from drawing up a management report applied in accordance with § 264 (3) and § 264 b HGB.  
Exemption from publication of financial statements applied in accordance with § 264 (3) and § 264 b HGB.  
These entities are neither consolidated nor accounted for using the equity method due to their overall immateriality for the Group Financial Statements.  
The amounts shown for entities accounted for using the equity method and for proportionately consolidated entities correspond to the annual financial statements drawn up in accordance with uniform  
IFRS rules. Equity not denominated in euro is translated into euro using the closing exchange rate at the balance sheet date, earnings are translated using the average rate.  
Including power to appoint representative bodies.  
Exemption pursuant to Article 2:403 of the Civil Code of the Netherlands (Burgerlijk Wetboek).  
First-time consolidation.  
9
1
1
1
0
1
2
Deconsolidation in the financial year 2019: DriveNow GmbH & Co. KG, Munich, DriveNow Verwaltungs GmbH, Munich, DriveNow Austria GmbH, Vienna, DriveNow UK Ltd., London, DriveNow Sverige AB,  
Sollentuna, DriveNow Belgium S.p.r.l., Brussels, DriveNow Italy S.r.l., Milan, BMW Coordination Center V.o.F., Bornem, BMW Services Belgium N.V., Bornem, BMW Roma S.r.l., Rome (merger),  
APD Industries plc, Birmingham, BMW Den Haag B.V., The Hague  
1
1
3
4
Control on basis of economic dependence.  
Other: Blitz 18-353 GmbH, Munich, has been operating under the name YOUR NOW GmbH since 3 January 2020. Sutum ROM GmbH was merged with BMW Romania S.R.L., Bucharest, effective  
1
4 January 2020.  
1
98  
Group  
Financial  
Statements  
Munich, 16 March 2020  
Bayerische Motoren Werke  
Notes to the Group  
Financial Statements  
Aktiengesellschaft  
List of Investments  
at 31 December 2019  
The Board of Management  
Oliver Zipse  
Klaus Fröhlich  
Ilka Horstmeier  
Pieter Nota  
Dr. Milan Nedeljković  
Dr. Nicolas Peter  
Dr.-Ing. Andreas Wendt  
CORPORATE  
GOVERNANCE  
4
Corporate  
Governance  
Company’s Govern-  
ing Constitution  
Board of  
Management  
Supervisory Board  
Compliance  
Page 200 Corporate Governance  
Compensation  
Report  
(
Part of the Combined Management Report)  
Page 200 Information on the Company’s Governing Constitution  
Page 201 Board of Management  
Page 201 Supervisory Board  
Page 202 Shareholders and Annual General Meeting  
Page 202 Declaration of Compliance  
Page 202 Corporate Governance Statement  
Page 203 Members of the Board of Management  
Page 204 Members of the Supervisory Board  
Page 207 Overview of Supervisory Board committees and their composition  
Page 208 Compliance and Human Rights in the BMW Group  
Page 211 Compensation Report  
(
Part of the Combined Management Report)  
Page 242 Glossary – Explanation of Key Figures  
Page 246 Responsibility Statement by the Company’s  
Legal Representatives  
Page 247 Independent Auditor’s Report  
2
00  
Corporate  
Governance  
Good corporate governance – acting in accordance  
with the principles of responsible management  
aimed at increasing enterprise value on a sustainable  
basis – is an essential requirement for the BMW Group  
embracing all areas of the business. Corporate culture  
within the BMW Group is founded on transparent  
reporting and internal communication, corporate  
governance in the interest of all stakeholders, trustful  
cooperation both of the Board of Management and the  
Supervisory Board as well as among employees, and  
compliance with applicable law.  
CORPORATE  
GOVERNANCE  
Information on the  
Company’s  
Governing  
Constitution  
Board of  
Management  
Supervisory Board  
The Board of Management and Supervisory Board  
report below on corporate governance at BMWAG in  
accordance with Section 3.10 of the German Corpo-  
rate Governance Code (DCGK) in the version dated  
7
February 2017 and principle 22 DCGK in the version  
dated 16 December 2019.  
Information on the Company’s  
Governing Constitution  
The designation BMW Group comprises Bayerische  
Motoren Werke Aktiengesellschaft (BMW AG) and  
its Group entities. BMW AG is a stock corporation  
(
Aktiengesellschaft) within the meaning of the  
German Stock Corporation Act (Aktiengesetz) and  
has its registered office in Munich, Germany. It has  
three representative bodies: the Annual General  
Meeting, the Supervisory Board and the Board of  
Management. The duties and powers of those bodies  
derive from the Stock Corporation Act and the Arti-  
cles of Incorporation of BMW AG. Shareholders, as  
the owners of the business, exercise their rights at  
the Annual General Meeting. The Board of Manage-  
ment is responsible for managing the enterprise and  
is monitored and advised by the Supervisory Board.  
The Supervisory Board appoints the members of the  
Board of Management and can, for an important rea-  
son, revoke an appointment at any time. The Board  
of Management informs the Supervisory Board and  
reports to it regularly, promptly and comprehen-  
sively, in line with the principles of conscientious  
and faithful accountability and in accordance with  
the law and the reporting duties determined by  
the Supervisory Board. The Board of Management  
requires the approval of the Supervisory Board for  
certain major business proceedings. The Supervisory  
Board is not, however, authorised to undertake man-  
agement measures itself.  
The close interaction between Board of Management  
and Supervisory Board in the interests of the enter-  
prise as described above is also known as a “two-tier  
board structure”.  
2
01  
Board of Management  
Supervisory Board  
The Board of Management manages the enterprise  
under its own responsibility, acting in the best inter-  
ests of the BMW Group with the aim of achieving sus-  
tainable growth in value. The interests of shareholders,  
employees and other stakeholders are also taken into  
account in the pursuit of this aim.  
BMWAG’s Supervisory Board is composed of ten  
shareholder representatives (elected by the Annual  
General Meeting) and ten employee representatives  
(elected in accordance with the Co-Determination  
Act). The ten Supervisory Board members represent-  
ing employees comprise seven Company employees,  
including one executive staff representative, and three  
members elected following nomination by unions. The  
Supervisory Board has the task of advising and super-  
vising the Board of Management in its management of  
BMWAG. It is involved in all decisions of fundamental  
importance for BMWAG. The Supervisory Board  
appoints the members of the Board of Management  
and decides upon the level of compensation they  
receive. The Supervisory Board can revoke appoint-  
ments for important reasons.  
In accordance with §7 of the Articles of Incorporation,  
the Board of Management of BMWAG comprises two  
or more persons; other than that the number of mem-  
bers of the Board of Management is determined by the  
Supervisory Board. At 31 December 2019, the Board  
of Management comprised seven members. The Board  
of Management decides on the principal guidelines  
for managing the enterprise, determines and agrees  
upon the strategic orientation with the Supervisory  
Board, and ensures its implementation. The Board of  
Management is also responsible for ensuring that all  
provisions of law and internal regulations are com-  
plied with. Further details on compliance within the  
BMW Group are available in the section “Corporate  
Governance, Compliance and Human Rights in the  
BMW Group” of the Annual Report. The Board of  
Management is also responsible for ensuring that  
appropriate risk management and risk controlling  
systems are in place throughout the Group.  
Members of the Supervisory Board of BMWAG are  
obliged to act in the best interests of the enterprise as a  
whole. They may not pursue personal interests in their  
decisions or take advantage of business opportunities  
intended to benefit the BMW Group.  
Members of the Supervisory Board are obliged to  
inform the full Supervisory Board of any conflicts  
of interest, in particular those resulting from a  
consultant or executive function with clients, sup-  
pliers, lenders or other business partners, so that  
the Supervisory Board can report to the shareholders  
at the Annual General Meeting on its treatment of  
the issue. Significant and non-temporary conflicts of  
interest of a Supervisory Board member result in the  
termination of mandate.  
Members of the Board of Management are required  
to act in the enterprise’s best interests and may not  
pursue personal interests in their decisions or take  
advantage of business opportunities intended for the  
benefit of the BMW Group. Individual members of  
the Board of Management of BMWAG are required  
to disclose any conflicts of interest to the Supervisory  
Board without delay and inform the other members  
of the Board of Management accordingly.  
The Supervisory Board regularly assesses the efficiency  
of its activities. To this end, shared discussion is con-  
ducted within the Supervisory Board and individual  
meetings held with the Chairman, prepared on the  
basis of a questionnaire sent in advance, which is  
drawn up by the Supervisory Board.  
Deliberations are held and decisions taken by the  
Board of Management as a collegiate body at full Board  
meetings, at Product and Customer full Board meetings  
(since 1 November 2019) and at Sustainability Board  
meetings (combined with full Board meetings with  
effect from 1 November 2019). The Board of Manage-  
ment also deliberates and makes decisions at meetings  
The Supervisory Board has stated specific targets for  
its composition, agreed to a diversity concept and  
determined a competency profile. Members of the  
Supervisory Board are responsible for undertaking  
any training required for the performance of their  
duties. The Company provides them with appropriate  
assistance therein.  
of its Customer committee (since 1 November 2019) and  
its Senior Executives and Operations committees. The  
overall framework for developing business strategies,  
the use of resources, the implementation of strategies  
and matters of particular importance to BMWAG are  
decided upon at full Board of Management meetings.  
Taking into account the specific circumstances of the  
BMW Group and the number of Board members, the  
Supervisory Board has set up a Presiding Board and  
four committees: the Personnel Committee, the Audit  
Committee, the Nomination Committee and the Medi-  
ation Committee. These serve to raise the efficiency  
of the Supervisory Board’s work and facilitate the  
handling of complex issues.  
Terms of procedure approved by the Board of Man-  
agement contain a plan for the allocation of areas of  
responsibility among the individual Board members.  
Further information on the composition and work  
procedures of the Board of Management and its com-  
mittees is available at  
Governance).  
www.bmwgroup.com/scg (Corporate  
2
02  
Corporate  
Governance  
Composition of the Presiding Board and the various  
committees is based on legal requirements, the Arti-  
cles of Incorporation, rules of procedure and corporate  
governance principles, while taking into particular  
account the expertise of Board members.  
Declaration of Compliance  
Once a year, the Board of Management and the Super-  
visory Board of BMWAG issue a Declaration of Compli-  
ancepursuantto§161oftheGermanStockCorporation  
Act (AktG) with regard to the recommendations of the  
“Government Commission on the German Corporate  
Governance Code”, as officially published and valid  
at the date of the Declaration. BMWAG’s current and  
previous Declarations of Compliance are available  
Supervisory Board  
Shareholders and  
Annual General  
Meeting  
Declaration of  
Compliance  
Corporate Govern-  
ance Statement  
BMWAG ensures that the Supervisory Board and  
its committees are appropriately equipped to carry  
out their duties. This includes providing a central  
Supervisory Board office to support the chairpersons  
in their coordination work.  
Members of the  
Board of  
Management  
online at  
www.bmwgroup.com/compliancedeclaration (Corporate  
Governance). In the Declaration of Compliance issued  
in December 2019, the Board of Management and  
the Supervisory Board declared that all recommen-  
dations of the German Corporate Governance Code  
Further information on the composition and work  
procedures of the Supervisory Board and its com-  
mittees is available at  
Governance).  
www.bmwgroup.com/scg (Corporate  
(version dated 7 February 2017) will be complied with  
going forward.  
Shareholders and Annual General Meeting  
Corporate Governance Statement  
The shareholders of BMWAG exercise their rights at  
the Annual General Meeting. The Annual General  
Meeting decides in particular on the utilisation of  
unappropriated profit, the ratification of the acts of  
the members of the Board of Management and of the  
Supervisory Board, the appointment of the external  
auditor, changes to the Articles of Incorporation and  
specified capital measures and elects the shareholders’  
representatives to the Supervisory Board.  
Further information on corporate management and  
governance, including the declaration of compliance  
according to §161 of the German Stock Corporation  
Act, can be found in the Corporate Governance State-  
ment (sections 289f and 315 of the German Commer-  
cial Code (HGB)) at  
www.bmwgroup.com/compliancedeclaration  
(Corporate Governance).  
Moreover, the system for the compensation of mem-  
bers of the Board of Management is presented to the  
Annual General Meeting for approval in the case of  
significant changes, but at least every four years.  
Shareholders may exercise their voting rights at the  
Annual General Meeting either in person, via a proxy  
or via a representative designated by BMWAG. Voting  
rights may also be exercised by postal vote.  
2
03  
MEMBERS OF THE  
BOARD OF MANAGEMENT  
Dr. Milan ꢁedeljković (b.1969)  
Production (since 1 October 2019)  
Mandates  
♦
BMW (South Africa) (Pty) Ltd. , Chairman  
(
since 1 November 2019)  
♦
BMW Motoren GmbHꢁ , Chairman  
(Member since 7 October 2019,  
Chairman since 4 December)  
ꢈꢅiver Zipse (b.1964)  
Chairman (since 16 August 2019)  
Production (until 15 August 2019)  
Mandates  
ꢋieter ꢃota (b.1964)  
Customer, Brands, Sales (since 1 April 2019)  
Sales and Brand BMW, Aftersales BMW Group  
(until 31 March 2019)  
♦
BMW (South Africa) (Pty) Ltd. , Chairman  
(
until 31 October 2019)  
♦
BMW Motoren GmbHꢁ , Chairman  
Mandates  
♦
(until 7 October 2019)  
Rolls-Royce Motor Cars Limitedꢁ , Chairman  
(since 1 April 2019)  
ꢉaraꢅd Krüger (b.1965)  
Chairman (until 15 August 2019)  
Mandates  
ꢄr. ꢃicoꢅas ꢋeter (b.1962)  
Finance  
Deutsche Telekom AG  
Mandates  
BMW Brilliance Automotive Ltd.♦,  
Deputy Chairman  
Miꢅagros Caiña Carreiro-Andree (b.1962)  
Human Resources, Labour Relations Director  
(
until 31 October 2019)  
ꢀeter Schwarzenbauer (b.1959)  
Transformation Electromobility  
(1 April 2019 until 31 October 2019)  
MINI, Rolls-Royce, BMW Motorrad,  
Customer Engagement and Digital Business  
Innovation BMW Group (until 31 March 2019)  
Mandates  
Mandates  
LOGISTRIAL Real Estate AGꢁ♦  
23 September 2019 until 17 December 2019)  
(
Kꢅaus Fröhꢅich (b.1960)  
Development  
Mandates  
Scout24 AG  
♦
Rolls-Royce Motor Cars Limitedꢁ , Chairman  
E.ON SE  
(until 31 March 2019)  
ꢃlka Horstmeier (b.1969)  
Human Resources, Labour Relations Director  
ꢄr.-Ing. Andreas Wendt (b.1958)  
Purchasing and Supplier Network  
Production  
(since 1 November 2019)  
(16 August 2019 until 30 September 2019)  
General Counsel:  
ꢄr. Andreas liepe  
♦
Not listed on the stock exchange.  
Membership of other statutory supervisory boards.  
Membership of equivalent national or foreign boards of business enterprises.  
2
04  
Corporate  
Governance  
MEMBERS OF THE  
SUPERVISORY BOARD  
Dr. jur. Karl-Ludwig Kley (b.1951)  
Member since 2008, elected until the AGM 2021  
Deputy Chairman of the Supervisory Board  
Chairman of the Supervisory Board of E.ON SE  
and of the Deutsche Lufthansa Aktiengesellschaft  
Mandates  
Members of the  
Supervisory Board  
E.ON SE, Chairman  
Deutsche Lufthansa Aktiengesellschaft, Chairman  
Dr.-ꢃng. Dr.-ꢃng. E.ꢂh. ꢁorbert Reithofer (b.1956)  
Member since 2015, elected until the  
Annual General Meeting (AGM) 2020  
Chairman of the Supervisory Board  
Former Chairman of the Board of  
Management of BMWAG  
2
ꢄhristiane Bennerꢂ (b.1968)  
Member since 2014, elected until the AGM 2024  
Second Chairwoman of IG Metall  
Mandates  
Mandates  
Continental AG, Deputy Chairwoman  
Siemens Aktiengesellschaft  
Henkel AG & Co. KGaA (Shareholders’ Committee)  
Dr. rer. pol. Kurt Bock (b.1958)  
Member since 2018, elected until the AGM 2023  
Former Chairman of the Board of  
Management of BASF SE  
1
Manfred Schochꢂ (b.1955)  
Member since 1988, elected until the AGM 2024  
Deputy Chairman of the Supervisory Board  
Chairman of the European  
and General Works Council  
Industrial Engineer  
Mandates  
FUCHS PETROLUB SE, Chairman  
(since 7 May 2019)  
Fresenius Management SEꢁ♦  
Münchener Rückversicherungs-Gesellschaft  
Aktiengesellschaft in Munich  
Stefan quandt (b.1966)  
Member since 1997, elected until the AGM 2024  
Deputy Chairman of the Supervisory Board  
Entrepreneur  
2
Verena zu Dohna-Jaegerꢂ (b.1975)  
Member since 16 May 2019,  
Mandates  
elected until the AGM 2024  
Department head with the Executive Board of  
IG Metall  
Mandates  
♦
DELTON Health AGꢁ , Chairman  
DELTON Technology SEꢁ , Chairman  
Frankfurter Allgemeine Zeitung GmbHꢁ♦  
♦
(
since 24 June 2019)  
ABB AG  
♦
AQTON SEꢁ , Chairman  
Entrust Datacard Corp.♦  
Franz Haniel (b.1955)  
Member since 2004 until 16 May 2019  
Entrepreneur  
1
Stefan Schmidꢂ (b.1965)  
Member since 2007, elected until the AGM 2024  
Deputy Chairman of the Supervisory Board  
Chairman of the Works Council, Dingolfing  
Mandates  
♦
Franz Haniel & Cie. GmbHꢁ , Chairman  
DELTON Technology SEꢁ  
Heraeus Holding GmbHꢁ  
TBG AGꢁ♦  
♦
♦
1
Employee representatives (Company employees).  
Employee representatives (union representatives).  
Employee representatives (members of senior management).  
2
3
♦
Not listed on the stock exchange.  
Membership of other statutory supervisory boards.  
Membership of equivalent national or foreign boards of business enterprises.  
2
05  
3
2
Ralf Hattlerꢂ (b.1968)  
Horst Lischkaꢂ (b.1963)  
Member since 2017 until 16 May 2019  
Head of Purchasing Indirect Goods and Services,  
Raw Material, Production Partner  
Member since 2009, elected until the AGM 2024  
General Representative of IG Metall Munich  
Mandates  
KraussMaffei Group GmbHꢁ♦  
MAN Truck & Bus SEꢁ♦  
ꢄr.-Ing. ꢉeinrich ꢉiesinger (b.1960)  
Member since 2017, elected until the AGM 2022  
Former Chairman of the Board of Management  
of thyssenkrupp AG  
(since 19 March 2019, former MAN Truck & Bus AG)  
Städtisches Klinikum München GmbHꢁ♦  
1
Mandates  
Willibald Löwꢂ (b.1956)  
Deutsche Post AG (since 15 May 2019)  
Member since 1999, elected until the AGM 2024  
Chairman of the Works Council, Landshut  
ꢀ
rof. Dr. rer. nat. Dr. h.ꢂc. Reinhard Hüttl (b.1957)  
Member since 2008, elected until the AGM 2023  
Chairman of the Executive Board  
of Helmholtz-Zentrum Potsdam  
Deutsches GeoForschungsZentrum – GFZ  
University Professor  
Simone Menne (b.1960)  
Member since 2015, elected until the AGM 2021  
Member of supervisory boards  
Mandates  
Deutsche Post AG  
Springer Nature AG & Co.KGaAꢁ♦  
Johnson Controls International plc  
Russell Reynolds Associates Inc.♦  
(since 19 January 2019)  
Susanne Kꢅatten (b.1962)  
Member since 1997, elected until the AGM 2024  
Entrepreneur  
Mandates  
1
SGL Carbon SE, Chairwoman  
Dr. Dominique Mohabeerꢂ (b.1963)  
♦
ALTANA AGꢁ , Deputy Chairwoman  
Member since 2012, elected until the AGM 2024  
Member of the Works Council, Munich  
♦
UnternehmerTUM GmbHꢁ , Chairwoman  
1
ꢋrof. ꢄr. rer. poꢅ. Renate Köcher (b.1952)  
Member since 2008, elected until the AGM 2022  
Director of Institut für Demoskopie  
Allensbach Gesellschaft zum Studium der  
öffentlichen Meinung mbH  
Brigitte Rödigꢂ (b.1963)  
Member since 2013, elected until the AGM 2024  
Member of the Works Council, Dingolfing  
Mandates  
Dr. Vishal Sikka (b.1967)  
Infineon Technologies AG  
Nestlé Deutschland AGꢁ  
Robert Bosch GmbHꢁ♦  
Member since 16 May 2019,  
elected until the AGM 2024  
CEO & Founder, Vianai Systems, Inc.  
Mandates  
♦
Oracle Corporation (since 6 December 2019)  
1
Employee representatives (Company employees).  
Employee representatives (union representatives).  
Employee representatives (members of senior management).  
2
3
♦
Not listed on the stock exchange.  
Membership of other statutory supervisory boards.  
Membership of equivalent national or foreign boards of business enterprises.  
2
06  
2
Corporate  
Governance  
Jürgen Wechslerꢂ (b.1955)  
Member since 2011 until 16 May 2019  
Former Regional Head of IG Metall Bavaria  
Mandates  
Members of the  
Supervisory Board  
Overview of  
Supervisory Board  
committees and  
their composition  
Schaeffler AG, Deputy Chairman  
Siemens Healthcare GmbHꢁ , Deputy Chairman  
♦
(until 18 March 2019)  
3
Dr. Thomas Wittigꢂ (b.1960)  
Member since 16 May 2019,  
elected until the AGM 2024  
Senior Vice President Financial Services  
Mandates  
♦
BMW Bank GmbHꢁ , Chairman  
BMW Automotive Finance (China) Co., Ltd. ,  
Chairman  
♦
1
Werner Ziererꢂ (b.1959)  
Member since 2001, elected until the AGM 2024  
Chairman of the Works Council, Regensburg  
1
Employee representatives (Company employees).  
Employee representatives (union representatives).  
Employee representatives (members of senior management).  
2
3
♦
Not listed on the stock exchange.  
Membership of other statutory supervisory boards.  
Membership of equivalent national or foreign boards of business enterprises.  
2
07  
Overview of Supervisory Board committees  
and their composition  
Principal duties, basis for activities  
Members  
ꢋRꢀSIꢄIꢃG bꢈARꢄ  
1
—
—
preparation of Supervisory Board meetings to the extent that the subject matter to be  
discussed does not fall within the remit of a committee  
Norbert Reithofer , Manfred Schoch, Stefan Quandt, Stefan Schmid,  
Karl-Ludwig Kley  
activities based on terms of procedure  
ꢋꢀRSꢈꢃꢃꢀl CꢈMMIꢁꢁꢀꢀ  
1
—
—
—
preparation of decisions relating to the appointment and revocation of appointment of  
members of the Board of Management, the compensation and the regular review of the  
Board of Management’s compensation system  
Norbert Reithofer , Manfred Schoch, Stefan Quandt, Stefan Schmid,  
Karl-Ludwig Kley  
conclusion, amendment and revocation of employment contracts (in conjunction with  
the resolutions taken by the Supervisory Board regarding the compensation of the Board  
of Management) and other contracts with members of the Board of Management  
decisions relating to the approval of ancillary activities of Board of Management  
members, including acceptance of non-BMW Group supervisory mandates as well as the  
approval of transactions requiring Supervisory Board approval by dint of law (e.g. loans  
to Board of Management or Supervisory Board members)  
—
established in accordance with the recommendation contained in the German Corporate  
Governance Code, activities based on terms of procedure  
AꢂꢄIꢁ CꢈMMIꢁꢁꢀꢀ  
—
supervision of the financial reporting process, the effectiveness of the internal control  
system, the risk management system, as well as the performance of Supervisory  
Board duties in connection with audits pursuant to §32 of the German Securities Trading  
Act (WpHG)  
Karl-Ludwig Kley1, 2, Norbert Reithofer, Manfred Schoch, Stefan Quandt,  
Stefan Schmid  
—
—
supervision of external audit, in particular auditor independence and additional work  
performed by external auditor  
preparation of proposals for election of external auditor at Annual General Meeting,  
engagement (recommendation) of external auditor, determination of additional areas of  
audit emphasis and fee agreements with external auditor  
—
preparation of Supervisory Board’s resolution on Company and  
Group Financial Statements  
—
—
discussion of interim reports with Board of Management prior to publication  
preparation of the Supervisory Board’s audit of the non-financial reporting, preparation of  
the selection of the auditor for non-financial reporting and engagement of the auditor  
—
supervision of internal audit system and compliance as well as the audit and supervision of  
any needs for action related to possible violations of duties by members of the Board of  
Management in preparation of a resolution in the Supervisory Board  
—
—
—
decision on approval for utilisation of Authorised Capital 2019  
amendments to Articles of Incorporation only affecting wording  
established in accordance with the recommendation contained in the German Corporate  
Governance Code, activities based on terms of procedure  
ꢃꢈMIꢃAꢁIꢈꢃ CꢈMMIꢁꢁꢀꢀ  
1
—
identification of suitable candidates as shareholder representatives on the Supervisory  
Board to be put forward for inclusion in the Supervisory Board’s proposals for election at  
the Annual General Meeting  
Norbert Reithofer , Susanne Klatten, Karl-Ludwig Kley, Stefan Quandt  
(In line with the recommendations of the German Corporate Governance  
Code, the Nomination Committee comprises only shareholder  
representatives.)  
—
established in accordance with the recommendation contained in the German Corporate  
Governance Code, activities based on terms of procedure  
MꢀꢄIAꢁIꢈꢃ CꢈMMIꢁꢁꢀꢀ  
—
proposal to Supervisory Board if resolution for appointment of Board of Management  
member has not been carried by the necessary two-thirds majority of Supervisory Board  
members’ votes  
Norbert Reithofer, Manfred Schoch, Stefan Quandt, Stefan Schmid  
(In accordance with statutory requirements, the Mediation Committee  
comprises the Chairman and Deputy Chairman of the Supervisory Board  
and one member each selected by shareholder representatives and  
employee representatives.)  
—
established as required by law  
1
Chair.  
2
(
Independent) financial expert within the meaning of §§ 100 (5) and 107 (4) AktG, no. 5.3.2 GCGC.  
It is planned to bring about a change in the position  
of Chair of the Audit Committee directly following  
the 2020 Annual General Meeting. In line with the  
requirements profile, the intention is for an indepen-  
dent financial expert to continue to hold this position  
in the future.  
2
08  
Corporate  
Governance  
COMPLIANCE AND  
HUMAN RIGHTS IN  
THE BMW GROUP  
bMW Group Compꢅiance Management Sꢆstem  
• 75  
Compliance and  
Human Rights in  
the BMW Group  
Supervisorꢆ board bMWAG  
board of Management bMWAG  
bMW Group Compꢅiance Committee  
Annual  
Report  
Responsible and lawful conduct is fundamental to  
the success of the BMW Group. Compliance is an  
integral part of our corporate culture and the reason  
why customers, shareholders, business partners and  
the general public place their trust in us. The Board of  
Management and the employees of the BMW Group  
are obliged to act responsibly and in compliance with  
applicable laws and regulations. The BMW Group also  
expects its business partners to conduct themselves  
in the same manner.  
Annual  
Report  
bMW Group Compꢅiance Committee  
ꢈffice  
Annual  
Compliance  
Reporting Run  
bMW Group Compꢅiance  
ꢁ
etwork  
The BMW Group Compliance Management System  
is designed to ensure that the BMW Group, its repre-  
sentative bodies, its managers and staff act in a lawful  
manner. Particular emphasis is placed on measures  
to ensure compliance with antitrust legislation and  
avoid the risk of corruption or money laundering.  
Activities to avoid non-compliance with the law  
are managed and monitored by the BMW Group  
Compliance Committee. These activities include  
legal monitoring, internal compliance regulations,  
communications and training activities, complaint  
and case management, compliance reporting and  
compliance controls, as well as following through  
with sanctions in cases of non-compliance.  
Compꢅiance Instruments  
of the bMW Group  
Compliance Controls  
Compliance Reporting  
Compliance Strategy  
Legal Compliance  
Monitoring and Trends  
Compliance  
Risks and  
Preventive Excellence  
Compliance Case  
Management  
Compliance Processes  
and IT Systems  
Compliance Codes and  
Internal Regulations  
Compliance Academy and Culture  
Compliance Communications  
The BMW Group Compliance Committee reports  
regularly and on a case-by-case basis to the Board of  
Management and the Audit Committee of the Super-  
visory Board on all compliance-related issues, includ-  
ing the progress made in refining the BMW Group  
Compliance Management System, details of inves-  
tigations performed, known infringements of the  
law, sanctions imposed and correctiveꢁ/ꢁpreventative  
measures implemented. This also ensures the Board of  
Management and Supervisory Board are immediately  
notified of any cases of particular significance. On  
the basis of this information, the Board of Manage-  
ment keeps track of and analyses compliance-related  
developments and trends and initiates the measures  
needed to improve the Compliance Management  
System. In 2019 the system was further enhanced, par-  
ticularly with a focus on the characteristics of the roles  
and responsibilities in the Group-wide Compliance  
Management as well as the monitoring of compliance  
training and additional preventative activities.  
The decisions taken by the BMW Group Compliance  
Committee are drafted in concept and implemented  
operationally by the BMW Group Compliance Com-  
mittee Office. The BMW Group Compliance Commit-  
tee Office has more than 20 employees and is allocated  
in organisational terms to the Chairman of the Board  
of Management. For operational implementation of  
compliance topics, it is supported by a Group-wide  
compliance network of around 240 BMW Group  
Compliance Responsibles (heads of the local units)  
and over 70 local Compliance Officers (heads of the  
local compliance functions). The specific compliance  
activities required for financial services business are  
coordinated by a separate compliance department  
within the Financial Services segment.  
2
09  
The various elements of the BMW Group Compliance  
Management System are shown in the diagram on the  
previous page and are applicable to all BMW Group  
organisational units worldwide. The BMW Group  
Legal Compliance Code, which forms the core of the  
Group’s Compliance Management System, is supple-  
mented by an internal set of rules. The BMW Group  
Policy “Antitrust Compliance”, which establishes  
binding rules of conduct for all employees across the  
BMW Group to prevent unlawful restriction of compe-  
tition, deserves particular mention. The BMW Group  
Policy “Corruption Prevention” and the BMW Group  
Instruction “Corporate Hospitality and Gifts” deal with  
lawful handling of gifts and benefits and define appro-  
priate assessment criteria and approval procedures.  
than 35,000 managers and employees worldwide have  
so far completed antitrust compliance training and  
currently hold a valid certificate. Additional classroom  
training and multi-day coaching sessions are also held  
for all key compliance topics in local markets. The main  
emphasis here is on training in antitrust law.  
Any member of staff with questions or concerns  
relating to compliance is expected to discuss these  
matters with their managers and with the relevant  
departments within the BMW Group: in particular,  
with the BMW Group Compliance Committee Office,  
Legal Affairs and Corporate Audit. The BMW Group  
Compliance Contact also serves as a further point of  
contact and provides non-employees with a system for  
reporting concerns relating to compliance. Commu-  
nication with the BMW Group Compliance Contact  
may remain anonymous, if preferred. BMW Group  
employees worldwide also have the opportunity to  
submit information about possible breaches of the law  
within the Company anonymously and confidentially  
in several languages via the BMW Group SpeakUP  
Line. All compliance-related queries and concerns  
are documented and followed up by the BMW Group  
Compliance Committee Office using an electronic  
Case Management System. If necessary, Corporate  
Audit, Corporate Security, the legal departments or  
the Works Council may be called upon to assist in  
the process.  
Compliance measures are determined and prioritised  
on the basis of a regular Group-wide compliance risk  
assessment that relies on data-based risk indicators  
and transaction validation, among other methods.  
Various internal media and communications materi-  
als are used to raise employee awareness across all  
compliance issues, including newsletters, employee  
newspapers and the compliance homepage in the  
BMW Group intranet, where employees can find all  
compliance-related information and training materi-  
als. A Group-wide Compliance Day was organised for  
the first time in 2019 to boost employee awareness of  
the importance of creating a culture of transparency  
and trust.  
Various IT systems support BMW Group employees  
with the assessment, approval and documentation  
of compliance-relevant matters. For example, all  
exchange activities with competitors must be docu-  
mented and approved in a special compliance IT system.  
The same applies to verifying legal admissibility and  
documenting benefits, especially in connection with  
corporate hospitality. The BMW Group also uses an  
IT-based Business Relations Compliance programme  
to ensure the reliability of its business relations. Rel-  
evant business partners are checked and evaluated  
for potential compliance risks. Appropriate measures  
are implemented to manage compliance risks based  
on the results of the evaluation. A further IT system  
is used to verify customer integrity as required under  
anti-money-laundering regulations.  
Existing employee training activities were restructured  
and refined with the creation of the BMW Group  
Compliance Academy in 2019. As well as impart-  
ing knowledge, its online and classroom training  
options with Company-specific case studies play  
an important role in reinforcing compliance in the  
corporate culture. The online training modules must  
be repeated by the required target groups every two  
years and include a final test. Successful completion  
of the test is confirmed by a certificate. More than  
4
8,500 managers and staff worldwide have so far  
received training in the basic principles of compli-  
ance and hold a valid training certificate. Successful  
completion of the training programme is mandatory  
for all BMW Group managers. The Company makes  
sure that newly recruited managers and promoted  
staff undergo compliance training. In this way, the  
BMW Group achieves almost full training coverage for  
its managers in compliance matters. Online training  
in antitrust compliance is mandatory for managers  
and staff exposed to antitrust risks as a result of their  
functions or on specific occasions. A total of more  
Through the Group-wide reporting system, compli-  
ance responsibles across all organisational units of  
the BMW Group report, on both a regular and ad hoc  
basis, on the compliance status of their respective  
units, on any identified legal risks and incidences of  
non-compliance, as well as on sanctions and correc-  
tiveꢁ/ꢁpreventative measures implemented.  
2
10  
Corporate  
Governance  
Compliance with and implementation of compli-  
ance rules and processes are audited regularly by  
Corporate Audit and subjected to control checks  
by the BMW Group Compliance Committee Office.  
Corporate Audit carries out on-site audits as part of  
its regular activities. The BMW Group Compliance  
Committee also engages Corporate Audit to perform  
compliance-specific checks and, if necessary, brings  
in Corporate Security to investigate suspected cases.  
Compliance is also an important factor in safeguarding  
the future of the BMW Group workforce. With this  
in mind, the Board of Management and the national  
and international employee representative bodies of  
the BMW Group have agreed on a binding set of joint  
principles for lawful conduct. Employee representa-  
tives are regularly involved in the process of refining  
compliance management within the BMW Group.  
Compliance and  
Human Rights in  
the BMW Group  
Compensation  
Report  
A
BMW Group Compliance Spot Check, a sample test  
specifically designed to identify potential corruption  
risks, and two antitrust compliance validations (to  
identify and audit possible antitrust risks) were  
carried out in addition in 2019.  
Managers, in particular, bear a high degree of respon-  
sibility and must set a good example with regard to  
preventing infringements. Managers throughout the  
BMW Group acknowledge this principle by signing  
a written declaration, in which they also undertake  
to make staff working for them aware of legal risks.  
Managers must, at regular intervals and on their  
own initiative, verify compliance with the law. It  
is important to signal to employees that they take  
compliance risks seriously and that disclosing rele-  
vant information is extremely valuable. In dealings  
with their staff, managers remain open to discussion  
and listen to differing opinions. Any indication of  
non-compliance with the law must be rigorously and  
judiciously investigated.  
It is essential for compliance at the BMW Group that  
employees are aware of and comply with applicable  
legal regulations. The BMW Group does not tolerate  
violations of the law by its employees. Culpable  
violations of the law result in employment-contract  
sanctions and may involve personal liability conse-  
quences for the employee involved.  
The BMW Group is committed to respecting interna-  
tionally recognised human rights and gears its due dil-  
igence process towards the UN Guiding Principles on  
Business and Human Rights, focusing on topics and  
areas of activity where it can leverage its influence as  
a commercial enterprise. The BMW Group stated its  
position clearly back in 2005, with the Joint Decla-  
ration on Human Rights and Working Conditions at  
the BMW Group, which was updated in 2010. In 2018  
,
for further clarification, the BMW Group published  
its Code on Human Rights and Working Conditions,  
which strengthens the Company’s commitment to  
human rights and outlines how it promotes human  
rights and implements the core labour standards  
of the ILO.  
2
11  
COMPENSATION REPORT  
PART OF THE COMBINED  
MANAGEMENT REPORT)  
ꢋrincipꢅes of compensation  
The compensation system for the Board of Management  
at BMWAG is designed to encourage a management  
approach focused on the sustainable development of  
the BMW Group. A further principle of the compensa-  
tion system at the BMW Group is that of consistency.  
This means that compensation systems for the Board  
of Management, executive management and employ-  
ees of BMWAG are composed of similar elements.  
The Supervisory Board performs an annual review to  
ensure that all Board of Management compensation  
components are appropriate, both individually and in  
total, and do not encourage the Board of Management  
to take inappropriate risks for the BMW Group. At  
the same time, the compensation model used for the  
Board of Management needs to be attractive for highly  
qualified executives in a competitive environment.  
(
The following section describes the principles govern-  
ing the compensation of the Board of Management  
for financial years since 2018. A description of the  
stipulations set out in the Company’s statutes relat-  
ing to the compensation of the Supervisory Board is  
also provided. In addition to explaining the system of  
compensation, details of components of compensation  
are also provided with figures. Furthermore, the com-  
pensation of each member of the Board of Management  
and the Supervisory Board for the financial year 2019  
is disclosed by individual member and analysed with  
its component parts.  
The compensation of members of the Board of Man-  
agement is determined by the full Supervisory Board  
on the basis of performance criteria and after taking  
into account any remuneration received from Group  
companies. The principal performance criteria are the  
tasks and exercise of mandate of the Board member,  
the economic situation as well as the performance and  
future prospects of the BMW Group. The Supervisory  
Board sets ambitious and relevant parameters as the  
basis for variable compensation. It also ensures that  
variable components based on multi-year criteria take  
account of both positive and negative developments  
and that the overall incentive is on the long term. As  
a general rule, targets and comparative parameters  
may not be changed retrospectively.  
1
. board of Management compensation  
Responsiꢇiꢅities  
The full Supervisory Board is responsible for determin-  
ing and regularly reviewing the system and structure  
of the Board of Management’s compensation as well  
as for determining the compensation of individual  
Board members. The Supervisory Board’s Personnel  
Committee is responsible for the preparatory work  
relating to those tasks.  
The Supervisory Board reviews the appropriateness  
of the compensation system annually. In preparation,  
the Personnel Committee also consults remuneration  
studies. In order to check that the compensation  
system is in line with peers, the Supervisory Board  
especially compares compensation paid by other  
DAX companies. For a vertical view, it compares Board  
compensation with the salaries of executive managers  
and with the average salaries of employees of BMWAG  
based in Germany, also with regard to salary devel-  
opment over time. During the consultative process,  
consideration is also given to the recommendations  
of an independent external remuneration expert as  
well as to input from investors and analysts.  
The Supervisory Board presents the compensation  
system to the Annual General Meeting for shareholder  
approval whenever significant changes are proposed,  
but at least once every four years. The currently valid  
compensation system was approved by the Annual  
General Meeting in 2018.  
2
12  
Corporate  
Governance  
Compensation sꢆstem, compensation components  
Board of Management compensation comprises fixed  
and variable cash elements as well as a share-based  
component. Retirement and surviving dependants’  
benefit entitlements are also in place. The compensa-  
tion components are described in more detail below.  
Fixed remuneration  
Fixed remuneration consists of a base salary, which is  
paid monthly, and fringe benefits (other remuneration  
elements such as the use of Company cars, insurance  
premiums and contributions towards security sys-  
tems). With effect from the financial year 2018, the  
Compensation  
Report  
base salary is €ꢁ  
during the first period of office, €ꢁ  
0
.
8
million p.ꢁa. for a Board member  
95 million p.ꢁa. for  
0
.
ꢅverview of compensation system: depiction of  
allocation to cash benefits (target compensation)  
a Board member from the second period of office or  
the fourth year of mandate and €ꢁ1.8 million p.ꢁa. for  
the Chairman of the Board of Management.  
1
and pension contributionꢂ  
•
76  
ꢌariaꢇꢅe remuneration  
in %  
The variable remuneration of the Board of Manage-  
ment comprises three components:  
Pension contribution  
approx. 8  
Base salary  
approx. 27  
— bonus  
— Performance Cash Plan and  
— share-based remuneration  
Payment of a discretionary additional bonus is not  
provided for. An upper limit has been set for each  
component of variable remuneration (see Overview of  
compensation system and compensation components).  
Share-based  
remuneration  
approx. 14  
Earn-  
ings-based  
component of  
the bonus  
Performance  
Cash Plan  
approx. 24  
approx. 8  
Performance component  
of the bonus approx. 19  
1
bonus  
Simplified depiction of target amounts for the variable cash remuneration of the Chairman  
of the Board of Management and pension contribution. Excludes other remuneration.  
Based on the assumption that the share price remains unchanged for the calculation of the  
matching component.  
In the case of 100% target achievement, the bonus  
comprises an earnings-related component of 30%  
and a performance-related component of 70%. The  
target bonus (100%) is €ꢁ0.85 million p.ꢁa. for a Board  
ꢅverview of compensation system: depiction of  
member during the first period of office, €ꢁ  
p.ꢁa. from the second period of office or the fourth year  
of mandate and €ꢁ million p.ꢁa. for the Chairman of  
1.0 million  
2
variable remuneration (target compensation)ꢂ  
•
77  
1.8  
the Board of Management. For all Board members, the  
upper limit of the bonus is set at 180% of the relevant  
target bonus.  
in %  
Share-based remuneration  
approx. 22  
In order to calculate the earnings-related component,  
an earnings factor is determined on the basis of the  
target parameters and multiplied by 30% of the target  
bonus amount. The level of the earnings-related com-  
ponent depends on the degree to which the targets  
set by the Supervisory Board for Group net profit  
Earnings-based  
component  
of the bonus  
approx. 12  
Performance  
component  
of the bonus  
approx. 29  
(
from the financial year 2022: earnings share of the  
Performance  
Cash Plan  
approx. 37  
shareholders of BMWAG) and Group post-tax return  
on sales are achieved. The degree of achievement  
is expressed in an earnings factor. The underlying  
measurement values are determined in advance for a  
period of three financial years and may not be changed  
retrospectively. The earnings factor is capped at a  
maximum of 1.8. The bonus is paid out after the end  
of the Annual General Meeting, at which the sepa-  
rate financial statements of BMWAG for the relevant  
financial year are presented.  
2
Simplified depiction of target amounts for the variable cash remuneration of the Chairman  
of the Board of Management. Excludes basic salary, other remuneration and pension  
contribution. Based on the assumption that the share price remains unchanged for the  
calculation of the matching component.  
2
13  
An earnings factor of  
1
.
000 would give rise to a profit-  
A minimum earnings factor of  
event of a Group net profit of €ꢁ3 billion and a post-  
tax return on sales of %. If the Group net profit  
were below €ꢁ billion or the post-tax return on sales  
below %, the earnings factor would be zero. In this  
case, a profit-related component would not be paid.  
The maximum earnings factor of 800 is reached in  
the event of a Group net profit of €ꢁ11 billion and  
a post-tax return on sales of 9 %. In exceptional  
circumstances, for instance major acquisitions or  
disposals, the Supervisory Board may adjust the  
earnings factor.  
0.135 arises in the  
related component of €ꢁ0.255 million for a Board  
member in the first period of office, €ꢁ0.3 million  
from the second period of office or the fourth year  
3
3
of mandate and €ꢁ  
the Board of Management. For instance, in the event  
of a Group net profit of €ꢁ billion and a post-tax  
return on sales of 5.6 %, the earnings factor is 1.000.  
Similarly, a Group net profit of €ꢁ billion and a post-  
0
.
54 million for the Chairman of  
3
5
.
3
1.  
6.9  
tax return on sales of 7.3 % gives rise to an earnings  
factor of 1.500 and a Group net profit of €ꢁ9.0 billion  
and a post-tax return on sales of 8.0 % to one of 1.637.  
1
Earnings components: allocation table for calculating earnings factorꢂ  
•
78  
9
8
.0 Upper limit  
.0  
1
.800  
1.637  
1
.520²  
7
.4  
7
.3  
1
.500  
1
.000  
5
4
.6  
.8  
0
.798³  
0
.135  
3
.0 Lower limit  
3
.0  
5.0 5.3  
6.9 7. 2  
9.0  
11.0  
Upper limit  
Lower limit  
Group net profit after tax (in € billion)  
1
Simplified depiction.  
Earnings factor 2018.  
Earnings factor 2019.  
2
3
The performance-related component is calculated using  
a performance factor which the Supervisory Board sets  
for each member of the Board of Management and  
which is multiplied by 70% of the target bonus amount.  
The Supervisory Board sets the performance factor on  
the basis of a detailed evaluation of the contribution  
made by Board members to sustainable and long-term  
business development over a period of at least three  
financial years. The evaluation by the Supervisory  
Board is based on predefined criteria that take into  
account the Group’s long-term success, the interests  
of shareholders and stakeholders as well as social  
responsibility.  
The criteria include in particular innovation (economic  
and ecological, for example in the reduction of car-  
bon dioxide emissions), the Group’s market position  
compared to its competitors, customer focus, ability  
to adapt, leadership, corporate culture, promotion  
of compliance and integrity, contribution to the  
Group’s attractiveness as an employer, progress in  
implementing the diversity concept, and activities that  
foster corporate social responsibility. The Supervisory  
Board also draws comparisons with competitors. The  
individual performance factor lies between zero and  
a maximum 1.8.  
2
14  
Corporate  
Governance  
Bonus overview  
•
79  
Compensation  
Report  
ꢀ
ARꢃIꢃGS CꢈMꢋꢈꢃꢀꢃꢁ bꢈꢃꢂS  
ꢋꢀRFꢈRMAꢃCꢀ CꢈMꢋꢈꢃꢀꢃꢁ  
ꢁꢈꢁAl  
+
=
Earnings factor  
x 0.3 of target amount  
Performance factor  
x 0.7 of target amount  
—
—
Cash payment  
Capped at 180 %  
of target amount  
—
Value between 0 and 1.8  
—
Value between 0 and 1.8  
Basis for earnings factor:  
Basis for performance factor:  
—
—
Group net profit  
—
Contribution to sustainable and long-term  
business development over a period of  
at least three financial years  
Group post-tax return on sales  
—
Qualitative, mainly non-financial parameters  
ꢋerformance Cash ꢋꢅan  
In order to determine the multi-year earnings factor,  
an earnings factor is calculated for each year of the  
three-year evaluation period and an average is then  
calculated for the evaluation period. As for the earn-  
ings-related component of the bonus, the earnings  
factor for each individual year within the evaluation  
period is determined on the basis of Group net profit  
and post-tax return on sales for the relevant year.  
The maximum earnings factor is 1.8. The underlying  
measurement values are determined in advance for  
a period of three financial years and may not be  
changed retrospectively.  
Since the financial year 2018, variable cash com-  
pensation includes a multi-year and future-oriented  
Performance Cash Plan (PCP). The PCP is calculated  
at the end of a three-year evaluation period by mul-  
tiplying a predefined target amount by a factor that  
is based on multi-year target achievement (the PCP  
factor). The PCP target amount (100%) amounts to  
€ꢁ0.85 million p.ꢁa. for a Board member in the first  
period of office, €ꢁ0.95 million p.ꢁa. from the second  
period of office or the fourth year of mandate and  
€ꢁ1.6 million p.ꢁa. for the Chairman of the Board of  
Management. The maximum amount that can be paid  
to a Board member is capped at 180% of the PCP  
target amount p.ꢁa.  
In addition to the multi-year earnings factor, the  
Supervisory Board also determines a multi-year per-  
formance factor after the end of the evaluation period.  
To this end, the Supervisory Board takes account of  
in particular the business development during the  
evaluation period, the forecast trend in the business  
development, the Board member’s individual contri-  
bution to profitability and the status of compliance  
within the Board member’s area of responsibility.  
The multi-year performance factor can be between  
0.9 and 1.1.  
The PCP evaluation period comprises three years,  
the grant year and the two subsequent years. PCP  
entitlements are paid in cash. The bonus is paid out  
after the end of the Annual General Meeting, at which  
the separate financial statements of BMWAG for the  
third year of the evaluation period are presented.  
In order to determine the PCP factor, a multi-year  
earnings factor is multiplied by a multi-year perfor-  
mance factor. The PCP factor is capped at a maximum  
value of 1.8.  
ꢀ
erformance ꢄash ꢀlan overview  
•
80  
ꢁARGꢀꢁ AMꢈꢂꢃꢁ  
ꢋCꢋ FACꢁꢈR  
CASꢉ ꢋAyMꢀꢃꢁ  
x
=
—
—
Cash payment at end of evaluation period  
Capped at 180 % of target amount  
2
15  
ꢀꢄꢀ factor overview  
• 81  
MꢂlꢁI-yꢀAR ꢀARꢃIꢃGS FACꢁꢈR  
MꢂlꢁI-yꢀAR ꢋꢀRFꢈRMAꢃCꢀ FACꢁꢈR  
ꢋCꢋ FACꢁꢈR  
=
x
—
—
Average earnings factor  
Measurement based on  
multi-year performance factor:  
Based on Group net profit and  
Group post-tax return on sales  
—
—
Trend in business development  
—
Value between 0 and 1.8  
Status of compliance in each Board member’s  
area of responsibility  
—
—
—
Individual contribution to profitability  
Forecast trend in business development  
Value between 0.9 and 1.1  
Members of the Board of Management who were  
Board members on January 2018 receive advance  
payments out of the Performance Cash Plan 2018 and  
the Performance Cash Plan 2019 in the years 2019 and  
ꢈther  
1
In the event of death or invalidity, special rules apply  
for early payment of performance cash plans and  
share-based remuneration components based on  
the target amounts. Insofar as the service contract  
is prematurely terminated and the Company has an  
extraordinary right of termination, or if the Board  
member resigns without the Company’s agreement,  
entitlements to amounts as yet unpaid relating to per-  
formance cash plans and share-based remuneration  
are forfeited.  
2
020. At the end of each relevant evaluation period,  
the advance payment is set off or repaid, depending  
on the amount then determined. The advance pay-  
ment for each relevant year is €ꢁ0.5 million for a Board  
member in the first period of office and €ꢁ0.6 million  
from the second period of office or the fourth year of  
mandate. For the Chairman of the Board of Manage-  
ment the amount is €ꢁ0.9 million p.ꢁa.  
A one-year post-contractual non-competition clause  
has been agreed with Board members under spec-  
ified circumstances. During that one-year period,  
the former Board member is entitled to receive  
monthly compensation equivalent to 60 % of his or  
her previous base remuneration, reduced by any  
amount of other income exceeding 40 % of the base  
remuneration. The Company may unilaterally waive  
the requirement to comply with the post-contractual  
non-competition clause.  
Share-ꢇased remuneration  
At the end of the Annual General Meeting at which  
the separate financial statements of BMW AG for the  
relevant financial year are presented, members of the  
Board of Management receive a cash compensation  
(
investment component) for the specific purpose of  
investment – after tax and deductions – in shares of  
common stock of BMW AG. The investment compo-  
nent corresponds to 45 % of the gross bonus. The  
shares of common stock are purchased immediately  
after the investment component has been paid out.  
As a general rule, the acquired shares are required  
to be held by Board members for four years. This  
period also applies if a Board member leaves the  
Board of Management.  
At the end of the holding period, Board members  
receive from the Company for every three shares of  
common stock held, either one additional share of  
common stock or the cash equivalent, to be decided  
at the Company’s discretion (matching component).  
Upper limits have been defined for both the invest-  
ment component and the matching component  
(
see Overview of compensation system and compen-  
sation components).  
2
16  
Corporate  
Governance  
ꢅverview of compensation system and compensation  
components  
Compensation  
Report  
Component  
Parameter / measurement base  
bASꢀ SAlARy  
Member of the Board of Management:  
—
—
€0.80 million p.a. (first period of office)  
€0.95 million p.a. (from second period of office or fourth year of mandate)  
Chairman of the Board of Management:  
—
€1.80 million p.a.  
ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Bonus  
Target amount p.a. (at 100 % target achievement):  
(
sum of earnings-related bonus and performance-related bonus)  
—
—
—
—
—
€0.85 million (first period of office)  
€1.0 million (from second period of office or fourth year of mandate)  
€1.8 million (Chairman of the Board of Management)  
Capped at 180 % of target amount, see section Remuneration caps  
Payment at the end of the Annual General Meeting at which the separate  
financial statements of BMW AG are presented  
a) Earnings-related bonus  
at 100 % target achievement corresponds to 30 % of target amount)  
—
—
Formula: 30 % target amount x earnings factor  
(
Base amount p.a. (30 % target amount per bonus):  
—
—
—
€0.255 million (first period of office)  
€0.30 million (from second period of office or fourth year of mandate)  
€0.54 million (Chairman of the Board of Management)  
—
Earnings factor is derived from Group net profit (from the financial year 2022: earnings  
share of the shareholders of BMW AG) and Group post-tax return on sales  
—
—
Allocation table fixed in advance for a period of three financial years  
The earnings factor is 1.0 in the event of a Group net profit of €5.3 billion and a post-tax  
return on sales of 5.6 %  
—
—
Earnings factor may not exceed 1.8  
Maximum amount of earnings-related bonus p.a.:  
—
—
—
€0.459 million (first period of office)  
€0.54 million (from second period of office or fourth year of mandate)  
€0.972 million (Chairman of the Board of Management)  
b) Performance-related bonus  
at 100 % target achievement corresponds to 70 % of target amount)  
—
—
Formula: 70 % target amount x performance factor  
(
Base amount p.a. (70 % target amount per bonus):  
—
—
—
€0.595 million (first period of office)  
€0.70 million (from second period of office or fourth year of mandate)  
€1.26 million (Chairman of the Board of Management)  
—
—
Primarily qualitative, non-financial criteria, expressed in terms of a performance factor  
aimed at measuring the Board member’s contribution to the sustainable and long-term  
development and the future viability of the Company over a period of at least three finan-  
cial years  
Criteria for the performance factor include: innovation (economic and ecological, for  
example in the reduction of carbon dioxide emissions), the Group’s market position  
compared to its competitors, customer focus, ability to adapt, leadership, corporate  
culture, promotion of compliance and integrity, contribution to the Group’s attractiveness  
as an employer, progress in implementing the diversity concept, and activities that  
foster corporate social responsibility  
—
—
Performance factor may not exceed 1.8  
Maximum amount of performance-related bonus p.a.:  
—
—
—
€1.071 million (first period of office)  
€1.26 million (from second period of office or fourth year of mandate)  
€2.268 million (Chairman of the Board of Management)  
2
17  
Component  
Parameter / measurement base  
ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance Cash Plan  
Target amount p.a. (at 100 % target achievement):  
—
—
—
€0.85 million (first period of office)  
€0.95 million (from second period of office or fourth year of mandate)  
€1.6 million (Chairman of the Board of Management)  
—
—
Three-year evaluation period  
Capped at 180 % of target amount, see section Remuneration caps  
—
—
—
—
Formula: PCP factor x target amount  
PCP factor: multi-year earnings factor x multi-year performance factor  
PCP factor may not exceed 1.8  
Payment at the end of the Annual General Meeting at which the separate financial state-  
ments of BMW AG for the third year of the evaluation period are presented  
a) Multi-year earnings factor  
—
Earnings factor for each year of three-year evaluation period derived from Group net profit  
and Group post-tax return on sale  
—
Earnings factor for each year may not exceed 1.8  
Average for evaluation period calculated  
—
b) Multi-year performance factor  
—
—
Determined by Supervisory Board at end of evaluation period  
Criteria include in particular the trend in business development during the evaluation  
period, the forecast trend in business development, individual contribution to profitability  
and the status of compliance within the Board member’s area of responsibility  
—
—
Multi-year performance factor can be between 0.9 and 1.1  
Share-based remuneration programme  
Requirement for Board of Management members to invest an amount of 45 % of the  
gross bonus after tax and contributions in BMW AG common stock  
—
Requirement for Board of Management members to hold the acquired shares of common  
stock for four years  
a) Cash remuneration component  
—
—
Earmarked cash remuneration amounting to 45 % of the gross bonus  
Cash remuneration p.a. at 100 % target achievement of the bonus:  
(
investment component)  
—
—
—
€0.3825 million (first period of office)  
€0.45 million (from second period of office or fourth year of mandate)  
€0.81 million (Chairman of the Board of Management)  
—
—
Maximum remuneration, see section Remuneration caps  
Payment at the end of the Annual General Meeting at which the separate financial  
statements of BMW AG for the relevant financial year are presented  
—
—
Share acquisition immediately after payment of earmarked cash remuneration  
b) Share-based remuneration component  
matching component)  
Once the four-year holding period requirement is fulfilled, Board of Management mem-  
bers receive for each three common stock shares held either – at the Company’s option –  
one further share of common stock or the equivalent amount in cash  
(
—
Maximum remuneration, see section Remuneration caps  
ꢈꢁꢉꢀR RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Contractual agreement, main points: non-cash benefits from use of Company car, insurance  
premiums, contributions towards security systems  
2
18  
Corporate  
Governance  
ꢅverview of compensation system and compensation  
components onwards  
Compensation  
Report  
RꢀꢁIRꢀMꢀꢃꢁ Aꢃꢄ SꢂRꢌIꢌIꢃG ꢄꢀꢋꢀꢃꢄAꢃꢁS’ bꢀꢃꢀFIꢁS  
Model  
Principal features  
Defined contribution system with guaranteed minimum rate of return  
Pension based on amounts credited to individual savings accounts for contributions paid  
and interest earned, various forms of disbursement  
Pension contributions p. a.:  
Member of the Board of Management: €350,000  
Chairman of the Board of Management: €500,000  
RꢀMꢂꢃꢀRAꢁIꢈꢃ CAꢋS (MAꢍIMꢂM RꢀMꢂꢃꢀRAꢁIꢈꢃ)  
Share-based compensation programme  
Cash compen-  
sation for share  
acquisition  
Monetary value  
of matching  
component  
Performance  
Cash Plan  
in € p. a.  
Bonus  
Total*  
Member of the Board of Management  
in the first period of office  
1,530,000  
1,530,000  
688,500  
344,500  
4,925,000  
Member of the Board of Management  
in the second period of office or from fourth year of mandate  
1,800,000  
3,240,000  
1,710,000  
2,880,000  
810,000  
405,000  
729,000  
5,500,000  
9,850,000  
Chairman of the Board of Management  
1,458,000  
*
Including base salary, other fixed remuneration elements and pension contribution. The overall cap is lower than the sum of the maximum amounts for each of the individual components.  
Retirement benefits  
If a member of the Board of Management with a vested  
entitlement dies prior to the commencement of bene-  
fit payments, a surviving spouse or registered partner,  
or otherwise surviving children – in the latter case  
depending on their age and education – are entitled  
to receive benefits as surviving dependants.  
With effect from  
1 January 2010, the provision of  
retirement benefits for members of the Board of  
Management was changed to a defined contribution  
system with a guaranteed minimum return. Retire-  
ment benefits remain unchanged as part of the new  
compensation system applicable for financial years  
from 2018 onwards, as they are appropriate and in  
line with customary market practice.  
In the case of death or invalidity, a minimum benefit  
is payable based on the number of contributions  
possible up to the age of 60 (subject to maximum of  
ten contributions).  
If a mandate is terminated, the defined contribution  
system provides, in the case of death or invalidity, for  
amounts accumulated on individual pension accounts  
to be paid out as a one-off amount or in instalments.  
For entitlements arising before 2016, there is an  
option to receive payment as a lifelong pension or in  
a combined form. Former Board members are entitled  
to receive the retirement benefit at the earliest upon  
reaching the age of 60, or in the case of entitlements  
awarded for the first time after 1 January 2012, upon  
reaching the age of 62.  
The annual contribution paid by the Company is  
€ꢁ350,000 for a Board member and €ꢁ500,000 for the  
Chairman of the Board of Management. The guaran-  
teed minimum rate of return p.ꢁa. corresponds to the  
maximum interest rate used to calculate insurance  
reserves for life insurance policies (guaranteed interest  
on life insurance policies). When granting pension  
entitlements, the Supervisory Board considers the  
targeted level of pension provision in each case as well  
as the resulting expense for the BMW Group.  
The amount of the benefits to be paid is determined  
on the basis of the amount accrued in each Board  
member’s individual pension savings account. The  
amount on this account results from annual contri-  
butions paid in, plus interest earned depending on  
the type of investment.  
2
19  
Contributions falling due under the defined contri-  
bution model are paid into an external fund in con-  
junction with a trust model that is also used to fund  
pension obligations to employees.  
to €ꢁ0.06 million. The expected cash value of the match-  
ing component for the relevant proportionate period in  
the financial year 2020 amounts to €ꢁ 05 million. The  
0
.
Company will pay a pension contribution of €ꢁ0.2 mil-  
lion for the period from the date of departure from the  
Board of Management up to 31 December 2019 and a  
corresponding proportionate amount of €ꢁ0.2 million  
for the financial year 2020. Compensation for the  
agreed one-year post-contractual non-competition  
clause amounts to €ꢁ1.1 million. A provision has been  
recognised for remuneration relating to the period  
after 31 December 2019.  
Income earned on an employed or a self-employed  
basis up to the age of 63 may be offset against instal-  
ment payments. In addition, certain circumstances  
have been specified, in the event of which the Com-  
pany no longer has any obligation to pay benefits.  
Transitional payments are not provided.  
In the event of the death of a Board member during  
the service contract term, the base remuneration  
for the month of death and a maximum of three  
further calendar months are paid to entitled surviving  
dependants.  
Ms Caiña Carreiro-Andree left the Board of Manage-  
ment at the end of 31 October 2019 and was released  
from her duties for the remaining period of her ser-  
vice contract (until 30 June 2020). The proportionate  
amount of base and other remuneration relating to  
the period after her departure from the Board and  
to the financial year 2019 amounts to €ꢁ0.2 million.  
Fixed remuneration relating to the financial year 2020  
amounts to €ꢁ0.5 million.  
Members of the Board of Management who retire  
immediately after their service on the Board, or  
who are deemed to be in an equivalent position, are  
entitled to acquire vehicles and other BMW Group  
products and services at conditions that also apply to  
BMW pensioners and to lease BMW Group vehicles in  
accordance with the guidelines applicable to senior  
heads of departments. Retired Chairmen of the Board  
of Management are entitled to use a BMW Group  
vehicle as a company car on a similar basis to senior  
heads of departments, and depending on availability  
and against payment, use BMW chauffeur services.  
Termination benefits on premature termination of  
Board activities, benefits paid by third parties  
In agreement with the Supervisory Board, Mr Krüger  
resigned from the Board of Management at the end of  
1
5 August 2019 and was released from his duties for  
the remaining term of his service contract, which ends  
on 30 April 2020. The proportionate amount of base  
and other remuneration relating to the period after  
his departure from the Board and to the financial year  
2
019 amounted to €ꢁ0.7 million. The proportionate  
amount of base remuneration relating to the finan-  
cial year 2020 amounts to €ꢁ0.6 million. The expected  
amount of variable cash remuneration (bonus, cash  
component of share-based remuneration, PCP) for  
the remaining term of the contract from the date  
of departure from the Board of Management totals  
€ꢁ3.5 million, where necessary taking into account  
forecast figures. This includes the bonus for the period  
from 16 August to 31 December 2019 amounting to  
€
ꢁ0.8 million as well as the proportionate amount of  
the cash component of remuneration (investment  
component) for this period amounting to €ꢁ million.  
0.3  
The cash value of the cash component of share-based  
remuneration (matching component) for the period  
from 16 August 2019 to 31 December 2019 amounts  
2
20  
Corporate  
Governance  
The expected amount of variable cash remuneration  
bonus, cash component of share-based remuneration,  
PCP) for the remaining term of the contract from the  
date of departure from the Board of Management totals  
Remuneration caps  
(
The Supervisory Board has stipulated upper limits  
for all variable remuneration components and for the  
remuneration of members of the Board of Manage-  
ment in total. The upper limits are shown in the table  
Overview of compensation system and compensation  
components.  
Compensation  
Report  
€
ꢁ
1
.
9
million, where necessary taking into account  
forecast figures. This includes a bonus for the period  
from November to 31 December 2019 amounting to  
million and the proportionate amount of the cash  
1
€ꢁ0.2  
component of remuneration (investment component)  
for this period amounting to €ꢁ0.1 million. The cash  
value of the cash remuneration component of the  
share-based remuneration programme (matching  
The overall upper limits (caps) have not changed in  
conjunction with the revised compensation system  
for financial years from 2018 onwards and are lower  
than the sum of the maximum amounts of the various  
individual components.  
component) for the period from  
1 November 2019  
to 31 December 2019 amounts to €ꢁ0.01 million. The  
expected cash value of the matching component for  
the relevant proportionate period in the financial year  
Revision of board of Management compensation for  
financial years from 2021 onwards  
2
020 amounts to €ꢁ  
amount of pension contribution for the 2019 and  
020 financial years is €ꢁ0.1 million and €ꢁ0.2 million  
0
.
05 million. The proportionate  
Regulations governing management board compen-  
sation and the reporting thereof were again reformed  
by lawmakers through the implementation of the EU’s  
Second Shareholder Rights Directive (ARUG II). More-  
over, the Government Commission on the German  
Corporate Governance Code revised the recommenda-  
tions and suggestions relating to management board  
compensation in its revised version of the German  
2
respectively. Compensation for the agreed one-year  
non-competition clause amounts to €ꢁ0.6 million.  
A provision has been recognised for remuneration  
relating to the period after 31 December 2019.  
Mr Schwarzenbauer left the Board of Management at  
the end of 31 October 2019. Under the terms of his  
service contract, a one-year post-contractual non-com-  
petition clause applies. The proportionate amount of  
compensation relating to the financial year 2019 is  
Corporate Governance Code dated 16 December 2019.  
The Supervisory Board has examined the new regula-  
tions and intends to revise the compensation system  
for the Board of Management of BMWAG during the  
financial year 2020. The revised compensation system  
will be submitted for approval by the shareholders at  
the Annual General Meeting held during the finan-  
cial year 2021. The Supervisory Board will also take  
account of input from investors when revising the  
compensation system.  
€
ꢁ
0
.
1
million. The corresponding figure for the remain-  
ing period from 1 January 2020 to 31 October 2020 is  
million, for which a provision has been recognised.  
€ꢁ0.5  
In line with the recommendation of the German  
Corporate Governance Code dated February 2017  
7
,
Board of Management service contracts provide for  
severance pay to be paid to the Board member in  
the event of premature termination by the Company  
without important reason, the amount of which is  
limited to a maximum of two years’ compensation  
(
severance payment cap). If the remaining term of the  
contract is less than two years, the severance payment  
is reduced proportionately. For these purposes, annual  
compensation comprises base remuneration, the target  
bonus amount and the target PCP amount for the last  
full financial year before termination.  
No commitments or agreements exist for payment of  
compensation in the event of early termination of a  
Board member’s mandate due to a change of control or  
a takeover offer. No members of the Board of Manage-  
ment received any payments or relevant commitment  
from third parties in 2019 on account of their activities  
as members of the Board of Management.  
2
21  
ꢁ
otaꢅ compensation of the board of Management for  
penetration of technologies relating to electrification,  
including the opening of the new battery cell com-  
petence centre. Also considered were the continuous  
the financial year 2019 (2018)  
The total compensation of the current members of the  
Board of Management of BMWAG for the financial  
progress made in reducing the fleet’s CO emissions  
2
year 2019 amounted to €ꢁ21  
lion), of which €ꢁ million (2018: €ꢁ  
to fixed components including other remuneration.  
Variable components amounted to €ꢁ12 million (2018  
15 million) and the share-based remuneration com-  
ponent to €ꢁ0.7 million (2018: €ꢁ0.8 million).  
.
4
million (2018: €ꢁ24  
.
0
mil-  
as well as the planning decisions taken – such as  
the development of the product portfolio – to ensure  
compliance with emission thresholds. The develop-  
ment of the market position was another focus area  
of the evaluation. Here, the Supervisory Board took  
into account in particular the BMW Group’s achieve-  
ments in confirming its position as the world’s lead-  
ing premium automobile manufacturer for the 16th  
consecutive year and setting a new delivery volume  
record for the ninth consecutive year. Furthermore,  
the Supervisory Board also considered the Board  
of Management’s decision to successively integrate  
electrified models into the production system. The  
focus on flexible plant structures is a prerequisite for  
the further expansion of electrification. As part of the  
evaluation of other performance criteria, the Supervi-  
sory Board also assessed in particular the Company’s  
ability to adapt to change, measured for example in  
terms of developments in the area of cooperation  
arrangements and strategic investments. In the area  
of Corporate Social Responsibility, consideration  
was given to the BMW Group’s activities to promote  
children and young people through educational  
programmes and road safety education as well as to  
the BMW Group’s excellent performance in various  
sustainability indices over a number of years. The  
BMW Group’s attractiveness as an employer was eval-  
uated by reference to various studies over a period of  
several years, in which the BMW Group was ranked  
among the top employers.  
8
.
1
8.2  
million) relates  
.
6
:
€
ꢁ
.0  
The BMW Group achieved a net profit of €ꢁ5,022 mil-  
lion (2018: €ꢁ7 207 million) and a post-tax return on  
,
sales of 4.8% (2018: 7.4%). According to the defined  
allocation table, these results yield an earnings factor  
of 0.798 (2018: 1.520) for the earnings component  
relevant for the bonus of members of the Board of  
Management in office during the financial year 2019.  
The Supervisory Board set a performance factor of  
1
.20 (2018: 1.20) for the performance component of  
Board members for the financial year 2019.  
In determining the performance factor, the Super-  
visory Board uses various criteria to evaluate the  
contribution of Board members to the sustainable  
and long-term development and future viability of  
the Company. In this context, the Supervisory Board  
considers developments over recent years as well as  
the impact of planning decisions going forward.  
A central topic of focus was innovation performance,  
particularly in the area of electrification. The Super-  
visory Board took into account continuous growth in  
the number of electrified vehicles delivered in recent  
years as well as the measures taken to accelerate the  
2
019  
2018  
Amount  
in € million  
Amount  
Proportion in %  
Proportion in %  
Fixed compensation  
8.1  
12.6  
0.7  
37.8  
58.9  
3.3  
8.2  
15.0  
0.8  
34.2  
62.5  
Variable cash compensation  
Share-based compensation component*  
Total compensation  
3.3  
21.4  
100.0  
24.0  
100.0  
*
Matching component; provisional number/cash value calculated at grant date (date on which the entitlement became binding in accordance with German Accounting Standard 17 (DRS 17)).  
The final number of matching shares is determined in each case when the requirement to invest in BMW AG common stock has been fulfilled.  
The following table shows the compensation of the  
members of the Board of Management in accordance  
with commercial law and the accounting principles  
required to be applied.  
2
22  
Corporate  
Governance  
Compensation of the individuaꢅ memꢇers  
of the board of Management for the  
financial year 2019 (2018)ꢂ  
Compensation  
Report  
Fixed compensation  
Variable cash compensation  
Share-based  
compensation  
component (invest-  
Performance  
Cash Plan  
in € or  
Other  
compensation  
8
number of matching shares  
Base salary  
Total  
Bonus  
ment component)  
2018 – 2020  
Oliver Zipse1  
1,269,892  
50,947  
(24,994)  
87,597  
(22,392)  
60,607  
(74,964)  
71,822  
(64,033)  
29,375  
(–)  
1,320,839  
(924,994)  
1,210,178  
(1,822,392)  
852,274  
(1,024,964)  
1,021,822  
(1,014,033)  
162,708  
(–)  
1,404,380  
(1,231,200)  
1,279,742  
(2,332,800)  
899,500  
631,971  
(554,040)  
575,884  
(1,049,760)  
404,775  
(583,200)  
485,730  
(583,200)  
68,812  
–
(–)  
–
(
900,000)  
Harald Krüger2  
Milagros Caiña Carreiro-Andree3  
Klaus Fröhlich  
Ilka Horstmeier4  
Milan Nedeljković5  
Pieter Nota  
1,122,581  
1,800,000)  
791,667  
(
(–)  
–
(
950,000)  
950,000  
950,000)  
133,333  
(1,296,000)  
1,079,400  
(1,296,000)  
152,915  
(–)  
–
(
(–)  
–
(
–)  
200,000  
–)  
(–)  
(–)  
(–)  
–
5,105  
205,105  
(–)  
229,373  
103,218  
(–)  
(
(–)  
(–)  
(–)  
–
800,000  
800,000)  
800,000  
800,000)  
791,667  
950,000)  
800,000  
200,000)  
20,782  
(90,369)  
29,988  
(38,612)  
37,347  
(51,777)  
102,701  
(13,029)  
496,271  
(421,209)  
820,782  
(890,369)  
829,988  
(838,612)  
829,014  
(1,001,777)  
902,701  
(213,029)  
8,155,411  
(8,222,822)  
917,490  
412,871  
(495,720)  
412,871  
(495,720)  
404,775  
(583,200)  
412,871  
(123,930)  
3,913,778  
(4,657,922)  
(
(
(
(
(1,101,600)  
917,490  
(–)  
–
Nicolas Peter  
(1,101,600)  
899,500  
(–)  
–
Peter Schwarzenbauer6  
Andreas Wendt  
Total7  
(1,296,000)  
917,490  
(–)  
–
(275,400)  
8,697,280  
(10,350,938)  
(–)  
–
7,659,140  
(
7,801,613)  
(–)  
1
Member of the Board of Management since 13 May 2015, Chairman of the Board of Management since 16 August 2019.  
Member and Chairman of the Board of Management until 15 August 2019.  
Member of the Board of Management until 31 October 2019.  
Member of the Board of Management since 1 November 2019.  
Member of the Board of Management since 1 October 2019.  
Member of the Board of Management until 31 October 2019.  
Disclosures for the previous year include amounts relating to a member of the Board of Management who left office with effect from the end of the financial year 2018.  
PCP is paid out after the end of the relevant three-year evaluation period.  
Provisional amount/cash value calculated at grant date (date on which the entitlement became binding in law in accordance with German Accounting Standard 17 (DRS 17).  
The final number of matching shares is determined in each case when the requirement to invest in BMW AG common stock has been fulfilled. See note 41 to the Group Financial Statements  
for a description of the accounting treatment of the share-based compensation component.  
2
3
4
5
6
7
8
9
2
23  
Share-based  
compensation component  
(matching component)  
Compensation  
Total  
9
Variable cash compensation  
Performance  
Cash Plan  
019 – 2021  
8
2
Total  
Number  
Monetary value  
–
2,036,351  
(1,785,240)  
1,855,626  
(3,382,560)  
1,304,275  
(1,879,200)  
1,565,130  
(1,879,200)  
221,727  
1,725  
(1,045)  
1,346  
(1,981)  
1,016  
(1,181)  
1,135  
(1,100)  
173  
103,037  
(90,288)  
93,870  
(171,158)  
70,856  
(102,038)  
79,155  
(95,040)  
12,013  
(–)  
3,460,227  
(2,800,522)  
3,159,674  
(5,376,110)  
2,227,405  
(3,006,202)  
2,666,107  
(2,988,273)  
396,448  
Oliver Zipse1  
Harald Krüger2  
(
(
(
(
(
(
(
(
(
(
(
–)  
–
–)  
–
Milagros Caiña Carreiro-Andree3  
Klaus Fröhlich  
–)  
–
–)  
–
Ilka Horstmeier4  
–)  
–
(–)  
(–)  
(–)  
332,591  
280  
18,026  
(–)  
555,722  
Milan Nedeljković5  
Pieter Nota  
–)  
–
(–)  
(–)  
(–)  
1,330,361  
(1,597,320)  
1,330,361  
(1,597,320)  
1,304,275  
(1,879,200)  
1,330,361  
(399,330)  
12,611,058  
(15,008,860)  
1,036  
(1,004)  
965  
72,251  
(86,746)  
67,299  
(80,784)  
70,856  
(102,038)  
72,251  
(21,645)  
659,614  
(782,828)  
2,223,394  
(2,574,435)  
2,227,648  
(2,516,716)  
2,204,145  
(2,983,015)  
2,305,313  
(634,004)  
21,426,083  
(24,014,510)  
–)  
–
Nicolas Peter  
–)  
–
(935)  
1,016  
(1,181)  
1,036  
(277)  
Peter Schwarzenbauer6  
Andreas Wendt  
–)  
–
–)  
–
9,728  
(9,087)  
Total7  
–)  
2
24  
Corporate  
Governance  
In addition to the disclosures required by German  
commercial law and the accounting principles required  
to be applied, the following tables show the amounts  
awarded and payments made to individual members  
of the Board of Management in accordance with the  
requirements of the German Corporate Governance  
Code in the version dated 7 February 2017.  
Compensation  
Report  
Oliver Zipse  
Chairman of the board of Management  
since 16 August 2019  
Memꢇer of the board of Management  
since 13 Maꢆ 2015  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
1,269,892  
50,947  
1,269,892  
50,947  
1,269,892  
50,947  
900,000  
24,994  
1,269,892  
50,947  
900,000  
24,994  
1,320,839  
1,320,839  
1,320,839  
924,994  
1,320,839  
924,994  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
390,323  
0
702,581  
285,000  
311,477  
433,200  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
665,000  
–
–
798,000  
–
910,753  
1,639,355  
1,092,903  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
916,667  
–
566,666  
–
PCP 2019 – 20212  
1,194,624  
2,150,323  
712,900  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
–
0
–
–
–
–
0
–
427,500  
–
554,040  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
585,484  
1,053,871  
–
631,971  
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2015 for holding obligation 2016 – 2020  
(
–
–
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2016 for holding obligation 2017– 2021  
(
–
–
–
Share-based remuneration component  
matching component) 2017 for holding obligation 2018 – 2022  
(
–
–
–
–
–
90,288  
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
103,037  
526,935  
Other  
–
4,505,060  
406,452  
–
1,320,839  
406,452  
–
7,393,904  
406,452  
–
3,309,449  
353,289  
–
4,070,090  
406,452  
–
3,276,900  
353,289  
Total  
Pension expense3  
Total compensation  
4,911,512  
1,727,291  
7,137,0974 3,662,738  
4,476,542  
3,630,189  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
25  
Harald Krüger  
Chairman of the board of Management  
1
3 Maꢆ 2015 untiꢅ 15 August 2019  
Memꢇer of the board of Management  
since 1 ꢄecemꢇer 2008 untiꢅ 13 Maꢆ 2015  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
1,122,581  
87,597  
1,122,581  
87,597  
1,122,581  
87,597  
1,800,000  
22,392  
1,122,581  
87,597  
1,800,000  
22,392  
1,210,178  
1,210,178  
1,210,178  
1,822,392  
1,210,178  
1,822,392  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
336,774  
336,774  
606,194  
540,000  
336,774  
820,000  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
–
1,260,000  
–
–
1,512,000  
–
903,677  
903,677  
1,414,452  
942,968  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
1,600,000  
–
–
900,000  
–
PCP 2019 – 20212  
997,849  
1,796,129  
561,290  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
–
–
810,000  
–
1,049,760  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
558,203  
558,203  
909,290  
–
575,884  
–
Share-based remuneration component  
matching component) 2013 for holding obligation 2014 – 2018  
(
–
–
–
–
–
88,157  
Share-based remuneration component  
matching component) 2014 for holding obligation 2015 – 2019  
(
–
–
–
–
57,105  
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2015 for holding obligation 2016 – 2020  
(
–
–
–
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2016 for holding obligation 2017– 2021  
(
–
–
–
–
Share-based remuneration component  
matching component) 2017 for holding obligation 2018 – 2022  
(
–
–
–
–
–
–
–
171,158  
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
93,870  
91,011  
454,645  
Other  
–
4,100,551  
316,758  
–
3,099,843  
316,758  
–
6,390,888  
316,758  
–
6,203,550  
504,831  
–
3,684,199  
316,758  
–
6,192,309  
504,831  
Total  
Pension expense3  
Total compensation  
4,417,309  
3,416,601  
6,143,0114 6,708,381  
4,000,957  
6,697,140  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
26  
Corporate  
Governance  
Milagros Caiña Carreiro-Andree  
ꢉuman Resources, Industriaꢅ Reꢅations ꢄirector  
Memꢇer of the board of Management  
Compensation  
Report  
1
Juꢅꢆ 2012 untiꢅ 31 ꢈctoꢇer 2019  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
791,667  
60,607  
791,667  
60,607  
791,667  
60,607  
950,000  
74,964  
791,667  
60,607  
950,000  
74,964  
852,274  
852,274  
852,274  
1,024,964  
852,274  
1,024,964  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
250,000  
0
450,000  
300,000  
199,500  
456,000  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
–
700,000  
–
–
840,000  
–
700,000  
700,000  
1,050,000  
700,000  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
950,000  
–
–
600,000  
–
PCP 2019 – 20212  
791,667  
1,425,000  
500,000  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
–
–
450,000  
–
583,200  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
375,000  
315,000  
675,000  
–
404,775  
–
Share-based remuneration component  
matching component) 2013 for holding obligation 2014 – 2018  
(
–
–
–
–
–
81,130  
Share-based remuneration component  
matching component) 2014 for holding obligation 2015 – 2019  
(
–
–
–
–
52,520  
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2015 for holding obligation 2016 – 2020  
(
–
–
–
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2016 for holding obligation 2017– 2021  
(
–
–
–
–
Share-based remuneration component  
matching component) 2017 for holding obligation 2018 – 2022  
(
–
–
–
–
–
–
–
102,038  
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
70,856  
55,095  
337,500  
Other  
–
3,039,797  
295,446  
–
1,922,369  
295,446  
–
4,789,774  
295,446  
–
3,527,002  
354,224  
–
2,709,069  
295,446  
–
3,585,294  
354,224  
Total  
Pension expense3  
Total compensation  
3,335,243  
2,217,815  
4,583,3334 3,881,226  
3,004,515  
3,939,518  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
27  
Klaus Fröhlich  
ꢄeveꢅopment  
Memꢇer of the board of Management  
since 9 ꢄecemꢇer 2014  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
950,000  
71,822  
950,000  
71,822  
950,000  
71,822  
950,000  
64,033  
950,000  
71,822  
950,000  
64,033  
1,021,822  
1,021,822  
1,021,822  
1,014,033  
1,021,822  
1,014,033  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
300,000  
0
540,000  
300,000  
239,400  
456,000  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
700,000  
–
–
840,000  
–
700,000  
1,260,000  
840,000  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
950,000  
–
–
600,000  
–
PCP 2019 – 20212  
950,000  
1,710,000  
600,000  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
–
0
–
–
–
–
–
0
–
450,000  
–
583,200  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
450,000  
810,000  
–
485,730  
–
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2014 for holding obligation 2015 – 2019  
(
–
–
–
2,966  
Share-based remuneration component  
matching component) 2015 for holding obligation 2016 – 2020  
(
–
–
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2016 for holding obligation 2017– 2021  
(
–
–
–
Share-based remuneration component  
matching component) 2017 for holding obligation 2018 – 2022  
(
–
–
–
–
–
95,040  
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
79,155  
405,000  
Other  
–
3,500,977  
353,327  
–
1,021,822  
353,327  
–
5,746,822  
353,327  
–
3,509,073  
353,119  
–
3,189,918  
353,327  
–
3,493,233  
353,119  
Total  
Pension expense3  
Total compensation  
3,854,304  
1,375,149  
5,500,0004 3,862,192  
3,543,245  
3,846,352  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
28  
Corporate  
Governance  
Ilka Horstmeier  
ꢉuman Resources, Industriaꢅ Reꢅations ꢄirector  
Memꢇer of the board of Management  
since 1 ꢃovemꢇer 2019  
Compensation  
Report  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
133,333  
29,375  
133,333  
29,375  
133,333  
29,375  
–
–
–
133,333  
29,375  
–
–
–
162,708  
162,708  
162,708  
162,708  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
42,500  
0
76,500  
–
33,915  
–
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
–
–
–
–
–
99,167  
178,500  
119,000  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
–
–
–
0
–
–
PCP 2019 – 20212  
141,667  
255,000  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
63,750  
12,013  
–
0
0
–
114,750  
57,417  
–
–
–
–
68,812  
–
–
–
–
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
Other  
–
521,805  
58,333  
–
162,708  
58,333  
–
844,875  
58,333  
–
–
–
–
384,435  
58,333  
–
–
–
Total  
Pension expense3  
Total compensation  
580,138  
221,041  
820,8334  
–
442,768  
–
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
29  
Milan Nedeljković  
ꢋroduction  
Memꢇer of the board of Management  
since 1 ꢈctoꢇer 2019  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
200,000  
5,105  
200,000  
5,105  
200,000  
5,105  
–
–
–
200,000  
5,105  
–
–
–
205,105  
205,105  
205,105  
205,105  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
63,750  
0
114,750  
–
50,873  
–
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
–
–
–
–
–
148,750  
267,750  
178,500  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
–
–
–
0
–
–
PCP 2019 – 20212  
212,500  
382,500  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
95,625  
18,026  
–
0
0
–
172,125  
86,125  
–
–
–
–
103,218  
–
–
–
–
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
Other  
–
743,756  
87,500  
–
205,105  
87,500  
–
1,228,355  
87,500  
–
–
–
–
537,696  
87,500  
–
–
–
Total  
Pension expense3  
Total compensation  
831,256  
292,605  
1,231,2504  
–
625,196  
–
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
30  
Corporate  
Governance  
Pieter Nota  
Customer, brands, Saꢅes  
Memꢇer of the board of Management  
since 1 Apriꢅ 2018  
Compensation  
Report  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
800,000  
20,782  
800,000  
20,782  
800,000  
20,782  
800,000  
90,396  
800,000  
20,782  
800,000  
90,396  
820,782  
820,782  
820,782  
890,396  
820,782  
890,396  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
255,000  
0
459,000  
255,000  
203,490  
387,600  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
595,000  
–
–
714,000  
–
595,000  
1,071,000  
714,000  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
850,000  
–
–
500,000  
–
PCP 2019 – 20212  
850,000  
1,530,000  
500,000  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
382,500  
–
–
0
–
0
–
688,500  
–
382,500  
–
495,720  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
–
86,746  
–
412,871  
–
–
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
–
–
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
72,251  
344,500  
Other  
–
2,975,533  
359,979  
–
820,782  
359,979  
–
4,913,782  
359,979  
–
3,059,642  
350,000  
–
2,651,143  
359,979  
–
2,987,716  
350,000  
Total  
Pension expense3  
Total compensation  
3,335,512  
1,180,761  
4,925,0004 3,409,642  
3,011,122  
3,337,716  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
31  
Nicolas Peter  
Finance  
Memꢇer of the board of Management  
since 1 Januarꢆ 2017  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
800,000  
29,988  
800,000  
29,988  
800,000  
29,988  
800,000  
38,612  
800,000  
29,988  
800,000  
38,612  
829,988  
829,988  
829,988  
838,612  
829,988  
838,612  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
255,000  
0
459,000  
255,000  
203,490  
387,600  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
595,000  
–
–
714,000  
–
595,000  
1,071,000  
714,000  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
850,000  
–
–
500,000  
–
PCP 2019 – 20212  
850,000  
1,530,000  
500,000  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
382,500  
–
–
0
–
–
0
–
688,500  
–
382,500  
–
495,720  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
–
412,871  
–
–
–
–
Share-based remuneration component  
matching component) 2017 for holding obligation 2018 – 2022  
(
–
80,784  
–
–
–
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
–
–
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
67,299  
344,500  
Other  
–
2,979,787  
353,327  
–
829,988  
353,327  
–
4,922,988  
353,327  
–
3,001,896  
353,119  
–
2,660,349  
353,327  
–
2,935,932  
353,119  
Total  
Pension expense3  
Total compensation  
3,333,114  
1,183,315  
4,925,0004 3,355,015  
3,013,676  
3,289,051  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
32  
Corporate  
Governance  
Peter Schwarzenbauer  
ransformation ꢀꢅectromoꢇiꢅitꢆ  
Memꢇer of the board of Management  
since 1 Apriꢅ 2013 untiꢅ 31 ꢈctoꢇer 2019  
ꢁ
Compensation  
Report  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
791,667  
37,347  
791,667  
37,347  
791,667  
37,347  
950,000  
51,777  
791,667  
37,347  
950,000  
51,777  
829,014  
829,014  
829,014  
1,001,777  
829,014  
1,001,777  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
250,000  
0
450,000  
300,000  
199,500  
456,000  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
700,000  
–
–
840,000  
–
583,333  
1,050,000  
700,000  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
950,000  
–
–
600,000  
–
PCP 2019 – 20212  
791,667  
1,425,000  
500,000  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
–
0
–
–
–
–
–
–
0
–
450,000  
–
583,200  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
375,000  
675,000  
–
404,775  
–
Share-based remuneration component  
matching component) 2013 for holding obligation 2014 – 2018  
(
–
–
–
–
60,779  
Share-based remuneration component  
matching component) 2014 for holding obligation 2015 – 2019  
(
–
–
–
52,520  
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2015 for holding obligation 2016 – 2020  
(
–
–
–
–
–
–
–
–
Share-based remuneration component  
matching component) 2016 for holding obligation 2017– 2021  
(
–
–
–
Share-based remuneration component  
matching component) 2017 for holding obligation 2018 – 2022  
(
–
–
–
–
–
102,038  
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
70,856  
337,500  
Other  
–
2,899,870  
291,667  
–
829,014  
291,667  
–
4,766,514  
291,667  
–
3,503,815  
353,119  
–
2,685,809  
291,667  
–
3,541,756  
353,119  
Total  
Pension expense3  
Total compensation  
3,191,537  
1,120,681  
4,583,3334 3,856,934  
2,977,476  
3,894,875  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
33  
Andreas Wendt  
urchasing and Supplier ꢁetwork  
ꢀ
Memꢇer of the board of Management  
since 1 ꢈctoꢇer 2018  
Grants  
Payout  
FY 2019  
in €  
FY 2019  
FY 2019 (Min) FY 2019 (Max)  
FY 2018  
FY 2018  
bASꢀ SAlARy  
Fixed compensation  
Fringe benefits (other compensation)  
Total  
800,000  
102,701  
902,701  
800,000  
102,701  
902,701  
800,000  
102,701  
902,701  
200,000  
13,029  
800,000  
102,701  
902,701  
200,000  
13,029  
213,029  
213,029  
ꢈꢃꢀ-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Earnings-based component of the bonus1  
255,000  
0
459,000  
63,750  
203,490  
96,900  
MꢂlꢁI-yꢀAR ꢌARIAblꢀ RꢀMꢂꢃꢀRAꢁIꢈꢃ  
Performance component of the bonus  
Performance component of the bonus 2018 (three-year plan term)1  
Performance component of the bonus 2019 (three-year plan term)1  
–
–
0
–
148,750  
–
–
178,500  
–
595,000  
1,071,000  
714,000  
Performance Cash Plan  
PCP 2018 – 20202  
–
–
0
–
212,500  
–
–
0
0
–
PCP 2019 – 20212  
850,000  
1,530,000  
Share-based remuneration programme  
Cash remuneration component  
(
investment component) 2018 for holding obligation 2019 – 20231  
–
382,500  
–
–
0
–
0
–
688,500  
–
95,625  
–
123,930  
Cash remuneration component  
investment component) 2019 for holding obligation 2020 – 20241  
(
–
21,645  
–
412,871  
–
–
–
Share-based remuneration component  
matching component) 2018 for holding obligation 2019 – 2023  
(
–
–
Share-based remuneration component  
matching component) 2019 for holding obligation 2020 – 2024  
(
72,251  
344,500  
Other  
–
3,057,452  
353,327  
–
902,701  
353,327  
–
4,995,701  
353,327  
–
755,299  
132,500  
–
2,233,062  
353,327  
–
612,359  
132,500  
Total  
Pension expense3  
Total compensation  
3,410,779  
1,256,028  
4,925,0004  
887,799  
2,586,389  
744,859  
1
The bonus and cash remuneration component reported for the financial years 2019 and 2018 in accordance with the German Corporate Governance Code will be paid in 2020 and 2019 respectively.  
Advance payments relating to the PCP 2019 – 2021 and the PCP 2018 – 2020 reported for the 2019 and 2018 financial years will be paid in 2020 or 2019.  
Pension expense measured in accordance with IAS 19 reflects the expense recognised by the Company; this amount was not paid in the financial year.  
Agreed cap. The cap is lower than the sum of the maximum amounts of the various individual components.  
2
3
4
2
34  
Corporate  
Governance  
For financial years from 2018 onwards, a new variable  
compensation component was introduced in the form  
of the Performance Cash Plan. The PCP is paid out after  
the end of the relevant three-year evaluation period. In  
the case of the PCP for the financial year 2019, the eval-  
uation period covers the financial years 2019 to 2021.  
At the end of each relevant evaluation period, the  
advance payments are set off or repaid, depending  
on the amount then determined. In the financial year  
2019, an expense of €ꢁ8.3 million (2018: €ꢁ5.3 million)  
Compensation  
Report  
was recognised for the PCP in accordance with IAS 19  
.
The target amount for the PCP 2019  
lion for Mr Zipse, €ꢁ0.95 million for Mr Fröhlich,  
142 million for Ms Horstmeier, €ꢁ 213 million for  
Mr Nedeljković and €ꢁ 85 million each for Mr Nota,  
Dr Peter and Dr Wendt. The proportionate amount of  
the target amount is €ꢁ 998 million for Mr Krüger and  
792 million each for Ms Caiña Carreiro-Andree and  
Mr Schwarzenbauer. Due to the fact that the criteria for  
the evaluation period 2019 to 2021 have not yet been  
fully met, this component is not included in variable  
compensation for the financial year 2019.  
–
2021 is €ꢁ  
1
.
195 mil-  
Members of the Board of Management hold a total of  
92,519 shares of BMW common stock (2018: 65,690)  
which are subject to holding requirements relating  
€
ꢁ
0
.
0.  
0
.
to the financial years 2015–2018 (cash remuneration  
components 2015 – 2018). The cash remuneration  
component for the financial year 2019 will be paid  
after the Annual General Meeting 2020. The purchase  
of shares of BMW common stock takes place imme-  
diately thereafter.  
0
.
€ꢁ0.  
In the financial year 2019, advance payments totalling  
€
ꢁ
4
.
27 million were made to the members of the  
Board of Management, who belonged to the Board at  
January 2018, for the PCP 2018 –2020. This figure  
1
includes advance payments to Mr Krüger, Ms Caiña  
Carreiro-Andree and Mr Schwarzenbauer totalling  
€
ꢁ2.10 million.  
2
35  
Shares of BMW common stock held by individual  
memꢇers of the board of Management suꢇject to  
holding requirements in connection with share-based  
1
remuneration for the financial years 2015–2018ꢂ  
1
in €  
Total  
Oliver Zipse2  
11,938  
(
7,821)  
Harald Krüger3  
24,788  
19,528)  
15,608  
13,294)  
13,305  
(
(
Milagros Caiña Carreiro-Andree4  
Klaus Fröhlich  
(
9,106)  
Ilka Horstmeier5  
Milan Nedeljković6  
Pieter Nota  
–
(
(
–)  
–
–)  
3,954  
–)  
(
Nicolas Peter  
6,736  
(
3,053)  
Peter Schwarzenbauer7  
Andreas Wendt  
Total  
15,202  
12,888)  
988  
(
(
(
–)  
92,519  
65,690)  
1
Only takes into account shares of BMW common stock acquired with the cash remuneration component relating to the Board of Management’s  
share-based remuneration programme and for which the four-year holding requirement has not yet expired.  
Member of the Board of Management since 13 May 2015, Chairman of the Board of Management since 16 August 2019.  
Member and Chairman of the Board of Management until 15 August 2019.  
Member of the Board of Management until 31 October 2019.  
Member of the Board of Management since 1 November 2019.  
Member of the Board of Management since 1 October 2019.  
Member of the Board of Management until 31 October 2019.  
2
3
4
5
6
7
In addition, an expense of €ꢁ  
2
.
9
million (2018: €ꢁ  
3
.
4
mil-  
totalling €ꢁ10.3 million, as reported above, in con-  
nection with the departure of Mr Krüger, Ms Caiña  
Carreiro-Andree and Mr Schwarzenbauer from the  
Board of Management. Some of these amounts have  
not yet been paid.  
lion) was recognised in the financial year 2019 for  
current members of the Board of Management for  
the period after the end of their service relationship.  
This relates to the expense for allocations to pension  
provisions in accordance with IAS 19.  
Pension obligations to former members of the Board  
of Management and their surviving dependants are  
fully covered by pension provisions amounting to  
Total benefits paid to former members of the Board of  
Management and their surviving dependants for the  
financial year 2019 amounted to €ꢁ16  
million). This total figure of former members  
of the Board of Management also includes amounts  
.
0
million (2018  
:
€ꢁ113.1 million (2018: €ꢁ91.0 million), recognised in  
accordance with IAS 19.  
€ꢁ9.2  
2
36  
Corporate  
Governance  
Share-ꢇased component of the individuaꢅ memꢇers  
of the board of Management for the  
financial year 2019 (2018)ꢂ1  
Compensation  
Report  
Provision at  
31.12. 2019 in  
accordance with  
HGB and IFRS  
Expense in 2019  
in accordance with  
HGB and IFRS  
1
in €  
Oliver Zipse2  
135,272  
358,043  
(222,771)  
571,504  
(458,341)  
359,649  
(268,257)  
356,008  
(254,591)  
668  
(
29,002)  
170,267  
30,821)  
143,912  
46,218)  
Harald Krüger3  
Milagros Caiña Carreiro-Andree4  
Klaus Fröhlich  
Ilka Horstmeier5  
Milan Nedeljković6  
Pieter Nota  
(
(
104,384  
–19,097)  
668  
(
(
–)  
1,516  
–)  
(–)  
1,516  
(
(–)  
76,736  
100,397  
(23,661)  
231,415  
(80,987)  
441,254  
(354,125)  
36,304  
(
23,661)  
Nicolas Peter  
150,428  
51,812)  
139,649  
(
Peter Schwarzenbauer7  
Andreas Wendt  
Total8  
(
32,264)  
34,672  
(
1,632)  
(1,632)  
957,504  
2,456,758  
(1,786,110)  
(
274,927)  
1
Provisional number or provisional monetary value calculated on the basis of the closing price of BMW common stock in the Xetra trading system on 30 December 2019 (€73.14) (fair value at reporting date).  
Member of the Board of Management since 13 May 2015, Chairman of the Board of Management since 16 August 2019.  
Member and Chairman of the Board of Management until 15 August 2019.  
Member of the Board of Management until 31 October 2019.  
Member of the Board of Management since 1 November 2019.  
Member of the Board of Management since 1 October 2019.  
Member of the Board of Management until 31 October 2019.  
Disclosures for the previous year include amounts relating to a member of the Board of Management who left office during the financial year 2018.  
2
3
4
5
6
7
8
2
37  
ꢋension entitꢅements  
Service cost in  
accordance with  
IFRS for the  
Service cost in  
accordance with  
HGB for the  
Defined benefit  
obligation IFRS  
Defined benefit  
1
obligation HGB  
1
1
1
in €  
financial year 2019 financial year 2019  
Oliver Zipse2  
406,452  
353,289)  
316,758  
504,831)  
295,446  
354,224)  
353,327  
353,119)  
58,333  
406,452  
(356,550)  
319,966  
(509,486)  
297,688  
(357,468)  
355,573  
(356,382)  
58,333  
3,054,273  
(2,298,444)  
7,259,148  
(5,753,913)  
3,463,676  
(2,561,031)  
3,256,267  
(2,660,630)  
993,548  
3,054,125  
(2,298,405)  
7,259,148  
(5,753,776)  
3,463,676  
(2,560,943)  
3,256,267  
(2,660,630)  
992,662  
(
(
(
(
Harald Krüger3  
Milagros Caiña Carreiro-Andree4  
Klaus Fröhlich  
Ilka Horstmeier5  
Milan Nedeljković6  
Pieter Nota  
(
–)  
87,500  
–)  
(–)  
(–)  
(–)  
87,500  
1,421,605  
(–)  
1,421,152  
(–)  
(
(–)  
359,979  
350,000)  
353,327  
353,119)  
291,667  
353,119)  
353,327  
132,500)  
362,125  
(350,000)  
355,573  
(356,382)  
291,667  
(356,382)  
355,573  
(132,500)  
2,890,450  
(2,775,150)  
760,562  
760,306  
(
(
(
(
(350,276)  
2,656,550  
(2,004,567)  
2,682,925  
(2,188,161)  
2,414,082  
(1,886,766)  
27,962,636  
(19,703,788)  
(350,041)  
2,656,550  
(2,004,567)  
2,682,925  
(2,188,159)  
2,414,082  
(1,886,766)  
27,960,893  
(19,703,287)  
Nicolas Peter  
Peter Schwarzenbauer7  
Andreas Wendt  
Total8  
2,876,116  
(
2,754,201)  
1
Service cost differs due to the different valuation bases used to measure pension obligations for HGB purposes (expected settlement amount)  
and for IFRS purposes (present value of the defined benefit obligation).  
2
3
4
5
6
7
8
Member of the Board of Management since 13 May 2015, Chairman of the Board of Management since 16 August 2019.  
Member and Chairman of the Board of Management until 15 August 2019.  
Member of the Board of Management until 31 October 2019.  
Member of the Board of Management since 1 November 2019.  
Member of the Board of Management since 1 October 2019.  
Member of the Board of Management until 31 October 2019.  
Prior year’s figures comprise only members of the Board of Management at 31 December 2018.  
2
38  
Corporate  
Governance  
2. Supervisorꢆ board compensation  
With fixed compensation elements and an earnings-  
related compensation component oriented toward  
sustainable growth, the compensation structure in  
place for BMWAG’s Supervisory Board complies with  
the recommendation on supervisory board compensa-  
tion contained in section 5.4.6 paragraph 2 sentence 2  
of the German Corporate Governance Code (version  
dated 7 February 2017).  
Compensation  
Report  
Responsiꢇiꢅities, provisions of Articꢅes of  
Incorporation  
The compensation of the Supervisory Board is specified  
either by a resolution of the shareholders at the Annual  
General Meeting or in the Articles of Incorporation.  
The compensation provisions valid for the financial  
year under report were resolved by shareholders at  
the Annual General Meeting on 14 May 2013 and  
are set out in Article 15 of BMW AG’s Articles of  
Incorporation, which are available at www.bmwgroup.com  
within the section “Company” (menu items “Company  
Portrait” and “Corporate Governance”) as well as in  
The German Corporate Governance Code (version  
dated 7 February 2017) also recommends in sec-  
tion 5.4.6 paragraph 1 sentence 2 that the exercising  
of chair and deputy chair positions in the Supervisory  
Board as well as the chair and membership of commit-  
tees should also be considered in the compensation.  
“
BMW Group Download Centre”.  
Compensation principꢅes, compensation components  
The Supervisory Board of BMWAG receives a fixed  
compensation component as well as an earnings-  
related compensation component, which is oriented  
toward sustainable growth. The earnings-related  
component is based on average earnings per share  
of common stock for the remuneration year and the  
two preceding financial years.  
Accordingly, the Articles of Incorporation of BMW AG  
stipulate that the Chairman of the Supervisory Board  
shall receive three times the amount and each Deputy  
Chairman shall receive twice the amount of the  
remuneration of a Supervisory Board member. Each  
chairman of the Supervisory Board’s committees  
receives twice the amount and each member of a  
committee receives one-and-a-half times the amount  
of the remuneration of a Supervisory Board mem-  
ber, provided the relevant committee convened for  
meetings on at least three days during the financial  
year. If a member of the Supervisory Board exercises  
more than one of the functions referred to above,  
the compensation is measured only on the basis of  
the function that is remunerated with the highest  
amount.  
The fixed and earnings-related components in combi-  
nation are intended to ensure that the compensation  
of Supervisory Board members is appropriate in  
relation to the tasks of Supervisory Board members  
and the Company’s financial condition and also  
takes account of the Company’s performance over  
several years.  
In accordance with the Articles of Incorporation, each  
member of BMWAG’s Supervisory Board receives, in  
addition to the reimbursement of reasonable expenses,  
a fixed amount of €ꢁ70,000 (payable at the end of the  
year) as well as earnings-related compensation of €ꢁ170  
In addition, each member of the Supervisory Board  
receives an attendance fee of €ꢁ2,000 for each full  
meeting of the Supervisory Board (Plenum) which  
the member has attended, payable at the end of the  
financial year. Attendance at more than one meeting  
on the same day is not remunerated separately.  
for each full €ꢁ  
0.01 by which the average amount of  
(
undiluted) earnings per share (EPS) of common stock  
reported in the Group Financial Statements for the  
remuneration year and the two preceding financial  
years exceeds a minimum amount of €ꢁ2.00, payable  
after the Annual General Meeting held in the fol-  
lowing year. An upper limit corresponding to twice  
the amount of the fixed compensation is in place for  
the earnings-related compensation. The limit for a  
member of the Supervisory Board with no additional  
compensation-relevant function is set at €ꢁ140,000.  
The Company also reimburses to each member of the  
Supervisory Board reasonable expenses and any value-  
added tax arising on the member’s remuneration. The  
amounts disclosed below are net amounts.  
In order to perform his duties, the Chairman of the  
Supervisory Board has the use of an office, with  
administrative support, as well as access to the BMW  
car service.  
2
39  
ꢁ
otaꢅ compensation of the Supervisorꢆ board for the  
remuneration of €ꢁ2.0 million (2018: €ꢁ2.0 million)  
and variable remuneration of €ꢁ3.6 million (2018:  
financial year 2019  
In accordance with Article 15 of the Articles of Incor-  
poration, the compensation of the Supervisory Board  
for activities during the financial year 2019 totalled  
€ꢁ3.6 million). The earnings-related remuneration for  
the financial year 2019 was capped at the maximum  
amount stipulated in the Articles of Incorporation.  
€ꢁ5.6 million (2018: €ꢁ5.6 million). This includes fixed  
2
019  
2018  
Amount  
in € million  
Amount  
Proportion in %  
Proportion in %  
Fixed compensation  
Variable compensation  
Total compensation  
2.0  
3.6  
5.6  
35.7  
64.3  
2.0  
3.6  
5.6  
35.7  
64.3  
100.0  
100.0  
Supervisory Board members did not receive any fur-  
ther compensation or benefits from the BMW Group  
for advisory or agency services personally rendered.  
2
40  
Corporate  
Governance  
Compensation of the individuaꢅ memꢇers of the  
Supervisory Board for the financial year 2019 (2018)  
Compensation  
Report  
Fixed  
Variable  
in €  
compensation  
Attendance fee  
compensation  
Total  
Norbert Reithofer (Chairman)  
210,000  
10,000  
(10,000)  
10,000  
(10,000)  
10,000  
(10,000)  
10,000  
(8,000)  
8,000  
420,000  
(420,000)  
280,000  
(280,000)  
280,000  
(280,000)  
280,000  
(280,000)  
280,000  
(280,000)  
140,000  
(140,000)  
140,000  
(87,312)  
87,688  
640,000  
(640,000)  
430,000  
(430,000)  
430,000  
(430,000)  
430,000  
(428,000)  
428,000  
(430,000)  
220,000  
(218,000)  
220,000  
(138,968)  
139,532  
(–)  
(
(
(
(
(
210,000)  
140,000  
140,000)  
140,000  
140,000)  
140,000  
140,000)  
140,000  
140,000)  
70,000  
Manfred Schoch (Deputy Chairman)1  
Stefan Quandt (Deputy Chairman)  
Stefan Schmid (Deputy Chairman)1  
Karl-Ludwig Kley (Deputy Chairman)  
Christiane Benner1  
(10,000)  
10,000  
(8,000)  
10,000  
(8,000)  
8,000  
(
70,000)  
70,000  
43,656)  
43,844  
Kurt Bock  
(
Verena zu Dohna-Jaeger1, 2  
Franz Haniel3  
(
–)  
(–)  
(–)  
26,344  
70,000)  
26,344  
70,000)  
70,000  
70,000)  
70,000  
70,000)  
2,000  
52,688  
81,032  
(
(
(
(
(8,000)  
2,000  
(140,000)  
52,688  
(218,000)  
81,032  
Ralf Hattler3  
(10,000)  
10,000  
(10,000)  
8,000  
(140,000)  
140,000  
(140,000)  
122,0004  
(120,000)  
(220,000)  
220,000  
(220,000)  
200,000  
(200,000)  
Heinrich Hiesinger  
Reinhard Hüttl4  
(10,000)  
1
These employee representatives have – in line with the guidelines of the Deutscher Gewerkschaftsbund – requested that their remuneration be paid into the Hans Böckler-Stiftung.  
Member of the Supervisory Board since 16 May 2019.  
Member of the Supervisory Board until 16 May 2019.  
2
3
4
Due to the requirements of his employer, Prof. Dr. Hüttl has waived his Supervisory Board compensation until further notice, to the extent that such compensation exceeds the amount of €200,000  
(
excluding value added tax) p.a.  
2
41  
Compensation of the individuaꢅ memꢇers of the  
Supervisory Board for the financial year 2019 (2018)  
Fixed  
Variable  
in €  
compensation  
Attendance fee  
compensation  
Total  
Susanne Klatten  
70,000  
10,000  
(8,000)  
10,000  
(10,000)  
10,000  
(10,000)  
10,000  
(10,000)  
10,000  
(8,000)  
10,000  
(10,000)  
10,000  
(10,000)  
8,000  
140,000  
(140,000)  
140,000  
(140,000)  
140,000  
(140,000)  
140,000  
(140,000)  
140,000  
(140,000)  
140,000  
(140,000)  
140,000  
(140,000)  
87,688  
220,000  
(218,000)  
220,000  
(220,000)  
220,000  
(220,000)  
220,000  
(220,000)  
220,000  
(218,000)  
220,000  
(220,000)  
220,000  
(220,000)  
139,532  
(–)  
(
(
(
(
(
(
(
70,000)  
70,000  
70,000)  
70,000  
70,000)  
70,000  
70,000)  
70,000  
70,000)  
70,000  
70,000)  
70,000  
70,000)  
43,844  
Renate Köcher  
Horst Lischka1  
Willibald Löw1  
Simone Menne  
Dominique Mohabeer1  
Brigitte Rödig1  
Vishal Sikka2  
Jürgen Wechsler1, 3  
Thomas Wittig2  
Werner Zierer1  
Total4  
(
–)  
(–)  
(–)  
26,344  
70,000)  
43,844  
2,000  
52,688  
81,032  
(
(8,000)  
8,000  
(140,000)  
87,688  
(218,000)  
139,532  
(–)  
(
–)  
(–)  
(–)  
70,000  
10,000  
(10,000)  
196,000  
(188,000)  
140,000  
(140,000)  
3,623,128  
(3,620,377)  
220,000  
(220,000)  
5,639,692  
(5,628,565)  
(
70,000)  
1,820,564  
(
1,820,188)  
1
These employee representatives have – in line with the guidelines of the Deutscher Gewerkschaftsbund – requested that their remuneration be paid into the Hans Böckler-Stiftung.  
Member of the Supervisory Board since 16 May 2019.  
Member of the Supervisory Board until 16 May 2019.  
2
3
4
Disclosures for the previous year include amounts relating to a member of the Supervisory Board who left office during the financial year 2018.  
Revision of Supervisorꢆ board compensation for  
3. ꢈther  
financial years from 2020 onwards  
The Supervisory Board and Board of Management  
propose to submit a proposal to the Annual General  
Meeting 2020 to change Supervisory Board compensa-  
With the exception of purchase, rental, leasing and  
financing contracts for vehicles on customary terms  
and conditions and the advance payments relating to  
tion for financial years beginning after  
1
January 2020  
the PCP 2018–2020 described above, neither BMWAG  
to an exclusively fixed compensation. The proposal of  
an exclusively fixed compensation model also corre-  
sponds to the new suggestion for supervisory board  
remuneration put forward by the Government Com-  
mission on the German Corporate Governance Code  
in the Code version dated 16 December 2019, section  
G.18. The proposed model is intended to strengthen  
the independent advisory and control function of the  
Supervisory Board. At the same time, the proposal will  
also help to simplify the compensation system.  
nor any of its subsidiaries granted loans or advances to  
members of the Board of Management or the Super-  
visory Board during the financial year 2019, nor were  
any contingent liabilities entered into on their behalf.  
A detailed description of the proposal will be included  
in the invitation to the Annual General Meeting 2020  
.
2
42  
Corporate  
Governance  
GLOSSARY – EXPLANATION  
OF KEY FIGURES  
Cash flow hedge  
A hedge against exposures to the variability in fore-  
casted cash flows, particularly in connection with  
exchange rate fluctuations.  
Glossary –  
Explanation  
of Key Figures  
CO fleet emissions  
2
Asset-backed financing transactions  
The calculation of average CO fleet emissions of a  
2
A form of corporate financing involving the sale of  
receivables to a financing company.  
manufacturer is reported through the weighted aver-  
age of CO emissions by all vehicles newly registered  
2
in the reporting period. The calculation is based on  
the volume of new registrations of the manufacturer  
in the EU in the calendar year as well as the individual  
vehicle-specific CO2 emissions, which have been cal-  
culated based on the WLTP test cycle and adapted to  
the New European Driving Cycle (NEDC). Additional  
effects from the recognition of eco-innovations are not  
taken into consideration in the disclosure of fleet emis-  
sions for 2019. For the 2020 forecast, the disclosure  
relates purely to a reduction of the CO2 fleet emissions  
and not the CO2 fleet limit, which the BMW Group  
needs to achieve. This means that the recognition of  
super credits, phase-in and eco-innovations is not part  
of the forecast.  
Bond  
A securitised debt instrument in which the issuer  
certifies its obligation to repay the nominal amount  
at the end of a fixed term and to pay a fixed or variable  
rate of interest.  
Business volume in balance sheet terms  
The sum of the balance sheet line items “Leased prod-  
ucts” and “Receivables from sales financing” (current  
and non-current), as reported in the balance sheet for  
the Financial Services segment.  
Capital expenditure ratio  
Commercial paper  
Investments in property, plant and equipment and  
other intangible assets (excluding capitalised devel-  
opment costs) as a percentage of Group revenues.  
Short-term debt instruments with a term of less than  
one year which are usually issued at a discount to  
their face value.  
Capitalisation rate  
Consolidation  
Capitalised development costs as a percentage of  
research and development expenditure.  
The process of combining separate financial state-  
ments of Group entities into Group Financial State-  
ments, depicting the financial position, net assets  
and results of operations of the Group as a single  
economic entity.  
Cash flow  
Liquid funds generated (cash inflows) or used (cash  
outflows) during a reporting period.  
Cash flow at risk  
Similar to “value at risk” (see definition below).  
2
43  
Credit default swap (CDS)  
EBIT  
Financial swap agreements, under which creditors of  
securities (usually bonds) pay premiums to the seller  
of the CDS to hedge against the risk that the issuer of  
the bond will default. As with credit default insurance  
agreements, the party receiving the premiums gives  
a commitment to compensate the bond creditor in  
the event of default.  
Abbreviation for “Earnings Before Interest and Taxes”,  
equivalent in the BMW Group income statement to  
“Profitꢁ/ꢁloss before financial result”. This is comprised  
of revenues less cost of sales, selling and administra-  
tive expenses and the net amount of other operating  
income and expenses.  
EBIT margin  
Deliveries  
Profitꢁ/ꢁloss before financial result as a percentage of  
A new or used vehicle will be recorded as a deliv-  
ery once handed over to the end user (which also  
includes leaseholders under lease contracts with  
BMW Financial Services). In the US and Canada, end  
users also include (1) dealers when they designate a  
vehicle as a service loaner or demonstrator vehicle  
revenues.  
EBT  
EBIT plus financial result.  
and (2) dealers and other third parties when they  
purchase a company vehicle at auction and dealers  
when they purchase company vehicles directly from  
Effective tax rate  
The effective tax rate is calculated by dividing the  
income tax expense by the Group profit before tax.  
BMW Group. Deliveries may be made by BMW AG  
one of its international subsidiaries, a BMW Group  
retail outlet, or independent third party dealers. The  
vast majority of deliveries – and hence the reporting  
to BMW Group of deliveries – is made by independent  
third party dealers. Retail vehicle deliveries during  
a given reporting period do not correlate directly to  
the revenue that BMW Group recognises in respect  
of such reporting period.  
,
Equity ratio  
Equity capital as a percentage of the balance sheet  
total.  
Earnings per share (EPS)  
Basic earnings per share are calculated for common  
and preferred stock by dividing the net profit after  
minority interests, as attributable to each category of  
stock, by the average number of shares in circulation.  
Earnings per share of preferred stock are computed  
on the basis of the number of preferred stock shares  
entitled to receive a dividend in each of the relevant  
financial years.  
2
44  
Corporate  
Governance  
Fair value  
Post-tax return on sales  
Group net profit as a percentage of Group revenues.  
The amount for which an asset could be exchanged,  
or a liability settled, between knowledgeable, willing  
parties in an arm’s length transaction.  
Glossary –  
Explanation  
of Key Figures  
Pre-tax return on sales  
Group profitꢁ/ꢁloss before tax as a percentage of Group  
revenues.  
Fair value hedge  
A hedge against exposures to fluctuations in the fair  
value of a balance sheet item.  
Research and development expenditure  
The sum of research and non-capitalised development  
cost and capitalised development cost (not including  
the associated scheduled amortisation).  
Free cash flow  
Free cash flow is derived from cash flows from oper-  
ating and investing activities. The cash flows from  
investing activities from the purchase and sale of  
marketable securities and investment funds is not  
included. Cash flows from the purchase and sale of  
shares and the dividend payout from investments  
accounted for using the equity method are included  
in the cash flows from investing activities.  
Research and development expenditure ratio  
Research and development expenditure as a percent-  
age of Group revenues.  
Research and development locations  
The engineering, IT and process expertise required for  
the (pre-)development of hardware and software for  
all BMW Group products and services is combined at  
the Group’s international research and development  
locations.  
Goodwill  
Goodwill corresponds to the consideration paid to  
acquire an entity, less the fair value of the separate  
assets acquired and liabilities assumed. The buyer  
is willing to pay the additional amount in return for  
future expected earnings.  
Return on capital employed (RoCE)  
RoCE in the Automotive and Motorcycles segments  
is measured on the basis of relevant segment profit  
before financial result and the average amount of  
capital employed – at the end of the last five quar-  
ters – in the segment concerned. Capital employed  
corresponds to the sum of all current and non-current  
operational assets, less liabilities that generally do not  
incur interest.  
Gross profit margin  
Gross profit as a percentage of Group revenues.  
Liquidity  
Cash and cash equivalents as well as marketable secu-  
rities and investment funds.  
2
45  
Return on equity (RoE)  
RoE in the Financial Services segment is calculated  
as segment profit before taxes, divided by the aver-  
age amount of equity capital – at the end of the last  
five quarters – attributable to the Financial Services  
segment.  
Value at risk  
A measure of the potential maximum loss in value of  
an item during a set time period, based on a specified  
probability.  
Vocational and further training  
Comprises in-house vocational training provided by  
the BMW Group in 11 countries as well as the further  
training of BMW Group employees and temporary  
staff working for consolidated companies worldwide.  
Workforce size  
The BMW Group’s workforce comprises the employees  
of BMWAG and those of all companies in which it  
holds a majority interest, irrespective of the treat-  
ment of those companies for consolidation purposes.  
Employees with dormant employment contracts,  
employees in the non-work phases of pre-retirement  
part-time working arrangements and low-income  
earners are not included.  
2
46  
Corporate  
Governance  
RESPONSIBILITY  
Responsibility  
STATEMENT BY THE  
COMPANY’S LEGAL  
REPRESENTATIVES  
Statement by the  
Company’s Legal  
Representatives  
Independent  
Auditor’s Report  
Statement pursuant to § 117 No. 1 of the  
Securities Trading Act (WpHG) in conjunction  
with § 297 (2) sentence 4 and § 315 (1) sentence  
5
of the German Commercial Code (HGB)  
“
To the best of our knowledge, and in accordance with  
the applicable reporting principles, the Consolidated  
Financial Statements give a true and fair view of the  
assets, liabilities, financial position and profit of the  
Group, and the Group Management Report includes  
a fair review of the development and performance of  
the business and the position of the Group, together  
with a description of the principal opportunities and  
risks associated with the expected development of  
the Group.”  
Munich, 16 March 2020  
Bayerische Motoren Werke  
Aktiengesellschaft  
The Board of Management  
Oliver Zipse  
Klaus Fröhlich  
Ilka Horstmeier  
Pieter Nota  
Dr. Milan Nedeljković  
Dr. Nicolas Peter  
Dr.-Ing. Andreas Wendt  
2
47  
INDEPENDENT  
AUDITOR’S REPORT  
the accompanying group management report as  
a whole provides an appropriate view of the  
Group’s position. In all material respects, this  
group management report is consistent with  
the consolidated financial statements, complies  
with German legal requirements and appro-  
priately presents the opportunities and risks of  
future development. Our audit opinion on  
the group management report does not cover  
the content of those parts of the group man-  
agement report listed in the “Other Information”  
section of our auditor’s report.  
—
To Bayerische Motoren Werke  
Aktiengesellschaft, Munich  
Report on the Audit of the Consoli-  
dated Financial Statements and of  
the Group Management Report  
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we  
declare that our audit has not led to any reservations  
relating to the legal compliance of the consolidated  
financial statements and of the group manage-  
ment report.  
Audit Opinions  
We have audited the consolidated financial statements  
of Bayerische Motoren Werke Aktiengesellschaft,  
Munich, and its subsidiaries (the Group), which com-  
prise the consolidated balance sheet as at Decem-  
Basis for the Audit Opinions  
We conducted our audit of the consolidated financial  
statements and of the group management report  
in accordance with § 317 HGB and the EU Audit  
Regulation (No. 537ꢁ/ꢁ2014, referred to subsequently  
as “EU Audit Regulation”) in compliance with Ger-  
man Generally Accepted Standards for Financial  
Statement Audits promulgated by the Institut der  
Wirtschaftsprüfer [Institute of Public Auditors in  
Germany] (IDW). Our responsibilities under those  
requirements and principles are further described  
in the “Auditor’s Responsibilities for the Audit of  
the Consolidated Financial Statements and of the  
Group Management Report” section of our auditor’s  
report. We are independent of the group entities  
in accordance with the requirements of European  
law and German commercial and professional law,  
and we have fulfilled our other German professional  
responsibilities in accordance with these require-  
ments. In addition, in accordance with Article 10 (2)  
point (f) of the EU Audit Regulation, we declare that  
we have not provided non-audit services prohibited  
under Article 5 (1) of the EU Audit Regulation. We  
believe that the audit evidence we have obtained is  
sufficient and appropriate to provide a basis for our  
audit opinions on the consolidated financial state-  
ments and on the group management report.  
ber 31, 2019, the consolidated income statement,  
consolidated statement of comprehensive income,  
consolidated statement of changes in equity and  
consolidated statement of cash flows for the financial  
year from January  
1 to December 31, 2019, and notes  
to the consolidated financial statements, including a  
summary of significant accounting policies.  
In our opinion, on the basis of the knowledge obtained  
in the audit,  
the accompanying consolidated financial state-  
—
ments comply, in all material respects, with  
the IFRS as adopted by the EU, and the addi-  
tional requirements of German commercial  
law pursuant to § [Article] 315e Abs. [paragraph] 1  
HGB [Handelsgesetzbuch: German Commer-  
cial Code] and, in compliance with these require-  
ments, give a true and fair view of the assets,  
liabilities, and financial position of the Group as  
at December 31, 2019, and of its financial per-  
formance for the financial year from January 1  
to December 31, 2019, and  
2
48  
Corporate  
Governance  
Key Audit Matters in the Audit of the Consolidated  
Financial Statements  
Key audit matters are those matters that, in our  
professional judgment, were of most significance in  
our audit of the consolidated financial statements  
available data on historical empirical values, current  
market data and market estimates as well as forecasts  
by external market research institutes. The estimation  
of future residual values is subject to judgment due to  
the large number of assumptions to be made by the  
executive directors and the amount of data included  
in the determination.  
Independent  
Auditor’s Report  
for the financial year from January 1 to December 31,  
019. These matters were addressed in the context  
2
of our audit of the consolidated financial state-  
ments as a whole, and in forming our audit opinion  
thereon; we do not provide a separate audit opinion  
on these matters.  
Against this background and due to the resulting  
significant uncertainties with regard to estimates  
in the context of measuring the residual values of  
the leased products, this matter was of particular  
significance in the context of our audit.  
In our view, the matters of most significance in our  
audit were as follows:  
As part of our audit we obtained an understanding of  
the development of operating leases, the underlying  
residual value risks as well as the business processes  
for the identification, management, monitoring and  
measurement of residual value risks, among other  
things by inquiries and inspection of documents  
related to the internal calculation methods. Further-  
more we evaluated the appropriateness and effec-  
tiveness of the internal control system, particularly  
regarding the determination of expected residual  
values. This included the evaluation of the propriety  
of the relevant IT systems as well as the implemented  
interfaces therein by our IT specialists. In addition,  
we evaluated the appropriateness of the forecasting  
methods, the model assumptions as well as the  
parameters used for the measurement of the residual  
values based on the validations carried out by the  
BMW Group. For this purpose, we inquired with the  
BMW Group’s experts responsible for the management  
and monitoring of residual value risks and inspected  
the internal analysis on residual value developments  
and residual value forecasts as well as the validation  
results. We examined the mathematically correctness  
of the forecast values using the key calculation steps.  
— Measurement of leased products  
— Valuation of receivables from sales financing  
Valuation of provisions for statutory and non-  
statutory warranty obligations and product  
guarantees  
—
Measurement and recognition of YOUR NOW  
equity investments  
—
Measurement of provision for risks relating to  
an EU antitrust proceeding  
—
Our presentation of these key audit matters has been  
structured in each case as follows:  
— Matter and issue  
— Audit approach and findings  
— Reference to further information  
Hereinafter we present the key audit matters:  
Based on our audit procedures, we were able to  
satisfy ourselves that the methods and processes for  
determining the expected residual values of leased  
products underlying the valuation are appropriate  
and the assumptions and parameters included in the  
forecast model for the residual value are appropriate  
as a whole.  
Measurement of ꢅeased products  
The BMW Group leases vehicles to end customers  
under operating leases (leased products). At the  
balance sheet date, the figure reported under the  
“
leased products” line item for operating leases was  
EUR 42,609 million (approximately 18.7 % of total  
assets). Leased products are measured at cost, which is  
depreciated on a straight-line basis over the lease term  
to the expected residual value (recoverable amount). A  
key estimated value for subsequent measurement of  
leased products is the expected residual value at the  
end of the lease term. The BMW Group uses internally  
The Company’s disclosures on the applied “Accounting  
policies, assumptions, judgments and estimations” are  
contained in the notes to the consolidated financial  
statements under note 4 and on leased products are  
contained under note 23.  
2
49  
Valuation of receivables from sales financing  
In our view, the assumptions and parameters used in  
the measurement of receivables from sales financing  
were appropriate overall.  
The BMW Group offers end customers, dealerships  
and importers various financing models for vehicles.  
In this context, current and non-current receivables  
from sales financing totaling EUR 92,437 million are  
reported in the consolidated statement of financial  
position as at the balance sheet date (approximately  
The Company’s disclosures on the applied “Accounting  
policies, assumptions, judgments and estimations” are  
contained in the notes to the consolidated financial  
EUR 40  
ing to EUR 1  
.
4
% of total assets). Impairment losses amount-  
099 million were recognized on these  
statements under note 4 and on “receivables from  
sales financing” are contained under note 25.  
,
receivables as at the balance sheet date. In order to  
determine the amount of the necessary valuation  
allowances to be recognized with respect to receiv-  
ables from sales financing, the BMW Group, among  
others, evaluates the creditworthiness of the dealers,  
importers and end customers, as well as any loss ratios,  
and risk provisioning parameters are derived based on  
historical default probabilities and loss ratios.  
ꢌaꢅuation of provisions for statutorꢆ and non-statu-  
tory warranty obligations and product guarantees  
Provisions for statutory and non-statutory war-  
ranty obligations as well as product guarantees are  
included in the consolidated financial statements of  
BMW Group as a material amount in other provi-  
sions. The provisions amounted to EUR 5  
,550 million  
(
approximately 2.4 % of total assets) as at December  
The determination of the valuation allowances by the  
executive directors is subject to a significant degree  
of judgment due to several value-influencing factors  
such as the estimation of creditworthiness, the deter-  
mination of probabilities of default and loss ratios and  
was therefore of particular significance in the context  
of our audit.  
31, 2019. BMW Group is responsible for the legally  
required warranty and product guarantees in the  
respective sales market. In order to estimate the  
liabilities arising from statutory and non-statutory  
warranty obligations and product guarantees for  
vehicles sold, information on the type and volume  
of damages arising and on remedial measures is  
recorded and analyzed at vehicle model level. The  
expected amount of obligations is extrapolated from  
costs of the past and recognized as a provision in  
the corresponding amount, if the criteria of IAS 37  
have been met. For specific or anticipated individual  
circumstances, for example recalls, additional provi-  
sions are recognized provided they have not already  
been taken into account.  
As part of our audit we obtained a comprehensive  
understanding of the development of receivables from  
sales financing, the associated default-related risks  
as well as the business processes for the identifica-  
tion, management, monitoring and measurement of  
default risks, among other things by inquiries and  
inspection of documents on the internal calculation  
methods. Furthermore we evaluated the appropriate-  
ness and effectiveness of the internal control system  
regarding the determination of the impairment loss  
to recognize. In this context, we also evaluated the  
relevant IT systems and internal processes. The eval-  
uation included an assessment by our IT specialists  
of the appropriateness of the systems concerned and  
associated interfaces to ensure the completeness of  
data as well as the audit of automated controls for  
data processing. As part of our audit we assessed in  
particular the appropriateness of the risk classification  
procedures as well as the risk provisioning parameters  
used. For this purpose, we analyzed in particular the  
validations of parameters that are regularly conducted  
by the Company. To assess the default risk, we also  
used targeted sampling of individual cases to examine  
whether the attributes for assignment to the respective  
risk categories were suitably available and the impair-  
ment losses had been calculated using the parameters  
defined for these risk categories.  
The determination of provisions is associated with  
unavoidable estimation uncertainties and is subject  
to a high risk of change, depending on factors such  
as notification of detected defects as well as claims  
made by vehicle owners. Against this background,  
this matter was of particular significance during  
our audit.  
2
50  
Corporate  
Governance  
In order to assess the appropriateness of the valuation  
method used for the determination of the provisions  
for statutory and non-statutory warranty obligations  
as well as product guarantees including the assump-  
tions and parameters, we primarily obtained an  
understanding of the process for determining the  
assumptions and parameters through discussions with  
the responsible employees of the BMW Group. We  
also evaluated the appropriateness as well as effective-  
ness of controls for determining the assumptions and  
parameters. With the involvement of our IT specialists,  
we checked the IT systems used regarding their com-  
pliance. We compared the expenses for claims and  
technical actions with actual costs incurred in order to  
draw conclusions on the forecast accuracy. Based on a  
targeted sample of vehicle models, the mathematically  
correctness of the valuation model used across the  
Group was examined. We examined and evaluated the  
assumptions used by the BMW Group concerning the  
extent to which the past values were representative of  
the expected susceptibility of damage, the expected  
value of damage per vehicle (comprising parts and  
labor input) as well as the expected assertion of claims  
from statutory and non-statutory warranties.  
and a reversal of impairment losses amounting to  
EUR 97 million was recognized. YOUR NOW gen-  
erated negative operating earnings amounting to  
EUR 662 million in the past financial year, which were  
recognized in the consolidated financial statements.  
Furthermore, there was a triggering event at the level  
of the BMW Group and a EUR 240 million impair-  
ment loss was recognized. The Company has defined  
a triggering event to be in particular a significant  
deviation from target figures.  
Independent  
Auditor’s Report  
The determination of the reversal of impairment  
losses, the purchase price allocation as well as the  
impairment loss is based on the exercise of judg-  
ment by the executive directors, which is subject  
to significant estimation uncertainties. Against this  
background, this matter was of particular significance  
during our audit.  
As part of our audit, we examined and evaluated the  
methodological procedure adopted for the purposes  
of calculating the fair value for the determination of  
the reversal of impairment losses, among other things.  
We compared the future cash inflows used in the cal-  
culation against the underlying budget and assessed  
their appropriateness. Moreover, we examined the  
methodological procedure used in the purchase price  
allocation. In connection with the impairment loss,  
we assessed whether a triggering event had occurred.  
We examined the impairment test conducted by the  
BMW Group based on the occurrence of a triggering  
event and assessed its methodical correctness. After  
comparing the future cash inflows used against the  
budget adopted by the shareholders, we examined  
in particular the derivation of the discount rate used.  
In our view, the method for the valuation of provisions  
for statutory and non-statutory warranty obligations  
as well as product guarantees is overall appropriate.  
Taking into consideration the information available,  
we believe that, overall, the measurement parameters  
and assumptions used by the executive directors  
are appropriate.  
The Company’s disclosures on the applied “Accounting  
policies, assumptions, judgments and estimations” are  
contained in the notes to the consolidated financial  
statements under note  
are contained under note 33.  
4
and on “Other provisions”  
The valuation parameters and assumptions used by the  
executive directors are overall in line with our expec-  
tations and are also within the ranges considered by  
us to be acceptable.  
Measurement and recognition of yꢈꢂR ꢃꢈW  
eꢊuitꢆ investments  
In the BMW Group’s consolidated financial state-  
ments as at December 31, 2019, the line item “Invest-  
ments accounted for using the equity method” the  
YOUR NOW equity investments with a carrying  
amount of EUR 987 million (approximately 0.4 %  
The Company’s disclosures on the applied “Account-  
ing policies, assumptions, judgments and estimations”  
are contained in the notes to the consolidated finan-  
cial statements under note 2 and on the YOUR NOW  
equity investments are contained under note 24.  
of total assets) is reported. The BMW Group and a  
competitor have bundled mobility services within  
YOUR NOW. As a result of the combination with  
the competitor, the BMW Group contributed its  
investment in DriveNow GmbH & Co. KG, Munich,  
Parkmobile Group Holding B.ꢁV., Amsterdam, Digital  
Charging Solutions GmbH, Berlin and Reach Now  
LLC, Seattle. In the course of the transaction, disposal  
proceeds amounting to EUR 232 million were realized  
2
51  
Measurement of provision for risks relating to an  
ꢂ antitrust proceeding  
Other Information  
ꢀ
The executive directors are responsible for the other  
information. The other information comprises the  
following non-audited parts of the group management  
report:  
In April 2019, the BMW Group was notified by the  
European Commission of complaints in a pending  
antitrust proceeding. The European Commission  
accuses various manufacturers of colluding to restrict  
competition in the field of innovation. In this con-  
the statement on corporate governance pur-  
—
nection, a EUR 1  
.
4
billion provision for litigation and  
suant to §ꢀ289ꢀf HGB and §ꢀ315ꢀd HGB included  
in section “Statement on Corporate Gover-  
nance (§ꢀ289ꢀf HGB)” of the group management  
report  
risk provisioning was recognized in the consolidated  
financial statements under the balance sheet item  
“
Other provisions”. The risk assessment to be made  
on developments in the EU antitrust proceeding and  
the estimation of whether or not a provision must  
be recognized to cover the risks, and if so, in what  
amount the current obligation must be measured, is  
subject to a high degree of uncertainties and charac-  
terized by the estimates and assumptions made by  
the executive directors.  
the corporate governance report pursuant to  
No. 3.10 of the German Corporate Governance  
Code  
—
the separate non-financial report pursuant to  
§ꢀ289ꢀb Abs. 3 HGB and §ꢀ315ꢀb Abs. 3 HGB  
—
In our view, this matter was of particular significance  
for our audit due to the significant uncertainties con-  
cerning the outcome of the EU antitrust proceeding  
and the potential effects on BMWAG’s assets, liabil-  
ities, financial position and financial performance.  
The other information comprises further the remaining  
parts of the annual report – excluding cross-references  
to external information – with the exception of the  
audited consolidated financial statements, the audited  
group management report and our auditor’s report.  
With the knowledge that estimated values result in an  
increased risk of accounting misstatements and that  
the executive directors’ recognition and measurement  
decisions have a direct effect on consolidated result,  
we evaluated the appropriateness of the carrying  
amounts, with the involvement of an internal PwC  
antitrust law expert. Furthermore, we also held reg-  
ular meetings with the Company’s legal department  
in order to receive information regarding updates  
on current developments and the reasons for the  
corresponding estimates. The development of the  
aforementioned risks arising from the EU antitrust  
proceeding, including the executive directors’ esti-  
mates concerning the potential proceeding outcomes,  
was provided to us by the Company in writing. In  
addition, we obtained and evaluated an external legal  
confirmation as at the balance sheet date.  
Our audit opinions on the consolidated financial  
statements and on the group management report  
do not cover the other information, and consequently  
we do not express an audit opinion or any other form  
of assurance conclusion thereon.  
In connection with our audit, our responsibility is  
to read the other information and, in so doing, to  
consider whether the other information  
is materially inconsistent with the consolidated  
—
financial statements, with the group manage-  
ment report or our knowledge obtained in the  
audit, or  
— otherwise appears to be materially misstated.  
In our view, the estimates made by the executive  
directors regarding the recognition and measurement  
of the provision for the risks from the EU antitrust  
proceeding described above and the associated risk  
provision in the consolidated financial statements are  
sufficiently documented and substantiated.  
The Company’s disclosures on the applied “Accounting  
policies, assumptions, judgments and estimations” are  
contained in the notes to the consolidated financial  
statements under note 4 and on “Other operating  
expenses” are contained under note 10.  
2
52  
Corporate  
Governance  
Responsibilities of the Executive Directors and the  
Supervisory Board for the Consolidated Financial  
Statements and the Group Management Report  
The executive directors are responsible for the prepa-  
ration of the consolidated financial statements that  
comply, in all material respects, with IFRS as adopted  
by the EU and the additional requirements of German  
commercial law pursuant to §315 e Abs. 1 HGB and  
that the consolidated financial statements, in com-  
pliance with these requirements, give a true and fair  
view of the assets, liabilities, financial position, and  
financial performance of the Group. In addition the  
executive directors are responsible for such internal  
control as they have determined necessary to enable  
the preparation of consolidated financial statements  
that are free from material misstatement, whether  
due to fraud or error.  
Auditor’s Responsibilities for the Audit of the  
Consolidated Financial Statements and of the  
Group Management Report  
Independent  
Auditor’s Report  
Our objectives are to obtain reasonable assurance  
about whether the consolidated financial statements  
as a whole are free from material misstatement,  
whether due to fraud or error, and whether the group  
management report as a whole provides an appropri-  
ate view of the Group’s position and, in all material  
respects, is consistent with the consolidated financial  
statements and the knowledge obtained in the audit,  
complies with the German legal requirements and  
appropriately presents the opportunities and risks  
of future development, as well as to issue an audi-  
tor’s report that includes our audit opinions on the  
consolidated financial statements and on the group  
management report.  
In preparing the consolidated financial statements,  
the executive directors are responsible for assessing  
the Group’s ability to continue as a going concern.  
They also have the responsibility for disclosing, as  
applicable, matters related to going concern. In  
addition, they are responsible for financial report-  
ing based on the going concern basis of accounting  
unless there is an intention to liquidate the Group or  
to cease operations, or there is no realistic alternative  
but to do so.  
Reasonable assurance is a high level of assurance, but  
is not a guarantee that an audit conducted in accor-  
dance with §317 HGB and the EU Audit Regulation  
and in compliance with German Generally Accepted  
Standards for Financial Statement Audits promulgated  
by the Institut der Wirtschaftsprüfer (IDW) will always  
detect a material misstatement. Misstatements can  
arise from fraud or error and are considered material if,  
individually or in the aggregate, they could reasonably  
be expected to influence the economic decisions of  
users taken on the basis of these consolidated financial  
statements and this group management report.  
Furthermore, the executive directors are responsible  
for the preparation of the group management report  
that, as a whole, provides an appropriate view of  
the Group’s position and is, in all material respects,  
consistent with the consolidated financial statements,  
complies with German legal requirements, and appro-  
priately presents the opportunities and risks of future  
development. In addition, the executive directors  
are responsible for such arrangements and measures  
We exercise professional judgment and maintain  
professional skepticism throughout the audit. We also:  
Identify and assess the risks of material misstate-  
—
ment of the consolidated financial statements  
and of the group management report, whether  
due to fraud or error, design and perform audit  
procedures responsive to those risks, and obtain  
audit evidence that is sufficient and appropri-  
ate to provide a basis for our audit opinions. The  
risk of not detecting a material misstatement  
resulting from fraud is higher than for one result-  
ing from error, as fraud may involve collusion,  
forgery, intentional omissions, misrepresenta-  
tions, or the override of internal controls.  
(
systems) as they have considered necessary to enable  
the preparation of a group management report that  
is in accordance with the applicable German legal  
requirements, and to be able to provide sufficient  
appropriate evidence for the assertions in the group  
management report.  
The supervisory board is responsible for overseeing  
the Group’s financial reporting process for the prepa-  
ration of the consolidated financial statements and of  
the group management report.  
2
53  
Obtain an understanding of internal control rele-  
vant to the audit of the consolidated financial  
statements and of arrangements and measures  
Obtain sufficient appropriate audit evidence  
regarding the financial information of the enti-  
ties or business activities within the Group to  
express audit opinions on the consolidated finan-  
cial statements and on the group management  
report. We are responsible for the direction, su-  
pervision and performance of the group audit.  
We remain solely responsible for our audit  
opinions.  
—
—
(
systems) relevant to the audit of the group man-  
agement report in order to design audit proce-  
dures that are appropriate in the circumstances,  
but not for the purpose of expressing an audit  
opinion on the effectiveness of these systems.  
Evaluate the appropriateness of accounting poli-  
cies used by the executive directors and the  
reasonableness of estimates made by the execu-  
tive directors and related disclosures.  
—
—
Evaluate the consistency of the group manage-  
ment report with the consolidated financial  
statements, its conformity with German law, and  
the view of the Group’s position it provides.  
—
—
Conclude on the appropriateness of the execu-  
tive directors’ use of the going concern basis of  
accounting and, based on the audit evidence  
obtained, whether a material uncertainty exists  
related to events or conditions that may cast  
significant doubt on the Group’s ability to con-  
tinue as a going concern. If we conclude that  
a material uncertainty exists, we are required to  
draw attention in the auditor’s report to the  
related disclosures in the consolidated financial  
statements and in the group management report  
or, if such disclosures are inadequate, to mod-  
ify our respective audit opinions. Our conclusions  
are based on the audit evidence obtained up  
to the date of our auditor’s report. However, fu-  
ture events or conditions may cause the Group  
to cease to be able to continue as a going concern.  
Perform audit procedures on the prospective in-  
formation presented by the executive directors  
in the group management report. On the basis  
of sufficient appropriate audit evidence we eval-  
uate, in particular, the significant assumptions  
used by the executive directors as a basis for  
the prospective information, and evaluate the  
proper derivation of the prospective informa-  
tion from these assumptions. We do not express  
a separate audit opinion on the prospective  
information and on the assumptions used as a  
basis. There is a substantial unavoidable risk  
that future events will differ materially from the  
prospective information.  
We communicate with those charged with governance  
regarding, among other matters, the planned scope  
and timing of the audit and significant audit findings,  
including any significant deficiencies in internal con-  
trol that we identify during our audit.  
Evaluate the overall presentation, structure and  
content of the consolidated financial statements,  
including the disclosures, and whether the con-  
solidated financial statements present the un-  
derlying transactions and events in a manner that  
the consolidated financial statements give a  
true and fair view of the assets, liabilities, finan-  
cial position and financial performance of the  
Group in compliance with IFRS as adopted by  
the EU and the additional requirements of  
German commercial law pursuant to §ꢀ315ꢀe  
Abs. 1 HGB.  
—
We also provide those charged with governance with  
a statement that we have complied with the relevant  
independence requirements, and communicate with  
them all relationships and other matters that may  
reasonably be thought to bear on our independence,  
and where applicable, the related safeguards.  
From the matters communicated with those charged  
with governance, we determine those matters that  
were of most significance in the audit of the consoli-  
dated financial statements of the current period and  
are therefore the key audit matters. We describe these  
matters in our auditor’s report unless law or regulation  
precludes public disclosure about the matter.  
2
54  
Corporate  
Governance  
Other Legal and Regulatory  
Requirements  
German Public Auditor Responsible  
for the Engagement  
Independent  
Auditor’s Report  
Further Information pursuant to Article 10 of the  
EU Audit Regulation  
The German Public Auditor responsible for the  
engagement is Andreas Fell.  
We were elected as group auditor by the annual gen-  
eral meeting on May 16, 2019. We were engaged by  
the supervisory board on May 17  
,
2019. We have been  
Munich, 11 March 2020ꢁ/ꢁlimited to the amendment  
referred to in the Information on the Supplementary  
Audit: 16 March 2020  
the group auditor of the Bayerische Motoren Werke  
Aktiengesellschaft, Munich, without interruption  
since the financial year 2019.  
ꢀ
ricewaterhouseꢄoopers GmbH  
We declare that the audit opinions expressed in this  
auditor’s report are consistent with the additional  
report to the audit committee pursuant to Article 11  
of the EU Audit Regulation (long-form audit report).  
Wirtschaftsprüfungsgesellschaft  
Petra Justenhoven  
Wirtschaftsprüferin  
Andreas Fell  
Wirtschaftsprüfer  
[
German Public Auditor]  
[German Public Auditor]  
Information on the  
Supplementary Audit  
We issue this auditor’s report on the amended con-  
solidated financial statements and amended group  
management report on the basis of our statutory audit  
completed on March 11  
audit completed on March 16  
,
2020 and our supplementary  
2020, which concerned  
,
the amendments to disclosures in the notes to the con-  
solidated financial statements and the group manage-  
ment report due to the updated reporting on expected  
developments and on risks and opportunities taking  
into account new information on the effects of the  
spread of coronavirus. Please refer to the presentation  
of the amendments by the executive directors in the  
sections entitled “Basis of preparation” and “Report on  
post-balance sheet date events” in the amended notes  
to the consolidated financial statements, and in the  
sections entitled “Organization and business model”,  
“
Report on economic position”, “Report on expected  
developments” and “Report on risks and opportunities”  
in the amended group management report.  
OTHER  
INFORMATION  
5
Other  
Information  
Ten-year  
Comparison  
Page 256 BMW Group Ten-year Comparison  
2
56  
Other  
Information  
BMW GROUP  
BMW Group  
Ten-year  
Comparison  
TEN-YEAR COMPARISON  
2
019  
20181  
2017  
2016  
ꢄꢀlIꢌꢀRIꢀS  
Automobiles2  
Motorcycles3  
units  
units  
2,538,367  
175,162  
2,483,292  
165,566  
2,468,658  
164,153  
2,352,440  
145,032  
ꢋRꢈꢄꢂCꢁIꢈꢃ ꢌꢈlꢂMꢀ  
Automobiles  
units  
units  
2,564,025  
187,116  
2,541,534  
162,687  
2,505,741  
185,682  
2,359,756  
145,555  
Motorcycles3  
FIꢃAꢃCIAl SꢀRꢌICꢀS  
Contract portfolio  
contracts  
€ million  
5,973,682  
142,834  
5,235,207  
133,147  
5,380,785  
124,719  
5,114,906  
123,394  
Business volume (based on balance sheet carrying amounts)  
IꢃCꢈMꢀ SꢁAꢁꢀMꢀꢃꢁ  
Revenues  
€ million  
%
104,210  
17.3  
96,855  
19.0  
98,282  
20.3  
94,163  
19.9  
Gross profit margin  
Earnings before financial result  
Earnings before tax  
€ million  
€ million  
%
7,411  
7,118  
6.8  
8,933  
9,627  
9.9  
9,899  
10,675  
10.9  
9,386  
9,665  
10.3  
Return on sales (earnings before tax / revenues)  
Income taxes  
€ million  
%
2,140  
30.1  
2,530  
26.3  
2,000  
18.7  
2,755  
28.5  
Effective tax rate  
Net profit for the year  
€ million  
5,022  
7,064  
8,675  
6,910  
bAlAꢃCꢀ Sꢉꢀꢀꢁ  
Non-current assets  
€ million  
€ million  
€ million  
%
137,404  
90,630  
5,650  
124,202  
84,736  
5,029  
121,964  
73,542  
4,688  
121,671  
66,864  
3,731  
Current assets  
Capital expenditure (excluding capitalised development costs)  
Capital expenditure ratio (capital expenditure / revenues)  
Equity  
5.4  
5.2  
4.8  
4.0  
€ million  
%
59,907  
26.3  
57,829  
27.7  
54,107  
27.7  
47,363  
25.1  
Equity ratio  
Non-current provisions and liabilities  
Current provisions and liabilities  
Balance sheet total  
€ million  
€ million  
€ million  
85,502  
82,625  
228,034  
79,698  
71,411  
208,938  
69,634  
71,765  
195,506  
73,183  
67,989  
188,535  
CASꢉ FlꢈW SꢁAꢁꢀMꢀꢃꢁ  
Cash and cash equivalents at balance sheet date  
Free cash flow Automotive segment  
€ million  
€ million  
12,036  
2,567  
10,979  
2,713  
9,039  
4,459  
7,880  
5,792  
ꢋꢀRSꢈꢃꢃꢀl  
Workforce at year-end4  
133,778  
98,901  
134,682  
101,178  
129,932  
100,760  
124,729  
99,575  
Personnel cost per employee  
€
ꢄIꢌIꢄꢀꢃꢄ  
Dividend total  
€ million  
€
1,646  
2,303  
2,630  
2,300  
2.50 / 2.525  
5
3.50 / 3.52  
4.00 / 4.02  
3.50 / 3.52  
Dividend per share of common stock / preferred stock  
1
Prior year’s figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 6 to the Group Financial Statements.  
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.  
Delivery figures have been adjusted retrospectively going back to 2015. The basis for the adjustments is a review of sales data in prior periods for the BMW Group’s  
most important markets (China, USA, Germany, UK, Italy and Japan). The retrospective adjustment enables better comparability. Additional information can be found  
in the section “Comparison of Forecasts for 2019 with Actual Results in 2019”.  
Excluding Husqvarna, deliveries up to 2013: 59,776 units; production up to 2013: 59,426 units.  
Figures exclude dormant employment contracts, employees in the non-work phases of pre-retirement part-time working arrangements and low wage earners.  
Proposal by management.  
2
3
4
5
2
57  
2
015  
2014  
2013  
2012  
2011  
2010  
ꢄꢀlIꢌꢀRIꢀS  
Automobiles2  
Motorcycles3  
2
2
4
,257,851  
36,963  
2,117,965  
123,495  
1,963,798  
115,215  
1,845,186  
106,358  
1,668,982  
104,286  
1,461,166  
98,047  
1
ꢋRꢈꢄꢂCꢁIꢈꢃ ꢌꢈlꢂMꢀ  
Automobiles  
,279,503  
51,004  
2,165,566  
133,615  
2,006,366  
110,127  
1,861,826  
113,811  
1,738,160  
110,360  
1,481,253  
99,236  
1
Motorcycles3  
FIꢃAꢃCIAl SꢀRꢌICꢀS  
Contract portfolio  
,718,970  
111,191  
4,359,572  
96,390  
4,130,002  
84,347  
3,846,364  
80,974  
3,592,093  
75,245  
3,190,353  
66,233  
Business volume (based on balance sheet carrying amounts)  
IꢃCꢈMꢀ SꢁAꢁꢀMꢀꢃꢁ  
Revenues  
9
2,175  
9.7  
80,401  
21.2  
76,059  
20.1  
76,848  
20.2  
68,821  
21.1  
60,477  
18.1  
1
Gross profit margin  
9
9
,593  
,224  
9,118  
8,707  
10.8  
7,978  
7,893  
10.4  
8,275  
7,803  
10.2  
8,018  
7,383  
10.7  
5,111  
4,853  
8.0  
Earnings before financial result  
Earnings before tax  
1
0.0  
,828  
0.7  
,396  
Return on sales (earnings before tax / revenues)  
Income taxes  
2
6
2,890  
33.2  
2,564  
32.5  
2,692  
34.5  
2,476  
33.5  
1,610  
33.1  
3
Effective tax rate  
5,817  
5,329  
5,111  
4,907  
3,243  
Net profit for the year  
bAlAꢃCꢀ Sꢉꢀꢀꢁ  
Non-current assets  
1
10,343  
97,959  
56,844  
4,601  
86,193  
52,184  
4,967  
81,305  
50,530  
4,151  
74,425  
49,004  
2,720  
67,013  
43,151  
2,312  
6
1,831  
,826  
.2  
2,764  
4.8  
Current assets  
3
Capital expenditure (excluding capitalised development costs)  
Capital expenditure ratio (capital expenditure / revenues)  
Equity  
4
5.7  
6.5  
5.4  
4.0  
3.8  
4
37,437  
24.2  
35,600  
25.7  
30,606  
23.2  
27,103  
22.0  
23,930  
21.7  
2
Equity ratio  
6
6
3,819  
5,591  
58,288  
59,078  
154,803  
51,643  
51,134  
138,377  
52,834  
48,395  
131,835  
49,113  
47,213  
123,429  
46,100  
40,134  
110,164  
Non-current provisions and liabilities  
Current provisions and liabilities  
Balance sheet total  
1
72,174  
CASꢉ FlꢈW SꢁAꢁꢀMꢀꢃꢁ  
Cash and cash equivalents at balance sheet date  
Free cash flow Automotive segment  
6
5
,122  
,404  
7,688  
3,481  
7,671  
3,003  
8,370  
3,809  
7,776  
3,166  
7,432  
4,471  
ꢋꢀRSꢈꢃꢃꢀl  
Workforce at year-end4  
1
22,244  
7,136  
116,324  
92,337  
110,351  
89,869  
105,876  
89,161  
100,306  
84,887  
95,453  
83,141  
9
Personnel cost per employee  
ꢄIꢌIꢄꢀꢃꢄ  
Dividend total  
2
,102  
1,904  
1,707  
1,640  
1,508  
852  
3
.20/ 3.22  
2.90 / 2.92  
2.60 / 2.62  
2.50 / 2.52  
2.30 / 2.32  
1.30 /1.32  
Dividend per share of common stock / preferred stock  
2
58  
A further contribution  
towards preserving resources  
The BMW Annual Report was printed on paper produced in accordance with the international  
®
FSC Standard: the pulp is sourced from sustainably managed forests.  
The corresponding CO  
protection measures as part of a reforestation project in collaboration with Bergwaldprojekt e. V.  
certificate number: DE-141-1VLEQD2).  
2
emissions were compensated by additional environmental and climate  
(
This version of the Annual Report is a translation  
from the German version. Only the original German  
version is binding.  
P U B L I S H E D B Y  
Bayerische Motoren Werke  
Aktiengesellschaft  
8
0788 Munich  
Germany  
Telephone +49 89 382-0  


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